Stuart Eccles, Made by Many
The Rise of Opinionated Software – And What It Means for Agencies
For years, tech entrepreneurs have been able to solve large-scale problems for entire markets at a very broad level. Their ability to do so is enabled by the unit economics* of software. Conversely, business consultants and agencies, inhibited by the labor costs and discernment required to develop and execute customized – yet scalable - strategies, have oftentimes resigned themselves to narrowly solve problems for clients facing distinct challenges at precise moments in time. Never the two shall meet. Until now.
I’m convinced that the next big turn of the wheel for enterprise software belongs to consultants and other experts looking to deliver their vision at scale. The foundation is in place for them to deliver that vision within a more narrowly defined problem area than has typically been the case in the enterprise segment which usually focuses on broad service offerings.
These days, the most promising opportunity in the consulting realm is turning new ideas into repeatable, scalable, ‘value-adding’ SaaS (Software as a Service) solutions to sell to clients. The value upside is far greater than consulting models alone and it can solve issues such as lumpy cash flow by producing monthly, recurring revenue streams.
This new opportunity exists because service businesses are now more readily able to couple their deep understanding of their clients’ problems with new creative ways of solving those problems. The goal (and promise) in this new era is to produce better ways of doing things, not just more efficient ways of doing things. Such a vision requires the deployment of Opinionated Products.
An Opinionated Product is a software product that has been developed based on the belief that a certain way of approaching a business process is inherently better than the alternatives. Products always start out with a plan and a purpose, yet it is fairly common to see them morph and deviate from their intended path over time. And that’s fine to a certain degree as long as the new end-product is a byproduct of your opinion, your vision and your strategic assessment of the product’s usage. Non-opinionated products are jam-packed with settings and configurations developed to provide ultimate flexibility to users. The problem with this approach is that no product can do all things equally well when it has an inordinate number of configuration settings.
Enterprise SaaS is to some degree opinionated, in that the very act of prioritizing which features are included in the product requires the creators to assert what they think is important. But as these products and the market mature, they become less opinionated. They do so because more features are added to provide feature parity with competitors and more customization options are offered in response to customers with particular needs. This then creates a more generic product able to broadly handle many types of workflows (good and bad), a product that is off-vision, and one that has eschewed best practices by offering an excessively large feature set..
These products then run the risk of being disrupted by new entrants that are not only leaner , but also more ‘opinionated.’ In fact, some products are now using opinion as a competitive advantage (not just in their content marketing, but baked into the software code itself). The mantra that you can’t be all things to all customers is clearly starting to resonate in the enterprise software market.
An opinionatedproduct can be a strong complement to a consulting practice. We know, for example, that professional services make up 20% of the revenue associated with most enterprise SaaS products. Building a truly opinionated product, however, requires a more narrow category focus and a tighter definition of the problems the solution will address. .
There’s a reason that Marc Andreessen’s adage “software is eating the world” has become one of the most quoted observations in the startup community in recent years. Any consultancy or agency out there right now would be foolish to side-step the question:
“How do we make the software version of what we do?”
- Unit economics = the direct revenues and costs associated with a particular business model expressed on a per unit basis. To study the unit economics of each customer, ask yourself… “Can I make more profit from customers than it costs me to acquire them?” If the answer is yes (as it has been for many enterprise software companies), you have a business.
About the author:
Stuart is the Co-Founder and CTO of Made by Many, a digital product innovation company. He has a Master’s degree in Engineering and 16 years of experience creating large-scale software based products. He is an advocate and frequent speaker on the use of agile project methodologies and lean manufacturing philosophies applied to the strategy, design and development of digital products.