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0 pointsblurry17y ago0 comments

I've never "met" a company that does tech consulting that carries just 3 employees. You either have more people (developers, designers, infrastructure, sales, HR, etc) and so the shop will invariably go Microsoft or something similar where they own the data (and by no means allow an "impulse buy" when it comes to their precious rolodex), or you are talking a couple individual freelancers teaming up on a specific project.

Of course there are some bigger clients for whom $70/month is not a big deal but I was talking scale. Would you rather charge $70/month to a 1,000 clients or $25/month to 10,000?

(And let's please not make sophistic arguments about "3 startup guys with no revenue living on rice and beans". It doesn't make for good discussion when you pretend that I made an obviously ridiculous statement and then refute it).

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webwright17y ago

FWIW, I ran a consulting shop for 8 years-- early in its life, we had 3 employees. Then 4. Then 5. Then (ultimately) 15. Happens all the time.

Can you show me a real business (with revenue and profit) with any employees who would be concerned about $70/mo? Or more importantly, the difference between $70 and the price that you think would be more appropriate?

The rice/beans argument wasn't sophistic-- it was an acknowledgment that yes, there are certainly tiny/new companies with little revenue/profit for whom $70 would "move the needle". 37Signals fails to capture these customers every day.

The 3-person example was aiming at the lowest end-- trying to show that even the tiniest business with profit and revenue would be silly to care about $70/mo if it helped their business be more efficient. The larger the team, the more ridiculous it sounds to say that 37s pricing is "prohibitive".

The $70:1000 customer vs. $25/10,000 is the crux-- Are there 9000 (90%) businesses/teams out there who would change their decision based on $45/mo? As a guy who has sold products and services to businesses for 14 years, my gut says no. It's all about the demand curve.

Great read on software pricing here, if you care to read it: http://www.joelonsoftware.com/articles/CamelsandRubberDuckie...