[robocat]

I saw a small company do all their work this way, where their pitch was more a marketing company with software skills. Projects were successful, but it folded a few years later due to other reasons.

One problem is that clients hate it, even when success was very measurable. I suspect due to our natural tendency for zero-sum thinking. Note that usually the projects were limited to ones where there was a directly measurable outcome to drive the metrics for the payments.

Wierdly enough you would think that such a business could pivot to developing its own product. Why is it that custom software dev houses hardly ever manage to pivot to developing a successful product?

[erklik]

>One problem is that clients hate it

I've seen this personally as well. Especially with non-Software clients, the psychology you're battling seems to be that "they're ripping us off" since most of the work you're doing isn't happening while you're earning money.

[larrik]

My theory:

1) They generally don't make enough profit to save up and then cover the investment period of developing new unproven software (which can be years).

2) If it's too similar to work they've done, former customers may be able to claim some ownership and eliminate the profit.

3) If it's too dissimilar to work they've done, then it's just a shitty startup with no funding.

4) Even if all that worked out, it's wildly impractical to work on client projects and your own projects with the same staff at the same time. So you either need to do one or the other.