Value Extraction vs Creation

Software companies are no exceptions to the Lindy Effect. They are unique in the abstractness of construction with code, unlike say, a multi-apartment building. Hard to tell what’s underneath until you rip those floors, bring the walls down and attempt a remodel.

While it’s fully anticipated that a 40 year old building will need extensive repairs, the half life for a software company is closer to 15 years. This is sufficient to have seen from one to three technology shifts, and pass through enough hands that the elegant term “technology debt” aptly describes, exists aplenty.

And yet. Buyers of tech enter into this world with the naïveté of a first time marriage. What do you mean that this needs work done? That it’s a <gulp> fixer upper? That slapping a coat of fresh sales and marketing paint isn’t going to cut it?