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Know Your Company grows up and moves out

37signals.com

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Re: Know Your Company grows up and moves out

#11

Post by jasonfried »

rushabh wrote: post #10
jasonfried wrote: post #6

Earlier quoted context omitted.

What did you want to know that we didn't share?

The one time pricing is very interesting. How do you define the $100 one time pricing? What if you decide to cut the product in the middle, do you give a full refund? Is there a time limit (20 years) or is this for as long as the service is alive? Is there a limit on file uploads? Is there a small annual recurring fee for maintenance?

$100 per person one-time works exactly how it reads.

If you have 27 employees, it costs $2700 one time. If you hire 3 more people, it's an extra $300, one time. If you let someone go, and hire another person, it's an extra $100. We don't sell against seats, we sell against unique people.

No recurring monthly or annual fees.

Re: Know Your Company grows up and moves out

#12

Post by cjstott »

This will be interesting to watch. Given the sales page currently is simply a letter by Jason Fried, my assumption (and it is just an assumption) is that companies have gone with this offering because it's 37Signals. That said now momentum is built, that in turn should generate the referrals rather, perhaps more so than the initial buzz of working directly with 37signals people, so I guess this makes sense.

I've always seen 37signals as a very focused company, and this spin off enables them to focus back on their core business. I just finished reading Focus by Al Ries, hence this is top of mind, but 37signals seem the masters of relentless focus in the modern age.

Re: Know Your Company grows up and moves out

#13

Post by anon808 »

jasonfried wrote: post #6
anon808 wrote: post #2

I always feel like 37signals shares just enough to make you think you're part of their community, but not enough if in fact you actually were.

What did you want to know that we didn't share?

Why are you spinning off the business if it's profitable? Why isn't Claire joining 37S instead? What's happening to ClarityBox? What other operating scenarios did you guys consider? Who is going to run the business . . . will Claire be doing product development, programming, customer support herself? What exactly will she be doing? Is she hiring people? Who are these people?

Of course you don't owe anyone any of that info. However, if you crack the door open just a little bit, don't be offended/surprised etc. if my curiosity is piqued and I want to open it.

Re: Know Your Company grows up and moves out

#14

Post by corry »

jasonfried wrote: post #11
rushabh wrote: post #10

Earlier quoted context omitted.

The one time pricing is very interesting. How do you define the $100 one time pricing? What if you decide to cut the product in the middle, do you give a full refund? Is there a time limit (20 years) or is this for as long as the service is alive? Is there a limit on file uploads? Is there a small annual recurring fee for maintenance?

$100 per person one-time works exactly how it reads. If you have 27 employees, it costs $2700 one time. If you hire 3 more people, it's an extra $300, one time. If you let someone go, and hire another person, it's an extra $100. We don't sell against seats, we sell against unique people. No recurring monthly or annual fees.

Hi Jason - mundane accounting question: how do you account for revenue deferral? I believe in general you're supposed to match revenues and expenses as they are incurred providing the services. i.e. Up-front revenue gets deferred over the lifetime of a contract, because you will incur costs of servicing that revenue during that whole time.

How does this work when there is no actual term?

(Sorry if this is off-topic - we're thinking through some pricing model stuff, and this was top of mind!)

Re: Know Your Company grows up and moves out

#15

Post by rushabh »

jasonfried wrote: post #11
rushabh wrote: post #10

Earlier quoted context omitted.

The one time pricing is very interesting. How do you define the $100 one time pricing? What if you decide to cut the product in the middle, do you give a full refund? Is there a time limit (20 years) or is this for as long as the service is alive? Is there a limit on file uploads? Is there a small annual recurring fee for maintenance?

$100 per person one-time works exactly how it reads. If you have 27 employees, it costs $2700 one time. If you hire 3 more people, it's an extra $300, one time. If you let someone go, and hire another person, it's an extra $100. We don't sell against seats, we sell against unique people. No recurring monthly or annual fees.

Thanks for the clarification. It would be very interesting to see if anyone else adopts this pricing.

In spite of the flak you get from the HN crowd (the reason I am guessing, might be that you make it deceptively simple to hit $390,000 with 99% retention rate) it is always very refreshing to see your blog posts and the quality of your work is very inspiring. Thanks!

