I have been investing in developer tools since the earliest days of my VC career. The first investment I led in the late 80s was a financing that provided the funds to acquire a programming editor called Brief. It was a text-based editor for PCs. That investment worked out but we didn’t make a lot of money on it. Brief was eclipsed by other better editors.
But that did not cool my interest in developer tools. I have always believed that supporting the people who build software is a great business and it is.
At USV, we have made developer tools a key area of investment and some of our most well-known successes like MongoDB, Twilio, and Stripe are developer tools.
But as I learned from my Brief experience, all developer tools are not equal in terms of creating business value.
Last week, I was discussing this in a texting session with my partner Nick. And he observed that the tools that have produced the most value for the founders and investors, including USV, are the tools that are “in the flow” and not on the side.
That was quite an “aha moment” for me as it clarified something that I have longed felt intuitively but could not articulate. Now I can.
I think this is true for many other areas of software. If you build software that sits in the flow of something important (mission critical, recurring, etc) then it will increase in value over time, and sustain its value, much more significantly than something that “sits on the side.”
So when thinking about what to build or what to invest in (it is the same thing, just depends on if you are investing time or money), try to be in the flow.
