

Why we're doing things that don't scale - mh_
http://37signals.com/svn/posts/3589-why-were-doing-things-that-dont-scale

======
patio11
I don't know if this is quite public knowledge yet, so: human-assisted
onboarding is sort of catching on at a lot of SaaS companies in the B2B space,
at price points which are a bit north of the top end of typical 37signals/etc
apps. (Squarely in the zone for this new product, though.)

A lot of people find it very, very difficult to get started from a blank
slate. Automated onboarding/email sequences/video tutorials/etc gets you to a
point, but it still leaves guesswork in the process and (candidly) one can
always blow off a computer but blowing off a person who has been talking to
you for weeks is socially harder to do.

This also allows you to do basically a hybridized product/consulting model,
since if (without loss of generality) Jason Fried is spending 2 hours for you
talking about your business' challenges as he gets you up to speed on KYC,
that's essentially equivalent from the customer's perspective to "Rent Jason's
brains", but (crucially) the majority of the economic activity actually comes
from the product whose use is enabled by the mini-consult rather than through
consulting itself. This lets it scale to the moon. (Also, as every consulting
company at scale will tell you, you can have Jason Fried's insights on your
company actually delivered by an understudy. 37signals certainly doesn't lack
for smart people who understand the 37signals playbook.)

This is currently giving me fits, since I haven't figured out a great way to
deliver it consistently for non-enterprise accounts given that I'm 14 time
zones away from many customers, but it's one of the big things I'm working on
currently. The word on the B2B SaaS grapevine is it works very, very, very
well at moving $X,000 to $X0,000 per year SaaS accounts.

I'll blog about this if I ever manage to systemize it successfully. (As usual,
the plan is 1) Throw stuff at the wall and figure out what works. 2) Write
down what worked and execute against that plan. 3) Pay someone to do #2. I'm
currently somewhere in stage #1.)

~~~
hkarthik
I have my reservations about this, because it feels like B2B SaaS is now going
upmarket by reaching for the familiar Enterprise, high-touch sales process.

We've all been through this, and we know where it leads.

You have to bring on dedicated high-touch sales people to "scale" the
business.

Sales people can rarely bring the same passion or insight as the original
founders when approaching each lead. So they start doing more dastardly things
(See Zed
Shaw:[http://zedshaw.com/essays/control_and_responsibility.html](http://zedshaw.com/essays/control_and_responsibility.html)).

Going up market means compromising more on the scope of what the products do.
As individual deals become more lucrative, the incentive to close them grows.
As this incentive increases, the products often suffer and you get the Bananas
in the Lasagna problem (See Jason Fried:
[http://entrepreneursunpluggd.com/blog/37signals-jason-
fried-...](http://entrepreneursunpluggd.com/blog/37signals-jason-fried-
interview)).

So my question to the folks advocating this "new" approach is, how are you
going to avoid all those things?

~~~
jasonfried
As I mentioned in my post, high-touch, full-service doesn't have to be the
permanent model. Our plan isn't to do it this way forever. Our plan is to do
it this way for a while so we can learn everything we can. Then later on we
can automate this and make it self-service. The product will be a lot better
off because of it. This was pg's point in his original post as well.

~~~
tvtime15
But what about "post-sale"? I think there will always be customer demand for
concierge-level of service. Some SaaS models do lend themselves to self-
service, but others don't. Knowing that distinction is key.

~~~
jasonfried
Anyone who's signed up at the concierge-level of service will always get that
level of service. And if we ultimately go self-service, I'd still keep the
concierge-level of service around, just at a premium. We might even consider
adding a concierge-level of service tier to Basecamp.

------
HNJohnC
Is this a new writing style I'm unaware of or just plain laziness?

Get to the _point_ blog writers!

Make your assertion clearly and right at the top, explain it if it could be
misconstrued so that we know what the hell is being discussed.

Then go on to write about it.

It seems like every second blog post linked to here is a long rambling missive
that only reveals the point somewhere minutes into reading it long after my
eyes have glazed over.

~~~
SkyMarshal
Yes, assume your reader has just woken up and has 20+ tabs open they're trying
to speed-read through before they finish their bagel and coffee and rush off
to work. They want the firehose, not Dostoyevsky.

Good rule of thumb for this kind of audience - invert your essay structure.
Put the concluding paragraph first, then work backwards through the supporting
paragraphs till you get to the original question.

That style is much more engaging than traditional, overused, boring form of
"Intro para -> 3x supporting para -> conclusion". Instead make a
strong/counterintuitive/nonobvious/etc _unsupported_ assertion right off the
bat, then work backwards to support it.

That initial assertion captures peoples attention much more effectively than a
slow build up, b/c they then want to read on to find out if the author can
actually support it, and are gratified when you do.

~~~
dragonwriter
> Good rule of thumb for this kind of audience - invert your essay structure.
> Put the concluding paragraph first, then work backwards through the
> supporting paragraphs till you get to the original question.

> That style is much more engaging than traditional, overused, boring form of
> "Intro para -> 3x supporting para -> conclusion".

