Built HEY. Built WWDC. Built Apple.

Transcript context

…Yes. I like to pitch it as what Gmail would’ve been with 20 years of lessons applied in a way where they could actually ship. Gmail was incredible when it launched in 2004 and it still is a great product but it’s also trapped in its initial success. You can’t redesign Gmail today, it just has way too many users. So, if you want fresh thinking on email, I wanted fresh thinking on email, I needed to build my own email system. And not just my own email client, that’s what a lot of people have done over the years, they build a client for Gmail but you’re severely constrained if you don’t control the email server as well. If you really want to move the ball forward with email, you have to control both the server and the client and that was the audacious mission we set out to do with HEY. And that was what’s funny, I thought our main obstacle here would be Gmail, it’s the 800-pound gorilla in the email space. Something like 70% of all email in the US is sent through Gmail, I think their world rates are probably in that neighborhood as well, they’re just absolutely huge. And trying to attack an enormous established competitor like that who’s so, actually, still loved by plenty of people and it’s free seems like a suicide mission. And it was only a mission we signed up for because we had grown ambitious enough after making Basecamp for 20 years that we thought we could tackle that problem. So, I thought, hey, this is dumb, I would not advise anyone to go head to head with Gmail, that seems like a suicide mission. We’re going to try anyway because, you know what, if we fail, it’s going to be fine, we’re just going to build a better email experience for me and Jason and the people at the company and our cat and that’ll be okay because we can afford to do so. But when we got ready to launch after spending two years building this product, millions of dollars in investment to it, we obviously needed mobile apps. You’re not going to be a serious contender with email if you’re not on a mobile phone and you need to be there with a native client. So, we had built a great native client for both iOS and for Android and, as we were getting ready to launch, we submitted both of them to the app stores, got both of them approved on, I think, Friday afternoon for the iOS app and we then went live on Monday and we were so excited. Hey, world, we’ve been working on this new thing, I’d love for you to check it out. And of course, as with anything when you launch a new product, there are some bugs so we quickly found a few in the iOS client and submitted a new build to Apple. Hey, here’s our bug fixes, can you please update and that’s when all hell broke loose. new product, there are some bugs so we quickly found a few in the iOS client and submitted a new build to Apple. Hey, here’s our bug fixes, can you please update and that’s when all hell broke loose. Not only were they not going to approve our update, they said, “Oh, wait a minute, we gave you permission to be in the app store but, I’m sorry, that was a mistake. We see that you’re not using our in-app payment system which means that we don’t get 30% of your business, you will have to rectify that or you can’t be in the app store.” And first I thought, well, it got approved already, we’re running on the same model we’ve run Basecamp on in the app store for a decade, if you’re not signing up through the app and we’re signing up our own customers on our own website and they’re just going to the app store to download their companion app, we’re going to be fine. That was the truth, right? That was why I never got so fired up about the app store. Even as Apple started tightening the screws, it was like, “My business was okay.” Now, suddenly, my business wasn’t okay. Apple was willing to destroy HEY if we did not agree to give them 30% of all the signups that came through the iOS app. And it wasn’t just about the 30%, it was also about splitting and not longer having a direct relationship with our customers. When you sell an app in the app store, you’re not selling an app to a customer, you’re selling an app to inventory at Apple and then Apple sells an app to that customer. That customer has a purchasing relationship with Apple so, if you want to give discounts or refunds or whatever, it’s complete hell. If you want to easily support multi-platform, that’s complete hell. If someone signs up for HEY on their iPhone and they want to switch to Android but, that billing relationship, it’s tied to Apple, it’s complete hell. For a million reasons, I did not want to hand my business over to Apple, I did not want to hand 30% of our revenue over to Apple so we decided to do something that seemingly Apple had never heard before, we said no. We’re not going to add the in-app payment. I don’t care if you’re threatening us, this is not fair, this is not reasonable, please approve. And of course they didn’t and it escalated and, after a couple of days, we realized, you know what, this isn’t a mistake, this isn’t going away, we’re going to be dead if they go through with this. If we’re not going to yield and give them the 30%, they’re going to kick us off unless we make such a racket, such noise that they will regret it and that’s exactly what then happened. We were blessed by the fact that we launched HEY one week before the WWDC, the Worldwide Developer Conference, where Apple loves to get up on stage and harp on how much they do for developers, how much they love them and why you should build their new devices and so on and so forth. And then we also just happened to have a platform on the internet which is very convenient when you need to go to war with a $3 trillion company. So, I started kicking and screaming- Oh, boy.…

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