4.1 Product Companies
There are tons of different companies in the IT industry, and there's no clear boundary. Big companies often do a whole bunch of things, some of which are definitely IT and others, well, not so much. We call a company an IT one if most of its revenue comes from IT products, or if it just owns a few big-name IT products.
In the US, IT isn't called Information Technology but High Tech — meaning high technology. So IT companies are high-tech companies, or simply tech companies.
Every year, tons of companies pop up, grow, and (let's be honest) die in the IT space. Founders aim to make sure their company doesn't die but grows big enough to have its stock traded on the stock exchange. Why's that necessary?
If a company goes public (gets traded on the exchange), founders don't have to sell their shares (and pay hefty taxes). They can, for instance, take a loan secured by those shares and keep the shares. Or pay employees half their salary in cash and half in stock.
You can also reward top management with stock for great results. You could even buy out competitors with stock — a pretty savvy way to take over those risky, but still small, competitors.
Getting paid in stock is pretty sweet for employees too. First off, it's a tax saver, and secondly, it can make you super rich.
When Facebook moved into its first office in San Francisco, Mark offered a local street artist to paint the office. The artist could earn $20k cash or the same amount in stock. Those shares are now worth $200 million! P.S. The dude chose stock.
4.2 Modern Products
IT companies grow quickly thanks to investor money. Investors love it when companies grow fast. “You don't even need to make money—just grow” (c). “Get 100 million users, and we'll figure out how to monetize them later.”
As they say: “A person + technology beats a person without technology,” and “A businessman + investments beats a businessman without investments.” The key is growth. Really fast growth.
4.3 Modern Development
Companies need to grow quickly, products need to gain users quickly, and the team? The team needs to constantly add new features to the product.
50 years ago, when software development was just emerging, it was treated like construction. First, there was the requirement assessment phase, then design, then development, testing, and only then did the product reach the clients. It could take 5 years from start to first customer. Things are way different now.
Modern development is all about constant experimentation. Big companies are always testing new features. And they're releasing new product versions every month, every week, or even every day(!).
A feature (from the English word Feature — a special characteristic, spice) is a new functionality, often a minor one.
Facebook leads the pack, rolling out several dozen new “features” every day. Each feature is shown to 1% of users first, and then user reactions are automatically analyzed. If users like the feature, it gets shown to 10% of users, and so on.
And of course, this approach of adding new features requires a totally different approach to software development than what was used in the past.
GO TO FULL VERSION