Why we never sold Basecamp by the seat

Even before software as a service became a thing, it was pretty common to sell business applications on per-seat pricing. The bigger you are, the more you pay! At Basecamp, we rejected that model from day one, and have stuck to our guns for 13 years. Not because we don’t like money, but because we like our freedom more.

The problem with per-seat pricing is that it by definition makes your biggest customers your best customers. With money comes influence, if not outright power. And from that flows decisions about what and who to spend time on. There’s no way to be immune from such pressure once the money is flowing. The only fix is to cap the spigot.

So that’s what Jason and I decided to do from the start. We weren’t going to have clients, we were going to have customers. And lots of them. All pretty much equal in their contribution to the business. This would leave us with three key truths about the business:

First, since no one customer could pay us an outsized amount, no one customer’s demands for features or fixes or exceptions would automatically rise to the top. This left us free to make software for ourselves and on behalf of a broad base of customers, not at the behest of any single one. It’s a lot easier to do the right thing for the many when you don’t fear displeasing a few super customers could spell trouble.

Second, we wanted to build Basecamp for businesses like ourselves: Members of the Fortune 5,000,000. And not just build software for them, but really help them. To be honest, I don’t really give a shit about the Fortune 500. The corporate behemoths are much more likely to be set in stone, unable to change. With the Fortune 5,000,000 we have a real shot at making a real impact. That’s just a lot more satisfying work.

Third, we didn’t want to get sucked into the mechanics that chasing big contracts inevitably leads to. Key account managers. Sales meetings. Schmoozing. Strippers’n’steaks. The enterprise sales playbook is as well established as it is repulsive to me. But it’s also unavoidable once you open the door to the big bucks from the big shots. No thank you.

Has this outlook cost us money? I’m sure it has. Over the years, we’ve gotten countless knocks on the door from large corporations and organizations begging us for an enterprise sales track. And while flattering, we said thanks, but no thanks.

Because whether you enjoy what you do depends not just on what kind of product you’re building but who you’re selling to as well. We sell to the Fortune 5,000,000 and let others worry about the Fortune 500.