It’s easy to take for granted just how good we have it as software makers selling on the internet. This is truly a unique period in human history with unprecedented commercial freedom. It bears celebration and recognition.
Let me count the ways I love thee, unregulated internet:
- Access to world markets: Out of the 195 countries recognized by the US state department, we have customers in 191. There are no import tariffs to pay. No customs to clear. No multitude of electrical standards to comply with. Heck, we don’t even need to translate our products.
- Direct sale to customers: There are no distributors and no retailers with their hand out to take a cut. And we, the makers, get to talk directly to our customers—not someone else with a million other products to sell and none of our expertise.
- Free tools and education: All the software we needed to build our business with was not only freely available off the internet, it came with a wealth of free education that would shame any university. Programming languages, database systems, web servers, load balancers, operating systems. It was all there for the taking.
- No capital requirements: We didn’t need offices or fax machines or secretaries to get going. We could rent all our computing needs for next to nothing until customers with cash in hand started using our services and taxing our servers. This meant basically “no money down!” and no need to go hat in hand begging banks or venture capitalists for money.
- Self promotion can build a brand: We didn’t have to either convince journalists to write about us or buy expensive ads to get our name out. We “just” had to be interesting! It might not be easy, but it’s generally free. Aggregators like Reddit, Hacker News, and retweets have accelerated this power even more so recently.
Compare these extraordinary freedoms with just about any other business in the world. Nobody has it as good or are as free as software makers selling via the internet.
All we needed was an idea for a product that people were willing to pay for and the skills to pull it off. Ideas are all around us and the skills are learnable by self study.
You really can create something from nothing.
David wrote this on Nov 13 2012 There are 33 comments.
Seth 13 Nov 12
It’s amazing how many more people don’t realize this. Shh, don’t tell everyone let’s keep it a secret :)
Beau 13 Nov 12
Amen. We are living in special times.
jan korbel 13 Nov 12
Yeah, it’s like we are eating our pie and it keeps growing.
Jean 13 Nov 12
No inventory to manage is a big one too I think.
AJ 13 Nov 12
Ahh! now they are going to start charging import tariffs for 0’s and 1’s
MrCalc 13 Nov 12
Yes, it’s truly amazing. I kinda wanna agree with Seth in that we should keep it a secret though ;) However, I think most people won’t be able to realize or grasp this for a long time—if ever.
Jacob 13 Nov 12
@DHH
Don’t you have to charge sales tax (VAT) for those customer in pertinent countries?
Tomaz Zaman 13 Nov 12
Not just “skills to pull it off”. Determination, focus and lots of hard work. And some guts.
Steve 13 Nov 12
Damn this page looks good on my retina iPad…
Don 13 Nov 12
The internet age is classic case of an inefficient market. It’s a great distribution vehicle that flips capital costs over to operating expense. However, being able to service customers and win repeat business remains the most important consideration of any business.
Noah Parsons 13 Nov 12
What are you guys doing about taxes? Is that an issue at all?
Dave 13 Nov 12
You’re right, David. You point out many of the reasons I departed the corporate world in search of internet adventure. The opportunities are excellent, and I’m attempting to take advantage of them in my own unique way. You guys at 37 signals have been an inspiration to me, so keep leading the way.
David Andersen 13 Nov 12
What’s not to like?!
GeeIWonder 13 Nov 12
Let’s test this, shall we. I’ll make it easy on you—Pick one.
Rob 13 Nov 12
We do have it great.
I love how we can also change quickly to adapt to customers needs.
If you have an idea one night, it can be added to the code, pushed to the server, and be in use by your customer the very same day. The customer reaps the benefits of the quickness and new utility created online.
Jacob 13 Nov 12
Can someone comment on how a SaaS business handles taxes in foreign countries?
Anthony Barone 14 Nov 12
@dhh I needed that today : ) Thanks
chris 14 Nov 12
I agree with this philosophically, but have some gripes when it comes to the reality of the situation.
Firstly, not everyone has the time, or can spare the time, to execute what you propose. E.g. parents.
And secondly, self-promotion is more difficult these days. If you where starting out now, David, I’m convinced you’d have a different view on the matter.
I was compelled to write a more verbose version on my blog.
On a side note: props for having no share buttons. Boo for not having a box around the comment area—even a faint line would be better than none.
Ben Atkin 14 Nov 12
@Jacob @DHH doesn’t include sales taxes in the list of things he’s free from in international markets. It seems tariffs are different and harder to deal with than VAT .
Jacob 14 Nov 12
@Ben Atkin
My question is … how does 37signals address taxes in each country?
Does 37signals pay the taxes unbeknownst to the end user as part of the monthly fee or is 37signals adding the tax on top of your monthly bill?
David Neal 14 Nov 12
It’s amazing how many people, businesses, and cities are sitting around waiting for their version of the good old days of retail to return.
Chris 14 Nov 12
It feels like everybody has been telling me to get off my arse and build that app recently. Alright already, I’ll get on it.
Denis 14 Nov 12
You should take I18n seriously if you want to sell more.
DHH 14 Nov 12
No sales tax is collected anywhere as we don’t have any local subsidiaries. And in the US, there’s no sales tax on services (who knows how long that will last).
Raphael Saunier 14 Nov 12
@dhh, Denis has got a valid point. Do you have any plans for i18n? Or do you believe it’s not limiting your international expansion capabilities?
DHH 14 Nov 12
Raphael, we had (and have) i18n for Basecamp Classic, but the economic return wasn’t worth the effort expended. I have no doubt that we could grow faster with a stronger focus on international, but it takes much more than just translating your app. If we were willing to have local offices and a ton more people, it could surely be done. But we’re not.
Council Directive 2002/38/EC 14 Nov 12
I believe that non-EU suppliers of electronic services to EU consumers must account for VAT in the same way as an EU supplier, even if they don’t have any subsidiaries within the EU.
Don’t ask me how they enforce this, though.
DHH 14 Nov 12
Companies are certainly free to report their usage and cost of any of our apps to their local tax authorities and settle whatever use tax there might be there. That’s the same thing with ordering from Amazon in the US. If you’re not paying sales tax on ordering, you’re supposed to pay local taxes in your state by reporting it (but of course nobody does that).
Jeff Rodgers 14 Nov 12
@Jacob – VAT taxes, and the likes, are the responsibility of the customer. You, as the US-based software company, do not have to do anything.
Must pay for Greece 14 Nov 12
@Jeff: As per above comment, EU law may say otherwise…
EU commission’s web page about directive above says: “For the non-EU supplier whose EU customers are non-business individuals or organisations, there will now be an obligation to charge and account for VAT on these sales just as EU suppliers have to do.”
Felix 14 Nov 12
Long live the Internet! Great Post!
David Andersen 14 Nov 12
“And in the US, there’s no sales tax on services (who knows how long that will last).”
This is totally dependent on state law. My state, for example, does have a sales tax on services.
fgivmdyr 20 Nov 12
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This discussion is closed.