Make Really Good Software

I asked, "What's your competitive advantage?"

"We just make really good software, mate," replied the CEO.

At the time of our conversation in 2007, this seemed like an unsophisticated strategy to me. After all, what if others copied their software? What was their defensibility?

I had cold-called Eddie Machaalani, a software CEO based in Sydney. He was a co-founder of Interspire, a bootstrapped agency that had developed an ecommerce software product called BigCommerce. This was a few years before they moved to Austin, launched a SaaS product, and raised venture capital.

Eddie's words made an impression on me. When I spoke to him, I could tell he was exceptionally bright. His company was young, but growing rapidly. Maybe I was missing something in how I understood software startups?

Over the next few years, as I delved deeper into the software industry, it began to dawn on me that he was exactly right. Of course, it wasn't obvious to me that they would end up as an ecommerce SaaS leader with over $200 million in revenue - but maybe it should have been.

With the benefit of hindsight, I can see that their dedication to making really good software was brilliant early-stage strategy. That’s not to imply that making really good software is easy - it’s incredibly hard! But when it happens, it creates a powerful, highly scalable growth engine.

I know many people in the startup ecosystem like to talk about various business models, moats, and defensibility. For early stage software startups, I think strategy is actually simpler than many realize. Just make really good software, mate.