If you’re not running a software company now, you will be soon…

There’s a quote widely attributed to Abraham Lincoln that says, “Give me six hours to chop down a tree and I will spend the first four sharpening the axe.”

It highlights the importance of both preparation and of course, having the right tool for the job.

Sharpening the axe

No matter what market you operate in, using the right tools – software and systems – can make the difference between success and failure.

In an era when disrupters are affecting all industries, investing in the right tools, at the right time, is vital.

Blockbuster vs Netflix

The Blockbuster vs Netflix story is a great example to demonstrate the importance of having the right tools.


  • Was founded in 1985 and grew to become the dominant brand within the US and UK for home movie and video game rentals.
  • Eventually branched out into streaming and video on demand, and peaked in 2004, with nearly 60,000 employees and more than 8,000 stores.
  • Filed for bankruptcy in 2010 and sold for $320 million in 2011.

Meanwhile, Netflix:

  • Was founded in 1997, offering DVD-by-mail.
  • Introduced a subscription-based online service in 1999.
  • Closed the 2016 fiscal year with 93.8 million subscribers worldwide, up nearly 20 million from the previous year. Total revenue for 2017 was expected to be $8.83bn.
  • Invested close to $1bn in 2017 in technology and development – an increase of 109% on its technology and development spend in 2014.

The need to invest in the right tools in order to remain relevant and competitive, is essential. Regardless of company size, industry, or product/service offering.

And of course, investing in the wrong tools can be just as detrimental as not investing at all.

The wrong tools?

Ultimately it was recognising the importance of, and investing in, the right software and systems that made the difference in the battle between Blockbuster and Netflix. Adapting and creating digital technology and processes allowed Netflix to succeed, and to lead the way for video streaming.

When former Blockbuster CEO Jim W. Keyes joined the company, he famously said: “The Internet is worthless… and we’re getting out of it.”

Meanwhile, soon-to-be Netflix CEO Reed Hastings, was so annoyed at being charged a $40 late fee by Blockbuster for a rented copy of Apollo 13, that it inspired him to create superior systems and technology and lead to the founding of Netflix.

Netlfix and chilling

Since then of course, we’ve seen the rise of companies such as Amazon, Uber, and Deliveroo, which are essentially software companies at heart – they just happen to sell stuff; book taxis; and deliver food.

Arguably, almost every successful, contemporary business, is a software company at heart. The question now isn’t “Are you a software company or not?”. It’s “Are you a software company yet?”

Are you a software company yet?

If the answer is no, then it’s worthwhile considering when you will be.

Start thinking now about exactly the right tools you’ll need for your businesses to adapt and succeed in a rapidly changing tech-landscape. And consider how you’ll need to transform your digital processes to achieve your goals.

Whether that’s using robust frameworks to develop your website or software, reimagining your content strategy, or building bespoke digital platforms to engage with your customers you need to pay attention to what’s ahead.

Don’t become a Blockbuster when you can be a Netflix.

In need of some help or guidance on your inevitable path to becoming a software company? Let’s talk.