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Comment by matthuggins | Hacker News Reader

Saw this on reddit a few days ago. You could make a lot more money with it by making it a hosted solution and charging monthly/yearly.

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Then you are competing directly with Basecamp with no obvious product differentiation. It's going to be tough to get traction going this way.

The fact that it can be purchased and installed is the differentiating factor and may target a market audience that's largely ignored.

While there is usually the potential for higher sales with a SaaS approach, that doesn't mean it's always the correct fit when entering a market.

Why not price as the differentiating factor? Basecamp is expensive for what it is.

You could undercut Basecamp by a sizeable margin and still turn a nice profit.

I imagine the sort of people who's primary requirement for project management software is that it costs less than $20 per month to host 10 projects are not going to make the best customers with the highest retention in the long run.

Granted, but at $20/month you only need them for two and a bit months before you're earning more than with the $45 one-off fee sales model.

Income yes, but profit no. Hosting is not free. You can, of course, work towards minimizing hosting costs, but time spent on that may cut into other priorities.

Of course, as mentioned above, saving time not having to support customer installations could (easily?) offset hosting costs.

I am one of those uses who prefer a self hosted version, that is why I do NOT use Basecamp

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