No, its not "more engaging" than the traditional 5 paragraph essay, because in
the traditional 5-paragraph essay format, the _first sentence_ (the thesis
statement) is the unsupported (to that point!) position which the rest of the
essay supports. You aren't arguing for "inverting" the "traditional, overused,
boring" 5 paragraph essay format, you are arguing for _using_ the
"traditional, overused, boring" 5 paragraph essay format in exactly the manner
it is traditionally taught.

~~~
SkyMarshal
Haha, fine, then I'm arguing for inverting whatever the current standard seems
to be, or perhaps more accurately, _reverting_ it to the original.

Either way, for blog posts, let's dispense with the long-winded intro.

~~~
dragonwriter
> Haha, fine, then I'm arguing for inverting whatever the current standard
> seems to be

Insofar as long, rambling intros that don't get quickly to a point are the
norm, that's a standard only insofar as "people don't bother to apply any
writing advice anyone has ever given" is a standard.

------
kvcrawford
Interesting...there was an article on HN recently that posited a major reason
for the 'failure' of the Facebook Platform was an over-engineered attempt to
mitigate spam and promote quality control through automation...instead of
curating apps by hand, a la the iOS App Store.

(The article in question: [http://pandodaily.com/2013/07/23/move-fast-break-
things-the-...](http://pandodaily.com/2013/07/23/move-fast-break-things-the-
sad-story-of-platform-facebooks-gigantic-missed-opportunity/))

------
alexatkeplar
pg's original article was great, and it's nice that 37signals are along for
the ride - but let's be clear, Jason's article is about "artisanal high-
touch", not the real deal.

The real-deal looks like email lists, cron jobs, Google Docs, throwaway Ruby
scripts, Access databases. It's operational and technical debt that's the
least worst option. Artisanal high-touch has a bevelled drop-shadowed button
saying "They paid us! Enter the transaction manually..." and full Campfire
integration.

~~~
wizzard
Well, pg gave several examples of "things that don't scale" in his article,
and I believe Jason is referring to focusing on individual users, not doing
tasks manually. He mentions eschewing automation but he's talking about
automation of client interations, not automation of all the software
processes.

In terms of software I agree though, clicking pretty boxes is just a different
type of automation. I am co-opting the phrase "artisanal high-touch."

------
amac
> human-assisted onboarding

Otherwise known as professional services. I think that's what some folks miss
when they think about SAAS - it's going to be about service more than anything
else despite the network delivery.

------
jmduke
I've got two nitpicks.

1\. Know Your Company is, at minimum, a $2500 service. The amount of time you
can spend with a given customer is huge, in that respect, because the customer
support you're doing for that one customer is proportionally much more
valuable. If I have a SaaS offering billing out at $20/mo., how much time can
I feasibly spend with a customer (of which there are multitudes) before I have
to think of ways to avoid timesinks?

2\. The "manually adding people to a database" thing seems contrived. It's
valuable because you learn the departments and the employees: so what's wrong
with automating the excel/email uploads and having the script spit out an org
chart and dossier to the printer? (That isn't a rhetorical question --
wouldn't a birds-eye view of an organization be more helpful?)

(Overall, I absolutely agree with Jason's point! But I think the argument is a
bit more nuanced than the way he presents it.)

~~~
jasonfried
1\. This is part of the point. Maybe $20/month isn't the right model. Maybe
there's a different model you can consider where you'd have fewer customers,
but those customers would be at a much higher price point. Who knows. Point
is, it's your call and it's all possible depending on how you approach it.

2\. Importing the spreadsheet of customer names will likely be one of the
first things we automate. It's less insightful than the other things on the
list, but I still believe doing it manually is teaching us something right
now.

~~~
larrys
"Maybe $20/month isn't the right model. Maybe there's a different model you
can consider where you'd have fewer customers, but those customers would be at
a much higher price point."

Another model to consider would be to have different private label companies
(that you control) serving up essentially the same product, priced
differently, and offered through a different company name.

For example you have basecamp where you can manage unlimited projects at $3000
per year.

But it's possible that Boeing might pay $50,000 per year if they got even a
higher level of service and a personal account manager. [1]

Now you could do this by adding a tier to basecamp but you could also be your
own competition with basecamp just for the bespoke offering.

Figures arbitrary to make a point.

[1] Sold by a professional sales force or some other higher cost method than
adwords.

For example I'm helping to investigate, as a favor, solutions for Physician
scheduling. I'm amazed at how cheap the service is. I know that the group that
wants this would easily pay much more to solve the problem in a turnkey
fashion. But the current offerings are being sold on price only as a way to
get attention. (And not doing a good job at it for that matter.)

------
krmmalik
I know the article is referring to b2b SaaS products, but we employed a
version of this idea on Http://storifi.it

We already knew that people wouldn't know what the game was about, so we sat
with each user individually and talked them through the onboard process. We
learned alot of things we would not have otherwise spotted and then
capitalised on that learning. The web app was just an mvp, but we incorporated
all the learning into our mobile app which resulted in a 100% activation rate.

Next step for us is now to finish off the app and concentrate on user
engagement for which we'll be following a similar philosophy.

------
spitfire
Nice long form sales letter on the KYC page. David Ogilvy would be proud!

