Every once in a while you get a chance to put your money where your mouth is. An opportunity to ask yourself if you practice what you preach, knowing that anything other than a resounding “yes” will force you to ask yourself a more unsettling question: “Why not?”
I came face to face with one such opportunity in February thanks to a celebrity entrepreneur who refuses to play by the rules.
In case you missed the big announcement, 37Signals — the fiercely independent company founded by best-selling author Jason Fried — has decided to divest itself of its popular CRM product, Highrise, as part of a larger overall strategy.
I’ve been a Highrise customer since February of 2012, but my struggle to find the right CRM solution dates back to December of 2009. I was so frustrated by trying to figure out what to use at my firm that I asked readers of my New York Times blog to help me choose between ACT and Salesforce.com — the two obvious frontrunners at the time. I ended up using Salfeforce.com for about a year, but found it to be overkill given my modest needs. I then tried Zoho, Sugar and Insightly before somehow I stumbled on Highrise.
True to its 37Signals heritage — known for minimalist yet robust design, and relentless focus on the customer — Highrise is easy to use and lovely to look at. It strikes the perfect balance between having enough features without being overwhelming. After a brief learning curve, I quickly worked Highrise into my daily process and became a happy customer.
Then came the news. Gasp! Jason Fried was changing the name of the company from 37Signals to Basecamp — its flagship project management product — focusing solely on the one product while selling off the rest, including Highrise. Throwing confidentiality to the wind, he announced the entire plan on the 37Signals website, and vowed to continue supporting Highrise and its customers as long as necessary.
My first reaction was disbelief. Who would tell the world that they’re selling a company, or beloved business unit? It’s one thing to be transparent, but this seemed imprudent. Would the customer base flock to another CRM tool, thus eroding the value of Highrise and scaring away good buyers? What about the employees assigned to keep working in a division with one foot out the door. It was madness!
After the initial surprise came panic. What about me? What was I going to do? After all my hard work and 30-day free trials, was I headed back to the proverbial drawing board? How could he do this to me? Traitor!
Panic turned to indignation. In a moment of weakness I signed up for the free trial version of Nutshell.
Then it hit me. What am I doing? What’s so bad about Highrise being for sale? I make a living helping people sell businesses, and am quick to reassure everyone that a great buyer will be found and everything will be fine. Take a deep breath. Relax. It will all be okay.
So, after talking myself off the ledge I’ve decided to hang on for the ride with Highrise and see what happens. Here are my reasons:
I have faith in the seller
I’ve read Jason Fried’s book, Rework, twice and consider him to be one of the smartest entrepreneurs on the planet. When he says he cares about his products, his company and his customers I believe him. I don’t think he’s going to sell Highrise to a buyer that won’t take care of its customers and the CRM product we depend on. In fact, I’d be shocked if he pawned us all off to a bad buyer at a fire sale price. Mr. Fried has done an incredible job of leading his company up to this point. Divestitures may be new territory, but I have faith in him and his team.
I still like the product
Did anything really change after the big announcement? Not really. The product is still there, functioning as it always has, and I still enjoy using it. Why would I ditch Highrise just because its ownership structure may change? Customers leave when products stop working, or cease to bring value that justifies the price. Highrise hasn’t done that.
If there’s one thing I’ve learned as an M&A broker it’s to take a good hard look at whether or not the wrong emotions are clouding your decision making process. If I left Highrise now it would be for emotional reasons, namely fear of an uncertain future. Not only would that be unfair, it would be silly.
I trust the process
If Jason Fried is like the rest of us, the decision to sell Highrise was a difficult one to make. Some have speculated that divesting secondary products like Highrise and Campfire from 37Signals will build the value of Basecamp, and they’re probably right. We rarely get the full story about these decisions until well after a sale has been completed. But I’ve seen businesses bought and sold every day for the past eight years. If it’s handled well there will be an orderly and seamless transition, and the future of Highrise may actually be brighter in someone else’s hands.
I wish I could be a fly on the wall at Basecamp and watch the Highrise deal get done. I’ll just have to be satisfied with watching the acquisition unfold from the standpoint of a loyal customer.
Come on Jason, don’t fail me now!
What do you think? Should 37Signals have announced the sale of Highrise, or kept it quiet?