I spent a few days out in the country last weekend. The city may have the energy, but the country helps me recharge.

Something I really noticed this time was just how dark dark is in the country. The view through the window at night is empty. It might as well be painted black.

In Chicago you can’t find total darkness outside. Nighttime is tinted orange. Street lights, lamps, passing cars, reflections — they all dye the dark. When you look out the window at night in the city you can what’s outside.

It’s not any better or worse, it’s just different.

You also can’t really see the nighttime sky in the city. You can look up, but you can’t see what’s really up there. You may catch a few lucky stars and that moon, but there a million things missing.

All of this reminds me that everything is relative. Dark here isn’t dark there even though it’s nighttime in both places. The sky there isn’t the sky here. Even though you’re looking up at the same thing, they aren’t the same.

That’s a good thing to be reminded of from time to time.

Sequoia Capital’s “R.I.P. Good Times” deck made the rounds on the web last week. It’s Sequoia’s take on what happened with the economy and what their portfolio companies should do to weather the storm.

What was their advice before the downturn?

The analysis is good and the advice sound, but it also begs the question: What was their advice before the downturn?

Now they are saying you should:

• Control spending
• Throttle back growth assumptions
• Cut earnings assumptions
• Focus on quality
• Lower risk
• Reduce debt

They also say that you “need to become cash flow positive” and “spend every dollar as if it were your last.”

So what was their old advice? Did they encourage their companies to spend more than they had, skimp on quality, grow grow grow, take on more risk, and accumulate more debt?

Was being cash flow positive not a favored strategy before the downturn? If it wasn’t then, when was it going to be? If you weren’t in a position to make money when times were good how are you supposed to be in a position to make money when times are bad?

Logbook is the first product from “Transmissions”, a group that is building Mac OS companion apps for our products.

Logbook allows you to keep your Backpack Journal updated from your Mac menu bar. You can update your status and log journal entries without having to log into Backpack. Logbook is $12.99.

It’s slick and very well executed. I’ve been using it for a while and it’s really encouraged me to keep my journal updated. We’re excited to see what other apps they cook up that work with our products.

Promotion

They’re running an exclusive promotion for Signal vs. Noise readers: They will give away 10 licenses, chosen at random, for readers who email [email protected] with the subject “SvsN Contest”. Good luck!

Mattijs asks:

I am developing an internet product and I am rapidly approaching the point at which I will need to set a pricing scheme for this product. Problem: I have no idea what to shoot for! I have done some research which shows a wide range of similar products with varying pricing schemes. When 37signals was developing Basecamp, how did you come up with pricing?

When we first priced Basecamp in Feburary 2004 the plans were $9, $19, $39, and $59. There wasn’t much science behind it. We asked ourselves a couple questions:

1. What would we pay?
2. What numbers feel right?

What would you pay?

I think this is the most important question. If you are designing a product that you are going to use then it’s fair to ask yourself what you would pay if you were buying it from someone else. The numbers we came up with seemed fair and reasonable. $9 seemed like a good toe-dip, and $59 seemed like a good top price. We have since changed our prices, but those numbers worked great for an unknown product for an unknown market.

This line of questioning resulted in a course correction when we were designing and pricing Campfire. Originally we were going to price Campfire at $5/chat. The idea was that people would create a temporary Campfire chat room to coincide with a meeting or conference call. We felt $5/meeting/call was about right.

But then we thought about it some more. We asked ourselves would we actually pull out of credit card and pay $5 for something we might only use for a few minutes? We decided no. That changed the entire product focus. Gone was the idea of temporary event chats and in was the idea of a persistent chat room that never closes. Then we adopted the Basecamp-like monthly recurring fee schedule. I’m confident that was the right choice.

What numbers feel right

There’s a big psychological and emotional side to pricing. A friend who worked at Wal-Mart once told me that Wal-Mart never prices anything ending in a 9. They always end in 8 (or 6 or 4) or something other than 9. They want the customer to know that Wal-Mart is always working hard to shave an extra penny off the price — hence the uncommon 8 not the familiar 9.

We’re not that scientific about our prices. Maybe we should be, but we’re not. Our current pricing lineup for Basecamp is $12, $24, $49, $99, and $149. We’ve had these prices in place for a few years now and we like the mix. It feels right. Each tier is roughly double the previous tier, but we deliver more than double the benefits.

For example, at Basecamp Basic ($24/month) you get 15 projects and 3GB of file storage. At Basecamp Plus ($49/month) you get 35 projects (more than double the Basic tier) and 10GB of file storage (more than three times the Basic tier). So the price is double but the benefits are more than double. This pattern continues throughout our pricing plans.

Found this happy honeycrisp apple at the farmers market Saturday.

The Senz aerodynamic umbrella turns itself to the best position in the wind and won a red dot award for its novel design. Even the shaft was rethought and redesigned (it’s oval, not cylindrical or square). I love reinventions of every day objects that are long taken for granted.

And not that an umbrella matters in a hurricane, but…

A good portion of this industry is still trying to figure out how to make money for the first time (hint: charge people). But for those who’ve mastered that, I want to talk about the next step: making money twice (or three or four times).

Making money off original content isn’t hard as long as you aren’t afraid of making money. You can sell it, you can offer subscriptions to it, you can talk about it, etc. But what’s more interesting — and easier — is making money again of something that already made you money before.

Repackaging

Repackaging allows you to earn money multiple times on the same content. It’s a great way to grow your revenues without significant marginal cost.

Money One: A lot of our ideas originate on this blog. We post articles which generate traffic. We make money off the traffic by running Deck ads in the sidebar. We make a few thousand a month off The Deck ads.

Money Two: We bundled up the best blog posts about our software development philosophy and turned it into a PDF book called Getting Real. We sell the PDF for $19. We’ve made a few hundred thousand dollars from the PDF.

Money Three: We take the Getting Real PDF and turn it into a paperback at Lulu.com. We sell the paperback for $25 and we make a few thousand a month on royalties. The paperback is currently ranked the 4th best seller on Lulu.

Money Four: We took the content from Getting Real and produced a Getting Real conference series. We held a few conferences a year and made about $50K per conference. We’ve produced about 5 of these conferences.

It adds up

So if we add this all up, we made about $100K on The Deck ads (The Deck has been around about two years and we are a founding partner), $350K on the Getting Real PDF, about $65K on the Getting Real paperback, and about $250K on the Getting Real conferences (before that they were called Building of Basecamp).

That’s roughly $765,000 over a few years off roughly the same content. Insight and ideas about how we run our business. Blog entries, PDF, paperback, and conferences.

We probably could have done a few more things and pushed that total over a million. Regardless, making a little extra here and there over something you’ve already produced is a great way to grow revenues.