Costs To Do Business, Then and Now

I was thinking recently at how the cost of business has changed in the 12 years I have run Infinity Softworks. A brief list of the changes we’ve seen:

  • In 1997, we had to offer telephone ordering and be able to ship products to customers. Many of our customers didn’t even have an email address. Originally, we’d email ordered product to our customers that ordered electronic software. Now none of that is needed. We don’t even offer physical product any more. Just downloads off the web.
  • In 1997, we had to staff both sales and support lines and support an 800 number. Now we really don’t have any of them. We handle all sales and support via email. We try to keep our response time down to a few hours and can do this partly due to the use of a BlackBerry when we are not in the office.
  • In 1997, we had to get a credit card machine to process charges. We kept it in a closet hooked up to a phone line. We would get the card over the phone and put the customer on hold while we processed the card. No one would give us the ability to process cards on the web (and none of our customers trusted it). Now, everything is over the web and there is no human involvement in the process.
  • In 1997, the costs to run a single server was a thousand dollars a month. Now, we pay about $40 per month with better quality and capabilities.
  • In 1997, 70-80% of our support issues were install and reinstall issues. Now, well… it’s the same. But improved software stores means these issues should be eliminated.

The bottom line? In the 12 years I’ve run Infinity Softworks, our costs have been reduced by 90%. I believe, for the first time, that it’s possible to run a highly successful and profitable software business without the number of people and dollars that it used to.

In fact, I’m betting on it. In 2001-2, we raised $550,000 to build Infinity Softworks. We added a number of people, expanded server capacity, and generally used the money to build infrastructure for the future. Now, I think we can build a far more successful business with far less dollars up front and far fewer employees to make it happen.