A static business is a healthy business

Is that the sun? No, it’s our business. Read on…

Aim for many nondescript dots, not a few obvious ones

Last year I wrote an article suggesting that you shouldn’t let any one (or small group) of customers overpay you.

If you have a small handful of customers paying you significantly more than most of your customers, you’re no longer a product company — you’re actually a consulting company working for those big payers. You’ll do what they say — often at the detriment of your smaller customers — because the big guys pay the big bucks.

And if you don’t follow their money with your effort, an exodus of just one or two big customers could seriously impact your bottom line. It could put you at major risk.

So instead we take the other approach — a broad customer base where nearly everyone pays us roughly the same amount per month, all things considered. Over 100,000 companies pay for Basecamp, and we don’t play favorites.

Remember that picture up at the top of this article? This one…

Our star

That chart represents the lifetime revenue per Basecamp account. Each dot represents the lifetime $billings of a single account.

See how uniform that is? It looks like static. Static is a healthy business. No outliers, no major splotches. If you removed any one dot — or even any 10, 20, or 100 dots — you’d barely notice. You could probably remove 1000 random dots and it would still look the same.

You know what else it looks like? Insulation. Because it is insulation — insulation from risk. We wouldn’t want this to happen, but because our revenue is so equally distributed across a large number of independent customers, if a random 10% of our customers left tomorrow, we’d be fine. We’d never have to cross our fingers and hope that “Customer X” wasn’t part of that 10%. Can you say that about your business?

If you mapped your customers like this, what would your your star look like? If you started pulling away your 10 biggest customers, would you see big gaps, or would the holes be swallowed up by the whole? Would it be obvious with a few removed or would you be able to even tell the difference? Are you diversified or dangerously dedicated to a few big bets?

Over 100,000 companies pay for Basecamp. If you’re still running your business on email, text, chat, and meetings, come on over and see how much better things can be with Basecamp 3. There’s nothing else out there like it.