Podcast Summary
Navigating Challenges of the Pandemic and Launching a New Product: Despite the ongoing pandemic and its impact on industries, Basecamp founders remain optimistic and continue to innovate, building a new email product in a stale market.
The founders of Basecamp, Jason Freed and David Hanson, are navigating the challenges of the pandemic while launching their new product, hay.com. They expressed frustration with the ongoing COVID-19 situation in the US and the lack of a clear solution or vaccine, which has affected various industries and businesses, including their own. The discussion also touched on the resilience of the human species and the importance of adapting to unexpected circumstances. In 2019, they identified an opportunity to create an email competitor or a new email product due to the lack of excitement in the email space since the launch of Gmail in 2004. Despite the challenges, they remain optimistic and continue to build and innovate.
Revolutionizing Email with Hey.com: Hey.com, a new email service by Basecamp, aims to innovate email by controlling both the service and clients, introducing new ways to organize and control email while maintaining interoperability.
The founders of Basecamp identified long-standing frustrations with the limitations of email and saw an opportunity to improve the experience by building a vertically integrated email service called Hey.com. They recognized that email's basic protocol hasn't changed much, but by controlling both the service and the clients, they could introduce new ways to organize and control email. The acquisition of the three-letter domain name, Hey.com, was a significant investment. Despite its high value, an individual had owned it since 1995, and the exact cost remains undisclosed. The team's determination to innovate and redefine email, while maintaining interoperability with other email providers, has led to the creation of a service that aims to breathe new life into this essential communication medium.
Persistence pays off in domain name acquisition: Be patient and persistent in securing valuable domain names for your business, as it can lead to significant long-term benefits.
Persistence and long-term thinking are crucial when it comes to securing valuable domain names for your business. Jason Calacanis, the podcast guest, shared his experience of acquiring the domain name "hey.com" after 18 months of negotiation. He initially wanted the domain for his email service, as it aligned well with his "hey" menu in Basecamp. Despite multiple false starts and dead spots in the negotiation process, he eventually succeeded and believes the domain owner also benefited from the deal. This experience highlights the importance of being patient and persistent in achieving your business goals, even if they take longer than anticipated. Additionally, Calacanis mentioned the importance of having a reliable payroll provider like Gusto, which offers easy-to-use payroll systems, tax filing, and various other HR services, allowing business owners to focus on their customers and building their product or service.
Apple's strict App Store policies limit bug fixes for developers: Apple's monopolistic App Store policies restrict bug fixes through in-app purchases, creating a power dynamic between Apple and developers and potential risks for small companies.
Apple's strict control over its App Store leads to limitations for developers and consumers. In this case, the email service Hay wanted to offer bug fixes through the app but was rejected by Apple because they didn't want to pay a 30% fee to Apple for in-app purchases. This led to a public dispute, with Hay and its founder David Heinemeier Hansson speaking out against Apple's policies. The situation highlighted Apple's monopolistic and inconsistent approach to app development, as other similar services like Basecamp, Salesforce, and Slack were allowed to follow different rules. The dispute underscores the power dynamic between Apple and app developers and the potential risks for small companies if they're not in the App Store.
App Store rules: Unpredictable, unfair, and frustrating for small businesses: Apple's control over in-app payments and customer support creates challenges for small businesses, including a 30% fee and lack of flexibility in handling customer issues directly. Businesses must adapt and innovate to overcome these hurdles, using controversy as a marketing tool.
The App Store rules and practices of tech giants like Apple can be unpredictable, unfair, and frustrating for small businesses, especially app makers. These businesses often face challenges in providing equal customer service across multiple platforms due to Apple's control over in-app payments and customer support. The 30% fee is a significant concern, but the lack of flexibility in handling customer issues directly is a major pain point for these businesses. The scrutiny and regulatory attention towards tech companies today may put them in a more vulnerable position when it comes to public backlash and potential antitrust actions. Despite the challenges, businesses must continue to innovate and adapt, leveraging controversy as a marketing strategy to gain attention and customer loyalty.
Apple's in-app payment system: Seamless user experience but challenges for businesses: Apple's in-app payment system offers user privacy and convenience, but businesses face high commission fees and potential loss of control over payment processors and distribution channels.
While Apple's in-app payment system may offer a seamless user experience and protect user privacy, it can also create challenges for businesses, particularly those that rely on their own payment processors and distribution channels. The 30% commission fee, which includes charges for processing payments and distribution services, can be a significant cost for some businesses. There's a growing sentiment that Apple may eventually allow businesses to choose their own payment processors and decouple the commission fees. Additionally, businesses value responsive customer service and efficient delivery, as exemplified by the modern furniture brand ModLoft, which offers risk-free at-home trials, international design awards, and quick delivery.
