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2Inspire Interview Series
"You should try things, measure the results, do what works and don't what doesn't"
Neil Davidson is joint CEO of Red Gate Software and founder of the Business of Software conference. You can follow him on twitter and read his blog at http://blog.businessofsoftware.org. He's been into the software business for more than 10 years now and in this interview he shares his thoughts on both the software developers' concerns and successfully managing a software business.
Adriana Iordan: Please present yourself to our readers, tell us how you evolved inside the software business. Of all the things you've done, what are you most proud of?
Neil Davidson: I was unhappy in my previous job. I hated people telling me what to do, especially when I didn't always agree with what they were saying. I was the classic cynical developer, always whining about why things wouldn't work, about how things should be better. Eventually - and after some pushing - I figured that I'd have to stop whining and actually do something. Simon Galbraith and I had met at school a decade earlier and we'd always wanted to start something together. So I called him, and we set up Red Gate.
Adriana Iordan: By all standards you are a very successful software business CEO. What were the key factors that led to this situation and what can you recommend to all other software business newbies out there?
Sure, the current economic climate makes it harder to stick to our principles, but - to paraphrase a great man - we reject as false the choice between profit and our ideals
Neil Davidson: There's a Woody Allen quote that goes "90% of success is turning up". If you're going to run a software business, you need to turn up. And turn up full time: if you're not prepared to give your all to getting your business of the ground, it's going to fail. It's easy to hedge your bets, keep your day job and work on your business in your spare time. But at some point you need to ask yourself the question: am I really prepared to turn this into a business? Or is this a hobby? There's nothing wrong with the second answer, of course.
Adriana Iordan: Red Gate is presented as a great company to work for, in employees tops according to some prestigious publications. Haven't you ever thought that maybe this kind of investment in your team would have a bigger ROI if put elsewhere? What is your motivation behind this human resources strategy? Will anything change, given the current world financial situation?
Neil Davidson: It's not just a question of ROI. Part of the reason Simon and I set up Red Gate was to create an environment that we liked working in. We want to work in a place that we'd want to work, if that makes sense. That means working with smart, creative and happy people, being able to work flexible hours, not being treated like children, and so on. A lot it's just common sense.
There's a Woody Allen quote that goes "90% of success is turning up". If you're going to run a software business, you need to turn up.
Sure, the current economic climate makes it harder to stick to our principles, but - to paraphrase a great man - we reject as false the choice between profit and our ideals. In fact, we've just moved to shiny new offices and are about to start providing free hot meals to all of our employees. That has a measurable cost, but it also has an immeasurable benefit. You can't point at a bacon butty and say that sandwich cost Red Gate £2 but will generate £4 in revenue. But the benefit - financial and otherwise - is still there.
Adriana Iordan: In terms of software marketing, what strategies would you recommend to other software vendors?
Neil Davidson: I'd recommend reading "In Search of Stupidity" by Rick Chapman and "Marketing High Technology" by William Davidow. Embarrassingly, I haven't read the last book myself. But apparently it's very good. I just ordered a copy.
I'd also recommend looking at marketing strategies in other sectors. For example, although Red Gate is a software business, it has more in common with Unilever or Procter and Gamble than SAP.
Adriana Iordan: Were there any marketing outlets that you found to be a waste of time/money?
Neil Davidson: I don't think there are any general principles. You should try things, measure the results, do what works and don't what doesn't. Of course, that's not as easy to do in practice as in principle. And it's not as obvious as it seems. Or most TV ads, and government anti-obesity campaigns, wouldn't be run.
Adriana Iordan: What are your future plans with Red Gate? Any special turnovers to adapt to the financial crisis?
Neil Davidson: Just to keep growing! We're doing some things because of the financial crisis, but nothing drastic. Things are going really well for us right now. We got nervous about the economy about 18 months ago and started making small changes back then. That should mean we won't need to make big changes now.
Adriana Iordan: Some two years ago you were mentioning in an article that at Red Gate the term "social media" is banned from usage. What happened to you in the meantime: you've created the Business of Software online social community, regularly write on blogs, including on your own, you are micro blogging on Twitter and so on...
You should try things, measure the results, do what works and don't what doesn't.
Neil Davidson: I think we banned the term but not the substance. In the same article I talk about blogs, message boards and so on. It's just that the phrase s****l m***a was irritating the hell out of people at Red Gate at the time. I've got over that a bit, so you can probably get away with using it. Just don't call it vibrant. Or I really will slap you. I'm a twitter convert though (you can follow me at twitter.com/neil.davidson ). It took me a while to see the point, but I'm getting used to it now.
Adriana Iordan: As founder of Business of Software Conference, what do you expect from it in 2009? What kind of participants are you expecting, different from last years? What have you learned from your involvement?
Neil Davidson: I think BoS 2009 is going to be great. I'm hoping we'll get a lot of the same crowd as last year, and some new people too. It had a really good vibe - lots of people trying to build long term, sustainable software businesses, just like me. This year, Joel is speaking again, and we've got Geoffrey Moore, Donald Norman and Paul Graham lined up too.
Adriana Iordan: One last question Neil - why aren't you selling software online with Avangate? :) If I'm not mistaken, you have an in house payment processing solution, what are the benefits of this option and have you encountered any disadvantages so far?
Neil Davidson: We put so much money, and so much of our business through our online shop that we feel it's something we need to control ourselves. It's not a function we're comfortable outsourcing to a third party, no matter how competent and reputable that third party is. The main disadvantage of doing it this way is that it takes up a lot of our time. Building an online shop and hooking it up to all of our internal systems, and providing interfaces for credit control, support renewals and all the other people at Red Gate who need access, is complicated. Otherwise, I'd definitely consider Avangate.