You’re reading Signal v. Noise, a publication about the web by Basecamp since 1999. Happy !
The new year brings with it a new 37signals employee. Welcome aboard Jeffrey!
The first step with any new hire? Keeping things secure. Here’s where we begin…
1. Use encrypted mail for 37signals stuff. For Mail.app users: If you don’t already have a client certificate installed, you can use this guide.
2. We use Adium (for it’s encryption) for IM so we can throw around passwords and other sensitive data.
3. We use encrypted disk images for source code. I think everyone here uses Knox for that.
A few years ago I switched from Cingular to T-Mobile because Cingular’s customer service stunk. My experience today was another proof that I made the right choice.
Late Saturday night my beloved Samsung T509 had full signal in my apartment, but I couldn’t place or receive any calls. Heading outside, I walked six blocks before my calls would go through. Some kind of cell phone black hole was centered right on my apartment. What a bummer, especially when you’re trying to order pizza without a landline.
So the next morning I went out for brunch beyond the boundary of the black hole. I called T-Mobile with a forkful of chilaquiles and expected to wait on hold. Much to my surprise, T-Mobile doesn’t make you wait. They take your number instead and call you back. Three minutes later, my phone rang. The girl on the other end was friendly, listened to my problem, apologized, and told me she’d send an engineer asap. She couldn’t promise a response before Wednesday due to New Years, so I crossed my fingers and hoped for the best.
Today my comatose phone gave a familiar chirp. T-Mobile had texted me this message:
An Engineer has reviewed your trouble ticket and a resolution has been found. Thank you for choosing T-Mobile.
After making a few calls and dancing around the room, I had to reflect on this. T-Mobile nailed this support experience from the beginning through the middle to the end.
1. I never had to stand in line
Waiting on hold sucks. T-Mobile knows it so they gave me another option and called me back.
2. The agent cared about my problem
The girl on the line was kind, attentive, and apologetic. She made me feel like it was their problem and their responsibility. Which is exactly what I want as a customer. She also promised an update by a specific date, which eased my uncertainty.
3. When the problem was fixed, I heard it from them first
I received a text message as soon as my service was restored. That little victory SMS taught me that when they have downtime in the future, I can trust they will work quickly and notify me when it’s fixed. It’s so frustrating to repeatedly pick up the phone every half hour to see if it works. Thanks to their communication, next time I can relax and wait for the good news.
Kudos to T-Mobile for the good example.
Photo Credit: Jasmined
Anyone who spent time in Chicago’s Wicker Park over the last few years probably ran into Gene Lee “the dancing Asian guy.” Insert “weird” or “questionable fashion sense” at your discretion. Sadly, Gene recently passed away.
Gene was important because he represented an increasingly elusive burst of color and character. As our cities homogenize, our street corners fill with banks, and our old buildings are replaced by cookie cutter replicas of the uninspired cinderblock box next door, we’re reminded that it’s the people – especially the local characters – that flavor the city. Gene was one of those people.
Wicker Park has its share of street people and neighborhood fixtures. But most of them are ignored and fade into the chaos of cars, commuters, and city bustle. Gene, however, was impossible to ignore. It was fun to just watch people react to him. They didn’t look down, they didn’t just walk by, they didn’t ignore him—they smiled. They pointed and laughed too, but usually in a “hey, good for that guy!” kinda way. He cheered people up.
It’s so easy to go through your daily routine and never look at what’s going on around you. Gene snapped you out of that funk.
According to his brother, Gene was haunted by addiction and bipolar disorder. When he was dancing it was hard to tell if he was happy, miserable, or like most of us, somewhere in between. But he definitely made a lot of people smile. I hope that’s how he’s remembered.
Matt asks:
In my experience, credit card processing has been one of the major hurdles in starting an online business. Especially recurring/subscription charges.
You’ve got PayPal, which seems a little unprofessional (and is a pain in the a*), and an absurd number of 3rd party vendors offering various pieces of the puzzle. Integration is a pain, and the costs are really steep.
Can you offer any advice or guidance? When you were still small and just starting out with Basecamp, how did you tackle that?
I think I was a relatively early customer, and I was really impressed by how smooth and seamless the payment process was – it gave me a lot of confidence that I was buying a professional product, even though you hadn’t yet developed much of a name yet in the product world.
Many thanks for all that you contribute to the small business community – great products, great insights, and great inspiration.
