Comment by fhennig
1 year ago
I really like the idea, but I'm not sure how the traditional "Made in Germany" success stories would translate into a digital world.
For example Würth is the world leading producer of screws. I think it's a good example of how a lot of these companies make parts. But what are the parts in the digital world? It's libraries and frameworks, and nobody is paying for those.
Also the values you mentioned: excellence and stability. That's exactly what we see in libraries. Everybody wants stable APIs and the library to get out of the way.
Maybe another angle to look at this can be "parts" for a knowledge-based company. Like a software to model and simulate financial products or insurance risks, or - as the article mentions - complex 3D models. I have also already seen companies working on digitazing factories, digital twins etc.
Screws are probably primarily not a B2C product , and screw producers probably integrate with their customers' systems and processes in non-trivial ways. I don't know enough about screws to make this concrete.
If there's no market for libraries and frameworks (like there used to be), the next best equivalent appears to be SaaS and software you can buy and run/host yourself. Germany seems to be doing pretty good there, considering SAP.
The problem I see is primarily that most software businesses aim to get out of their niche. I suppose a screw maker is perfectly content just being the number one in screws. A software business is rarely that focused: Better to do a lot of things OK than one thing great. Marketing and sales are the big levers, not quality. Probably because software is largely being sold to people who can't even judge their quality and mostly buy based on vibe. Software is, after all, a pop culture.
So if every piece of software gravitates towards being everything for everyone, and if marketing (money) is the big lever, it's a lot more of a winner takes all environment. That's an excellent environment for strong hustlers. It's a terrible environment for quiet people that care about quality.
> But what are the parts in the digital world?
In essence, all software is a service; often legally even. But for this we'd need to look at software that's "shipped" to all customers in more or less the same form. But is also not a full blown end-user product. Taking that, we can look at "parts" or even "partial products" as:
* B2B SAAS services. From microservices to large services. From API-only to full blown UI based. That reservation system for nail-studios or the extract-PDF-to-our-bookeeping-API.
* B2B Mobile apps. E.g. a scanner-app to help with packaging or finding in a warehouse. Or a PoS for restaurants or shops.
* Hosted versions of FLOSS software. e.g. nexcloud, mastodon, matomo, a ci-pipeline, SIP, LMS, CMS, etc.
* Managed common PAAS parts. Managed Postgres, managed LDAP, managed CI, managed firewall etc. Not on-prem (that would be services) but more like AWS, but then from local "Vendors".
* Plugins and micro-saas. Just look at the amount of paid-for plugins in shopify, salesforce, google docs, github-marketplace etc. etc.
Almost all of these could be startups. But have a very restricted TAM. So they'll remain small. They also don't deliver a full-blown end-user-product, but something that's built on top of other common IT components. They often have very localized focus (a common restaurant reservation in France is very different from a reservation in the Netherlands, for example), often have a benefit from being trusted on a human level (I'd either backup my companies data to some FAANG, or to that one guy that I know and has been servicing my company for the last decades very well already).
But most of all, they are too small to become scale-ups in the "silicon valley" sense. Because in doing so, they'd loose all that makes them valuable today.
(Source: I've worked at or on many such "startups" that would forever remain small but big enough for the founders to get a solid income from)