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Why is selling software so weird?

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Re: Why is selling software so weird?

#51

Post by mschuster91 »

sirsinsalot wrote: post #37
gumby wrote: post #28

Earlier quoted context omitted.

> Software still has the lowest marginal cost... I invite you to switch sectors to the pharma world. I worked on a program for a drug planned to be sold at $2,000/dose with a projected cost of $0.0025/dose. That figure included amortization for all the manufacturing equipment, QC etc and raw materials.

Having friends in pharma too, I never hear anything about the commercial end that I don't find disgusting. I get that like any business the goal is maximizing wealth, but feeling empathy for the "customer" makes the margins and decisions seem sickening. Honestly, the idealist in me says healthcare/pharma/research should be publicly owned and operated.

The problem is that the production cost for a dose of medication (at least as long as it's a chemical synthetization process) is extremely low... but the cost of bringing it to market extremely high. Only a rare fraction of candidates makes it through the first stages of research and validation, and of what remains a large part gets rejected in human trials. All of these trials are expensive, especially the human ones.

And that one successful medication has to pay for all the trials of all the other candidates that didn't make it... and all the low hanging fruits have long been picked. What is remaining now is stuff for rare viral diseases (not just Covid vaccines that work effectively against mutations, but also HIV, Ebola and similars), cancers and multi-resistant bacteria. All of this has been going on for decades and news of actual marketable products are much rarer than news about promising cancer or whatever treatment ideas.

Everyone loves to dunk on pharma (with reasons, see e.g. Skhreli or the bullshit regarding insulin patents), but the core problem is the sheer cost associated with developing pharmaceuticals.

Re: Why is selling software so weird?

#52

Post by krisoft »

dotancohen wrote: post #14
galaxyLogic wrote: post #12

The weird part about software is that most of individual code-units (i.e. functions, methods) are not very specific to your product. Thus they could be part of another product as well And then you realize it's actually a huge waste that they are not used by other products as well. You are almost re-inventing the wheel most of the time you write a new function. The value is only in what your multitude of trivial parts…

That is not peculiar to software development, even the most sophisticated F1 motor or Raptor engine is composed of five or six "simple machines" based on only three principals: wheel (wheel, pulley), lever (lever, screw), inclined plane (inclined plane, wedge).

How would you break down a coaxial swirl injector (an important part of the Raptor engine) into “simple machines”?

Are the regenerative coolant pipes built into the Raptor’s nozzle a wheel, a lever, or an inclined plane?

Re: Why is selling software so weird?

#54

Post by hutzlibu »

Jaruzel wrote: post #46
jahewson wrote: post #10

Earlier quoted context omitted.

Perfectly describes the experience of a startup staring to sell to enterprise!

I had exactly this experience many many years ago when I was just starting out. I'd written a small tool that enabled pop-up messages between [Windows] users on a network. It was protocol agnostic - as long as the users had a shared file area, it would work. This was back in the day when even internal email was new and mostly non-existent in the workplace. I sold it as shareware originally, but then a Big Fish came a…

"The people with money assume they can ask for whatever they like and have no concept that sometimes it's simply unprofitable for the little-guy to deliver it."

Thats a question of negotiating, isn't it?

They can ask for whatever they like and you can reply with whatever you like.

And then you find a agreement, or not.

The problem in your case seems to have been more lack of confidence and experience on your part, because like you said, selling a licence for a existing product is something very different, from making a contract about new features.

Otherwise a little guy can grow and hire more people to help him with a big contract, if this is what he or she wants.

Re: Why is selling software so weird?

#55

Post by dotancohen »

krisoft wrote: post #52
dotancohen wrote: post #14

Earlier quoted context omitted.

That is not peculiar to software development, even the most sophisticated F1 motor or Raptor engine is composed of five or six "simple machines" based on only three principals: wheel (wheel, pulley), lever (lever, screw), inclined plane (inclined plane, wedge).

How would you break down a coaxial swirl injector (an important part of the Raptor engine) into “simple machines”? Are the regenerative coolant pipes built into the Raptor’s nozzle a wheel, a lever, or an inclined plane?

  > How would you break down a coaxial swirl injector (an important part of the Raptor engine) into “simple machines”?
I didn't complete the Mechanical Engineering degree two decades ago, so you might want to consult an engineer. Preferably one at SpaceX )) Being familiar with only typical automotive electromechanical fuel injectors, which presumably operate on similar principals, I'd also like to see where the spring and solenoid are classified. The valve itself is obviously an inclined plane.