First off, thanks for being an early customer. We have a special affinity for those who were willing to take a leap of faith and trust us in the early days. I know it’s hard to trust something new, so thanks.
So, credit card processing and set up and all that stuff is a real pain in the ass. It’s definitely intimidating to get started. The industry just feels dirty. So many companies offering merchant accounts, so many companies providing gateway software and integration, so many deals and discounts and conditions and terms and acronyms. What do we need? Who can we trust? How does it all work?
Before I get into how we’re set up now, I’ll tell you a little story about how we originally thought we’d be selling Basecamp.
We launched Basecamp back in February 2004. We were planning on launching in January, but we were held up because the sales method we originally wanted to go with was rejected by our merchant account provider.
At first we wanted to sell Basecamp with a flat yearly fee. $99/year, $149/year, $199/year. We thought it would be easier for customers to just pay once a year instead of every month. So we built the internals to support such a sales cycle.
However, when we explained our business to the company we picked to process our credit card transactions, they balked. They wouldn’t allow us to charge annually because we were unproven, we didn’t have a corporate credit history, and they didn’t really get the idea of subscription-based software. When we couldn’t provide a marketing brochure (didn’t have one), an annual report (didn’t have one), or anything “official” on paper (we still don’t have official letterhead stationary), I think they may have thought we were peddling porn.
The main issue was that if we went out of business in three months, they’d be left holding the risk of an annual subscription fee. So if someone paid us $149 in April for 12 months, and we went out of business in July, the merchant account company would be on the hook when the customer came calling for a refund. That wasn’t risk they were willing to take. I can’t say I blame them.
So we had to rejigger our entire business model. Instead of billing annually we had to switch to billing monthly. It turned out to be considerably more lucrative for us, and considerably more comfortable for our customers too. More revenue for us, lower cost of entry our customers. Instead of having to pony up $99 up front, they could pay $12/month for as long as they wanted. No contracts, no lock-in, no big initial investment on their part.
Ok, so how do we do all this? First off, we have a merchant account. A merchant account is needed to accept credit cards. Every business that accepts credit cards needs to have a merchant account. We’ve used a few companies in the past, but currently we’re using an account provided by Chase bank. You should basically look for a reputable company you can trust that has good rates. The rates may not make all that much difference early on, but once your daily volume picks up a few basis points can make a big difference on your bottom line. But at first I’d pick trust over rates. You can always negotiate for better rates down the road.
Next we have an account with Authorize.net. Authorize.net is the gateway that our systems talk to. They take the credit card charge information from us, process the charge, and then deposit the money into our merchant account. If the charge doesn’t go through they send us a denial code which we then wordsmith and present to our customer.
The engine to process the recurring monthly charges is something we built custom. If you use Rails, Active Merchant would give you a good place to start. We don’t use Active Merchant because we built our stuff before AM was released, but it’s definitely a nice library.
Every night the system scans the paying accounts for each product and determines which ones are due for a charge. We then submit the charges one by one and record the result.
If the charge was successful we shoot off an paid invoice to the customer via email. If the charge was declined we shoot them an email with the explanation. We then try the declined card again three days later and then another three days after that if it was declined a second time. The customer’s account remains open while we attempt to process the charge. If the charge was declined three times we freeze the account until the customer is able to provide a valid credit card number.
The one thing we’re often surprised by is how many accounts have charge issues so it’s important to really think about the error handling and customer experience issues related to declined cards. Freezing an account too fast is unfair, but it’s also important to put a limit on your goodwill. We’ve gotten better at this over time, but the sheer number of charge errors initially caught us off guard. It’s not fraud, it’s just things like expired cards, credit limits, corporate charge policies, etc.
We’ve also recently started a major conversion of our internal systems to a centralized billing system. In the past each product had its own internal billing engine. Today we’re centralizing this. We’re essentially building an internal web service that our other products can talk to when they need to charge a card. They ping the service with the details and the central system takes care of the rest. This is much cleaner and much easier to maintain since we only have to deal with processing in one place. Other benefits will come from this centralization down the road.
I hope this provides at least a basic understanding of the fundamental moving parts and how we bill our customers. If you have other questions please post them in the comments section and we’ll try to answer what we can.
Got a question about design, business, marketing, etc? We’re happy to try to provide some insight into how we’d tackle the problem. Just email svn [at] 37signals dot com with the subject “Ask 37signals”. Thanks.
