5 ms·

37Signals Doubles Price for Basecamp

32 points by jbail 16y ago

ukdm 16y ago
Update: Jason Fried responds Shortly after our post went live, 37signals founder Jason Fried left a comment, clarifying that they are toying with the design of the sign-up page, but that all of the old plans are still available. "While we used to have four plans on the sign up chart, today we only have three," said Fried. "Same prices as before, just fewer plans displayed. A while back we used to have six plans to choose from, but we found that was ultimately confusing customers. So we went to five. Then we went to four. Now we're experimenting with three." Fried echoed Hansson's earlier statement that the changes are purely experimental and that they may continue to alter the plans listed on their sign-up page, depending on their findings.
- jbail 16y ago
  Interesting. Thanks for the update. So the news is that they are merely toying with the idea of making $49/mo the new "cheap" plan. That would eliminate the free plan (do they still have that?) as well as the $12 and $24 plans.
  - gcheong 16y ago
    They don't have the free and $12 and $24 plans listed on the website anymore as far as I can tell, but perhaps you are able to downgrade to one of those plans after signing up for one of the other plans.
    - cvg 16y ago
      Free plan isn't displayed, but available at https://signup.37signals.com/basecamp/Free/signup/new https://signup.37signals.com/basecamp/Free/signup/new
      - gcheong 16y ago
        How can someone get to this if they don't know the URL?
        cvg 16y ago
        I made a guess at the url based on how they format their live urls. I guess this could be one negative of having nice urls. The current signup urls are: Maximum: https://signup.37signals.com/basecamp/Max/signup/new https://signup.37signals.com/basecamp/Max/signup/new Premium: https://signup.37signals.com/basecamp/Premium/signup/new https://signup.37signals.com/basecamp/Premium/signup/new Plus: https://signup.37signals.com/basecamp/Plus/signup/new https://signup.37signals.com/basecamp/Plus/signup/new Old Plans: Basic: https://signup.37signals.com/basecamp/Basic/signup/new https://signup.37signals.com/basecamp/Basic/signup/new Free: https://signup.37signals.com/basecamp/Free/signup/new https://signup.37signals.com/basecamp/Free/signup/new
        gcheong 16y ago
        Oh, of course. I meant people who wouldn't think of hacking the url ;^). So it looks like the old plans are there but they just don't want to make it easy to get to them.
    - gattone 16y ago
      There is a mention of the Free Plan on the Sign Up page, right under the Max/Premium/Plus boxes.
- jasonfried 16y ago
  To add, none of the prices have changed. The make up of the plans, and the prices of the plans, are the same as they were before the experiment. The experiment is in design, layout, suggestion, and reducing the number of plans shown at sign up to reduce confusion.
patio11 16y ago
This is both a) ballsy and b) going to buy DHH another few sportscars. People should A/B test more, including consequential tests like product mix and pricing.
- webwright 16y ago
  We (RescueTime) did TONS of A/B testing on pricing/plans, to very good effect. People seem really hesitant to do this for fear of pissing off customers, but we didn't get any complaints. A few folks noticed, and we'd always honor the lowest price they saw if they were part of the experiment.
  - dmix 16y ago
    How much of a fluctuation did you test? $9 vs $19? $49 vs $99?
    - webwright 16y ago
      We mostly only had enough volume for solo users, where we tested anywhere from $4-$20/month for an individual account. Found VERY little difference in conversion anywhere below $10, with a big dropoff thereafter. Pretty remarkable that conversions change almost not at all between 9.95 and 3.95/month. Our volume for business signups wasn't super high at the time (that's since changed-- go RescueTime!), so we didn't fiddle much with that.
      - dmix 16y ago
        I also heard from an ex-employee at FreshBooks that there was little difference between $12.99 and $19.99 in terms of conversion. It must be a common psychological trait to value things in sequences of $9-10.
dpcan 16y ago
I commented on the article too - but, could this just be a customer retention ploy? I no longer want to cancel anything because if I need to come back and re-activate my projects, well, it looks like it may cost me double.
- marcamillion 16y ago
  This is an interesting idea actually. Never thought about that. Brilliant!
  - ryanwaggoner 16y ago
    Terrible! This is akin to building a wall around your garden after you've invited a bunch of friends over for some tea and cookies. If I thought for a second that some business was trying to lock me in by making it super painful to leave and come back, I'd leave and never come back. It's not like there's any shortage of project management web apps. However, I highly doubt this is what they're doing.
    - marcamillion 16y ago
      Well...I meant, this was a brilliant, subtle strategy from their point of view. They aren't building a wall, they are simply sending a signal that the value you are currently taking advantage of is higher than you initially paid for it - and we realize it. I see nothing wrong with the way they have done it. If they forced you to increase your monthly spend as a current client, then that would be more akin to your scenario. But they aren't doing that. A better analogy would be, they have a nice lush garden setup with fruit stalls everywhere. As one of the first 100 people into the garden, you get all you can eat for $10. However, for everybody after that you have to pay $20. If you know this, and leave the garden and want to come in later....well, whose fault is that?
- nek4life 16y ago
  I recently archived and cancelled my personal account and now see that there is no way to resume projects on the free plan and the personal plan has been removed.
TeHCrAzY 16y ago
Not sure how you are intended to get to the other plans, but if you remember the names, you can access their signup forms directly ie: https://signup.37signals.com/basecamp/free https://signup.37signals.com/basecamp/free
