Your Code Is Not Your Business

When I first started my company as a non-technical founder I would often hear the phrase “your code is not your business”.

At first I used to nod along.  It seemed obvious to me that customers don’t pay just for your app, they pay for customer support, for expertise in the field, to solve a problem, to increase revenue / decrease inefficiencies etc.

What I didn’t anticipate however, was just how little the actual software itself matters in the context of building a business for the market.

I believe that this is the reason why a lot of software engineers fail at creating a successful business and it’s also the reason why a lot of non-technical people don’t attempt to start a company which involves software as a product.

large_business_model_canvas

Business Models!

The image above should be closely studied by anyone thinking of starting a business.  It is a “business model canvas” which was popularised by Alexander Osterwalder.

What’s really cool about this canvas is how it makes you dissect your business and think about different components in a logical way.  Founders often drive themselves crazy with an ongoing monologue in their mind.  What they often fail to realise is how these questions are all important aspects of their business, but totally different components.

For example they may ask themselves “what’s the cost structure going to be?”, closely followed by “how will I systematically find these paying customers?”, followed by “what happens if I get 100 hundred customers….how will I source my raw materials?”.  And on and on it goes.

The fact is that these are all inter-related and different aspects of the business model.

This business model canvas goes a long way to explain why “your code is not your business” is so true, even though it may seem counter-intuitive at first.  It’s clear that what your app actually does, is only about 10-20% of the canvas and that if you don’t have the other pieces in place then your business will fail.

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