Wednesday, January 26, 2011

Business & Technology; Yin & Yang?

This conversation (errr spirited debate) has come up too many times in my world over the past week to not blog about it. It's the age-old discussion around what is the most critical component when building a software product/company; the "business" end of things, or the "technology" side of things.

Let me start by saying I've always hated this separation in companies. The "business guys" and the "engineers"... even in language the separation puts me on edge. I fought using the separation, mental and in conversation, for over a decade. I recently conceded however (just might have had something to do with me porting from CTO to CEO at our company Gnip) and now believe they are two camps. A company or product's success comes from getting them to work as one. Sometimes that's natural and easy, and other times it's brutal and tears the product/company apart.

However, a "technology" or "software" company, as the label implies, is nothing without engineering. I'll repeat that... _nothing_. If you're trying to build a software product/company sans engineering ballast, you are listless, and your boat will eventually crash on that hidden reef just under the surface. How you obtain that resource is another ball of wax. Outsourcing, crowdsourcing, dedicated staff, high-quality, low-quality; I have my bias, but there are lots of ways to get it done.

It goes without saying that incredible engineers and engineering efforts can just as easily crash and burn without the right injection of a business model or marketing plan.

I was doing some due diligence for a friend at a Valley VC firm recently. He is considering an investment in a highly technical product/team that I'm friends with. He highlighted that the team was heavily weighted on the technical side of things (both founders are amazing engineers with proven backgrounds), but not as shiny on the sales side of the house where he saw a need. I, jokingly at the time, but now the topic of this post, pointed out that the hardest part had been solved; the technology. If you have the recipe for the software, and the software tastes good, sufficient business-side brain power can always be found.

Why Is That True?
Engineering is hard and takes a resource that is in relatively short supply. Engineering brains are different from other human brains. If you see a good piece of software, and good people that built it with their hands, you are a fool not to join the party. If you see an awesome business model that lacks a recipe for cooking and baking it, who cares (unless you're the engineering talent to provide that recipe)? I always use the teleporter example to make this point. I have the most incredible business model you have ever heard. It is one that will make more money than any business in civilization's history. The product will change the world. Here it is; let's charge people for a teleportation service that allows them to move between any two points on Earth (we can expand to other planets later) in a split-second. Everyone will buy it; bottom line. Unfortunately, there's a complete lack of engineering support for this product.

I'm not suggesting that any engineer or technical team will be successful. Untold hours are spent writing useless software because engineering is lost wandering around without a map. Untold hours are also wasted because there are plenty of bad engineers in the world. I've lost many months of my life working on software that was cool and fun to write, but flopped because of bad "business." I've also written plenty of bad software.

The game is about getting the right blend together. Whether it's a team comprised exclusively of engineers winging the business, or it's a crew of business guys winging the engineering (Nate/Natty of Everlater are a great local example of this being successful), or a balanced team of both, it doesn't matter.

You do need code that solves a good challenge at the end of the day though. If that code can't find a good business model and associated execution, it may eventually be cast into the open source abyss and hopefully move human-kind forward, even though it's economic potential might not ever be directly realized.