If one were looking at the economy a decade ago, Stripe COO Claire Hughes Johnson told Karen Webster, the biggest challenge businesses faced in growing was clear: access to capital. Ten years ago, the economy was in the midst of the “Great Financial Crisis,” and businesses were reeling from the credit crunch that came along for the ride.
The last 10 years have changed the playing field a lot.
When Stripe surveyed thousands of C-level executives and developers across five different countries for its Developer Coefficient report, it found that while access to capital is still a top-five concern for businesses, it’s not top of the charts anymore. The top concern now, said Johnson, is access to talent, with software engineers in the third position. And that lack of access is costly for businesses — and for the economy in general.
“About 30 percent of developer time is going to maintenance — on average, finding things like bad code,” Johnson said. “These developers aren’t developing; they are maintaining legacy systems.”
When Stripe did the back-of-the-envelope math on that misallocation of time, the company found it to be worth nearly $300 billion in potential gross domestic product (GDP) on an annual basis. Over 10 years, that totals to $3 trillion. It’s also a preventable loss, Johnson emphasized.
First, businesses need to liberate their developers from legacy systems so they can more effectively work with the engineers they have. Second, in a world where “developers are often the deciders” when it comes to technical matters for business, the worlds of talent management, sales and marketing need to rethink and rewrite how they pitch to and recruit those within the developer community.
Getting Liberated From Legacy Systems
Developers, Johnson told Webster, are precious resources because they are scarce.
“There are not enough developers in the world right now to meet the need, and they have an ability to have an outsized impact in the roles that they have,” she said.
That could be a very good thing, Johnson noted, if only for the fact that they’re saddled with system maintenance 30 percent of the time. That means whatever a business’ core function is, it isn’t developing or innovating around it. It’s just keeping the signal up, more or less.
Now, in some sense, developers have to work with what they have, Webster noted. If the infrastructure is dreadful, the developer will have to work around it. Johnson agreed that this is the way of the world, as legacy systems are breathing their last. However, she said, the reality is that they are phasing out in favor of developer-focused alternatives like Stripe because, at some point, legacy systems are costing too much of a precious resource.
“To me,” Johnson said, “the [trend] is pointing away from legacy systems on premises (systems that were brittle and hard to develop), and pointing [toward] more composable systems and API-driven models that are more agile and much easier for existing developers [in-house] to work with.”
That transition, she noted, is becoming much more inevitable, as commerce is increasingly mobile and multichannel — since, at the end of the day and in most cases, legacy platforms can’t scale or offer solutions, and they don’t grow. That frees developers from the caretaker roll and uses their time more efficiently.
That efficiency is then compounded by the fact that, in an API-based ecosystem where developers can maximize their time and abilities, they can also hand off cumbersome and complex regulatory items — such as payments — to firms like Stripe, with engineers that specialize in the movement of money. Freed from things like billing and payments, and all the complex interactions that come with managing them in-house, developers are now able to use their talents to tackle core business issues and innovate new solutions.
“Business[es], particularly smaller ones when they are growing, need to invest in core innovation,” Johnson said. “And enterprises are seeing the advantages of this in smaller businesses and are realizing they want the strategic advantage of agility in their systems and better-leveraged developer time.”
Developers And Decision-Makers
Though it’s critical to keep up with and be responsive to technological advances to build and maintain developer relationships and resources, Johnson noted, it’s not enough by itself. An often invisible — but extremely important — change that has quietly occurred in the last decade is that developers are increasingly the decision-makers within organizations.
“It is a fairly recent thing that developers are making decisions, and I think when you talk to marketing, product and sales people, that is something that is still surprising. They are used to talking to the CEO or the CFO, but, increasingly, it is the CTO or the technical leader of engineering, [who] will actually be using the product, that [has] the critical voice in the decision-making process,” Johnson said.
That means, she noted, that sales and marketing professionals are going into organizations ready for the wrong type of conversation with their audience. Things like upselling and cross-selling are mostly unhelpful, and things like sales funnels are the wrong models to apply. To sell to developers, one has to understand them and what they are looking for: low friction, simple documentation, easy integration and the ability to, fairly immediately, start using and experimenting with the product offering.
However, the bigger issue, she noted, is about knowing the developers themselves.
“A lot of Stripe’s growth was not based on investment in sales and marketing, but being active in developer communities and building our product with them,” Johnson said. “Developers are, unsurprisingly, a very networked community — and you have to meet them in the community, with the support of other members of the community vouching for your product. Developer-to-developer virality is a thing.”
It’s a very important thing, she told Webster, because it means the nature of the conversation has to change. It needs to be more technical and less marketing-oriented, particularly when the technicians are driving the conversations.