Frank is a very smart guy who works for a large utilities company. He knows more about the intricacies of enterprise software than any other human being that I know. He’s passionate about the stuff.
During a recent conversation at a friend’s party, he described an idea to build enterprise software that would solve the database woes of most large corporations. Although his description went over my head, he was convinced that if he had the right investors and enough capital, that he could build this software.
“How much will you need?” I asked.
“About $40 million to start,” he said.
“40 million?” I blurted. The amount sounded so…umm…old fashioned to me.
“Yeah,” he answered, matter-of-factly.
“Do you know other people who are as passionate about solving this problem as you are?” I asked.
He thought for a moment, nodded, and said, “Yes.”
“Then why not consider building this product as an open source project?”
Frank looked at me as if I had asked him to calculate the square root of fifty-three without a calculator.
I tried to explain. Rather than trying to find investors willing to fund $40 million into a startup company, he could start much smaller and thus less risky company whose job is to orchestrates the building of the software. By writing the spec, partitioning the design, prioritizing the modules, and ultimately showing how they’ll all come together into a single road map, his company would become the worldwide expert in the new software.
He wasn’t convinced. “But how will I make any money?”
“If your big solution is as valuable as you say it is,” I said, ”there will be plenty of money available.” I explained that companies needed to be convinced to use the software. Once convinced, the software must be installed. And, if the solution was as valuable Frank said, companies will still need the help of consulting services to integrate it with their existing platforms.
“The key to getting paid is the fact that you know the problem and the solution inside and out. That highly specialized knowledge creates opportunities to explore new business models.”
An odd moment of silence filled the air. Soon, we changed the subject to our families. And while we both explained what our kids were doing in September, I had the feeling that we were both thinking, yet not saying, the same thing.
“That guy is nuts.”