The Book
The Economics of Software Engineering
Translating Technical Decisions into Business Outcomes for Software Companies
A book by Andreas Creten
Burn rate is up. Velocity is down. The CTO cannot explain why the team needs a quarter on technical debt instead of features. Nobody is speaking the same language. So nobody makes good decisions.
The problem
Three conversations. Zero translation.
These conversations happen in parallel universes that occasionally collide when something goes wrong. This book creates a shared language between them.
Engineers talk
- Velocity
- Code quality
- Technical debt
Executives talk
- Burn rate
- Runway
- Revenue growth
Boards talk
- Capital efficiency
- Unit economics
- Path to profitability
What you'll learn
Engineering through a business lens
Not by teaching executives to code or engineers to read balance sheets, but by creating a shared language: the economics of software engineering.
The cost of a bug
Every escaped bug has a financial signature. Learn to quantify the impact on churn, support costs, and revenue so you can make the case for quality investment.
The cost of technical debt
Technical debt is not just a developer problem. Understand how it slows velocity, increases CAC, and erodes margins, in numbers your board will understand.
The cost of building the wrong thing
The most expensive engineering decision is solving the wrong problem. A framework for understanding the full cost of misaligned product work before you commit.
The economics of build vs. buy
When does building in-house create competitive advantage, and when does it just create cost? A framework for making the decision with clear economic reasoning.
What's inside
Inside the book
Introduction
Translating Engineering Into Economics
Chapter 1
How Money Flows Through Engineering
Chapter 2
Measuring Throughput and Cost per Unit of Value
Chapter 3
The Cost of a Bug
Chapter 4
The Cost of a Bad Hire
Chapter 5
The Cost of Technical Debt
Chapter 6
The Cost of Changing the Roadmap
Chapter 7
The Cost of More Engineers
Chapter 8
The Cost of Manual Work
Chapter 9
The Economics of Build vs. Buy
Chapter 10
The Cost of a Rewrite
Chapter 11
The Cost of Building the Wrong Thing
Chapter 12
The Cost of Premature Optimisation
Chapter 13
The Cost of Cutting Corners
Chapter 14
The Cost of Externalising Development
Chapter 15
Putting It All Together
Chapter 16
Having the Conversation
Conclusion
What Changes
Who this is for
Written for both sides of the table
You do not have to read this sequentially. Each chapter is designed to stand alone. If you are dealing with a specific problem, jump straight to the relevant chapter.
For executives and investors
Understand why your engineering team makes the decisions they do
Spot the difference between necessary technical investment and engineering gold-plating
Learn why hiring more engineers often makes things slower, not faster
Ask better questions in technical reviews and budget meetings
For engineering managers and technical leaders
Translate your instincts into arguments that resonate with CFOs and boards
Quantify code quality, hiring practices, and technical debt in terms non-technical stakeholders understand
Build a business case for technical investment that survives a budget review
Walk into roadmap discussions able to articulate the opportunity cost of every decision
Software engineering is not a cost centre.
It is a strategic investment that compounds over time.
Companies that understand this build better products, retain better people, and create more value with less capital. The ones that do not burn through cash, churn through people, and wonder why their competitors are moving faster despite spending less.
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Why bugs in production cost 100x more than bugs caught in development
Why bad hires destroy the value of your best people, not just their own salary
Why hiring more engineers often makes delivery slower, not faster
How to make the case for technical investment in terms CFOs and boards understand
About the author
Andreas Creten
Founder, madewithlove
Andreas has spent nearly two decades helping software companies build better engineering teams and stronger businesses. As founder of madewithlove, he has worked with hundreds of technical leaders across Europe and beyond.
His mission is to bridge the gap between software engineers and their non-technical stakeholders. The technical leaders who excelled were not necessarily the best programmers. They were the ones who understood the economic impact of their decisions and could translate technical challenges into business realities for their stakeholders.