HEY Strategies That Deserve More Attention Than the Apple Controversy
Alfred Lua / Written on 03 July 2020
This week's paid content for paying subscribers is on influencing product roadmap. After becoming a product marketer, I noticed this is one of the most common questions by product marketers. I hope it helps to share what has worked for me so far (though, I'm also still learning).
Onto this week's analysis:
HEY, HEY, HEY
While a lot of attention was on the uniqueness of HEY and the Apple App Store debate, there are three product and marketing strategies that I think deserve more recognition than they got.
1. Multiple products, distinct brands
HEY isn't the second product the Basecamp team has built. Nor the third, fourth, or fifth. HEY is their 12th product.
As companies grow, they often launch new products and sell them to their customers. Shopify started with an e-commerce platform and added POS, payment, and fulfillment. Uber started with Uber-the-product and eventually branched out to Uber Eats and Jump. By keeping the new products under the same brand, they can take advantage of the existing brand and cross-sell to their customers, instead of finding new customers. This is also what we tried at Buffer, which enabled us to grow Buffer Analyze to $1m annual recurring revenue in about 17 months from launch. 
While most people know HEY as a product built by the Basecamp team, the Basecamp team actually took a slightly different approach, which I thought is brilliant.
HEY is kept as a separate brand but promoted mostly through the Basecamp founders, Jason Fried and David Heinemeier Hansson.
HEY has a separate website and Twitter account, both with only a tiny reference to Basecamp. The Basecamp website has no mentions of HEY at all . The Basecamp Twitter account has mentioned HEY once so far.
Let's first discuss the downsides of having a new brand, compared with the traditional approach I mentioned above. Anyone bought into Basecamp's no notification, calm work life ideology would likely love a no-notification, calm inbox. If the Basecamp team had kept HEY under the Basecamp branding, they could tap into the existing brand that many love and cross-sell to existing customers (e.g. send an email to announce the new product). Also, people who haven't been following the news and tweets might not know HEY is by the Basecamp team. In a way, the Basecamp team might not have fully utilized the strong brand they have built.
But this is where it gets interesting, and why I thought their strategy is brilliant. Basecamp's brand is essentially Fried and Heinemeier Hansson. Andy Didorosi, who recently joined as their Head of Marketing, has done some creative campaigns such as organizing a playoff on Dribbble and sponsoring newsletters. I don't want to discount his work but so far, Basecamp's branding is Fried and Heinemeier Hansson. Their Twitter following combined is about five times that of the Basecamp Twitter account. Basecamp's content marketing is articles by Fried andHeinemeier Hansson. I'd argue most people heard of them before they know about Basecamp.
By keeping HEY has a separate brand, they avoid diluting the Basecamp brand and avoid the complexity of marketing and supporting multiple products under one brand (e.g. having multiple sets of onboarding emails, connecting the two products, etc.) But at the same time, they still managed to fully utilize the Basecamp Jason Fried and DHH brand.
Generally speaking, I think companies should go to either extremes. Have distinct brands for new products (e.g. Basecamp, Atlassian) or bundle new products with the existing product (e.g. Mailchimp, Shopify).
2. Early access, invite codes, and founder demo
Ninety-nine percent of the attention was focused on their Apple App Store "stunt" but I think the true strategic marketing move is their early access, invite codes, and Jason Fried's demo.
A quick word about the Apple App Store "stunt" first: While many think the entire issue was intentionally orchestrated to get press and attention, I genuinely believe it wasn't a coordinated marketing campaign. But I do think it is a natural result of their company culture or Fried and Heinemeier Hansson's personality. When they see something they feel strongly against, they would express it loudly. The App Store rejection gave them something to go against very publicly, and they did. (If it was planned, hats off to them!)
What could have been planned, and more useful for us to learn, is their early access, giving people three invite codes, and Fried personally doing a demo.
Fried first tweeted about HEY in February this year. That generated more than 10,000 early access signups within a day. Then a | few | people | started | tweeting about HEY; several of whom have a huge following.
❤️ the level of product thinking that’s gone into rebuilding email from scratch. — Ryan Hoover (@rrhoover) May 12, 2020
I don't think the Basecamp team intentionally gave "tech influencers" access first. It's likely these people in tech are always keen to try new products (who doesn't want to try something that promises to revolutionize email?!), and some happen to have a huge following.
Then the Basecamp team slowly opened up access in June, giving people who signed up for early access three invite codes each. Sweet plain-text email People, including myself, were giving away the invite codes on Twitter, and many others were eager to get them.
Finally, there's the 37-min demo video by Fried. I originally didn't believe in the hype but caved in after watching the video. There's something powerful about a founder describing their vision and product, like Steve Jobs announcing new Apple products or Elon Musk announcing a new Tesla vehicle. Their conviction in their products adds another layer of credibility, which often creates a cult-like following and helps nudge people who are on the fence. Again, the Basecamp founders are the Basecamp brand.
In less than two weeks, more than 120,000 people signed up for HEY. This was even before the Basecamp team opened up HEY to the public. While the additional press thanks to the App Store rejection surely boosted the number, I believe tens of thousands of people would still have tried HEY.
3. Mergers, sales, and spinoffs
As mentioned earlier, the Basecamp team has built numerous other products before HEY.
Here are a few products that they have launched but eventually sold, retired, or merged into other products: Backpack (a personal organizer), Ta-da List (a to-do list app), Writeboard (a formattable text document), and Breeze (a mailing list tool for small groups), and Campfire (a team messaging app).
Two products that did relatively better were spun off as new companies.
In 2013, the Basecamp launched Know Your Company, a team management software. In six months, they booked $390,000 in revenue. Eventually, they spun it off into a new company, which is co-owned by Claire Lew, the new CEO of Know Your Company.
When they decided to focus on just one product, Basecamp, they also spun off Highrise, a CRM software, as a subsidiary with its own team. Highrise was then their second most popular product behind Basecamp, making multi-million dollar profits annually. This venture didn't go as well as they eventually moved Highrise back to the Basecamp team and then stopped developing it altogether.
At first, I was thinking the Basecamp team might follow the same path and spin HEY off into a new company. But given how Fried and Heinemeier Hansson's identity around privacy, control, and no notifications is built into the product, I have a hunch they would prefer to own and run the company themselves. In a sense, HEY's branding around, similarly, privacy, control, and no notifications will be weaker if Fried and Heinemeier Hansson are no longer involved in building and representing the product.
Having seen at Buffer how challenging it can be to manage multiple products with a small team, I'm curious to see how the Basecamp team of 55 manages Basecamp and HEY (and hope they would share their "company secrets" as they have been doing). They do seem to know what they are doing. When I emailed their support for help, I heard back in less than an hour, sometimes in a few minutes. That's impressive.
I'm rooting for them.
: Despite the good financial results in the early stage, this strategy didn't work well for us. I wrote more about why unbundling didn't work for us.