What did you want to know that we didn't share?
Of course you don't owe anyone any of that info. However, if you crack the door open just a little bit, don't be offended/surprised etc. if my curiosity is piqued and I want to open it.
I think it makes a lot of sense and is a smart move.
Gives an incentive to the person running it to "do their own thing" and by creating a separate entity they can also sell it more easily (if they want to). Or give an equity stake to Claire. And empower her to take chances she might not take if she is just "joining 37 signals" and is all distracted with general company goals.
More importantly it even creates a template to start other similar businesses and do the same. And not to get dragged into the day to day of each and every business or product line or decision.
"not to get dragged into the day to day of each and every business or product"; 37S has a successful history of getting into the day to day of every business and product, that's what they do exceptionally well. Why change that?
As I mentioned in the original post, we wanted to hire Claire to run Know Your Company inside 37signals, but there was a fundamental conflict of interest: She had interviewed everyone at 37signals as part of a consulting project, and knew a lot of details about how everyone felt about the company. Everyone spoke to her in confidence as an outside consultant, not as a colleague. Bringing her into 37signals as an employee later would be a violation of that trust, so we weren't able to hire her.
You'd have to ask Claire how she plans on staffing the company, but initially it's just her with a little bit of our help during the transition. As far as I understand, soon she will be bringing someone on part time to help with product development until she's ready to make a full-time hire. Slow, steady, and prudent.
Hope that was helpful.
The product is in great hands now with Claire fully-focused on making it better as her full time job.
I'm standing by as an advisor and eager to help when called upon.
We also still own a sizable piece of the company so it's in our best interest to see it succeed.
And we're customers - we use Know Your Company every week.
Also, Claire was friend of friend of mine in college, and I'm very excited for her!
As the CEO of Know Your Company, I'll be running the business day-to-day. In the beginning, that will include everything from sales to customer support. I'll be bringing on a part-time programmer to do a bit of product development + maintenance until I'm ready to make a full-time hire. Overall, I'm not looking to build a huge team out-of-the-gate. I want to focus on talking with customers, listening to why KYC works for them, and learning how it could be better.
I'll be placing ClarityBox, the consulting practice, on hold to focus on running KYC and delivering the product. In the future though, I could potentially envision both a service and product offered together.
Let me know if you have any other questions – I'm happy to answer them.
If you have 27 employees, it costs $2700 one time. If you hire 3 more people, it's an extra $300, one time. If you let someone go, and hire another person, it's an extra $100. We don't sell against seats, we sell against unique people.
No recurring monthly or annual fees.
How does this work when there is no actual term?
(Sorry if this is off-topic - we're thinking through some pricing model stuff, and this was top of mind!)
In spite of the flak you get from the HN crowd (the reason I am guessing, might be that you make it deceptively simple to hit $390,000 with 99% retention rate) it is always very refreshing to see your blog posts and the quality of your work is very inspiring. Thanks!
For large enterprises, the upfront cost requires a bit of coaxing, while the maintenance cost is a no-brainer. I'd be curious to see where they go with larger installations. I'd love to see this product aimed at enterprises for 50-60 employees reporting up to a dirext or middle manager, while also proving insight to the executive team.
"This is a one-time investment, not an ongoing expense."
I like the idea and it makes sense.
But I think it has to be restated in a way to not sound as if there is a hidden cost that pops out when getting to the fine print. That creates a negative in a buyers mind [1]. Needs to be restated in more of a "ok I understand makes sense" or might backfire.
[1] Example: I had a building security system quote (cameras). Company said "we take care of the installation and everything". Quote states more or less "oh yeah but you have to supply 110vac outlets where we will put cameras". Oh great what is that going to cost me? Surprise. To me "everything" means turn key. Doesn't mean I am right but that is what I (not dealing with this every day) thought. My reaction. Had the salesperson said "Installation includes everything but electrical and that's normally $100 per outlet" prior to the quote I would have felt much better about the process.
I was at a funeral the other day for a man who built a very successful residual alarm installation and monitoring business.
At the eulogy it was said that he taught his kids to say "and that's only" specifically the word "only" (not "just").
Btw, I would think that there is a fair amount of elasticity in this pricing. I would guess that people would pay $125 as easily as they would pay $100. "think" means that I would test. You may have already.
Since I brought up the point (which you answered) the way I would restate the copy (since this is HN and people want to learn and debate) would be:
(for now let's go with $125 for my illustration)
"The cost for this?
It's only $125 to setup an employee.
That's it.
The fee is one time and there are no additional or ongoing charges.
None at all."
(Note the word "setup" is used).
My point is by saying "$125 per employee" in my mind the (ad copy) gives me the impression that I won't have to pay if I replace an employee. The "only $125 to setup" in my opinion takes away that issue for the most part.
Strictly my thoughts from playing with pricing and wording for many many years. Others may feel differently. Personally I feel $125 is a better number than $100 can't quite put in words why.
if you're a fan of IPA's, you should try and have some Pliny, Heady Topper and Ghandi Bot.