Friday, September 30, 2011

A Celebration of the Fastest Growing Companies in CT

This week the Connecticut Technology Council held one of my favorite events – the Marcum Tech Top 40 – celebrating the 40 fastest growing technology companies in Connecticut. It’s so much fun spending an evening meeting such successful people and reconnecting with old friends. We have been lucky to have the opportunity to work with many of the people in the room.

The diversity of the companies is amazing: from online travel service, to oil-drilling equipment manufacturer APS Technology, Inc, to vaccine maker Protein Sciences Corporation, to IT Services provider OpenSky, the overall winner with 18,221% growth!

One thing I can’t help but ask myself is: what makes some companies so successful while others struggle? Listening to the speeches of each category’s winner, there was one common answer – the team. I’ve always believed that a small, talented, focused team can accomplish amazing things, and these CEOs were saying the same thing.

Congratulations to this year’s Tech Top 40, and to all those who aspire to join them – my best advice – surround yourself with the best and brightest you can find.

Friday, September 9, 2011

Build or Buy? How to know if you need custom software

I met a woman yesterday who asked me if we could build some software for her business. I told her yes, we could, but it probably wouldn’t make sense. Let me explain.

Building custom software is an investment, and that investment usually doesn’t make sense unless you’re going to sell multiple copies of the software, or it’s going to give you a significant competitive advantage in your business. And I do mean significant.

For example, I spoke with a company not too long ago that was thinking about developing some software to help them with an internal business process. They had done their research, and there were packages on the market, but they didn’t exactly meet their needs. I spent enough time with them to give them a ball park quote, and it turns out the custom solution was seven times more expensive than the off-the-shelf solution. Frankly, this isn’t even a lot. Think about it – if the vender of the generic solution spent the same amount of money developing their solution, they would only need to sell seven copies to break even. I realize it’s more complicated than this, there’s distribution, support, marketing, overhead, etc. but what if they sold 70 copies? You can see how this kind of investment could pay off. And if they sold 700 – wow!

So this company decided to buy the off-the-shelf product that met most of their needs. In my opinion, that was the right decision. It only makes sense to build custom software for internal use when you can get a significant competitive advantage. Before you think about investing in custom software, look at what’s already on the market to meet your needs. It may not meet all of your needs, or meet them perfectly, but ask yourself how much would it be worth to have that perfect solution? Would I be willing to pay ten times the cost of this package? More? Often the answer will be no, and in that case, just find the product that meets your needs the best or allows you some ability to customize.

Friday, September 2, 2011

Want to develop a new product? Where do you start?

I’ve been working with a lot of companies lately that have never developed a new product from scratch. They all seem to have the same question – “Where do I start?”

The answer is always the same – with requirements, and by requirements I don’t mean a bullet list of features, although that’s a start. By requirements, I mean detailed requirements of what you want the product to do and how it should behave in every situation. Error conditions are one thing that’s typically forgotten. Requirements are also not necessarily functional, for example, the maximum (or target) manufacturing cost is a common, and commonly overlooked, requirement for an embedded system. They say the “devil’s in the details.” In this case, that’s true.

The first question clients have (well, maybe it’s not the first, but it’s the big one everyone wants to know) is “how much will this cost?” Without the kind of detailed requirements I’m talking about, it’s impossible to give any kind of meaningful estimate. That’s why we’ve had such great success creating an initial engagement that delivers requirements and a rough estimate of time and cost. This initial engagement typically lasts between a week and a month, depending on the scope and complexity of the project and gives the client accurate information that they can use to make decisions. We usually find areas of trade-off, like features that could be in a future release, and can balance the client’s time to market and budget needs.

So remember, next time you have a new product you’re developing. Details, details, details!