Re: Know Your Company grows up and moves out

#17

Post by larrys »

anon808 wrote: post #13
jasonfried wrote: post #6

Earlier quoted context omitted.

What did you want to know that we didn't share?

Why are you spinning off the business if it's profitable? Why isn't Claire joining 37S instead? What's happening to ClarityBox? What other operating scenarios did you guys consider? Who is going to run the business . . . will Claire be doing product development, programming, customer support herself? What exactly will she be doing? Is she hiring people? Who are these people? Of course you don't owe anyone any of that…

"Why are you spinning off the business if it's profitable?"

I think it makes a lot of sense and is a smart move.

Gives an incentive to the person running it to "do their own thing" and by creating a separate entity they can also sell it more easily (if they want to). Or give an equity stake to Claire. And empower her to take chances she might not take if she is just "joining 37 signals" and is all distracted with general company goals.

More importantly it even creates a template to start other similar businesses and do the same. And not to get dragged into the day to day of each and every business or product line or decision.

Re: Know Your Company grows up and moves out

#18

Post by larrys »

jasonfried wrote: post #11
rushabh wrote: post #10

Earlier quoted context omitted.

The one time pricing is very interesting. How do you define the $100 one time pricing? What if you decide to cut the product in the middle, do you give a full refund? Is there a time limit (20 years) or is this for as long as the service is alive? Is there a limit on file uploads? Is there a small annual recurring fee for maintenance?

$100 per person one-time works exactly how it reads. If you have 27 employees, it costs $2700 one time. If you hire 3 more people, it's an extra $300, one time. If you let someone go, and hire another person, it's an extra $100. We don't sell against seats, we sell against unique people. No recurring monthly or annual fees.

From the blog post:

"This is a one-time investment, not an ongoing expense."

I like the idea and it makes sense.

But I think it has to be restated in a way to not sound as if there is a hidden cost that pops out when getting to the fine print. That creates a negative in a buyers mind [1]. Needs to be restated in more of a "ok I understand makes sense" or might backfire.

[1] Example: I had a building security system quote (cameras). Company said "we take care of the installation and everything". Quote states more or less "oh yeah but you have to supply 110vac outlets where we will put cameras". Oh great what is that going to cost me? Surprise. To me "everything" means turn key. Doesn't mean I am right but that is what I (not dealing with this every day) thought. My reaction. Had the salesperson said "Installation includes everything but electrical and that's normally $100 per outlet" prior to the quote I would have felt much better about the process.

Re: Know Your Company grows up and moves out

#19

Post by anon808 »

larrys wrote: post #17
anon808 wrote: post #13

Earlier quoted context omitted.

Why are you spinning off the business if it's profitable? Why isn't Claire joining 37S instead? What's happening to ClarityBox? What other operating scenarios did you guys consider? Who is going to run the business . . . will Claire be doing product development, programming, customer support herself? What exactly will she be doing? Is she hiring people? Who are these people? Of course you don't owe anyone any of that…

"Why are you spinning off the business if it's profitable?" I think it makes a lot of sense and is a smart move. Gives an incentive to the person running it to "do their own thing" and by creating a separate entity they can also sell it more easily (if they want to). Or give an equity stake to Claire. And empower her to take chances she might not take if she is just "joining 37 signals" and is all distracted with gen…

Why not just keep the product in 37Signals if it's a profitable product?

"not to get dragged into the day to day of each and every business or product"; 37S has a successful history of getting into the day to day of every business and product, that's what they do exceptionally well. Why change that?

Re: Know Your Company grows up and moves out

#20

Post by larrys »

tptacek wrote: post #4
anon808 wrote: post #2

I always feel like 37signals shares just enough to make you think you're part of their community, but not enough if in fact you actually were.

What does that mean? 37signals is a business. Savvy businesses create superficial communities for marketing, and 37signals is especially adept at doing that; they've even created a genuine community (Rails) which bolsters their bona fides. But they are at the end of the day a business. What information do you feel that they owe you that they haven't shared?

"But they are at the end of the day a business"

I sometimes wish that some of the "newly hatched" were around back in the day when I started in business. The idea of "download netscape now" buttons and links outside your website would be as likely as a mall store putting in a door to let you escape from the maze of aisles meant to focus you on their product. Not to mention allowing your customers to share their opinions with your other customers.[1]

[1] In other words, unthinkable.

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