|By Hollis Tibbetts||
|October 13, 2011 10:30 AM EDT||
One of the things that struck me at RedMonk's Analyst Conference was how much innovation was being driven by very small groups of software developers - and how those innovations are enabling even more innovation by lowering the technical and financial barriers to the creation of new software.
This is one of two articles about the RedMonk conference - "Innovation to Shake Up the Software Industry" gives additional insights into and examples of software innovation at the analyst conference I just attended.
Dr. Innovation from Harvard
There's some very exciting research out there by a Harvard professor I met with a few weeks ago named Dr. Karim Lakhani on the topic of how innovation happens with software development. He is possibly the world's foremost academic expert on how innovation happens. One of Dr. Innovation's key conclusions is that innovation is driven by a combination of diversity and parallel paths. By lowering the barrier to entry for the creation, we create both diversity and parallel paths. Innovation is the result.
Breaking the Traditional Software Mold
There were so many examples of people breaking the traditional software mold and creating some truly excellent software:
One of the guys I met at the conference - I'll call him "Reston Virginia Guy", told me how he and 2 other guys developed some amazing software in the course of only 3 days as part of a competition. If that's not interesting enough, he had never met the two other guys before. And the three of them were in 3 different parts of the country.
Another guy, "OCaml Guy" develops sophisticated software platforms for asynchronous communications in his spare time, when he's not developing more mundane web applications using things like PHP.
Zack Urlocker, formerly EVP of Products at open source rocketship MySQL, spoke about how they benefited by an innovative distributed development model - distributing hundreds of developers across 40 countries, with 95% of them working at home.
Greg Avola, a parallel (rather than serial) entrepreneur, building products like Untappd, "When Will I Be Mayor" and others with small teams of like-minded developers.
An Explosion of Junk
Zendesk COO Zack Urlocker and I discussed the implications of this - how the lowering of barriers inevitably means that there will be a lot of "junk" produced (products that nobody wants to buy or use).
Yes, undoubtedly there will be a blizzard of useless junk that will come out. But so what? Those products will fade away - the "market" will ensure that. What will be left is the increased number of good, great or even astonishing products. The "extreme outcomes" that Dr. Innovation talks about in his research.
Who Wins? Who Loses?
It's clear that the development community and the consumers will be the big winners.
I don't believe that there have to be any losers. But there will be.
The losers in this transformation (like in any evolutionary process) will be comprised of those who are not willing to adapt - too slow, too big, too stupid, too arrogant, too afraid, whatever.
The lowered financial barriers to entry, the increasing ability for developers to bootstrap their own new products has the potential to negatively impact angel investors and VC's.
External investors have gone from holding pretty much all the cards to holding slightly fewer of them. That trend will continue and those investors and VC's who refuse to embrace and enable this trend will lose out. I'm certainly not predicting the death of the Venture Capital industry. But it's no longer necessary to go begging in every situation for a few hundred thousand dollars in seed capital (and give up a huge percentage of the company in the process).
Big companies have the opportunity to be huge beneficiaries of this new wave of innovation - or huge losers. Some will be both.
Certainly, the deluge of new products that will come as a result of all of this will mean that big companies can do some serious shopping for cool new products and technologies. And given that some of these companies were bootstrapped and had no VC involvement, the transactions cheaper, faster and better for both sides. Nitobi (creator of PhoneGap, a product I mentioned earlier that enables mobile application development) - bootstrapped. No VC involvement. Just acquired by Adobe.
Additionally, the really smart large companies will start to selectively let go of their tightly controlled on-premises co-located development models - management structures and practices which have continued almost unchanged from the dawn of the industrial age (and which stamp out innovation, rather than encourage it). The forward-thinking ones will embrace the social/tech evolution and take advantage of it.
So Who Is King of Software?
On the front page of their website, RedMonk specifically states, "RedMonk is the first and only developer-focused industry analyst firm. We believe that developers are the most important constituency in technology, which is why we work on their behalf for technology companies large and small."
One might argue (as I have consistently done) that the customer (i.e., the target market) is the most important constituency; however, that's a bit like arguing "who has more influence, the husband or the wife." As that line goes in "My Big Fat Greek Wedding" "If the husband is the head, then the wife is the neck." I mean, being a head without a neck is not much fun. And being a neck with no head attached serves little purpose.
So when RedMonk says "developers are the most important constituency", it may rub "Pragmatic Product Managers and Product Marketers" the wrong way, but I don't believe that the two views are inconsistent with each other.
There is logic behind the statement that "developers are the new kingmakers". Because developers (increasingly in small or self-selected groups) are enabling all this innovation, they are driving "what is possible".
Developers in their ones and twos and dozens and hundreds are creating real value - the kind of value that in prior decades (for example the creation of Visual Basic that allowed a new class of people to develop on Windows) was created by big corporations or companies backed by big money. And those developments only impacted a very small number of people when compared to the impact that new software innovations have in today's world of nearly ubiquitous computing.
There's a symbiosis between the development community and consumers - to a much greater degree than there's ever been. And it's a good thing. Unless you're too slow, too big, too stupid, too arrogant or too afraid to take advantage of this techno-social evolution.
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