There are basically two things you can do to earn a living when you write code:

1. Consulting
2. Products

When doing consulting, you write code, and somebody else owns it; you are blamed for its bugs, rarely praised for its benefits, and usually you only sell one copy of your work. When working on products, you write code, and you actually own it; you can brag about it on your blog without pissing anyone, and if you are lucky you sell as many copies of it as you want, all for basically the same production cost.

Now, here’s an insider tip: if your objective is living a nightmare, tearing yourself apart and swear never touching a keyboard again, choose option 1. If your objective is enjoying a healthy life, making money and living long and prosper, choose option 2.

This fact is explained by economists as a “diseconomy of scale”: this means that fixed costs are very low relative to variable costs, which means that the cost of creating a new copy of your finished product is virtually zero. You only have to invest in the building, not on the replication. Actually this is not 100% true, because you should spend on marketing anyway, and you might as well add new features on the way, but the truth is that well-run software companies make more money than drug dealers, and guess what: software is an activity usually considered legal.

However, there is a tacit consensus in Switzerland, apparently, by which there can’t be successful companies doing software in this side of the world. And most companies choose option 1 above. Which has interesting side effects. Continue reading →