Why there's nothing special about the business of software
blog.businessofsoftware.org
blog.businessofsoftware.org
And, I pseudo-randomly sampled companies that interested me.
Walmart Revenue: $378 B Profit: $12 B Employees: 2055 K Revenue per employee: $183 K Profit per employee: $5 K
Exxon Revenue: $372 B Profit: $40 B Employees: 107 K Revenue per employee: $3476 K Profit per employee: $373 K
ING Group Revenue: $201 B Profit: $12 B Employees: 120 K Revenue per employee: $1675 K Profit per employee: $100 K
GM Revenue: $182 B Profit: $-38 B Employees: 266 K Revenue per employee: $684 K Profit per employee: $-143 K
Ford Revenue: $172 B Profit: $-2 B Employees: 246 K Revenue per employee: $699 K Profit per employee: $-9 K
Citigroup Revenue: $159 B Profit: $3 B Employees: 380 K Revenue per employee: $418 K Profit per employee: $7 K
At&T Revenue: $118 B Profit: $11 B Employees: 309 K Revenue per employee: $381 K Profit per employee: $35 K
Samsung Revenue: $106 B Profit: $7.9 B Employees: 144 K Revenue per employee: $736 K Profit per employee: $55 K
IBM Revenue: $98 B Profit: $10 B Employees: 386 K Revenue per employee: $253 K Profit per employee: $25 K
Nestle Revenue: $89 B Profit: $8 B Employees: 276 K Revenue per employee: $322 K Profit per employee: $28 K
Cardinal Health Revenue: $88 B Profit: $1.9 B Employees: 43 K Revenue per employee: $2046 K Profit per employee: $44 K
Sony Revenue: $77 B Profit: $3.2 B Employees: 180 K Revenue per employee: $427 K Profit per employee: $18 K
Costco Revenue: $64 B Profit: $1 B Employees: 98.5 K Revenue per employee: $650 K Profit per employee: $10 K
Microsoft Revenue: $51 B Profit: $14 B Employees: 79 K Revenue per employee: $645 K Profit per employee: $177 K
Oracle Revenue: $17.9 B Profit: $4 B Employees: 64.6 K Revenue per employee: $277 K Profit per employee: $62 K
Cisco Revenue: $34.9 B Profit: $7.3 B Employees: 61 K Revenue per employee: $572 K Profit per employee: $120 K
Coca Cola Revenue: $28.8 B Profit: $5.9 B Employees: 90 K Revenue per employee: $320 K Profit per employee: $66 K
TIAA-CREF Revenue: $27.5 B Profit: $1.4 B Employees: 7.5 K Revenue per employee: $3667 K Profit per employee: $187 K
Apple Revenue: $24 B Profit: $3.4 B Employees: 22.6 K Revenue per employee: $1062 K Profit per employee: $150 K
Personally, I would like my own country/principality (like Monaco or San Marino, maybe in the Caribbean) where everyone was involved in a software company, or services supporting software companies. I'd have a zero tax policy for software companies but the government automatically got 3% equity for all companies based there. Everyone would have free high speed internet and there'd be a free research university for students who passed the entrance exams.
Now, who wants to come and live in my country?
Even more interesting: salary per employee (not only for its meaning to employees but to the local economy.
If you search for software companies that do try to maximize their per-employee profit, you find companies like 37Signals and id software, which I imagine are at least an order of magnitude above any other organization that's been mentioned. They're what make the business of software special, not Microsoft and Google.
Total revenue can be useful. Total Profit can be useful. Profit per employee can be useful. Loss per employee is useful.
Revenue per employee is half the story. This is how you run your business into the ground - Believing half stories.
Perhaps the author conflates revenue and profit?
Edit: in fact, the author actually notes this. Which makes the whole exercise stupid: If you don't have the data you need, you don't have the data you need and using the maximum value instead is useless. As should have been trivially obvious at the time the author wrote the blog post by examining one of his or her own examples.
Gates, Ballmer, Allen, Brin, Page, Ellison, etc. There are plenty of others, of course, who didn't get there with software. But the numbers certainly make it seem like software is a good way to get fantastically wealthy.
I'm not saying that you're wrong, just that the data doesn't support the view.
Anyway, I don't know, either. We're all working with dramatically less data than we need to make an informed decision.
But, since we're probably all strongest at technical stuff, rather than finance or arbitrage or whatever other ways folks make a billion dollars, I kinda think our best odds are in playing to our strengths.
I was just think we're pretty lucky (or clever) to be working in a field that has produced so many billionaires in a short period of time, and now requires less risk and investment than ever before. It's a good time to be a nerd.
Brin and Page did not have billionaire parents. They earned their billions.
The Waltons were born into billions of dollars made by Sam Walton. They inherited it.
Not a complicated distinction, and has nothing to do with whether they work on software or not. It was also not a judgment on the character of the people in question. It was a comment on how plausible it is that someone like you or me could become fantastically wealthy through various means. Software seems as good a means as any. That's the conversation I thought we were all having here.
If too high, then how could conflating profit and revenue possibly make the numbers higher? Profit per employee will always be less than revenue per employee.