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Yesterday, I believe I coined the term “Conflict Marketing” on Twitter.

I’ve been watching with interest as the Basecamp creators have waged war against the Apple App Store over the principle of app approval. Basecamp’s corporate entity 37 Signals is rolling out a marginally interesting platform called HEY, a premium-priced email hosting service with some smart filters and UX improvements. This obviously requires client applications on iOS and Android, and thus these were created and submitted to their respective app stores for approval.

Jellyvision Q&A with DHH & Jason Fried - YouTube

Apple has a very specific policy, though, when it comes to apps which do signup and payment for hosted services. In essence, Apple thinks that if you’re acquiring customers on their devices and paying for their service via your own app functioning within their mobile app framework, you oughtta pay them 30%. This has worked favourably for mobile games and some other types of entertainment products which lean on in-app purchases for revenue, and for whom the 30% is worth it to focus their funnel on the app ecosystem almost entirely, and wash their hands of transaction management — leaving all of that up to Apple.

Where you have to build this anyway, however, for the web and for the management of subscriptions to a service, the economics of handing 30% to Apple vs. 2% to a payment processor start to look punitive.

I have surfed this reef for more than a decade, and the workarounds are generally well-understood. Netflix and many others offer subscription services, yet you can’t sign up via the iOS app. Slack might allow you to sign up / sign into a group as a user, but the flow quickly exits the app and continues via email if you start creating a new group. Is this ideal? No. Does it allow Apple to suck and blow at the same time, allowing app developers to serve their users on Apple devices while still escaping usury at the hands of Phil Schiller? Yes.

The creators of Hey, for their own reasons, chose not to use any of these workarounds — workarounds they clearly have made use of in the past for their core SaaS business. I’m not here to point out the merits or pain associated with Apple’s 30% policy. I’m here to speculate on the reason for the crusade undertaken by DHH and Hey in picking this fight simultaneous with the launch of their app.

Michael Jordan Air Ship

First, a rewind: in 1984, Nike was roundly criticized for signing an unproven basketball player to a $250,000.00 endorsement contract and designing a special basketball shoe — just for him. That player was Michael Jordan, and the first shoe out of the factory was the Jordan 1. You can read more about the history here, but because of the shoe’s controversial appearance it was banned by the NBA. Initially, they fined Michael Jordan (Nike paid the fines) and then banned the shoe outright for breaking “uniform rules”. This could have been a disaster for Nike. Instead, they used it to propel a marketing campaign positioning Nike as a countercultural revolutionary. This pitted the black, urban fan base that the NBA was attempting to cultivate at the time against them, and positioned Nike as sympathetic to the issue of race inequality at the hands of powerful corporations. The NBA gave Nike a huge gift with the ban: previously, basketball shoes were just leather and foam and stitching; but the NBA gifted the Jordan 1 with symbolism.

Jordans were not just taken up by urban kids aspiring to dunk in the Big League; they became objets within a hodgepodge of American, and indeed global, misfits and countercultural types. Everyone from skaters to grunge rockers to oddball intellectuals donned Jordans as a sign of rebellion. Thanks to campaigns and contributions from the likes of Spike Lee, the shoes became a symbol of the rise of black culture (and hip-hop along with it) that wonderfully infected global culture for the next three decades, and which continues today. While that unproven basketball player clearly delivered on the court and in the community Air Jordans attained a cultural prestige that grew far, far beyond the NBA. As the story goes: the NBA eventually relented, the deal with Michael eventually became worth tens of billions of dollars to Nike, and Jordan became an enduring symbol of freedom, athleticism, aspiration, and more.

This was an early example of conflict marketing. It turns out people generally side with Davids, not Goliaths.

As a founder of Basecamp and creator of Ruby on Rails, David Heinemeier Hansson is notorious for picking fights on Twitter. Like a certain orange-tinged President, DHH has learned that by being controversial he can garner attention. Attention is a currency he can then bestow upon his programming language, his project management software, his books, or whatever else he seeks to promote. This has worked pretty well. Basecamp is worth >$100Bn according to estimates.

With the launch of Hey, DHH and his partners have taken this conflict-centred marketing technique a step further: they picked a fight with Apple.

What’s most conspicuous about this, leading me to conclude that the conflict was deliberate, is that prior to launch the Hey crew submitted a fully-featured app to the App Store, sans signup/payment, for approval. Once this was cleared, available for release, and the launch had commenced, however, they uploaded a newer version which explicitly conflicts with Apple’s policy. This leaves the working app in the store, available for download. — while they are free to carry out their campaign against Apple to reform that policy.

They have now taken the guise of the revolutionary, positioning Apple as the big bad corporation, hiding behind its greed, old-world-thinking, and ideological zeal. They have become Jordan, and Apple is the NBA.

Email hosting is notoriously difficult to market, and even once users do sign up for a service it’s very difficult to onboard them. Who wants to change their email address? Who wants to abandon an online inbox filled with gigabytes of mail? Who wants to pay for an email service when they can use Gmail, Hotmail, etc. for free? How many people know how to move their personal domain from one email host to another, manipulating DNS and configuring SPF and DKIM? The audience narrows rather quickly.

As a result true innovation around email has been very slow, though we can all admit it’s very needed. Very few companies have launched that represent new ideas in the past ten years, let alone the past 20. And on the surface, “better email” is a bit of a yawn compared to, say, free music available instantly from the entire pantheon of recorded music.

So it makes sense, if you’ve spent a ridiculous amount of money (my guess is the domain name cost ~$2M), to juice the marketing at launch in any way you can. Most developers will see this fight as a worthy one, so their desire to amplify someone punching up at what they see as the schoolyard bully shaking them down for lunch money is strong. There has been resounding support in the several days since this has emerged. And the story of Hey’s launch, which did garner some attention because of who was launching it, has now been vastly overshadowed by the story about this fight. The natural early audience for Hey being a technical one, this also represents very good targeting.

Still, Apple maintains these policies for a reason, and the technique driving this controversial launch may in fact be backfiring. Hey could in fact find themselves with no access whatsoever to the Mac or iOS app stores, if they stick to their guns and let this controversy rage, which I assume they will.

Still, this mission could ultimately prove quixotic.

Michael Jordan has spent his entire adult life recognizing the need to fulfill his role as an inspiring and uncontroversial professional athlete in service of his brand. Along with Kaepernick, Woods, Gretzky, and other greats he has successfully cultivated a public image as a David smashing goliaths with sheer determination and some degree of moral righteousness.

Hansson and Fried, on the other hand, have used their pulpit to pick on Venture Capitalists, justify excluding employees from equity ownership in startups, and taken on other questionable debates. Nowadays there is no great shortage of programmers with messiah complexes, and one of this pairing may in fact be the patient zero of that phenomenon. In other words, DHH and Fried are far from puritanical when it comes to their business ethics, and this may ultimately blunt their assault on Apple, though they very clearly have delivered one or two slam dunks.