Building products

What’s it going to take to get traction? “Make something people want.” “Minimum viable products.” “Talk to users and build features.” These are all common phrases used amongst those of us who are focused on building products. But I recently had a great reminder…

It’s amazing how much of a phenomenon American Girl is. If you aren’t familiar, in 1986, a woman named Pleasant Rowland launched a new doll company. She was fed up with the shallowness of Barbie and Cabbage Patch Kids.

Here I was, in a generation of women at the forefront of redefining women’s roles, and yet our daughters were playing with dolls that celebrated being a teen queen.

So she made her own. At first, everyone thought she couldn’t compete. But it turned out to be an instant success.

The dolls don’t stand out to me as better quality than other dolls we could buy. They’re not bad quality. But if you were to size one up against a Journey Doll at Toy R Us:

American Girl vs Journey Doll

You might fail to spot any major differences.

Journey Dolls are marketed by Toys R Us. After 5 years, they’ve sold about 1 million dolls. That’s 200,000 Journey Dolls a year.

And according to American Girl stats, they’ve sold over 30 million dolls since 1986, or roughly more than 1,000,000 American Girl dolls each year.

This isn’t a knock against Journey Dolls, but why is American Girl doing so much better?

If you have a young daughter and have visited an American Girl store, the answer might be obvious to you.

A handful of weeks ago my niece was visiting from out of town. We brainstormed a bit on things to do with her, and having lunch at the American Girl store was at the top of the list.

Before lunch, walking through the store, we saw quite a few things I haven’t seen at a Toys R Us. You can make an appointment to get your doll’s hair done. Your doll, Julie, likes music from the 70s? Here’s a child sized room where you can experience Julie’s life by hanging out in an Egg Chair, listening to 70s music, watching lava lamps, and buy matching outfits.

And it’s not just about shopping for dolls. This American Girl store had an entire book store attached to it. Pleasant wanted her dolls to help teach girls the importance women have had on the world, so each original doll also had at least 6 books with deep backstories published along with it.

It wasn’t meant to blare from the shelves on its packaging or visual appeal alone. It had a more important message — one that had to be delivered in a softer voice.

Our lunch at American Girl wasn’t an ordinary lunch. It’s fancy. White table cloths. There’s multiple courses, starting with mini cinnamon rolls. Dolls get a special seat at the table and even their own cup and saucer. Didn’t bring a doll? You can borrow one of theirs.

Of course I recognize the marketing here. A girl without an American Girl gets to borrow a doll. It’s an addictive “free taste”.

But as a parent, this was something other than just spending money. It was a meal where my daughter and niece were fully engaged. A chance for us to bond while they get to inhabit a world of their choice.

American Girl was never just a doll. Equal, if not more, time has been spent not on the features of the doll, but on stories, messaging, lunches, and activities for the humans involved.

Pleasant realized that in order to get traction in a market as crowded as toys are, where no one thought she could succeed, instead of building products, she invented experiences.

And as I see my daughter grow, it becomes more and more apparent how independent she’s getting. I feel her pushing me away so she can do things herself. I cherish experiences like our lunch at American Girl.

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You should follow my YouTube channel, where I share more about how we run our business, do product design, market ourselves, and just get through life. And if you need a no-hassle system to track leads and manage follow-ups you should try Highrise 🙂

For sale: baby shoes, never worn

Unraveling the dismal science of my Facebook moms resale group

I recently discovered one easy trick to make money from home! Well, “easy” is relative and “make money” is also kind of debatable, but I definitely have not left my house.

I’ve been in decluttering mode for the last couple weeks and have become super active with my local moms resale group on Facebook. For those of you not deep into Suburban Mom World, these are private groups of parents (almost entirely moms) who are buying and selling things—mostly kids’ stuff, but also adult clothing and kitchenwares and furniture. Laura Hazard Owen has an superb write-up of how these groups work. She’s in the Boston area and I’m just outside Chicago, but the mechanics are the same: Members put up a photo, price and description of the item they’re selling and interested buyers comment on the post to claim their place in line. Pick-ups are typically done via porch—that is, sellers leave their goods outside and buyers swing by to get them at their convenience, sticking cash in a mailbox or under a doormat. It is a remarkably efficient system and very addictive. I once almost commented “Sold!” on a friend’s photo of green tea Kit Kats before realizing it was a regular post in my News Feed.