Hey.com sees record-breaking success with over 170,000 sign-ups and $2 million in revenue: Hey.com, an email service, experienced remarkable growth with 170,000 sign-ups and $2 million in revenue in the first month. The team faces challenges with customer inquiries and bugs, and plans to expand with more staff and a work version to increase revenue and offer more features.
Jason Calacanis' new email service, Hey.com, has seen unprecedented success with over 170,000 sign-ups in just the first month, resulting in a minimum revenue of $2 million. However, the team is currently facing challenges with the high volume of customer inquiries and bugs, and plans to hire additional support staff and launch a work version of the product to increase revenue and offer more features. Despite the initial success, Calacanis acknowledges that they need to sell a large number of personal accounts to make the business truly profitable. The team is working hard to keep up with the demand and maintain a healthy work-life balance.
Managing High Volume Customer Service Emails: Empowering users to control unwanted emails by approving or denying first-time contacts is essential for effective email management.
Email management is crucial for businesses, especially those with high volumes of customer service emails. The speaker, who manages around 500-600 customer service emails per day, emphasizes the need for a dedicated help system. For smaller teams dealing with fewer emails, shared inbox styles like Front or Hey can be effective. However, the speaker's favorite feature is the "screener" in Hey, which allows users to control who can email them by approving or denying first-time contacts. This feature addresses the issue of unwanted emails, particularly sales pitches and unsolicited messages, which have become a significant problem in today's digital age. The speaker believes that this feature, which empowers users to control their time and attention, should become the standard in email management.
Individuals want control over their digital experiences: Users value customization and choice in email settings and app access on their devices, emphasizing the importance of trust and competition for innovation and improved user experience
Individuals value control and choice over their digital experiences, especially when it comes to their devices and email communication. The user expressed frustration with being unable to fully control their email settings and access to apps on their Apple devices. They suggested a solution for Apple to allow third-party apps and app stores, but acknowledged the potential challenges from the company's perspective. The user also emphasized the importance of trust in companies and the desire for a competitive marketplace, leading to innovation and improvement in user experience. The discussion highlighted the evolving nature of technology and the need for flexibility and control for consumers.
Email privacy: respecting user data: Emails should have no tracking by default, individuals should opt-in, transparency is crucial, privacy-focused products are popular, opt-in email tracking should be standard, individuals can protect their privacy, respecting email privacy builds trust
Email privacy is a significant concern for many individuals and businesses. The use of tracking pixels in sales software to gather detailed information about email recipients without their consent is a contentious issue. The standard should be for emails to have no tracking by default, and individuals should have the option to opt-in if they choose to share such information. Transparency about data collection and usage is crucial. Products like Superhuman, which prioritize user privacy and offer features to block tracking pixels, are gaining popularity. The industry should consider making opt-in email tracking a standard, with clear disclosures to recipients about what data is being collected and how it's being used. Additionally, individuals can take steps to protect their privacy, such as using VPNs and privacy extensions, and being cautious about opening emails from unknown senders. Overall, respecting email privacy is essential for building trust and maintaining good relationships in both personal and professional contexts.
Competition in Email Services: Privacy vs Monetization: Users prioritize privacy and consider ease of use and features when choosing an email service, leading to competition between providers like Superhuman, Hey, Proton Mail, and FastMail, each offering unique approaches to these concerns.
Privacy is a significant concern when it comes to email services, and the revelation of personal information upon opening an email should be avoided. This issue has led to the rise of competitors like Superhuman and Hey, which prioritize user privacy and offer different features than industry giants like Gmail. Google's focus on email is not as intense as these competitors, and their monetization through ads and data mining is a concern for many users. Alternatively, email providers like Proton Mail and FastMail offer privacy and a paid model, appealing to users who prioritize these features. The competition in the email service market is healthy, driving innovation and improvements in the industry. Ultimately, users should consider their priorities when choosing an email service, with privacy, ease of use, and features being key factors.
Innovation in the Email Industry: Smaller Companies Leading the Charge: Smaller email companies are pushing boundaries with modern ideas, but larger providers may eventually adopt these features. Consumers must decide if they're willing to pay for a premium email experience or stick with free options. Maintaining direct customer relationships is crucial.
The email industry is in need of innovation, and smaller companies are leading the charge. The founders of these companies are passionate about improving email and bringing modern ideas to the table. However, larger email providers like Gmail and Outlook may eventually adopt some of these features. The decision to pay for a premium email service is a personal one, with some consumers willing to pay for a better experience and others preferring free options. The speaker emphasizes the importance of maintaining a direct relationship with customers and not relying on third-party platforms to handle payments and customer information. Overall, the conversation highlights the drive for innovation in the email industry and the importance of maintaining control over customer relationships.
