Follow the Money

Because we’re as modest as we are, we don’t like to brag. (But we will if we have to. 😉) We bring that up here because we were doing some research on the percentage of annual revenue some companies put back into their products. What we found suggested that in industries with long innovation cycles — and in which products are more standardized — companies may allocate five percent or less of their annual revenue for their products. Along with not bragging, we’re not inclined to say we’re the most innovative company on the planet. But we invest 22 percent of our annual revenue into our product.

Some of that may be attributable to the fact that we’re dedicated to serving U.S.-based property/casualty insurance companies only, which spares us some expenses other companies might incur. As examples:

• We don’t have to produce materials or product versions that are multi-lingual or multi-currency.
• We don’t have to build interfaces for foreign, third-party data sources.
• We don’t have to address varying cultural nuances and business practices.
• We can focus our efforts, allocate resources, and tailor our marketing, sales, and product-development efforts to one market.
• We can simplify our compliance with laws, regulations, and even data formats.
• We can establish and maintain deeper relationships with other U.S.-based companies, industry associations, and government agencies.
• We can provide customer support tailored to U.S. time zones and business hours.
• We can better target marketing messages and campaigns to U.S. businesses.
• We can prioritize the product features and enhancements we develop to ensure they’re most relevant to the U.S. market.
• We can enjoy relative economic stability as opposed to being exposed to the economic volatility of other global regions.

Money Isn’t Everything

That statement is certainly true. But money can be very influential. In our case, being able to put almost a quarter of our annual revenue back into our product-development efforts gives us discernible value over some of our competitors. And the corollary is that we’re investing that revenue for the benefit of our customers, who can be sure our software is as good as it can be, for the market we choose to serve, year after year.

No. Money isn’t everything. But if you follow it, you can learn some pretty interesting things.