Leadership
The Hard Lessons Behind Growing a Software Company From Two People
Max Dunn explains how pricing on value, building for parallel work and learning to delegate turned two programmers into a lasting software business.
How do you start a tech company in Silicon Valley? Ask Max Dunn!
Video from The Fractional Executive podcast with Ryan Kauth.
Generated from the canonical interview transcript and validated against source data by Guests on Air.
What lessons does a software founder learn from growing a company from two people?
Founders who start as engineers often learn the business side the hard way. Max Dunn found that clients pay for the value and return they get, not the hours spent, that a growing team needs clean architecture and real testing, and that delegating decisions to strong hires makes the company more successful and the founder's job easier.
Max Dunn co-founded Silicon Publishing as one of two programmers who loved building software and had little interest in anything else. Over more than two decades the company grew to about 30 people and a client list he describes as roughly a hundred household names, including Apple, Adobe, Amazon, Google and Nike.
On The Fractional Executive podcast with host Ryan Kauth, Dunn called that journey one long series of lessons. He was candid that many of them came from getting things wrong first: charging for effort instead of value, saying yes to every job, and assuming customers would do the software testing for free.
His answers are useful for any founder who started on the technical side of a business. They cover how to price work, how to scale a development team without drowning in tangled code, why hiring sits at the heart of growth, and why the business functions an engineer might dismiss deserve real respect.
Key takeaways
- Clients judge work by the value and return they receive, not by the hours a team puts in.
- Saying yes to every job is a trap; set clear expectations and be willing to turn work down.
- A large development team needs an architecture that supports parallel work, plus dedicated testing.
- Growth depends on careful hiring and on delegating decisions to people who are better at them.
1. Pricing on value, not effort
In the early days, Dunn and his co-founder Alyssa measured their worth by the hours they put in. If a project took 80 hours, they expected to be paid for 80 hours. He now calls that thinking naive. Clients, he learned, do not care how hard a team worked. They care about the outcome and whether it was worth the money they spent.
That shift reframed how Silicon Publishing approached every engagement. Instead of selling time, the company focused on making each project a win for both sides. Happy clients became the measure of success, and the effort behind a piece of work became a cost to manage rather than a number to bill. Some of those clients have now stayed with the company for over 20 years.
A second mistake followed from the first. When the phone rang once a month, the founders took every job that came their way. Over time they learned to set expectations carefully at the start, to talk clients out of ideas that needed miracles, and to turn people down when a project would not be good for both of them.
2. Scaling a development team
Growing from two people to about 30 forced a different kind of lesson. Dunn describes three stages: one developer who writes a whole project, two developers learning to share code, and then 20 people working on the same project at once. That last stage raised a hard question about how a large team can work in one code base without getting in each other's way.
The answer came when the company hired the engineers who had built Adobe InDesign, who joined in 2009. They taught Silicon Publishing two habits. The first was architecture: organising the code so that many people can work in parallel instead of all diving into one lump of spaghetti code. The team argued hard about the best design and came out with stronger systems.
The second habit was testing. Dunn admits he used to assume clients would report any bugs. The product manager from the InDesign team pointed out that this made the clients the testers, and that his old team ran two testers for every developer. Dunn says the first testers they hired multiplied the company's efficiency, and he now strongly believes in test driven development.
3. Learning to let go of decisions
Before founding the company, Dunn watched a business where one person made every decision, and he saw the mistakes that followed. So he and Alyssa started out sharing the vision and the decisions between them. As the company grew, they were careful with hiring, which he calls absolutely the essence of growing a business.
The move from renting out time by the hour to selling products brought new roles and new kinds of decisions. That forced the founders to involve more leaders. Dunn is open that delegating is hard, because nobody wants to hand control to someone who might damage the company. Yet he says a founder simply cannot make every decision and still keep growing.
When a competitor closed in 2019, Silicon Publishing gained two strong salespeople and a product leader whom Dunn says are much better at those jobs than he was. He has also learned to respect sales, marketing and contracts people after years of treating them as less important. The more he delegates, he says, the easier his life is and the more successful the company becomes.
