In a world dominated by a culture of rapid growth, huge financing, and a frantic race to achieve the highest market value, the Basecamp platform and its successor, 37signals, stand out as a counter-model that challenges these prevailing standards.
Since its founding more than two decades ago, the company has embraced a unique business philosophy that focuses on design simplicity, financial independence, and respect for employees’ personal lives.
At a time when many technology companies are suffering from the effects of job burnout and investor pressure, Thirty-Seven Signals offers an alternative model that proves that success can come in multiple forms that are not limited to massive growth and global expansion.
This report delves into the philosophy of Thirty Seven Signals, and how it was able to build a sustainable and profitable business model, away from the noise and pressures of traditional startup culture.
Unconventional statement
The company has been established for 26 years, having emerged in 1999 as a website design company that helps companies simplify their websites.
From the beginning, Jason Fried followed a unique approach that was far from traditional, and published a statement in which he expressed his ideas about business and website design.
When websites were overloaded with animated news feeds, buttons, and flashy frames, Farid decided to go against the trend, developing his theory of simplified software design in 1994 when he was a student at the university.
After graduating from the university, Fred published a statement – on his blog – in which he strongly criticized the shortcomings of most programs, and David Heinemeier Hansson, who was then a student at Copenhagen Business School in Denmark, agreed with him.
“Base Camp”… For internal use only
The business strategy worked, and Thirty-Seven Signals began accelerating its business and customer base, but contrary to its slogan, the business was far from simple.
Problems began to arise and things became chaotic and there was a lack of organization and discipline due to the lack of the appropriate tools and method to deal with the additional workload.
At that time, the company was managing projects via email, but it realized that this method of managing work was no longer useful, especially as the team grew and more employees joined.
Communication turned into a burden, and it became difficult to stay informed of project developments, and this was reflected in the image that the company showed to customers, as things were declining, and customers noticed this.
The team searched for a better way to manage projects, but the tools available at the time were outdated and unhelpful, so the company decided to create a program that met internal needs.
Farid approached Hanson to develop the software, which focuses on a simple set of tools for tracking work, keeping notes and reviews, and scheduling important deadlines.
Hanson wrote the code using the then-unknown programming language called Ruby, which most developers considered too slow and limited in use to be of much use.
Commercial product launch
The company began using the system with clients, who noticed a noticeable change in the way they work and enjoyed improved communication, transparency and project progress.
The new project management software was a huge success and helped the company’s team resume ongoing projects. At this point, the team was confident that the software they had developed for internal use could become a product.
As long as the company needs it internally, it is certain that hundreds of thousands of other companies may need it as well. The team spent a few months improving and developing it in all aspects before the first version of “BaseCamp” appeared in February 2004.
The company offered all users one free project, with the ability to upgrade to one of the three paid plans if additional projects were desired.
The company linked the program’s success measure to the possibility of achieving about $60,000 in annual revenue, and the product was able to achieve this number in about 6 weeks.
Within a year and a half of its launch, BaseCamp had grown in popularity and generated more revenue than web design, so the company stopped accepting new web design clients and focused its efforts on developing it, issuing hundreds of major updates and thousands of minor updates based on feedback and ideas from clients.
Build a set of collaboration tools
Along the way, software company Thirty-Seven Signals has developed a suite of collaboration and productivity tools that have enjoyed varying degrees of success, including:
- Ta-Da List: A web-based to-do list app.
- Writeboard: A simple writing application on the web.
- Campfire: A business-oriented web chat app.
- Highrise: A customer relationship management application.
- Sortfolio: A guide for website designers for small and medium businesses.
- Breeze: A mailing list app for small groups.
- WeWorkRemotely: A marketplace for remote jobs.
- Backpack: An application for organizing personal information.
- “Hey”: a unique email service.
During 2014, the company undertook a comprehensive restructuring to focus entirely on its main product, the software package also called “BaseCamp”, along with the email service called “High”.
The beginnings of Ruby on Rails
While building BaseCamp, Hanson developed a series of shortcuts to help him build quickly and easily, abandoning complexity and focusing on creating templates and designs to enable web developers to build what is needed.
Several months later, he collected the shortcuts he developed and released them as “Ruby on Rails,” a programming framework that is the cornerstone of thousands of websites and applications around the world.
The emergence of Ruby on Rails has had a major impact on web application development, with innovative features such as seamless database table creation, migrations, and structuring of views to enable rapid application development.
The influence of Ruby on Rails on other web frameworks is still evident today, with many frameworks in other languages borrowing its ideas.
Google awarded Hanson the “Hacker of the Year” award as an expression of gratitude for his contribution to the field of open source.
A counter-model to the prevailing growth culture
The company’s philosophy is based on the principles of simplicity, clarity and respect. Over the years of its operation, the founders have developed a vision that is different from the traditional industry path, preferring long-term and deliberate growth over rapid and reckless growth.
This approach was based on the conviction that quality and sustainability are more important than size and spread, and that continued profitability is better than attracting huge investments that may impose trends that are not consistent with the company’s core values.
While most startups spend huge amounts of money on customer acquisition and rapid expansion at the expense of profitability, Thirty-Seven Signals takes the exact opposite approach.
The company prefers natural growth based on product quality and customer satisfaction, rather than forced growth based on pumping investments. Instead of constantly seeking new customers at any cost, the company focuses on retaining existing customers and ensuring their complete satisfaction.
Thirty Seven Signals embraces a deep philosophy towards work-life balance, rejecting the culture of long working hours prevalent in Silicon Valley.
The company was one of the first companies to fully adopt remote work before it became a prevalent “fashion” during the pandemic. ThirtySeven Signals’ flexibility extends to its internal organizational structure, adopting a largely flat approach with minimal management layers.
This approach encourages independence and individual responsibility among employees, and reduces the bureaucracy that hinders innovation in large companies.
From humble beginnings, BaseCamp has grown to become the most popular project management tool in the world. Thirty-Seven Signals has focused on long-term sustainable value, which is the reason for its continued success in a very crowded market.
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