What is a software company ?

Software businesses :- Software technology businesses take a real world problem and virtualise it. Then they try to solve this virtual problem with software technology. The efficiency gained by solving the virtualised problem is the value creation.

Example: Google makes all the knowledge of world digitally searchable and accessible. You don't need to go to get physical books/ newspapers to know something. You can just query it.

Counter Example: Why delivery businesses are not very profitable. Because essentially the problem they have solved is of discovery, but delivery still needs to happen in real world, and solving delivery is not a software problem it's maybe a supply chain problem. That is why we keep seeing Ubers/Amazon of world trying to do deliveries via drones and invest in self-driving cars.

Source: Discussion with Ayan