I'm surprised I haven't seen more about this yet. Doesn't anyone realize that these smaller businesses are good for 37signals?
Starting companies designed to change the world either succeed or die, and they tend to find out which very fast, which leaves a good number of them dead. Those dead ones have no reason to stay subscribed to campfire. 37signals will make more money on "lifestyle" businesses than startup businesses (if startup is defined as high technology, get rich or die trying).
It's the long tail of business types. On the left, taller side, you have a few wildly successful companies (startup or otherwise). Just to the right of that, there are the moderately successful ones. They don't make as much, but there are more of them. To the right of that there extends a massive tail of "lifestyle" or similar businesses that didn't set out to change the world or make the founders billions - millions maybe, but not billions. The farther that long tail extends to the right, the larger the market potential for 37signals products.
The point is that they don't make money on the hight of the graph (the success of the companies) but by the length of the graph (the number of companies).
Bottom line: it's good business for 37signals to encourage more lifestyle companies. I don't blame them for it. In fact, it's actually pretty smart of them.
Starting companies designed to change the world either succeed or die, and they tend to find out which very fast, which leaves a good number of them dead. Those dead ones have no reason to stay subscribed to campfire. 37signals will make more money on "lifestyle" businesses than startup businesses (if startup is defined as high technology, get rich or die trying).
It's the long tail of business types. On the left, taller side, you have a few wildly successful companies (startup or otherwise). Just to the right of that, there are the moderately successful ones. They don't make as much, but there are more of them. To the right of that there extends a massive tail of "lifestyle" or similar businesses that didn't set out to change the world or make the founders billions - millions maybe, but not billions. The farther that long tail extends to the right, the larger the market potential for 37signals products.
The point is that they don't make money on the hight of the graph (the success of the companies) but by the length of the graph (the number of companies).
Bottom line: it's good business for 37signals to encourage more lifestyle companies. I don't blame them for it. In fact, it's actually pretty smart of them.