The software mindset shift
A recent Entrepreneur opinion piece warned corporates to “become a software company or die”. This sounds a bit dramatic, says Industrie & Co founder Con Zeritis, but adopting an engineering mindset is vital for any ventures looking to keep up with the current pace of change.
From Goldman Sachs to General Electric, household name companies are increasingly announcing their intentions to become a software company. A bold statement – and it’s more than just thinking of software as a first class citizen. Some of the companies we work with at Industrie & Co still offshore their software development. They don’t see software as part of who they are. But the companies we work with who’ve made the shift – while they work in partnership with us to understand how to successfully transition into this new mindset – are focused on how to make building software the core of their business.
The biggest ramification in the daily life of the company is the operational shift from projects and project management to product development. Gone are the days of scoping, building (hopefully) on time and budget and then jumping to the next thing as quickly as possible. The big realization this new generation of corporates are having is that how they build things is as important as what they’re building.
Never stop building
Software companies never finish building; it’s a constant process. Some companies might not think of themselves as a software company and stick to the project model, putting together temporary teams who are still working on the project ten years later after the launch date has been pushed back yet again.
Corporates who want to become software companies have to flip their mindset from this idea that there’s an end date to a project. Instead they need to focus on getting consistent teams: a product engineer, a product owner, developers. The whole mindset and budgeting process has to change so that they can embrace software development as a forever task rather than just as a six-month goal. They’re not running projects anymore – it’s just business as usual.
Marketing, sales and… software
Imagine if a marketing team were to say “We don’t do marketing, we’re just going to do a quick marketing project”. They’d soon realise that marketing is a core part of the business. In the same way as marketing, sales and operations have long been understood to be core parts of the business, in the last ten years companies have grown to realise that building software is another one of those core operational activities.
In short, being a software company recognizes that software development is actually operations.
Gearing up for exponential growth
Once you’ve started to think like a software company, you can start to think about scale. This is more than using Amazon Azure or other cloud technologies. This is about recognising that the way to build amazing companies is to have exponential organizations that can scale beyond their limited means. When you see companies of ten people scaling worldwide, it’s not just because they’re using cloud platforms but because everything they’re building can scale really quickly.
This exponential mindset has reached other parts of operations. Even marketing is now designed to scale, whether it’s viral marketing or the way digital onboarding experiences are planned. The next generation of company is thinking about how to build things with an exponential capability.
Amazon are a fantastic example of how companies of the future should think: at their heart they’re a retail store, but they’re a software company first. Whether you’re a retailer or a bank there are things you can learn from that approach.
Once you make the shift to software development as an ongoing part of what you do without clearly defined end goals, you’re on the way to adopting the broader venturing mindset. This notion of venturing into foreign territory and forever exploring is a huge part of thinking and acting like a great startup would today.
Twenty years ago Bezos wrote an opening letter to shareholders which talked about the strategy of the company. It said, “This is Day One of the internet”. Today his office building is called Day One and he’s created Day One as a cultural path. It reminds everyone who works at the company that the world – culture, customers, technology – is forever changing, so don’t get comfortable. It’s about keeping a beginner’s mindset.
When we started working with large companies, they weren’t interested in learning about the technical or engineering details of what we did. Today we’re helping them see that if they want to lead in the future, they need to take more of an interest and build up their own capabilities. They need to understand software, or die.