Will Developer Tools Startups Ever Find Investors?


Venture capital is an industry in which the exceptions are often more important than the rules. For many years, investors believed in a golden rule that software was the key to minting returns, leaving hardware as one of the most underinvested areas of venture. Then things changed as new technologies like 3D printing allowed hardware startups to accelerate their product design, and several large exits like Nest Labs, Dropcam, and GoPro encouraged investors to take a new look into the sector.

So I was deeply interested in our story yesterday that the development platform Xamarin raised $54 million in a series C investment from Insight Venture Partners, among others. Like hardware, developer tools has traditionally been a sector that received very little attention from venture capitalists. The reasons have remained persistent: the market isn’t very large, preventing huge scale; there are only a handful of potential buyers, leading to…

View original post 822 more words

Will Developer Tools Startups Ever Find Investors?

One thought on “Will Developer Tools Startups Ever Find Investors?

  1. Tools affect how you think and work. The wrong tools will make you think the way the tools want you to think, and impair your ability to innovate or adapt. Developers should not need to tolerate tools that do not work the way they want to work: hence the evolution of Eclipse with its highly modular architecture.

    But that need extends the whole way along the SDLC stack, to different stakeholders (some of which will be developers, and some of who won’t be).

    The principle of substitutability is key to a successful toolchain. But how do you value a software or tool whose principle value is that it can be replaced by another tool?

    Enterprises try to standardise on tooling: I do think this is a foolish exercise – *if* agility and innovation is actually relevant to your business. In essence, your toolchain is determined by your architecture. If you stick to a single architecture, a single toolchain will work well. If on the other hand, you have flexible loosely coupled architectures, then you need flexible, loosely coupled toolchains.

    Only the smallest companies can stick to a single architecture. And these companies are not likely to spend (big) money on tools. And big companies are not going to spend money on tools that not every team will find useful or productive.

    So I agree with this article..if tooling vendors figure out how to make themselves substitutable, they can, counter-intuitively, become very successful. The best tool makers already get this.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s