What’s for lunch? Software is still hungry

Last week Tesla released a software update that added an autopilot mode to its cars. Earlier this year they made their cars faster – again, through a software update. GoPro doubled the frame rate of its cameras and added new picture modes. Good times, and also a good illustration of the differences between hardware- and software-driven businesses.

If you work in an office, you probably have a phone on your desk. The functions may vary, but it’s essentially a piece of plastic, with 15+ buttons and a display. Each button has a function and the functionality of the phone hasn’t changed significantly since you first installed it. That’s pretty much a hardware-driven business: The product has been carefully designed, produced, shipped … and that’s it. Ship and forget. There are certain implications of this kind of business:

  • You need diligence in designing and manufacturing your product. Once you ship, there is no turning back. Mistakes are expensive, which is the reason Six Sigma is so popular in manufacturing industries.
  • The manufacturing process is fairly complex and involves either significant capital investment in plants or complex supplier relationships and coordination processes.
  • There is little chance that the functionality changes over time. If it does, consider it a bonus and the rare exception.

Now let’s compare that with the smartphone in your pocket, which is very different. First of all, the array of services it provides is much broader. It is an alarm clock in the morning, newspaper during commute, word processor in meetings, TV on the couch. Yes, there is pretty much an app for everything.

BestReview produced a video that illustrates how much gets replaced by software. The only thing missing is the move of the computer into the mobile.

Second, your phone changes constantly with automatic updates of apps. You wake up in the morning and realise that your note-taking app suddenly can scan business cards and automatically import those contact details into your address book. Or your sound system at home suddenly gives you access to a wider range of music. Only software can do that.

Most people think of applications like MS Office or Photoshop when they hear software. But software goes much further. It fundamentally changes the way business is done. There are several characteristics of software-driven businesses that are important to remember:

  • The barriers to entry are different. Capital is no longer a major barrier. If you know how to code, have a computer and a credit card, it is very easy and inexpensive to rent infrastructure from Amazon, Microsoft or Google to get going. The barrier to entry shifts towards talent.
  • As the competitive advantage of having access to capital diminishes, most incumbents struggle to compete with smaller software companies: (a) there’s just too many small companies and you don’t know who you’re competing with until it’s too late and (b) long-term access to engaged talent is not a problem to be solved by throwing money at it.
  • A shipping date becomes an interim milestone, not the end of a project. Once you ship (put your app on the app store) you continue improving and adding functionality. This gives you permission to experiment. If things don’t work out, you can change it. Speed gains importance, reaching six sigma loses relevance.
  • This accelerates what Clayton Christensen calls disruptive innovation: releasing a good-enough product that targets an un-served customer segment (which typically cannot afford the traditional products) and improve it until you capture not only the new market segment, but also traditional customer segments. You start small, continuously improve and in the process extend the market and take over the traditional market en passant.

A good example of a software-driven business (and probably the one that most people refer to) is Uber. However, the magic of Uber is less in its app. That is “just” the user experience – and make no mistake, it’s an excellent one. The magic is in a business model that is enabled by software. They figured out a way to create a transportation business without having to invest in vehicles. This allows them to be much more flexible and quicker to adapt than a traditional capital-based business. Again: Only software can do that.

Long story short: Marc Andreessen wrote in 2011 Software is Eating the World. It is still a must-read. Companies like Tesla and GoPro, that are on the surface hardware companies, succeeded in creating platforms that allow them to run their businesses as software-driven ones. The question is now: How many incumbents will manage to successfully shift their business from a hardware- to a software-driven one? Are you hungry or are you lunch?

Photo credit: Mário Tomé / Foter / CC BY-NC-SA

Advice to new graduates

Amongst other things, I’m a manager of new starters in my job. A few weeks ago I was asked to speak to the upcoming class of new starters in our organisation and share some of my learnings with them. Below is a write up of the talk, which I thought might be helpful. It isn’t meant to be advice, but rather it’s an opportunity to share a few things, that I remind myself of from time to time and which I believe might help a new starter:

1. Build your network

One advantage of working for a larger organisation is that you have access to a lot of great people. However, a pitfall of networking is viewing it as a transactional activity for the sake of increasing your influence. Don’t do that. Rather view it as an opportunity to learn. Here are three tested strategies to build your network as a graduate:

  • One of our core values is “better together”. As a graduate you have basically a license to tap into other peoples’ minds. So find interesting people and approach them. My last graduate was bold enough to chat up our CEO on the intranet … and got a response. Not that I recommend doing that to everybody, but it shows that people are open to engage with one another.
  • Learn from your fellow graduates. Exchange ideas and experiences so that you can help each other avoid mistakes. All of you are going to join the company at the same time, which typically creates a great bond. This gives you a great network and support group from the start. Use that.
  • Look for networking opportunities in seemingly mundane tasks. As an example, I’m working in a small team of 30 people. Every once in a while we need to update the team chart. I typically ask one of the graduates to do that. I could do it myself with a simple mass email. However, it’s a great opportunity to interact with the rest of the team and become visible. Volunteer for those tasks that give you exposure … even if it is something as mundane as updating contact information and profile pictures.

