Why Software is More Profitable Than Content

Written by... a content company

June 24, 2020

There was a Twitter thread a few weeks ago that listed the things that the person wished he knew when he was younger. A few examples of his advice:

Read every day. It doesn't matter what. It doesn't matter if you "finish the book". Just read.
Follow the Golden rule. You will run into people again and again throughout your life. Make sure they speak highly of you.
Invest in relationships. Your community matters more than you think.

It’s a nice thread and I’d encourage you to take a few minutes to scroll through it.

However, the contents of the thread isn’t the most interesting part. In fact, several of these threads pop up every week. Instead, the interesting part is the comments. Specifically, the comments that call upon Readwise or Threadreader to save the thread for later.

Now, I don’t know their intentions. However, I’ve been in a similar spot before, so I can guess. They probably nodded along to the thread. They related it back to their experience. Some of the advice they wish they would’ve taken, other advice they plan on using in the future. So they saved the thread so that one day, when the time comes, they can pull this information out of their back pocket and use it when appropriate.

I too have done this countless times. I’ve assumed that a single utterance or idea would neatly occupy a spot in my brain like a plug fills a socket. But that’s not how we humans work.

We need to be reminded of things; we need to receive information in the right context. I probably had heard a lot of the advice before I read that thread, but it still was valuable because it was phrased differently. Reframing information to the right context is what the media is all about.

Bo Lau@bolau_

naval tweets are just the tech bro version of white girl quotes

And all of this is the beginning to the answer of a question I’ve been pondering for months: what is the difference between content and software businesses?

Similarities Between Content and Software

At first glance, there are several similarities between software and content businesses.

Distribution. For both software and content businesses, there are no distribution constraints. Both products are delivered over the internet and there are no physical or digital gatekeepers. This helps for two reasons: it doesn’t take very long to scale, and there are basically zero incremental costs for spreading the product to more people.