My Macbook Pro has had multiple battery problems this year. It’s been a bummer but the genius bar at the SoHo store has helped immensely. I scheduled my appointments in advance using the online reservation system, received help from friendly staffers, and was given two brand new batteries at no charge. I was annoyed by the problems, but the level of support definitely helped turn a negative situation into one that at least makes me feel like Apple’s got my back. It’s really reassuring to know I can go somewhere and get instant help if/when the shit hits the fan.
According to “Inside Apple Stores, a Certain Aura Enchants the Faithful,” I’m not alone in feeling this way. The article describes how personal attention is driving tons of growth at Apple’s stores.
(Some numbers: Apple’s stock is up nearly 135 percent for the year. 20 percent of its revenue comes from its physical stores and that number is growing: The stores accounted for $1.25 billion of Apple’s $6.2 billion in revenues in 2007’s fourth quarter, a 42 percent increase over the previous year.)
The article suggests attentive staff may be the stores’ secret weapon.
Continued…But the secret formula may be the personal attention paid to customers by sales staff. Relentlessly smiling employees roam the floor, carrying hand-held terminals for instant credit-card swiping. Technicians work behind the so-called genius bar, ministering to customers’ ailing iPods, MacBooks and iPhones. Others, designated “personal trainers,” give one-on-one instruction and lead workshops.
Personal shoppers are available by appointment, and last month the company took the concept of personalized service to a new level, with concierge teams stationed throughout each store.
“They’ve become the Nordstrom of technology,” said Michael Gartenberg, vice president and research director at Jupiter Research, referring to the department store that is known for its service.
Ron Johnson, Apple’s senior vice president for retail, said he believed the high level of service played a large role in the success of the stores.
“The idea is that while people love to come to retail stores, and they do it all the time, what they really appreciate the most is that undivided personal attention,” Mr. Johnson said. The result is far fewer qualms among consumers about paying premium prices: $30 for an iPhone case, $200 for an iPod Nano or $1,200 for a computer.
Along with Jim Coudal of Coudal Partners and Carlos Segura of Segura Inc. and T.26, we’re again presenting a one-day conference on design, entrepreneurship and inspiration on Chicago’s IIT Campus. The date is Friday, January 18th.
We’ve sold over 120 seats so far so there are just a couple dozen left. For more on what it’s all about, check Mike Rohde’s illustrated notes from the first Seed and a couple reviews too. And this guy is going to SEED instead of MacWorld.
Rich asks:
Without revealing any financials or numbers from which financials could be derived, could you satisfy the geek curiosity in me and share a few details from 37 Signals apps? Number of customers, contacts, projects, milestones, files on S3, number of servers, logical infrastructure topology, etc.
Here are some rough numbers we can share:
We’re currently upgrading our server infrastructure to use significantly faster hardware along with the Xen virtualization software, so we’ll have fewer servers to manage. Our current server cluster contains around 30 machines, ranging from single processor file servers to 8 CPU application servers, for a total of around 100 CPUs and 200GB of RAM. Over the next couple of months, we plan to reduce the number of servers to 16 with around 92 CPU cores (each significantly faster than what we use today) and around 230 GB of combined RAM. Not only will our applications run faster, but our cluster will be much simpler to manage when we’re done.
Email svn at 37signals dot com and title the email “Ask 37signals”. Thanks!
The last few years has seen a proliferation of web-app development. Lots of productivity tools, to-do lists, online word processors and spreadsheets, presentation tools, groupware, calendars, etc. Lots of business software.
Noticeably absent are dedicated intranet tools. Software to help businesses get their shit together internally. A place to post common information, to have discussions, to share files, and possibly to share a calendar or important dates. There are definitely products out there, but this market doesn’t seem to have seen the same level of development as other business software.
When we were still doing client work back in the early 2000s we got a lot of calls about designing intranets. Everyone wanted an intranet. The employees we talked to loved their intranets too—their jobs depended on having access to bits of information, files, forms, etc. that were only available on their company intranet.
But since then I haven’t heard much noise from the intranet camp. Have people given up because the options were too complicated? Or have they built their own? Or are they piecing together blogs and wikis and file storage services and online calendars to get the job done?
What does your company or group use to keep your information together, centralized, and accessible to people you work with? Are you using something home grown? Something off the shelf? Something old? Something new? We’re curious.
Seen a great mobile web app interface? Link it up.
