A Story About Software Innovation: Value, Cost, and Toasters

The first toaster was invented in 1893 by a Scot named Alan MacMasters. The invention of that first toaster probably cost many years and ton of money to create. But that first toaster had immense value. More than 100 years later, we still make and use millions of toasters.

But at the time, I suspect MacMasters thought he was probably losing his mind. He worked on his electric toaster for years. For years, he had problems with basic components catching fire and destroying prototype after prototype. Electrical materials were simply not ready to heat toast reliably. Meanwhile, his neighbors kept making toast in a traditional toasting iron like they had for centuries. Eventually, more robust electrical components were available, MacMasters got it right, and overnight the toasting iron became a novelty item.

Innovation vs. Risk

In hindsight, I guess MacMasters was on to something. For him, innovation and invention were time-consuming and incredibly expensive, but they changed how the world makes breakfast.

Fast-forward to 2024. You can buy a basic toaster on Amazon for about $15! How did we get from Alan MacMasters’ life’s work (priceless) to a plastic toaster made in China ($15)?

That toaster costs $15 because the process of fabricating it over decades has driven all the risk out of it. The design is known. The components are known. The electrical engineering is known. It can be created quickly because the assembly process is also known. The factories to build the toaster as scale are built and functioning. All the risk and unknown MacMasters dealt with have been driven out of that toaster by the billions of toasters that came before it.

Innovation in Software

Now let’s talk about innovation and invention in software. It’s a regular occurrence for me to speak with potential clients who treat building custom software like buying a commodity like a toaster. In the early stages of our upfront consulting practice, we talk with prospective clients about different options and software solutions they’ve seen before that they liked. Then, they form the expectation that I’ll be able to total up all their desired features and integrations and give them a price for a software product.

In their minds, Atomic will build, and then they will buy for a specific price. I understand why they think this. They’ve seen all the concepts before. All we need to do is put them together and total them up. It almost seems like totaling up features on a new car. Then you expect a bill of materials (BOM) with a fixed price at the end.

The small problem is that we aren’t building a car in a factory using materials on a BOM that have all been designed and tested over a decade. We’re building the first car. Whatever we build could be the beginning of a new industry. It could disrupt all their competitors, or it could drive their revenue through the roof. But the price for being able to do this isn’t fixed!

The fact is that if invention and innovation exist, the possibility for revolutionary work also exists. But revolutionary work isn’t clearly defined and the work to make a vision a reality can’t be commoditized. Defining and building a revolutionary idea is a cost-intensive undertaking whose precise cost is difficult to estimate. Often, success in innovation takes the time it takes to achieve. This is why risk mitigation is an ongoing conversation with all our clients.

Transformative Software

In the end, the investment in custom software can be significant, but so can the rewards. Just as Alan MacMasters’ perseverance led to a revolution in how we prepare our breakfast, so too can innovation in software lead to transformative changes in how we work, live, and interact with the world around us.

If you are navigating this journey and want a sounding board, don’t hesitate to reach out. We’d love to help.