… there’s a lot of money to be made selling installable enterprise-ish software like Basecamp. The problem for us is that even though the revenue is there, we don’t have the manpower to service a wide and varying installed base. And – even more fundamentally – we don’t want to. I’m afraid that a large installed base will divert our focus away from progress and more towards management.

That’s a bit of a twist. The conventional thinking is that software is scalable - major non-recurring costs up front to develop the software and minor recurring cost for each copy sold.

I wonder how they would do selling a Basecamp appliance? The majority of support requests have to do with installation, customization and upgrades. Sold as an appliance, installation issues go away. Since Basecamp is currently sold as a hosted service, I assume that there is no customization - only configuration. Leaving only upgrades as an issue.