  > Are the regenerative coolant pipes built into the Raptor’s nozzle a wheel, a lever, or an inclined plane?
I'm not familiar with the Raptor, but from examining an RS-25 up close a few years back I would say that the intricate regenerative coolant pipes that make up the nozzle are not mechanical devices )). They are a component of a mechanical device, though, in the sense that they are bolted to the same device as the e.g. obviously mechanical turbopump is bolted to.

Surely there's a certified engineer in the HN audience who could chime in.

Re: Why is selling software so weird?

#56

Post by xmcqdpt2 »

bob1029 wrote: post #49

> Low volume software is not a good business to be in. I disagree very strongly with this based on my experience so far. Being in the business of low volume software is fantastic if your customers are other businesses . The advantages of low-volume/complex B2B software biz are incredible to me. Contract terms are measured in half-decades. Your users can actually be trained and held accountable in many cases. You don'…

Similarly, the article doesn't take into account the fact that many developers work on in-house software and developer tooling that are not directly sold to anyone.

Custom in-house development follows much the same principle as B2B products: the very high marginal cost are considered worth it by the business because of the degree of specialization they need or the advantage they gain over the competition.

Of course I won't become billionaire off it but it's not for the lack of "value" I'm creating.

Re: Why is selling software so weird?

#57

Post by kklisura »

sirsinsalot wrote: post #37
gumby wrote: post #28

Earlier quoted context omitted.

> Software still has the lowest marginal cost... I invite you to switch sectors to the pharma world. I worked on a program for a drug planned to be sold at $2,000/dose with a projected cost of $0.0025/dose. That figure included amortization for all the manufacturing equipment, QC etc and raw materials.

Having friends in pharma too, I never hear anything about the commercial end that I don't find disgusting. I get that like any business the goal is maximizing wealth, but feeling empathy for the "customer" makes the margins and decisions seem sickening. Honestly, the idealist in me says healthcare/pharma/research should be publicly owned and operated.

Couldn't a pragmatic approach be a market with mix of private and publicly owned companies healthcare/pharma/research companies? Private companies can continue maximize wealth, but now competing with publicly owned companies which have "empathy for the customer". That might lower the prices in the market.

Re: Why is selling software so weird?

#58

Post by HPsquared »

paxys wrote: post #11

While all of this is mostly true, this problem isn't unique to software by a mile. The model of high fixed cost, low marginal cost applies to pretty much every consumer good or service sold in the industrial age. If you think publishing the first copy of a piece of software is hard, try setting up a new production line in a factory, or opening a restaurant, or producing a music album or movie. Yes it is hard to break…

Even pre-industrial: writing books was similar. Marginal cost wasn't super low until the printing press, however.

Re: Why is selling software so weird?

#59

Post by tarsinge »

jahewson wrote: post #10
jsiaajdsdaa wrote: post #2

It's because the hardest parts of software involve connecting with other systems and soliciting your custom requirements. Imagine if you wanted to buy a custom car, but you wanted an "off the shelf from walmart" experience. "Hello, I'd like to buy a custom car." "Ok great, we have many over there." "Yes but you don't have any pink ones with cool designs" "Well, we could make you a pink one, but what design would you…

Perfectly describes the experience of a startup staring to sell to enterprise!

"We are looking for an economic daily driver. Please find our written requirements": unrealistic mix of a F1 car and a semi-truck.

Re: Why is selling software so weird?

#60

Post by folli »

emteycz wrote: post #40
sirsinsalot wrote: post #37

Earlier quoted context omitted.

Having friends in pharma too, I never hear anything about the commercial end that I don't find disgusting. I get that like any business the goal is maximizing wealth, but feeling empathy for the "customer" makes the margins and decisions seem sickening. Honestly, the idealist in me says healthcare/pharma/research should be publicly owned and operated.

We tried that in Europe and it was really the worst thing that can happen. Public funding is a good idea, public ownership is a really bad one. Even the German healthcare system is a combined system of public funding of privately owned healthcare providers. The biggest problem of pharma is IMHO lack of competition. The field is over regulated - some of it is for good reasons, but perhaps it went too far.

Can you elaborate on where and how that was tried? Seems very interesting.
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