Bonus tip: if you have the opportunity, meet people in person. The experience is typically much richer, you can associate a face to the person and it is not uncommon that the senior person takes up the check for coffee. Free coffee, what’s not to like.

2. Get organised

You will be thrown lots of curveballs and your job will get hectic at times. The last thing you want to worry about in those moments are questions like “What was that task I was supposed to do by end of the week?” or “What did we agree over coffee last week?” If that wasn’t enough, your brain will frequently remind you of those questions, typically at 4am, when you can do very little about it.

Getting organised and learning some basic self-management will help reduce your stress levels significantly. Here are three tips that will help you get better sleep at night:

  1. Write things down. Invest in a nice notebook, a pen and start taking notes in meetings. It will have multiple benefits, e.g. you are more engaged, you remember facts better and you have notes in case you forgot something – very important to calm down your mind at 4am. Don’t take notes on the computer. Trust me on this one: Science is pretty unanimous, that recall rates for hand written notes are far superior to typed ones. I always carry a notebook with me. If I have an idea, I write it down. If somebody says something smart, I write it down. This ensures that I don’t lose those nuggets. Once a day I review those notes and highlight the keepers or transfer tasks into my task manager. Which brings us to:
  2. Maintain a list of all your tasks. This can be a page in your new notebook, an app on your phone or a file on your computer. The only thing that matters is that you have a complete inventory of things that you need to be doing for two reasons:
    1. Your brain is good for having ideas, it is not very good for holding them. So get them out of your head onto paper. That alone releases stress.
    2. You can only feel good about the things that you’re doing, when you know what you are not doing. Having that inventory of all tasks will help you be very intentional about both, what to do and what not to do.
  3. Ask somebody who is good at this to share tips with you. Alternatively, read a book on personal organisation – and keep it to one book, because it is easy to read about productivity without actually doing the work. Two books I can recommend are “Getting Things Done” by David Allen or “Seven Habits of Highly Effective People” by Steven Covey – pick one.
    Getting organised will help you maintain a cool head in hectic times and make sound decisions. And most importantly, it will make you sleep well at 4am.

3. Aim to be good

Every single one of my graduates has asked me at some point: How do I become an exceptional graduate? While I appreciate the aspiration, the answer is not as straight forward. Especially when you work in a team, where everybody is motivated to bring their very best to work. Over time I have come to the following conclusions:

  1. Get the basics right – 100% of the time. It is not the fancy stuff that will set you apart, but consistently getting the basics right, e.g. being on time, being polite and treating others with respect even under stress, writing emails without typos, being open and honest when you made a mistake (and you will make mistakes, that’s part of the learning process). Exceptional graduates get that right 100% of the time. And if you don’t get the basics right, everything else won’t matter.
  2. Don’t compare yourself to others. The easiest way to misery is to compare yourself to what other graduates are doing. The temptation is there, because you all seem to start from the same point. But every one of you has different strengths and weaknesses. Be aware of those and use them to your advantage. Everybody runs their own race and constantly trying to run other peoples’ races isn’t much fun and won’t set you up for success.

4. Be kind to yourself

Work can be tough at times and you will without doubt run into a rough patch at work. This is going to be a time of growth for you after being a top student. Everybody here was a top student – that’s one of the reasons why you got the job. You will get criticised a lot and you will improve tremendously over the next 18 months … and honestly, for the rest of your career. It is hard work and can feel overwhelming at times. The good news: we’ve all been there at some point and you come through and will learn something, but it will be tough while it lasts.

That’s why it is important to have something to get your mind off of work like sports, meditation, cooking or dancing. Your best ideas will come when you’re not at your desk, but hiking in the mountains, surfing, showering or just being bored.

Do that regularly, because it is important to maintain a healthy perspective. Most days you won’t save lives. And to do great work, you need to be able to disengage from work from time to time. It is important to take care of yourself and your well-being. It is an investment in yourself that will pay off with long-term dividends.


The graduate program is designed to give you a wide range of experiences. Every six months you can chose a new challenge and try out something completely different. Use this opportunity and try out things that you have no idea about. And if the conclusion after a rotation was that you don’t like that specific area. That’s OK, because you didn’t know that before.

Get out of your comfort zone, experiment with areas that you don’t know anything about and make mistakes and learn from them. You are just starting out and this is the time to figure out what you’re made of. You might be surprised what you’re capable of doing.

In the end, all that is written here is nice to know and bleak theory. It will only prepare you so much for what is waiting for you. To really learn, you have to be there, make the mistakes and get your bruises (and I can promise you, every one of them will hurt). But then you get up, try again and succeed.

Photo credit: JohnE777 / Foter / CC BY