Alyona Mysko

This is best tech POV of the last year.
 
 It’s for “pay once” software (formerly known as plain old software.)
 
 While the idea of owning, instead of subscribing to, software isn’t new, what Jason Fried at 37signals has done here is some perfectly timed business genius.
 
 Because it makes a 60-year-old category sound like a revolution.
 
 On the heels of B2B SaaS bloat and growing customer frustration over the last 5 years—and a downturn in the economy—Fried came in and proposed a new way:
 
 Why pay subscription fees forever when you can pay once and own your software instead?
 
 Here’s a bit from their pitch-perfect POV:
 
 “For nearly two decades, the SaaS model benefitted landlords handsomely. With routine prayers — and payers — to the Church of Recurring Revenue, valuations shot to the moon on the backs of businesses subscribed at luxury prices for commodity services they had little control over.
 
 Add up your SaaS subscriptions last year. You should own that shit by now.”
 
 Their first “pay once” product is Campfire, a Slack competitor. Dozens of Slack competitors have failed over the years. 
 
 Why? Because, once established, it’s almost impossible to overtake a category leader.
 
 So 37 Signals competed with Slack by being something Slack could never be. 
 
 That’s the definition of great strategy. 
 
 Zig when they zag. Be strong where they're weak.
 
 Another smart thing 37 Signals did. They used what I call the three levers of differentiation: 
 
 - Business model
 - Product
 - Marketing. 
 
 By differentiating in all three dimensions, their customer is way more likely to consider their pitch. Here’s how they differentiated in each area:
 
 Business Model
 ↳ Pay once instead of forever.
 
 Product
 ↳ Campfire: simple, no-BS business messaging. Like Slack without all the feature creep (and you own it).
 
 Marketing
 ↳ Direct, honest, founder-led marketing.
 
 Because they have these three levers working together, it gives way more credibility to the idea that Campfire is categorically different than Slack.
 
 That 𝘥𝘪𝘧𝘧𝘦𝘳𝘦𝘯𝘤𝘦 is what makes customers pay attention to their pitch.
 
 It doesn’t hurt that some Slack customers could save hundreds of thousands of dollars a year by switching to Campfire.
 
 That’s a pretty good pitch.
 
 Still, a small software company competing with Salesforce and Microsoft usually ends badly.
 
 Do you think they’ll succeed? I do.
 
 #ceo 
 #cmo 
 #strategy