Lots of people are job-hunting these days. In conversations with friends about the companies they’re talking with, there’s a useful distinction to reflect on: Is the company default alive, or default dead? In other words, if everyone stopped writing new features, would the company immediately implode, or just sort of drift along?
A default dead enterprise software company is unable to survive without making new sales. Every quarter is a battle to find the right features to build, get them built as quickly as possible, and get them into customer hands. Who wants what we have? How do we let them know that we have it? Everything is uncertain in a default dead company, and your fortunes are dependent on resolving that uncertainty. You might need to pivot to new products, new customers, new go-to-market motions. There’s probably uncomfortable compromises to make, and lots of them. The mission is to create value, and the problem is to efficiently trade that value for dollars.
A default alive enterprise software company can subsist on its renewals. All its leadership has to do is avoid breaking the cash cow. Its product is not Done, because software never is, but it has pivoted from value creation to value extraction. How does a company get to this state? It’s not as simple as moving a lot of licenses: after all, a lot of CueCats got moved too. The key to default alive is that the software is embedded into customer process. If the customer needs your product to do their daily operational tasks, then your renewal is pretty safe. You might spend a bunch of resources rearchitecting or innovating or disrupting… but if you don’t, that’s okay too. Salesforce.com is default alive. Cisco is default alive. Okta is default alive.
A default dead company can have great clarity of mission, and its future paths are fairly constricted: death, a lifestyle business (more on this later), or capitalization and some form of exit (acquisition or going public). A default alive company on the other hand can face challenges in deciding its future. Growth of its core product might be predictable, or stagnant, but it’s certainly not exciting. Developing new products is exciting, but… it’s really hard for a default alive company to take on the risk of being default dead in one of its business units. These moonshots rarely work. In order to find exciting levels of growth, these companies often look to merger and acquisitions instead. While those rarely end well for the employees, they can certainly do the job of growing revenue. Buying another default alive company and cutting its expenses is the path to becoming a private equity firm instead of an enterprise software company, and that path is well trodden.
What’s better for you as a job-seeker, chaos or control? Only you can answer which type of environment you will thrive in.
Links:
Monkeynoodle.Org 