blog-spreadsheet
06. March 2018

Your biggest competitor is a spreadsheet

If you are in the software industry, odds are that your biggest competitor is a custom spreadsheet created by your target users themselves, their friends or coworkers.

Don’t believe me? Read on.

But first we need to establish a few things. Most importantly, you need to realize that spreadsheets are programs. Secondly you have to realize that spreadsheets are absolutely everywhere.

Capiche?

Good! On with the competition argument. There are obvious areas where this isn’t true. If you are making communication software or media heavy content sites, spreadsheets are not your competition. On the flip side of that are areas such as personal finance, budgeting and financial planning applications where spreadsheets are the default (and overwhelmingly dominant) alternatives.

There are less obvious examples where you may be surprised how prevalent spreadsheets are. To take an example close to home for me: Analytics software. Despite valiant efforts by the likes of TableauPowerBI and my former colleagues at Qlik, Excel is still by far the most used “BI and analytics” solution out there.

In a Gartner study in 2015, more than half of the surveyed IT leaders and professionals said that they “mostly”, or “completely” use spreadsheets for analysis. Similarly, in research by Ventana Research, 49% of analytics users said they preferred to use spreadsheets for data integration and 51% said they preferred to access Big Data analytics through spreadsheets!

But by no means does it stop here. Even pretty well established software companies may be up against surprising grassroots solutions built on spreadsheets. Glassdoor, that wants to give employees insight into the salaries, culture and overall quality of prospective workplaces is up against just such solutions that for various use-cases offer benefits over Glassdoor’s more formal and structured approach.

As for other examples, here are just a few:

  • Project planners: Way more projects are planned and tracked in Excel than any purpose-built project planning software.

  • Travel planner: Planning a family vacation, group travel or a multi-destination business trip? Odds are, there is a spreadsheet.

  • CRM: Small companies track their customers, sales funnel and even customer communications in Excel.

  • Real estate hunting: Options are collected in a spreadsheet.

  • Lending apps: What did I lend whom and when?

  • Library apps: Cataloging my personal library

  • Todo apps: Despite the plethora of them, I’m convinced more todo lists are tracked in Excel, than any of them (even all combined)

  • Employee directory, and more generally HR software: The spreadsheet is the small organization’s “Workday”.

  • Expense reports: Who needs Concur?

  • Food and exercise log: Whatever needs to be manually entered is just as well tracked in Excel as in a purpose built app.

  • Time sheets: Why use anything fancier?

  • Inventory tracking: A spreadsheet provides the ultimate flexibility.

  • Invoicing: Oh yes, many companies will create their first invoices in Excel. A mom & pop business may never grow out of it.

  • Group food orders: Too custom, random and ad-hoc for a custom software, but someone will have made a spreadsheet.

  • Party planner: Same.

…this list could go on.

But why? Well, mainly because spreadsheets are everywhere, everyone can use them to some extent and they are perceived as free. But there is a deeper answer. As my friend Andri pointed out when I posed the Excel-is-your-competition argument on Twitter the other day:

hjalli tweet

Andri (through another channel): “That’s half of the problem. The other half is that Excel can also solve 90% of future problems without having to turn around a dev team/product and processes. Put differently — most software solutions, especially new ones, lack flexibility in addressing future needs to be compelling replacements for incomplete solutions like Excel.”

So, a healthy question for any startup (and no less importantly, any custom software development project) would be: “To what extent can the need we’re fulfilling be solved with a spreadsheet?” If it can, you should really study how people are using those spreadsheets. It will teach you a lot about the requirements you need to meet, the usage patterns already in place and even the data model you need to implement.

And you also need to ask yourself hard: Is my solution superior enough to a home-grown spreadsheet for my target users to switch?

This post has also been published on Medium.

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