Money is like water, it flows along the path of least resistance. To
move either in a specific direction, you must either provide an
unobstructed channel or give it a push. When Autodesk started selling
drafting software for $1,000 in 1982, it created a wide open channel for
money to flow out of the pockets of computer-using drafters everywhere.
Twenty-five years later, AutoCAD rules 2D.
The marketplace likes standards, and it has one in AutoCAD and DWG.
So why, asks Bob McNeel, if the market likes standards so much, and the
money so clearly voted for AutoCAD as the 2D standard, is there no clear
winner in 3D? That is just one of the many questions that keep McNeel,
CEO and co-founder of Robert McNeel and Associates, from spending more
time riding his ten-speed bike.
The answer, McNeel muses, comes when you look closely at the sales
and marketing models of today’s leading CAD firms. In the last five
years, he says, CAD users spent $50 billion, helping the CAD industry
achieve $5 billion in market capitalization. Most of that $50 billion
came from existing users, who long ago made their software choice.
Behold the CAD Whisperer
The way Rhino enters a market is to release its software and then do
the CAD company equivalent of standing around waiting for the horse to
respond. No fancy ads in magazines, no big multi-city user campaigns. If
the users want to gather to talk about the software, let them organize
the meetings themselves. McNeel does exhibit at industry conferences,
usually with a local dealer or third-party developer. The booth is
always short-staffed, so that existing users and potential users will
meet, socialize and take care of business. It is much cheaper than
filling a booth with employees, and the existing users tend to be better
Refusing to spend a high percentage of revenue on sales, marketing,
and administration turns out to
be very liberating. “By making Sales and Marketing and Administration
more efficient, can we spend the savings on increasing user
productivity? Can we spend it on development, support, and training?”
Bob McNeel asks rhetorically. “Shouldn’t we focus on users instead of
Wall Street?” In the Way of Rhino, the answers are all “yes.”
When the user is the company stakeholder, the very act of setting the
price becomes a user-oriented decision process. The current price of
Rhino is $995. One global price means not having to constantly juggle
prices as economies and currencies shift. It means you can treat every
customer and every dealer equally. It also means, in the Internet era,
that there is no advantage for a potential customer to shop around for
the best deal.