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Why is selling software so weird?

zeptonaut.com

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Re: Why is selling software so weird?

#61

Post by ianai »

Their point is interesting. Feels a little like the first mover take all outcome, too. Ie if software does do something dramatically helpful (has a truly killer feature) it’ll often push other entrants out. Thinking of you, Windows 95.

I think this also underscores that programmers would benefit from some form of regularization. Like instead of a degree followed by a job, a close apprenticeship graduating into a junior membership in a programmer guild or union.

Is anybody offering that?

Re: Why is selling software so weird?

#62

Post by goodpoint »

usr1106 wrote: post #19

Software is very close to math. Most people would agree that math should not be sold or licensed. How to add numbers is not something that should be paid for. If actually someone made their living by adding numbers we would probably agree they should be paid. So the programmer should be paid, the hardware should be paid, but the software not? Doesn't seem to work. Exactly like people expect everything to be free on t…

> Doesn't seem to work

It worked very well when it came to do all the foundational work for developing semiconductors, early computers, fiber optic, GPS, GSM, particle physics, CD/DVDs, CCDs, spread spectrum radio, solar panels...

Research benefiting society needs was paid by society. It was paid by taxes.

Re: Why is selling software so weird?

#63

Post by ianai »

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.

I don’t think of it as idealism when the market skews so backwards and people are dying who shouldn’t have. Insulin prices being raised so high that people “ration” doses and have died. It’s a hundred year old medication!

Re: Why is selling software so weird?

#64

Post by chrisseaton »

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'…

> Your users can actually be trained and held accountable

What does it mean to hold a user accountable?

Re: Why is selling software so weird?

#65

Post by emteycz »

folli wrote: post #60
emteycz wrote: post #40

Earlier quoted context omitted.

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.

All of Eastern Europe pre-1989, and most of the same countries for few years post-1989, until they realized this is going nowhere and privatized.

Re: Why is selling software so weird?

#66

Post by ianai »

kklisura wrote: post #57
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.

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.

I’ve thought about this. I think one model would be to have successful treatments be “bought out” for public use through an appropriately priced awards process. So the pharmaceutical company would know with certainty that their costs and even profit targets would be satisfied upon success. Have the award process promise 2x their costs, or their costs plus a $somePercent premium above cost. Maybe one option comes with some public grant process along the way. Upon completion the underlying medication gets either publicly produced if market participants don’t satisfy demand and otherwise allowed to be produced by anyone.

I think something like that the government side is more akin to good accounting practices than heavy handed regulatory oversight.

Re: Why is selling software so weird?

#67

Post by krisoft »

dotancohen wrote: post #55
krisoft wrote: post #52

Earlier quoted context omitted.

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…

> you might want to consult an engineer. Preferably one at SpaceX

I suspect that they would tell us that the idea that every machine can be broken down into a series of simple machines was a cute theory in the Renaissance, but is not a usefull model to explain how a Raptor engine works. Maybe the theory of simple machines and compound machines is usefull for purely mechanical constructions, like a bicycle or a clock, but fails to account for the fluid mechanical effects which dominate in a rocket engine.

Re: Why is selling software so weird?

#68

Post by leftnode »

chrisseaton wrote: post #64
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'…

> Your users can actually be trained and held accountable What does it mean to hold a user accountable?

Not the OP, but also selling B2B software. You can hold a user accountable that they'll actually use the software purchased. The company is spending a lot of money on it, finds value in it, and wants to ensure it's being used and implemented correctly.

B2B software with figures like the OP means you're building a professional relationship with a customer (as opposed to a transactional one), and can push back when they're complaining about something, for example.

> "Your software isn't giving us the numbers you said it would!"

> "It will, if you use it as you were instructed, we're happy to review that with you again, but you have to have the internal SOP that you'll use it in the way it was intended if you want the numbers it can provide."

Re: Why is selling software so weird?

#69

Post by sokoloff »

simonh wrote: post #43
vineyardmike wrote: post #17

Earlier quoted context omitted.

Software still has the lowest marginal cost - the distribution cost is basically 0, unlike things like CDs. And unlike a movie or album, the value that can be extracted via software is much higher. There's tons of make-once sell-lots products, but you need factories and supply chains and all that crap, not just a cat6 connection. If you want to serve more customers, you need to buy more CDs. Streaming is better for c…

>They generated about $1B for the company by creating a portal to (essentially) sell access to the company's existing data. You are completely discounting the cost of creating and maintaining the underlying data. You can't just write that off as zero. It also doesn't matter if the data generates other sources of revenue, that's great but you still don't get to write the cost off against one revenue stream and not ano…

For average cost analysis across a portfolio, yes. For marginal cost analysis, the question is “what’s the difference in cost between n and n+1 units?”

Whether other streams succeed, fail, or don’t exist doesn’t change the cost to make the n+1 unit.

Re: Why is selling software so weird?

#70

Post by zeptonaut22 »

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'…

I actually had this as a planned footnote in the article, then cut it because I haven’t added support for footnotes yet lol
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