The overachiever in me wanted to become the mogul of my Facebook resale group, and the business journalist in me wanted to figure out which items sell and why. Sitting in my basement among plastic storage bins filled with my daughter’s outgrown clothing and baby gear, and perhaps inspired by Jason Fried’s advice that you should practice making money, I set out on my little sales experiment. Here’s what I learned.

Items awaiting pick-up on my porch.

Copywriting Doesn’t Matter

I was led astray by early success in offloading my DVD of Pride & Prejudice for $3. Here’s what I wrote:

It is a truth universally acknowledged that a person in possession of even a tiny fortune must be in want of this movie. Show how ardently you admire and love Colin Firth emerging from a lake wearing a clingy white shirt! This is a two-disc set. I just upgraded to Blu-ray so I don’t need the DVD anymore.

Not only did I have a taker within the hour with three more buyers commenting “Next,” but I also got 16 Likes and inspired a mini discussion about how much everyone loves the movie. You are surely made of hardier stuff than I am, but I was powerless to resist such social media affirmation.

I knew I couldn’t match the wit of my favorite salesmom, a woman who’s elevated the For Sale post to a kind of performance art (here’s one: “Crushed purple blazer. Small tear in armpit which can be easily fixed, unless your armpit is a size 8. I shoplifted this from Saks 12 years ago. It’s beautiful and I’m probably going to hell.”) But I was convinced I’d have to pen Jane Austen-level copy every time. So for a Little Mermaid hooded swim cover-up in 2T, I wrote, “Thingamabobs? You’ve got plenty. But do you have this adorable Little Mermaid cover-up?” I listed it for $2 and no one bought it. Meanwhile, other items whose posts were written in the sparsest language (3T shirt, VGUC, lots of life left, sf/pf PPU*, $3) sold just fine. I stopped being cute and just started listing the basic information. Of course, there are lots of sales scenarios where copywriting matters a great deal, but my weird bubble of a Facebook group did not appear to be one of them. I moved onto price.

(*very good used condition, smoke free/pet free, porch pick up)

Pretty Much Everything Costs Five Dollars

The Boppy is a U-shaped pillow designed for nursing. Mine was in good used condition and I also had two covers, one with a small tear in the seam. The pillow retails for around $30 new. One day, I saw a mom selling her Boppy and cover for $3. It was claimed almost immediately and then another woman commented “Next,” so I messaged that person and asked if she’d like to buy my Boppy and two covers. She asked how much I wanted for it and I hesitated. Three dollars seemed low, especially because I had an extra cover. But one of my covers had a tear. I didn’t know how to justify charging more than the other mom, so I said $3. She picked it up that afternoon.

The next day, a mom listed a Boppy and cover in the same condition for $2. Later that day, another mom listed her Boppy for free. Free! The local market for used Boppy nursing pillows had somehow collapsed entirely within two days.

I have no idea whether those second-day Boppy sellers even saw the earlier sale posts, let alone based their pricing on them. But I noticed that in my resale group, pretty much everything converges toward the $5 mark, regardless of original retail value. As Laura Hazard Owen notes in her essay, price and size tend to have an inverse relationship, resulting in a market where “you can sell a Jumperoo for maybe $5; you can sell two used pairs of Hanna Andersson baby socks for $5.” This is absolutely the case in my Facebook group. Even in cases where you can price items higher, the economics are hilariously skewed. I sold my daughter’s old crib and mattress for $30, a price so low that I’m not sure my husband feels fairly compensated for the time he spent looking for the hardware and instructions, not finding the manual either in the house or online, and then printing instructions off the Internet for a different crib model from the same manufacturer and carefully annotating them. I, on the other hand, felt fantastic about getting the crib and mattress out of the basement. And that brings me to the last thing I learned.