ComputerGuru 16y ago
Common enough strategy these days, though not usually from the big players. Double your price, you'll roughly halve your (new) customers - same revenue, but more profit because of less overhead.
- webwright 16y ago
  "Double your price, you'll roughly halve your (new) customers" Absolutely not true. I've experimented with dropping prices by half and got a barely noticable uptick in customers. I've also bumped prices by 20% and had conversion actually increase slightly. Pricing psychology is way more complex than that.
StavrosK 16y ago
In other, less exciting news, historious did the exact same thing a few hours before 37signals. The only logical conclusion is that they are copying us.
levigross 16y ago
I signed up yesterday for a friend of mine and when I saw the cheapest plan at $49.95 I just grabbed the free one and upgraded to the $24 plan. I thought it was a glitch in the pricing screen (and my friend still thinks I am seeing things).
- raganwald 16y ago
  It doesn't sound deliberate, but many pricing discrimination schemes work exactly like this: For someone who can afford it and is in a hurry, they pay $x. For people who are unwilling to 'flop' their chequebook, you give them the free option and offer an upgrade that is $(x/2). Neatly captures the surplus while hiding the $(x/2) price from people willing to pay $x when they sign up.
ryanwaggoner 16y ago
I love the unattributed testimonial: “Basecamp is so simple you can’t do anything wrong. It’s addictively easy-to-use.” Why bother with the risk of the FTC cracking down for fake testimonials when you can just quote yourself! With the popularity of Basecamp, I'm sure this is an actual customer quote, but I still think it's humorous. Perhaps I'll go pepper my blog with quotes about how awesome I am :)
- petercooper 16y ago
  Here's one for you so you don't have to fake it: Ryan Waggoner is an awesome developer and entrepreneur with a clear passion for all things geek. Not only is he a great developer but women have secretly whispered to me how sexually attractive he is. He has the charisma and wit of fifty men wrapped up in just one sack of skin. You know, come to think of it, a system to encourage HNers to give each other character testimonials would be kinda cool ;-) (that's not LinkedIn..)
- jasonfried 16y ago
  The original quote: http://www.businessweek.com/magazine/content/05_47/b3960412.htm http://www.businessweek.com/magazine/content/05_47/b3960412.... "Like Google's (GOOG ) spartan home page, it's so simple you can't do anything wrong -- and so addictively easy to use that one customer calls it "Basecrack."
RoyG 16y ago
I just found this out when I had an occasion to use PM on a small project. I found Huddle, which I think is a nice alternative, with a much better price point.
korch 16y ago
I'd like to see a quality open source Basecamp clone put up on Github. Written in Rails of course, ironically. There certainly are enough Rails devs driving open source projects to make this happen. That's the peril/blessing of embracing open source—given enough time, no matter how good you are, you will end up competing with free and/or a free clone of yourself! Then let folks just arrange for their own hosting(Heroku could become perfect for this), or host it locally, and install & run it themselves. What if many, many more companies would use a Basecamp-like app if they could run it inside their corporate firewalls? Basecamp is not rocket science. Its core is a dozen pages give or take, and a bunch of standard CRUD. It does look polished, very well designed and thought out, and is highly usable. It's a showcase example of what a great web app should be. Yet almost all of these unconventional parts that seem like they would need heavy lifting configuration could be automated away. Sure it's a bit of a dick move to make a white room clone, even though it happens all the time, and is almost the very definition of the majority of popular open source software. However, after several years, once some innovative software becomes mainstream, can it still claim exclusive right to the ephemeral methods of implementation? Once the knowledge of those methods, and the usage patterns are learned and spread throughout a community, the value of the knowledge plummets. Before it became obvious to everybody, sure, it would have been enormously difficult to create Basecamp from scratch. But after everyone has seen Basecamp and used it, it's funny that it now seems obvious that is how it should be done. It's like the software patent issue essentially. I'd be curious to know the true cost of each Basecamp user in terms of hardware, network and storage cost. What if it's oh say $1.00 on average? Then it would be profitable for some company like Heroku who specializes only in streamlined, small Rails app hosting to butt in and sell hosting for a cheap price like $5. The software is free, the hardware is not, to steal a page from the Apple play book. That would bleed 37signals' profit margins. Isn't it fun to play race to the bottom pricing of software as it crystalizes into a commodity over a few years? Sure a few years ago, Basecamp would be difficult to make. But 2 years from now? I don't know if the assumption holds that 2 years from now it will still be non-trivial to clone Basecamp in such a way we haven't even thought of nor seen on the web. Markets move quickly, especially in software. Everyone knows competition is a bitch, especially when the goal posts keep moving, and while the technology playing field itself undergoes rapid, constant geologic & volcanic upheaval. The workflow in Basecamp itself is a great template for creating other kinds of web apps outside of project management and address books. Many other kinds of businesses have similar workflows that could be represented in a souped up Basecamp without too many modifications. An open source clone could also serve as a good boiler-plate starter app for developing more customized Basecamp-like apps. What if the value of that is more profitable than selling Basecamp itself?

