The Web App Economy

Killiney at Dusk

They say that when everyone is panning for gold that you should sell pans.

It’s a clever statement and fits well with the spirit of an entrepreneur. I’ve heard it used time and again in the web industry as an argument for building software designed for other software developers. Over the last few years as I’ve become more experienced in the business of web apps I have formed a view on this which I’d like to share.

The argument for selling to other software developers

Positioning your business to sell to other software developers can be very attractive. There are a lot of reasons why you or I would see that as an easy market to target. Here’s a quick list of some of the benefits of designing software for other developers like myself:

  • we’re online all the time, so it’s easy to market and advertise to us;
  • there’s a strong community of developers, it’s easy to find us;
  • we value good software and are willing to pay for it if it makes our life easier in some way;
  • we understand the business model. We ‘get’ why you’re charging us;
  • we’re not scared to buy online, it’s second nature to us;
  • we also tend to be noisy. If we find something we like, we share it with other people;
  • and we’re not afraid to try new things.

All things considered, it’s pretty easy to see why more and more developers are choosing to build tools for other developers. Here are some great examples of software especially targetted to other web developers:

  1. Basecamp
  2. Freshbooks
  3. Campaign Monitor
  4. Postmark
  5. Intercom
  6. Stripe
  7. Twilio
  8. Wufoo
  9. Beanstalk
  10. Springloops

There are new ones popping up everyday. Just keep and eye on Read Write Web or Smashing Magazine and you’ll see what I mean.

It’s hard to argue against what companies like this are doing. There are some really really good reasons why an entrepreneur would go after web developers as a target market. But I’m going to give it a shot anyway, and tell you why I believe we, the web developers and entrepreneurs, should be looking beyond our own community to build a web business.

The argument against selling to other web developers

If all web developers only sold to other web developers then that micro economy would be a zero sum game.

Just for a moment, let’s use our imagination and try to think of the web community as a country, it’s population made up entirely of web developers and the trading that goes on between those web developers are that country’s local economy. Are you with me so far? Okay good. Now try to think of everyone else (i.e. the non-developer folk) as the populations that make up the other countries in the world.

Okay, now let’s try and think of this argument in terms of a local and an international economy. By trading amongst each other we are simply pushing money around between us. Web developers selling to other web developers.  We’re not helping to bring new money into the local economy.

Let’s keep the analogy going for a little longer and focus now on the international economy. Web developers that sell to to the non technical folk, the people that make up the other countries, are helping to bring in new money. They’re expanding into new markets and growing beyond their local community. They’re figuring out how to bring new wealth into the economy.

The web developers who simply sell to other web developers are really just passing on the responsibility to someone else to figure out how to bring in new money to the web app economy.

Selling outside of the web development community has a number of very real benefits:

  • it’s a huge market. Millions of different niches, billions of potential customers;
  • there’s less competition. When everyone’s selling to developers, you could be selling to everyone else;
  • there are tons real of problems that need solving;
  • opportunities for new business ideas are everywhere.
  • there’s less of a risk you’ll be providing a solution to a problem that doesn’t exist;

All that being said, there are some developers and companies who have decided to step outside the community and are selling into new industries. Here are some great examples of software targetted to people who are not web developers:

  1. Diary Monitor – built for Dentists & Doctors
  2. Decisions for Heroes – built for Search and Rescue Teams
  3. Salon Monster – built for Beauty Salons
  4. Snapizzi – built for Professional Photographers
  5. Fishpond – built for the Film Industry

Just in case you think I’m against writing apps for other developers, I’m not, I’m simply saying there are massive opportunities outside of our own community. In fact I believe that as an industry we’ve spent the last 10 years honing our skills, learning how to build great software and laying the groundwork for us to go out beyond our comfort zones and to start solving bigger problems. With the foundations laid, and our understanding of web apps and online software a little more mature, I think we should start to look beyond our backyard, to start ‘trading internationally’ and start solving problems for other industries, and not just our own.

Photo credit: Killiney Bay at dusk. November 6th 16:20. Taken with an iPhone 4.


4 Comments added. Add comment?

  1. Michael FitzGerald says:

    Good post Iarfhlaith, it’s something in my mind all the time… not so much the “for developers” market, but for a market that ticks the same boxes – comfortable online, buy online etc.
    I think is an example of something that might cross ‘both’? It’s really suitable to s/w dev / agile, but if you watch Joel’s presentation you’ll see he’s aiming at the general market. Sweet if he can pull it off, because he’ll get (us dev) early adopters to get momentum and help him hone the product. Similarly for us for it’s the web dev companies using it give the most feedback on issues/ideas.

    Nov 8, 2011
  2. Andy Black says:

    Loved that analogy Iarfhlaith.

    The market outside of web developers must be absolutely massive compared to just targeting web developers.

    Nov 13, 2011
  3. Iarfhlaith says:

    Mic, Andy, apologies – something was up with my blog notifications and I only just spotted these comments.

    Thanks Mic, I’m learning the hard way that being comfortable buying online is a must-have for any market you create software for. Changing people’s habits in this way can take years, and I can’t afford to wait that long.

    I’ll definitely check out Joel’s talk.

    Nov 19, 2011
  4. Iarfhlaith says:

    Thanks Andy, it certainly is a huge market. But like Mic points out, whatever the market, they’ve got to be comfortable buying online. It won’t matter if it helps them or not. If they won’t buy online you’re dead in the water.

    Nov 19, 2011

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