It’s Not About Money

In this mini economy, the value of a transaction is measured in something other than money. It’s about community! Oh barf, I know. But it’s true. As the seller, I accept a price below fair resale value for my daughter’s gently used dresses and bibs because it is a luxury to be able to private message my address to someone I’ve never met and trust that the money will simply appear under my doormat, without anyone getting scammed. I don’t use Craigslist anymore, but if I did, I would probably ask to meet in a McDonald’s parking lot or the lobby of my local police station (which specifically makes its lobby available for Craigslist transactions). It just feels too big and scary. And despite Facebook’s badgering, I have no desire to try their Marketplace, where you can post your items more publicly to people in your geography. The thought of complete strangers being able to see my name and profile photo is terrifying, and besides, the moms in my resale group who’ve tried Marketplace say they get bombarded by people who want to haggle. (I still haven’t worked out why I feel okay with dozens of Lyft drivers seeing my address and photo.)

On my resale group of 2,000-some people who live within a seven-mile radius, I feel safe. These are women that I know from my daughter’s preschool, my exercise studio, and the playground. Many of us are also members of two other Facebook groups of local moms that have become an indispensable source of hyperlocal news, recommendations for babysitters/handymen/birthday party venues, and general bonhomie. The resale group feels like an extension of that community.

I thought that I was providing something of value to the moms buying my used stuff. It turns out I get way more out of these little transactions as a seller. My husband and I had always planned to have more than one child. We recently, reluctantly changed our plans for a number of reasons, one of them being that my uterus seemed to have very different ideas about what the size of our family should be. I’ve been using the resale group as a kind of reverse retail therapy, a literal letting go of the idea that I should be keeping the nursing pillow and crib for a second kid. There are days when this turn of events makes me so sad I don’t want to leave the house. But I don’t have to! I go down to the basement, find something cute in a storage bin, snap a photo and post it. If I’m lucky, someone will buy it. I private message her my address, put the thing in a plastic grocery bag labeled with her name and leave it on my porch swing. Then I retreat to my office and listen for the sound of the porch door squeaking open. I pretend I’m not home. After she slips a few bills under my doormat and leaves, the door banging shut behind her, I feel a little lighter. Like I said before, it’s not easy and I’m not making much money. But I’m gradually feeling better. Very good condition, lots of life left.

To hear insights on making money from people who have been doing it for a long time, check out Basecamp’s podcast The Distance, featuring the stories of businesses that have been running for 25 years or more. New episodes every other Tuesday.

The Backfire Effect — How you can persuade even your toughest customers (or two year olds)

Here at Highrise, we hope our customers are incredibly happy. But every now and then we run into a tough case. For example, we now have Broadcast, a bulk email service.

We keep it under tight control. If spam complaints or bounces go over our stringent limits, the ability to use Broadcast is paused. We do that to make sure our delivery rates are sky high.

That doesn’t always make people happy. It’s actually a very delicate issue. When someone is paused they feel like we’ve labeled them a “spammer”. A “spammer” in their eyes is sending some illegal email about drugs, sex, and who knows what else. How can they be in the same club?

But when you send something you think people will love, even if they’ve opted in, some people may still mark it as spam. They have the option to mark anything they want as spam. Or if you email an old list, stuff is going to bounce. And it makes receiving mail servers like Gmail unhappy, because that’s also a tell-tale sign of people who are spamming random purchased lists of emails with offers of Viagra and casinos. We have to take all that into account, and occasionally we have to say to someone “Look you can’t send Broadcasts right now, because you aren’t following our sending practices.” And we’ve lost customers. Even folks who’ve been with us for years (and this is a brand new feature at no additional cost). Because they didn’t like what they heard about their ability to use Broadcast.

What do we do?

I was having breakfast with my two year old recently. We were reading the Wall Street Journal and eating a salad together, with her broccoli and spinach being dipped in her yogurt. Sounds pretty healthy right?

Then she drops: “I want a jellybean.” 🙂

Well at our house, we aren’t the epitome of strict eaters, but we pretty much have a “no candy for breakfast” policy. So we told her “No jellybeans for breakfast, honey.”

She melted down.

Crying. Yelling “I want a jellybean” — our good morning crumbling.

But the concept of persuasion has been on my mind a lot. Especially with the current political climate. And something I keep reading about is the “backfire effect.”

