Starting a High Tech Business: Plugging the Fat Pigeon


Plugging the Fat Pigeon

I'm starting a new business called Kynetx. As I go through some of the things I do, I'm planning to blog them. The whole series will be here. This is the twenty-fourth installment. You may find my efforts instructive. Or you may know a better way---if so, please let me know!

Some companies are "high-tech" companies. That is, their business model requires building custom technology that differentiates them from their competitors. Others don't differentiate through technology per se, but how they use it. In other words, their business model isn't very dependent upon building intellectual property in the form of software.

As many of you know, Kynetx is a Platform as a Service (PaaS) play. We essentially have a giant, programmable event loop in the cloud. Our business model is to get other folks to use our platform and pay us for the privilege. Anyone who's been is the PaaS business will tell you that occasionally customers decide that they'd like to do it on their own whether for cost, flexibility, or whatever. When one of our customers does that we call it "plugging the fat pigeon." (Yeah, there's a story behind that--ask me sometime.)

The intersection of these two ideas is interesting. We've had one company, whose business model didn't seem overly dependent on high-tech, plug the fat pigeon and hire a developer to essentially recreate small pieces of our platform. That made their business entirely dependent on this small, poorly documented codebase. Of course, you know the rest of the story: the developer quit and now their wondering how to proceed.

I believe that any company whose business model is based on "high-tech" ought to have a founder CTO. There's no way around it. That doesn't mean they ought to write their own code. In fact, I think there are lots of high-tech businesses that can be built on IaaS, PaaS, and even SaaS cloud platforms. I know of many.

But the opposite it also (almost always) true. If you're not a high-tech startup, you have no business (literally) hiring developers to recreate things you can buy somewhere else. You're just asking for trouble. Unless you're big and stable enough to have an IT department, you won't be able to create a codebase that creates lasting value. In most cases you'll end up just like the pigeon plugger I mentioned above: sitting on a business dependent on something you don't understand and can't properly leverage.

The moral of this story: find a platform that does what you want and use it. If you can't find one, then you're looking at a business that will be dependent on the technology you build and you'd better get a CTO co-founder who can code and is incented to stay the course.