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Patio11's Law: The software economy is bigger than you think

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Re: Patio11's Law: The software economy is bigger than you think

#321

Post by brentm »

nojito wrote: post #261
miki123211 wrote: post #249

Basecamp is a famous example of this. It's a pretty popular project management software, 56 employees at this point if I remember correctly, probably millions in revenue. It's a tiny, bootstrapped company, no investors breathing down their necks, no IPOs, nothing. And they're one of the few companies who actually have principles, are committed to privacy etc.

Because it’s almost impossible to switch out of Basecamp and use a competitor. The vast majority of companies like this have perfected the lock-in strategy to ensure that their customers can never leave.

I do recall Basecamp from day one allowed you to export your data which not many other people did. What you do with that and how you get it into something else is another story but also not really their problem.

Re: Patio11's Law: The software economy is bigger than you think

#322

Post by hello_moto »

piokoch wrote: post #244
NikolaNovak wrote: post #13

Earlier quoted context omitted.

That is fascinating to me, because virtually all my friends have heard of SAP outside of IT - as users or recipients. My engineer friend uses it for supply chain management, a beer store hq clerk helped implement it, construction accountant has used it, etc. At the same time, I guess you have to be at a company of a certain size for it to be relevant to your life... But that perhaps proves the point - HN is very star…

"My engineer friend uses it for supply chain management, a beer store hq clerk helped implement it, construction accountant has used it, etc." Is SAP something that can be somehow scaled down? if this is used for a beer store, it has to be really large store, if that's what is written in the cited article is true: "A basic installation of SAP has 20,000 database tables, 3,000 of which are configuration tables. In tho…

SAP has two scaled-down ERP products:

https://www.acclimation.com/au/solutions/sap-bydesign-vs-bus...

Re: Patio11's Law: The software economy is bigger than you think

#323

Post by yellowapple »

youdonthavekids wrote: post #238
ivalm wrote: post #21

Earlier quoted context omitted.

> At the same time, I guess you have to be at a company of a certain size for it to be relevant to your life... But that perhaps proves the point - HN is very starup focused That’s pretty dismissive. I work at a company with ~80B in revenue, I never interacted or heard of SAP in work context. In fact it is only incidentally that I’ve heard of them previously. There are hundred of thousands of engineers working in com…

SO what ERP system are you using? What do you sell? How do you manufacture? How do you handle inventory and finances? You're either using SAP and you don't know it or you're using Oracle. EDIT: just looked at your linkedin profile. I can see that your company literally has SAP consultants working for them full time. I don't know which SAP products you are using but you definitely are an SAP customer.

> You're either using SAP and you don't know it or you're using Oracle.

Or you're using NetSuite (which nowadays is Oracle, granted, but a rather different product from what most people think of when they talk about Oracle or SAP in an ERP context), or you're using Microsoft's ERP (Dynamics something or other? Never used it), or you're using something developed in-house (very likely running on an AS/400). Or hell, you might be running multiple ERPs in a weird limbo state mid-transition (e.g. Thermo Fisher, which was using AS/400 and SAP (or maybe it was Manhattan? Or both? My memory's fuzzy...) - the latter of which might very well have been partially implemented on AS/400 in order to integrate with the existing ERP - as of a couple years ago when I was working for them).

It's worth noting, too, that there are plenty of large and arguably-dysfunctional companies not using an ERP at all, or (like with my current employer) it's relegated to very specific uses because other functionality got offloaded to other systems (for example, it's relatively common to run a WMS separate from the ERP and integrate between the two, as it is with an eCommerce system; in my employer's case, all three are separate).

Re: Patio11's Law: The software economy is bigger than you think

#324

Post by luckylion »

rorykoehler wrote: post #312
luckylion wrote: post #293

Earlier quoted context omitted.

I think it has to be a startup, i.e. recently founded, hyper growth, usually VC-funded. A company worth a lot of money that has existed for 80 years isn't a unicorn, it's just a company worth $1B+.

When is a startup not a startup anymore. Are Facebook and Google still startups?

In my opinion they are not. They were and became unicorns, but they're not any longer, they are regular Fortune 500 corporations.