Brendan Nyhan and Jason Reifler, who gave the effect its name, have done quite a bit of research on what it’s like to correct people. For example, in one study they presented a group of conservatives with a fake news report that stated “Iraq had weapons of mass destruction prior to the US invasion”. Then some of those conservatives were presented with a correction: Iraq didn’t have WMDs before the invasion.

Conservatives who were presented with the correction were found now EVEN MORE likely than they were before to believe Iraq had WMDs.

Not only do folks try to confirm preexisting beliefs with evidence known as the confirmation-bias. But when supplied with contradictory evidence, those preexisting beliefs can become irrationally even stronger.

In other words, people don’t enjoy being contradicted. It changes us. We get heated. We become illogical. Irrational. How often have you been told “No”, now to want it even more?

So how can we deal with this situation? We still need meaningful dialog in cases like this. I still need to get my 2 year old back to breakfast.

I tried to stop contradicting her.

Instead of saying “No jellybeans for breakfast.” I tried empathy. I tried just confirming her feelings.

I told her, “You know, I want jellybeans for breakfast too. In fact I want ice cream.”

Her eyes lit up. Crying stopped. Now she said, “Daddy, the ice cream is in the freezer. I’ll get it.”

🙂 Oops. Was this a new problem I created?

But I continued, “Hold on. So I’d love all those things for breakfast, especially ice cream, but I know they aren’t good for me.”

Now she asked, “Why?”

And so I went on. “Well it’s important for me to get a great breakfast to start my day. Healthy foods. Even salads. So that’s why we avoid eating things like candy in the morning.”

And she was done with the tantrum. She listened, and moved on.

Woah, what just happened. I can’t believe I just stopped this meltdown. Was it a fluke?

Nope, the next morning it happened again. This time she “wanted a treat.” Again I said “I totally get it. I want a treat too. But because breakfast is important to be healthy, I wait to get treats until later in the day.” The whining stopped.

I was floored.

It dawned on me someone actually treated me recently like this too — a company I do business with called Indinero.

I use Indinero for all my bookkeeping and taxes on my side project Draft. Been using them for years. Well something came up that I wasn’t happy with and I emailed them some negative feedback. The response really caught me:

Good Morning Nate,
Thanks so much for the feedback, I would be incredibly frustrated in your situation as well. That is definitely not how we want you to feel and this not the experience we aim to provide our clients.
When it comes down to it, you’re right...

They agreed with me!? I’m right!?

They felt the same way as me. My customer support person even went on to say how things would be corrected. I was cooled down in a hurry.

This was one of the most pleasant customer support experiences I’ve ever had, and really nothing had actually been resolved. There was only a promise they’d improve something. And how many times have you gotten a “Sorry we’ll try to do better note” from a company with little or no dent on your dissatisfaction.

I didn’t feel like that at all. And they really followed up too. They’ve definitely won more loyalty from me.

And so these 2 events are changing how we answer certain requests. Recently a customer thought onboarding was too hard if he had to watch 3 ten minute long videos just to get started with Highrise. He tweeted this to all his followers. 🙁

But, instead of replying an empty: “Sorry you feel that way”, I confirmed what he felt. “Yep, you’re right, I wouldn’t watch them either to get started. We created them for customers who really need in-depth starts, but Highrise is straightforward enough to skip the manual all together.” I also explained that he raised a great point that I should address when these videos are presented that they aren’t “required reading.” He deleted the original tweet.

Those bulk email shutdowns? I’ve been there in my past.

Many years ago, managing newsletters to a huge list of emails, I was shut down multiple times by another email provider for too many bounces and too many spam complaints. It doesn’t feel good. I’ve come away the same way, feeling like “They shouldn’t have shut me down. I’m in the right.”

So I moved over to a competitor because they had lower standards and wouldn’t shut me down, but then I just found no one was opening my mail anymore. Most of it was in spam folders.

In the end, I returned back to the original provider who had shut me down, and I got better about my own practices of who I sent mail to.

Maybe this sort of message will resonate much better with our customers.

I realize my persuasion Jedi techniques won’t always work. But having that breakfast with my two year old, opened my eyes to the “backfire effect” and how it feels better when someone confirms it’s ok to feel the way I do. And even better, when they feel the same way. Now instead of heated and angry, I’m listening again. And maybe I become a little more open minded.