32 points by jbail 16y ago

ukdm 16y ago

Update: Jason Fried responds Shortly after our post went live, 37signals founder Jason Fried left a comment, clarifying that they are toying with the design of the sign-up page, but that all of the old plans are still available. "While we used to have four plans on the sign up chart, today we only have three," said Fried. "Same prices as before, just fewer plans displayed. A while back we used to have six plans to choose from, but we found that was ultimately confusing customers. So we went to five. Then we went to four. Now we're experimenting with three." Fried echoed Hansson's earlier statement that the changes are purely experimental and that they may continue to alter the plans listed on their sign-up page, depending on their findings.

jbail 16y ago
Interesting. Thanks for the update. So the news is that they are merely toying with the idea of making $49/mo the new "cheap" plan. That would eliminate the free plan (do they still have that?) as well as the $12 and $24 plans.
- gcheong 16y ago
  They don't have the free and $12 and $24 plans listed on the website anymore as far as I can tell, but perhaps you are able to downgrade to one of those plans after signing up for one of the other plans.
  - cvg 16y ago
    Free plan isn't displayed, but available at https://signup.37signals.com/basecamp/Free/signup/new https://signup.37signals.com/basecamp/Free/signup/new
    - gcheong 16y ago
      How can someone get to this if they don't know the URL?
      - cvg 16y ago
        I made a guess at the url based on how they format their live urls. I guess this could be one negative of having nice urls. The current signup urls are: Maximum: https://signup.37signals.com/basecamp/Max/signup/new https://signup.37signals.com/basecamp/Max/signup/new Premium: https://signup.37signals.com/basecamp/Premium/signup/new https://signup.37signals.com/basecamp/Premium/signup/new Plus: https://signup.37signals.com/basecamp/Plus/signup/new https://signup.37signals.com/basecamp/Plus/signup/new Old Plans: Basic: https://signup.37signals.com/basecamp/Basic/signup/new https://signup.37signals.com/basecamp/Basic/signup/new Free: https://signup.37signals.com/basecamp/Free/signup/new https://signup.37signals.com/basecamp/Free/signup/new
        gcheong 16y ago
        Oh, of course. I meant people who wouldn't think of hacking the url ;^). So it looks like the old plans are there but they just don't want to make it easy to get to them.
  - gattone 16y ago
    There is a mention of the Free Plan on the Sign Up page, right under the Max/Premium/Plus boxes.
jasonfried 16y ago
To add, none of the prices have changed. The make up of the plans, and the prices of the plans, are the same as they were before the experiment. The experiment is in design, layout, suggestion, and reducing the number of plans shown at sign up to reduce confusion.

