Wednesday, September 27, 2017

Alfidi Capital at DevTech Strategy Summit 2017

I attended the DevTech Strategy Summit in San Francisco. I don't recall ever seeing this event before so I couldn't miss it, especially because it's from the same organizers behind DeveloperWeek. The developers have their own show for practical tools, and this one was for executives bringing a bunch of enterprise functions together. Check out my badge selfie below and let's get to work.

Alfidi Capital at DevTech Strategy Summit 2017.

The dialogue between developers and executives got some needed attention. Developing mobile apps in a vacuum makes no sense if it ignores a market segment's pain points. Imagine how Customer Development works for a dev-focused product, then imagine engaging prospects at different levels of the marketing funnel. Use lots of imagination, or borrow someone else's imagination if you're left-brain dominant and can't compensate.

Developers still get hung up on designing the perfect product if they think budgets are unlimited, which happens when overly generous investors support weak managerial discipline. Project leads must show the Cloudonomics metrics demonstrating the lower cost and higher ROI of their preferred solution. My regular readers know that I have harped on Cloudonomics many times as a proof-of-concept guide, yet many developers dreaming of startup riches still don't take it seriously.

The CIO is still the ultimate purchase decision maker for tech not available in-house. They are especially important in minimizing buys of incompatible shadow IT. The key to their success is evangelizing developers who have the authority to recommend software buys. CIOs need Cloudonomics more than anyone but I suspect most don't even look for the metrics. Computer science programs need to start teaching a business-related elective covering the ROI of project development.

The DevTech panelists came with some best practices for executives. Using searches with Bayesian logic in Stack Overflow can measure developers' engagement with a topic by showing how quickly questions get answered. Tracking GitHub updates and following Hacker News are other ways to assess developers' engagement. Executives could also track my blog, for crying out loud, because I discuss the hottest tech sector developments ever.

The debate on open source versus closed source development got me thinking. I believe a freemium pricing and distribution model precludes a choice of closed-source architecture, but a 100% open-source solution is hard to monetize. Yeah, I know, open-source monetization must really be ad-based rather than fee-based.

The town hall toward the end reminded us that the big software companies carry the lobbying burden. Aspiring tech executives in the room should start building their lobbying expertise now by joining tech trade groups and tracking public testimony offered to regulators. Venture capitalists still don't understand devtech business models, which doesn't surprise me since I witnessed the cloud / mobile / Big Data convergence force multiple startups to pivot. The VCs are reluctant to invest in startups that often see little revenue traction from a large customer base. They do want to see KPIs like customer acquisition cost (CAC) and retention, which enables them to see how a prospective startup investment compares to known successes in their portfolios.

Guy Kawasaki always said sales fixes everything, so I can understand such VC reluctance to go for startups with nonexistent traction. The metrics in devtech also apply to other cloud/mobile app startups, so there's nothing surprising about a corporate VC asking devtech people to justify their CAC.

The DevTech Strategy Summit was a winner for any startup executive running a mature business. Anyone pursuing an acqui-hire as a specific strategy can probably find a niche in devtech. I am now such a regular fixture at Silicon Valley's biggest developer events that acqui-hire entrepreneurs are going to see me. Let me know what's working for you, tech community, and whether you benefit from my interpretations.