P.S. If you enjoyed this article, you should follow my YouTube channel, where I share more about how history, psychology, and science can help us make better decisions. And if you find yourself overwhelmed while organizing your own small business or customer feedback, check out how Highrise can help!

Why we need paid family leave in the U.S.

When you have a newborn baby, your home life descends into temporary chaos. There’s crying and messes and strange liquids everywhere, plus doctor appointments, grocery store runs, and endless laundry. And that’s not all: new moms need lots of support and ample time to recover.

But since Americans keep prioritizing EXTREME PRODUCTIVITY and individualism over everything else, most working parents don’t have time to get their lives in order. We’re expected to get back to the grind right away.

Don’t like it? Too bad. Stick that baby in a daycare, choke down a few painkillers, slap on a fake smile, and numb your way through the whole mess. You’ll see the kid on the weekends. It’s the American way!

Truth be told…the American way is fucked. This is what really happens when you go back to work so soon:

  • You’re a distracted, tired employee who’s running on fumes and whose mind is elsewhere.
  • You’re fighting with your partner because you’re overwhelmed trying to balance too much at once.
  • You’re missing precious time with your new child. At this early age they change every 20 minutes. You want to be there for that, and they need you to be there.

I know these things from experience. I had no parental leave when my daughter was born 7 years ago. I took a couple weeks of vacation and went back to work, leaving my wife alone with an especially feisty newborn. We slogged through it, but we suffered the fallout for a long time after that.

And I still had it relatively easy! At least I had some paid vacation time to use, and we could afford to have my wife stay home. Lower income families don’t have those options. If you’re earning hourly wages and living paycheck to paycheck, think you’ll skip getting paid when you suddenly have another person to care for?

These days, I’m so fortunate to work for a forward-thinking company with a generous parental leave policy. When my son was born in April, I was given 6 weeks of paid time off—a rare benefit for a father in the U.S.

Having that time allowed me to relax and focus entirely on my family. Being dad was my full-time job when it was needed most. I could do all the laundry, calm the crying, and help my wife get rest.

The family leave experience

I missed about a month of work, and everything kept on running without me. We put a couple of my projects on hold. It was fine.

Basecamp paid me my usual salary, but even more than that, they gave me a priceless gift: dedicated time with my new son. That experience endeared me to the company more than just about anything else they could do. In return, I came back to work feeling enthusiastic instead of worn out and stressed.

Now, of course paid leave is wonderful for an employee, but how about for a business? Why should a company pay workers not to work? It’s already expensive to pay for health insurance and other employee benefits.

That’s a fair argument, but forcing zombified employees back to work doesn’t make their problems magically go away. It just causes extra stress and burnout. That results in higher turnover. And turnover is even more expensive! Research shows many businesses save money overall with a paid family leave policy due to reduced turnover rates.

Whether a national solution for parental leave in the U.S. involves a cultural shift, government action, private sector changes, or some combination of all three, I hope I’ve helped shine a little light on the truth.

If you’re an American worker, look for jobs that have supportive family policies. (They’re hard to find right now, but they do exist.)

It’s worth the effort. You won’t remember yet another month you spent at work, but you’ll never forget the beginning of your child’s life.

And if you care about this issue like I do, keep talking about it! Call your representatives. Talk to your boss. Let’s help change it for everyone and make this post obsolete.

Basecamp is an amazing company with great benefits. We don’t hire new people all that often, but sometimes we do—keep an eye out! Give me a holler here or on Twitter if you have any thoughts about this.

Employee benefits at Basecamp

Our headquarters in Chicago.

I’m often asked about the benefits we offer at Basecamp. Potential employees are obviously curious, but most of the questions I get are from fellow business owners and entrepreneurs. Everyone’s looking to know what everyone else is doing — as are we — so I figured I might as well post our current benefit list publicly.

Note: Since the majority of our staff works remotely, and some outside the US, some of these benefits are provided in different ways. For example, the 401k is only available in the US. We’re currently working on making sure everyone, no matter where they work, have commensurate benefits (or at least as similar as possible). We’re still working on this, so hopefully I can write more about how we’ve addressed this down the road.

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