patio11 16y ago

This is both a) ballsy and b) going to buy DHH another few sportscars. People should A/B test more, including consequential tests like product mix and pricing.

webwright 16y ago
We (RescueTime) did TONS of A/B testing on pricing/plans, to very good effect. People seem really hesitant to do this for fear of pissing off customers, but we didn't get any complaints. A few folks noticed, and we'd always honor the lowest price they saw if they were part of the experiment.
- dmix 16y ago
  How much of a fluctuation did you test? $9 vs $19? $49 vs $99?
  - webwright 16y ago
    We mostly only had enough volume for solo users, where we tested anywhere from $4-$20/month for an individual account. Found VERY little difference in conversion anywhere below $10, with a big dropoff thereafter. Pretty remarkable that conversions change almost not at all between 9.95 and 3.95/month. Our volume for business signups wasn't super high at the time (that's since changed-- go RescueTime!), so we didn't fiddle much with that.
    - dmix 16y ago
      I also heard from an ex-employee at FreshBooks that there was little difference between $12.99 and $19.99 in terms of conversion. It must be a common psychological trait to value things in sequences of $9-10.

dpcan 16y ago

I commented on the article too - but, could this just be a customer retention ploy? I no longer want to cancel anything because if I need to come back and re-activate my projects, well, it looks like it may cost me double.

marcamillion 16y ago
This is an interesting idea actually. Never thought about that. Brilliant!
- ryanwaggoner 16y ago
  Terrible! This is akin to building a wall around your garden after you've invited a bunch of friends over for some tea and cookies. If I thought for a second that some business was trying to lock me in by making it super painful to leave and come back, I'd leave and never come back. It's not like there's any shortage of project management web apps. However, I highly doubt this is what they're doing.
  - marcamillion 16y ago
    Well...I meant, this was a brilliant, subtle strategy from their point of view. They aren't building a wall, they are simply sending a signal that the value you are currently taking advantage of is higher than you initially paid for it - and we realize it. I see nothing wrong with the way they have done it. If they forced you to increase your monthly spend as a current client, then that would be more akin to your scenario. But they aren't doing that. A better analogy would be, they have a nice lush garden setup with fruit stalls everywhere. As one of the first 100 people into the garden, you get all you can eat for $10. However, for everybody after that you have to pay $20. If you know this, and leave the garden and want to come in later....well, whose fault is that?
nek4life 16y ago
I recently archived and cancelled my personal account and now see that there is no way to resume projects on the free plan and the personal plan has been removed.

TeHCrAzY 16y ago

Not sure how you are intended to get to the other plans, but if you remember the names, you can access their signup forms directly ie: https://signup.37signals.com/basecamp/free https://signup.37signals.com/basecamp/free

ComputerGuru 16y ago

Common enough strategy these days, though not usually from the big players. Double your price, you'll roughly halve your (new) customers - same revenue, but more profit because of less overhead.

webwright 16y ago
"Double your price, you'll roughly halve your (new) customers" Absolutely not true. I've experimented with dropping prices by half and got a barely noticable uptick in customers. I've also bumped prices by 20% and had conversion actually increase slightly. Pricing psychology is way more complex than that.