Appreciating a Valuable Business Partner: Clear-minded, brilliant business partners bring value and success, even amid disagreements and challenges.
Clear-minded and brilliant business partners, like David, are invaluable, even if there are disagreements and debates. The speaker admires David's substance and belief in his arguments, and their partnership has been crucial to the success of their business, despite some challenges. The speaker values their independence and the freedom to make decisions for their company, and was even contemplating quitting during a difficult industry dispute. However, the importance of their partnership and the eventual resolution of the dispute kept them motivated to continue in business together.
Small businesses and developers standing up to larger corporations: Speaking up against unfair treatment by larger corporations and rallying community support can lead to positive change, benefiting everyone involved.
When a small business or developer feels bullied or unfairly treated by a larger corporation, speaking up and rallying support from the community can lead to positive change. The case of Spotify vs. Apple illustrates this, as Apple's anti-competitive practices against Spotify sparked a wave of support from other entrepreneurs and developers. This not only gave smaller companies energy and motivation but also led to rule changes that benefited everyone. Apple's bullying tactics not only harm the targeted companies but also create fear among other businesses, potentially leading to antitrust investigations and negative public perception. It's crucial for large corporations to consider the long-term consequences of their actions and treat smaller businesses and developers with fairness and respect.
Tech companies deceiving competitors with ads: Apple and Google's market dominance allows them to manipulate ads, making them appear as organic search results, deceiving competitors and frustrating the industry's smaller players.
Large tech companies, such as Apple and Google, face pressure from public markets to generate revenue and grow their businesses, leading them to make decisions that may be perceived as deceitful or harmful to competitors. For instance, Google selling branded keywords to competitors and making ads look like organic search results. This issue was discussed in the context of Basecamp, who experienced this problem and proposed a solution by recording users to prove that they often don't click on ads, making it clear that they are being deceived. However, the frustration lies in the fact that these companies, with vast resources and capabilities, can seemingly get away with such practices due to their market dominance. The tech industry is currently dominated by a duopoly of Apple and Google, leaving little room for competition in the mobile environment.
Adapting to Remote Work: Remote work necessitates a shift in communication and culture, emphasizing asynchronous communication and fewer meetings for autonomy and focus. However, it also presents challenges like isolation and the need for human connection. Adapt to these differences using tools like automatic check-ins to build a successful remote team.
Remote work is not just a replication of traditional office work but a different way of working that requires a shift in communication and culture. The speaker emphasizes the importance of asynchronous communication and fewer meetings, allowing employees more autonomy and time for focus. However, remote work also presents challenges such as isolation and the need for human connection. It's essential to recognize these differences and adapt to the unique opportunities and challenges of remote work to build a successful and productive team. The speaker also mentions the importance of using tools like Basecamp's automatic check-ins to foster communication and connection within a remote team. Overall, the key takeaway is that remote work requires a new mindset and approach to effectively build a strong and productive team.
Fostering connections in remote work and discovering potential profits in small tech businesses: Building camaraderie in remote teams through simple interactions and discovering potential profits in small tech businesses by focusing on creating great products and solutions
Creating connections and building camaraderie are essential, even in a remote work environment. This can be achieved through simple practices like asking about weekends or books read, which can lead to surprising commonalities and strengthen team bonds. The tech industry has seen numerous small businesses sell for significant amounts in the past, demonstrating the potential for profit and success. The end goal for these businesses is not always about proving something or reaching a certain age, but rather about continuing to create great products and solutions, and the freedom to do so independently.
Navigating Unexpected Challenges in Business: Stay flexible, learn from experiences, maintain control of funding, and pursue passions in an unpredictable business world.
While we may try to control our businesses and plan for the future, unforeseen events like pandemics and political changes can drastically alter the course of our plans. However, it's important to remain adaptable and keep moving forward. Another key takeaway is the value of bootstrapping and maintaining control over your company's funding, as seen in companies like Calm.com, Fitbod, and Qualtrics. Lastly, having influential mentors or investors, like Jeff Bezos, can provide valuable lessons and opportunities, but it's essential to maintain independence and autonomy in your business. Overall, the unpredictability of the business world emphasizes the importance of staying flexible, learning from experiences, and continuing to pursue passions.
Investing in Lucrative Companies: Making informed investments in profitable companies can lead to consistent returns and simplified financial matters through buyouts.
Smart investments, like the one Jason Freed made, can bring significant returns over time. Freed's investment in a company yielded him consistent distributions every year, making it a lucrative move. The discussion also touched upon the potential benefits of buyouts, as simplifying financial matters and reducing tax complications can be attractive. Jason Freed was praised for his entrepreneurial success, and the conversation ended on a positive note with a reminder to check out Hey.com. Overall, the conversation highlighted the importance of making informed investments and the potential rewards that come with them.