Re: Patio11's Law: The software economy is bigger than you think

#325

Post by yellowapple »

ck_one wrote: post #176
_bxg1 wrote: post #7

I remember reading this article about SAP a few months ago, and it just blew my mind: https://retool.com/blog/erp-for-engineers/ Here was an entire market segment I'd never heard of, and just the market leader is worth $163B . And on top of that, the technology is so totally alien to anything I'd ever heard of before. It's like an alternate-history kind of thing. Like if we discovered a continent somewhere in the Pac…

SAP is a German company so here everybody knows about it. There is even a startup strategy called "unbundling SAP" where you pick one feature of SAP, do it 10x better and target a smaller but still huge market. Examples for such companies are: Personio (500M valuation), Cellonis (2.5B valuation)

Sounds similar to the "unbundling Zapier" article that made its rounds here on HN a couple days ago. Definitely seems viable.

Re: Patio11's Law: The software economy is bigger than you think

#326

Post by mikekchar »

TheSpiceIsLife wrote: post #302
mikekchar wrote: post #201

Earlier quoted context omitted.

It's a good point. It varies widely depending on the industry, but even in the software industry a good rule of thumb is that IT costs about 10% of revenue (some places are as high as 30%, some as low as 2%). But that includes all the management (not executive management) and support staff. The spend for sales and marketing is much higher than development (though sometimes most of that goes out of the company, paying…

> IT costs about 10% of revenue (some places are as high as 30%, some as low as 2%). That’s the total expense, right? Not just employee remuneration.

Yes. However, it may or may not include equity depending on how things are set up.

Re: Patio11's Law: The software economy is bigger than you think

#328

Post by goatherders »

MattGaiser wrote: post #136
Kinrany wrote: post #26

This thread seems to suggest that there are heaps of 20$ bills lying all over the world and accessible to any software engineer. That they are not being picked up suggests that there's some other constraint. Either extracting this value is not really worth one's time, or the bottleneck is not the ability to automate things but some other rare skill.

> This thread seems to suggest that there are heaps of 20$ bills lying all over the world and accessible to any software engineer. I argue that they are. It is just that the dollar bills are stuck in the mud or hidden under a leaf or just down paths you rarely take. The bottleneck is knowing about them. You need to be the kind of person who thinks everything is done poorly and then thinks of ways to do it better. The…

This. I think one of the places where young entrepreneurs get stuck is in wanting to build something that gets noticed as much (or more) than building something that makes them financially successful. There are thousands of problems that need to be solved and can be solved by software. And almost all of them are super boring and niche specific.

Re: Patio11's Law: The software economy is bigger than you think

#329

Post by chadash »

hnick wrote: post #130
chadash wrote: post #20

Earlier quoted context omitted.

I spoke to a guy recently who works for a company doing $300 million revenue/year as a wholesale distributor of internet networking equipment (think finger optic cables and equipment for housing them underground). Their customers are the ISPs. The company is privately owned and not venture backed so you'll never hear of them unless you are in that business.

> The company is privately owned and not venture backed so you'll never hear of them unless you are in that business. Is the implication that venture backing needs growth so they get heavily involved in the media circus? I suppose that makes sense. I've always liked these "shadow industries", I've run into a few personally looking for things like special cut metal or wholesale pie crust or curtain rails.

Venture capitalists are often looking for billion dollar companies. If you found a company and grow it organically to where it's worth $25 million, then sure, you are no Bezos, but you are fairly successful (financially) by any standard. But venture capital doesn't care about $25 million companies, because their business model involves investing in so many companies that fail that a $25m success doesn't really move the needle for them. They want to see B's not M's in their companies' valuations.

Meanwhile, the media doesn't have much to work with when reporting on privately held, non-venture backed companies. There's no official valuation unless the company sells (sure, once you get to be the size of Cargill or Bloomberg, reporters will try to calculate some sort of valuation, but very few companies fall in this category), and the owners typically have no good reason to want publicity from the media, especially if they are selling B2B.

Re: Patio11's Law: The software economy is bigger than you think

#330

Post by harsh3195 »

_bxg1 wrote: post #7

I remember reading this article about SAP a few months ago, and it just blew my mind: https://retool.com/blog/erp-for-engineers/ Here was an entire market segment I'd never heard of, and just the market leader is worth $163B . And on top of that, the technology is so totally alien to anything I'd ever heard of before. It's like an alternate-history kind of thing. Like if we discovered a continent somewhere in the Pac…

I haven’t read of such things in my country but am hopeful that this will happen soon here in India.
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