As a client-oriented business, I am a proud disciple of the Gospel of Tools. 1. Tools are one of the few institutional advantages that are in the domain of th

As a client-oriented business, I am a proud disciple of the Gospel of Tools. 1. Tools are one of the few institutional advantages that are in the domain of the programmer (rather than the MBA or the sales force). There are many shops out there that suffer from a lack of technical leadership and compete on the basis of (absolutely incredible!) strength of the sales force. Software developers don't win at that game. They can, however, win at having the best tools. You have to have some unfair advantage, and in most developer-run studios, tools are easier to cultivate than sales methodologies. 2. Customer-facing tools provide customer-visible value. If you're writing error-reporting software that helps debug issues on customer systems, that's providing visible value. If you have client dashboards that show the status of their project and predict ship dates, that's visible value. If your network protocol is faster than REST for your vertical, that means faster software, and that's visible value. It's all about giving your customers something to hang their hat on to select your shop. If they are getting "good vibes" from the other sales guys, but your software automatically builds them a Powerpoint deck of the project status to present at the weekly update meeting, then there's some class of customers who will prefer working with you, and you are better insulated from competition. 3. If you and your competitors don't do tool investment, then all the boats will rise at the same speed. But if you are doing tool investment, your boat will rise faster. At some point you can do the same job and provide better value than anyone else. When people figure that out, your competitors are forced to first, cut prices to remain competitive, and second, raise expenses to try and achieve tool parity. But you've already got a long head start, so they will either run out of money, license the tools from you, or just focus on the more sales/MBA-receptive customer base, and shrink to a niche offering. 4. As I've hinted at, tools can be valuable and can be licensed to other shops. The only way to really get out of the client "rat race" is to become a product company. Tools are an easy way to make that transition; you have a built-in customer base and an intimate knowledge of the problem domain.