Sneaking into the Fortune 500 through the back door | Hacker News Reader

Sneaking into the Fortune 500 through the back door

37signals.com

65 pointsjoshuacc20 comments

The comments here are mildly frustrating to me. Core takeaway: despite what you might assume about purchasing rules, no-touch sales can successfully penetrate organizations which have billions of dollars invested in making sales difficult. That is VERY IMPORTANT for your business model because the LTV of an account fo these types of services is fairly high and thry are UTTERLY price insensitive at the dollar amounts we routinely bicker over.

There are copies of BCC bouncing around in the American defense industry. (Long story.) Obviously, when you can spend two million by hitting a button, the difference between $25 and $30 is immaterial.

> There are copies of BCC bouncing around in the American defense industry

That is one heck of an achievement. Mind if I ask how that happened?

The same way almost all sales of BCC happened: customer wants to play X bingo with users, customer Googles [X bingo cards], customer finds BCC web site, customer pays via credit card. The only reason I'm even consciously aware of this customer is that they really wanted a custom feature built and, because of who they were and what they were doing, I made it happen. (At the risk of stating the obvious, normally $29.95 does not entitle you to getting custom programming done on your behalf.)

If you look behind the numbers they aren't as impressive as they sound.

GE, for instance, has 287.000 employees, and it only takes one to tick them off in the stat they present here. A product that has some traction, as 37signals does, will almost certainly include a few people in large companies.

They are very good at marketing though...

I actually find it impressive still. The reason being that for companies as big as they are to actually allow to use a new product has to go up high a couple of levels, and needs a lot of approval. So if it made it all the way up, and it was approved, even for that "one guy", it means there is a future in the company for the product.

It's not clear but it looks like they're also counting people who just signed up for the trial version.

That would be true is Basecamp was a $500 a month product, but since the price is so low it falls within being a cost that can be expensed. That expense level is usually a few hundred dollar per month, before it needs approval.

Joel Spolsky wrote a post about this[1]. He had a great point - either price your product under the expense level, or if you prive it higher - go all the way and price it as an enterprise product, since it will involve a chain-of-approval, a sales cycle etc.

The other good example is Atlassian. They prices their products so that they can sneak in as expenses. The founders talk about how with a lot of their customers the bosses do not know that their products are being used. It is a way to sneak into an organization through developer love and being a line-item in an expense report rather than something that is bought and procured.

[1] Camels and Rubber Duckies - http://joelonsoftware.com/articles/CamelsandRubberDuckies.ht...

After reading the small print, the article reduces to "someone with an email address from company X is using our product, therefore our product is better than their industry standard". (Map this argument to the Fortune 50, 100 and 500 lists.)

Reading the title, I almost thought 37signals moved into Fortune's 500.

I don't want to be mean - but I hope you're not serious.

Well the word sneaked gave me a sneaky feeling which in turn raised my hopes.

Company #500 did $4bn+ in rev & $250mm+ in profit last year - think about that compared to 37signals (no offense to them).

That's exactly what I thought too. Was about to say, that would be the most epic 'Blog posts', if that's how 37Signals announces they were indeed in the Fortune 500. That would have been awesome.

Well, I thought the same thing, and was sadly disappointed.

Not directly in the Fortune 500, I mean - my assumption was that the post would include some bogus jokey calculation that, once turned into $, suggested that they were worth some unimaginable amount...

Just so you don't feel alone, I almost thought that too.

And I'm sure the people in charge of the F500 IT systems and PCI compliance are super frustrated at these basecamp/campfire implementors. "Just works" can often mean, "ignores some really important organizational rules," or "creates a bunch of new work for someone else." These rules are sometimes in place for a reason. Not all system constraints are waste.

In my experience, the biggest problem is that "one size fits all" IT rules don't make sense for many organizations that employ them.

For example, I've worked for two ISPs in which engineers are responsible for larger networks than the IT department is, yet the engineers are still not allowed to, say, install a new version of Java on their own machines.

Fortune 500 tools suck. They are purchased by the bosses to be used by the employees. Even worse, they are often poorly developed in-house as opposed to buying the leading product on the market(wtf?). It shouldn't be a surprise then that 1/3 of these employees then use illegal sofware- not to be rebels, but because they actually want to do good work.

There is a more subtle and generic message here: your product might sneak outside the target market despite best efforts. Be prepared to pivot. 37s actually has a huge opportunity if they choose to take it.

I think this is a bit misleading. They say it "is being used at", but that could easily mean that an external consultant or contractor is the one paying for the product and then adding a Fortune 500 guy to the project. Basecamp is nice for running smaller projects (maybe up to 50 people) and for sharing between employees from different companies. But it is too simple and un-extendable for running larger Fortune 500 projects.

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