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March 20, 2007
Cracking the SMB Nut
With 37signals' launch today of Highrise, its small-business CRM product, I got to thinking about 37signals and the small & medium business market for software. One of the hoariest and most accepted bits of wisdom about the SMB market is that it sucks. Not that it's small, because it demonstrably isn't, but because the market is full of tiny companies who don't purchase enough to justify the sales/marketing to get to them.Enter 37signals. What Jason et al., have done well is to recognize that the path to profitable SMB sales is to become the default choice of a new generation of companies. Their Basecamp, Backpack, and, now, Highrise, are part of a suite of hosted tools that are near-ubiquitous at startups, not just because they're well done, but because they are what everyone else is using. Yes, they're hosted, and yes they're simple, but it helps to be everywhere in a self-referencing niche too.
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Right, but how do you do "extensive promotion, marketing, and customer service support" to get cost-effective access to a zillion tiny customers?
"how do you do "extensive promotion, marketing, and customer service support" to get cost-effective access to a zillion tiny customers?"
That would be the $$ millon dollar question a smart VC would ask :) One way i would say is to get as many channel partners on board.
Got any other suggestions/ideas? We have a platform ready for the SMBs too, that focus on the lucrative local online advertising. Too bad we can't get any VCs/Angels's attention here around Boston area.
Know good ones we can try to ping to?
I really like the 37s product set but I think they (and others) are missing a massive opportunity in providing the more "normal" services (accounting, help desk, employee mgmt, workflow, etc.).
One aspect of 37signals' experience is that they are getting a lot of press for writing their code using Ruby, which is the hot new programming language these days. I have no doubt that factor has gotten them attention that similar SMB software providers might be missing.
Self-service tools require extensive promotion, marketing and customer service support - The “If we build it, they will come” syndrome is common with self-serve product and it's a big mistake.