StavrosK 16y ago

In other, less exciting news, historious did the exact same thing a few hours before 37signals. The only logical conclusion is that they are copying us.

levigross 16y ago

I signed up yesterday for a friend of mine and when I saw the cheapest plan at $49.95 I just grabbed the free one and upgraded to the $24 plan. I thought it was a glitch in the pricing screen (and my friend still thinks I am seeing things).

raganwald 16y ago
It doesn't sound deliberate, but many pricing discrimination schemes work exactly like this: For someone who can afford it and is in a hurry, they pay $x. For people who are unwilling to 'flop' their chequebook, you give them the free option and offer an upgrade that is $(x/2). Neatly captures the surplus while hiding the $(x/2) price from people willing to pay $x when they sign up.

ryanwaggoner 16y ago

I love the unattributed testimonial: “Basecamp is so simple you can’t do anything wrong. It’s addictively easy-to-use.” Why bother with the risk of the FTC cracking down for fake testimonials when you can just quote yourself! With the popularity of Basecamp, I'm sure this is an actual customer quote, but I still think it's humorous. Perhaps I'll go pepper my blog with quotes about how awesome I am :)

petercooper 16y ago
Here's one for you so you don't have to fake it: Ryan Waggoner is an awesome developer and entrepreneur with a clear passion for all things geek. Not only is he a great developer but women have secretly whispered to me how sexually attractive he is. He has the charisma and wit of fifty men wrapped up in just one sack of skin. You know, come to think of it, a system to encourage HNers to give each other character testimonials would be kinda cool ;-) (that's not LinkedIn..)
jasonfried 16y ago
The original quote: http://www.businessweek.com/magazine/content/05_47/b3960412.htm http://www.businessweek.com/magazine/content/05_47/b3960412.... "Like Google's (GOOG ) spartan home page, it's so simple you can't do anything wrong -- and so addictively easy to use that one customer calls it "Basecrack."

RoyG 16y ago

I just found this out when I had an occasion to use PM on a small project. I found Huddle, which I think is a nice alternative, with a much better price point.

korch 16y ago

I'd like to see a quality open source Basecamp clone put up on Github. Written in Rails of course, ironically. There certainly are enough Rails devs driving open source projects to make this happen. That's the peril/blessing of embracing open source—given enough time, no matter how good you are, you will end up competing with free and/or a free clone of yourself! Then let folks just arrange for their own hosting(Heroku could become perfect for this), or host it locally, and install & run it themselves. What if many, many more companies would use a Basecamp-like app if they could run it inside their corporate firewalls? Basecamp is not rocket science. Its core is a dozen pages give or take, and a bunch of standard CRUD. It does look polished, very well designed and thought out, and is highly usable. It's a showcase example of what a great web app should be. Yet almost all of these unconventional parts that seem like they would need heavy lifting configuration could be automated away. Sure it's a bit of a dick move to make a white room clone, even though it happens all the time, and is almost the very definition of the majority of popular open source software. However, after several years, once some innovative software becomes mainstream, can it still claim exclusive right to the ephemeral methods of implementation? Once the knowledge of those methods, and the usage patterns are learned and spread throughout a community, the value of the knowledge plummets. Before it became obvious to everybody, sure, it would have been enormously difficult to create Basecamp from scratch. But after everyone has seen Basecamp and used it, it's funny that it now seems obvious that is how it should be done. It's like the software patent issue essentially. I'd be curious to know the true cost of each Basecamp user in terms of hardware, network and storage cost. What if it's oh say $1.00 on average? Then it would be profitable for some company like Heroku who specializes only in streamlined, small Rails app hosting to butt in and sell hosting for a cheap price like $5. The software is free, the hardware is not, to steal a page from the Apple play book. That would bleed 37signals' profit margins. Isn't it fun to play race to the bottom pricing of software as it crystalizes into a commodity over a few years? Sure a few years ago, Basecamp would be difficult to make. But 2 years from now? I don't know if the assumption holds that 2 years from now it will still be non-trivial to clone Basecamp in such a way we haven't even thought of nor seen on the web. Markets move quickly, especially in software. Everyone knows competition is a bitch, especially when the goal posts keep moving, and while the technology playing field itself undergoes rapid, constant geologic & volcanic upheaval. The workflow in Basecamp itself is a great template for creating other kinds of web apps outside of project management and address books. Many other kinds of businesses have similar workflows that could be represented in a souped up Basecamp without too many modifications. An open source clone could also serve as a good boiler-plate starter app for developing more customized Basecamp-like apps. What if the value of that is more profitable than selling Basecamp itself?