Software is valuable when it lets you: (1) do things better/faster/easier than before, or (2) when it is so powerful it lets you do new things you could never have imagined doing before (creating a pro-quality video using Vegas and sharing it using YouTube), or lastly, (3) when it lets you predict the future before it arrives (e.g., installing web analytics software in your web site to analyze traffic patterns, or creating spreadsheet models to graph performance in different scenarios).

If you're building or selling software, you should know what value-category your product fits into, because knowing the value-category of your product will help you make decisions about how to update/enhance/evolve/fix it over time in a way that makes logical sense.

Will Marlow co-founded AlumniFidelity to help his clients reposition their fundraising to benefit from Web2.0 technology and marketing techniques. He’s working with clients such as UVA, the College of William & Mary, the University of Oklahoma, and Bowling Green State University, and he loves nothing better than a thorny marketing challenge.  Email him at