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Your observations, premise and conclusions sound about right, except that I didn't realize that the software market was really quite that bad yet (even as cynical as I tend to be.)

I have a general thought about the software industry's path over the last 15 years, and I have mentioned this before here in specific contexts.

The software industry (and by extension, we) are victims of its own wild success. If success in the IT industry had remained moderate and not exponential, I suspect that the entire industry would be a lot smaller and more human scaled today, and we professionals would enjoy it much more.

Here's the scenario in general. Because senior talent was relatively expensive at one point in the mid 90s, the IT industry whole heartedly embraced global business practices like offshoring, semi-enslaved guest workers, and outsourcing, in an attempt to restore balance to the equation of labor-management power. That, plus a plethora of career-destroying tactics like making certification the end-all of "professional" accomplishment. In other words, anything to marginalize senior talent and to posture that actual experience really doesn't matter and should not count in hiring or salary administration.

Giving away software is just another of many ways that big companies exert their power, by driving the best directly competing minds out of the business. Companies like Google are seeing to it that they are the only employers of any reasonable programming talent at a scale larger than the mISV stage.

This may read paranoid but I whole heartedly believe that this is what is going on: the SW industry is a victim of its success; everything that drove success in the early years has resulted in massive backlash and predation.

Peter Codewrite:

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P.S. I am sure this idea that writing software is not a big deal is spreading to the contracting market.
"I can get this complex open source software for free - I should I pay you big bucks to just customize it?"

My response when this kind of premise has been stated to me is something like: "write it yourself, f*ckhead." I think I did essentially say that to the last 1 or 2 places that contacted me from my online resume...

PS: About that founder - Joel Spolsky is a douchebag who has fed this dynamic of distracting feeble minded geeks with ego tripping at the expense of their long term career prospects, and so I don't respect him. Can I be any clearer?

What David Randolph described with the Craigslist based web designer and what you're describing is marketing an inexpensive service to people who can't justify paying much.

The "better" way (like I really know, ha ha) is to figure out how to make prospects think that using your services is going to profit them. Make it not about the up front cost. Make it about the opportunities that arise if only they use you versus the cheap competition.

There is no other way to make decent coin today. The only two things that fuel any B2B transaction are: 1) pure necessity - IE, like paying the electric bill; or, 2) the idea that it is an expense that pays back somehow.

The cheapo web designers are in the first camp. They are catering to clients who think they need a web site and who don't even think about the upside. You're better off marketing to the ones who are looking for a bona fide advantage, not just meeting a goalpost or a bare minimum expectation for their business.

IE: many web sites are very small and rarely used and updated. They exist because the business owner believes that he "should" have a web site as an abstract concept, just like "everyone needs business cards", but has little real interest in how users perceive it. I think that kind of "well, I *have* to have a web site" attitude is what fuels the business at this level.

Craigslist plus all of the online auction sites are crap. They're all "business ghettos". I believe that most business that gets transacted in such venues are purely optional, ego/vanity projects. The owners are not committed, they choose to spend little, and they can wait as long as it takes to get a poverty stricken type to come along and do their work.

You're just focusing on locating the clients with money to spend. You're not saying anything about what you are offering and what it may mean to (unnamed, unknown, unspecified) clients.

I'm saying that first you need to offer something that you have calculated (somehow) will make some business money, or will save some business money.

That "some businesses" is your target market. So you need to figure out what a certain segment of the whole IT market really needs right now.

Then you need to present it to businesses that resemble that target group. You need to start bugging members of that targeted market.

The narrower, probably, the better.

So "where are these clients"? Well, you need to hypothesize a group of prospects, and what they may value. That's where they may be.

As far as no money being around - F*ck that sh*t, I got told that constantly in the local area, the whole f*cking poverty mantra of the mediocre bottom feeder business.

I was reading a (sad) article in the NY Times today about a basketball coach in an impoverished southern Indiana town trying to develop his team into something worthwhile. The point is, the loser parents of these kids can afford cigarettes, beer and cable TV but wouldn't begrudge their own son the money for a pair of shoes for basketball practice.

I see LOTS of small businesses as essentially the business equivalent of those selfish loser redneck southern Indian parents.

That's why you target!!!! To hone in on paying customers, not the retarded, worthless, bottom feeding deadbeat a-hole majority of small biz owners out there.

I'm not saying it's easy. Business is tougher today. You need to figure out unmet needs. Not just hawk "programming services to make your business better."

Got it?

Richardk:

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You stuck a step in before mine - namely target a market need or niche with paying customers and THEN zoom in on them.

Yeah, that's right. Exactly. That is what has to happen. If it does not happen first, then you are just floundering with a bunch of skills that no particular business cares about.

I am saying this, precisely: it's a big world out there. Therefore you really need to know who to "zoom in on."

And I'm not advising anyone to bury themselves in an all new, unproven venture and spend thousands doing so.

I'm saying: you have a bunch of technical skills and business knowledge you've picked up over the years. Just spend some time trying to figure out an angle given what you know how to do that could, say, help a business struggling with X in today's hyper competitive biz environment.

Basically I'm saying, redeploy a bit of what you current know, to a tightly focused need and target group that you have "invented" by observation and by hypothesis.

You missed revenue enhancement. But that's basically the idea. Either one. You are valuable to B2B customers if you can help them keep more money, or earn more money.

Where I am lacking in sales ability is conveying the type of message that you describe - divorcing my technical acumen from my wisdom, experience in practical matters, etc that complement the technical chops.

I do think it still impresses certain valuable customers (like, the smartest ones!) for them to know that you reason and solve practical problems just as well as you implement technical stuff.

John Masterson wrote:

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I thought I covered it.

Get more or keep more. Either way. That's the only driver.

Right, I do see where you say "keep more".

I was responding to your subject title "you sell cost savings". It just seemed like your comment emphasized "saving" over "earning".

My thought is that the specific aspect that you emphasize (cost savings or revenue increase) really should depend on your prospect's psychology.

Some very conservative people value savings more than upside and may get nervous about the perceived risk of more upside. The more hard charging type will probably want to hear about how you're going to make them more money and that type will probably regard "cost savings" as boring.

In each case, the mechanism for the actual benefit will be exactly the same - net increase in earnings.