Why 37signals Refocused on a Single Product: Basecamp
A few months ago, I got into a heated debate with my business partner, David Heinemeier Hansson. We were discussing ambitious plans for new products and updates to existing products. I argued that we would need more people. He said he didn't want to run a company with 60-plus people, which is what we estimated we would ultimately need. I wasn't thrilled about going from 40 people to 60 people, either, but I didn't see an alternative, given our plans.
We realized that we really wanted the same thing: a company that was not too big, not too small--just right. But what did that company look like? We agreed to sleep on it for a while.
Fast-forward a few months. I had just gotten married and returned from an extended vacation, my first in years. As I checked in with everyone to see what people were working on and what they were excited about, everything suddenly clicked. I saw the company more clearly than I had in years.
So I dropped an email to David and two other company leaders and said, "I want to spend a few days together offsite to discuss the future of the company." I didn't let on what I was thinking other than to say I would present a vision for where I thought we should be going. I asked them to bring their own visions.
One morning the following week, in a hotel downtown, I started the meeting: "David and I have been talking about what products to build and how we should grow. We keep talking about doing more things, but we haven't entertained the other option: Do fewer. So I want to pitch something radical. I want us to put all of our efforts into a single product--our main product, Basecamp."
Basecamp, our project-management tool, represented about 87 percent of our revenue, 90 percent of our revenue growth, and 90 percent of our Web traffic, I noted. Our second most popular product was Highrise, a contacts manager that was very successful but represented a small fraction of revenue. Basecamp was our big hit, and it was time to be honest about it.
Then I dropped the big surprise: "Besides going all in on Basecamp, let's do something even more radical. Let's change the name of the company from 37signals to Basecamp. When we talk about who we are and what we do, we'll be saying the same thing. Basecamp the product, Basecamp the company."
We talked about pros and cons. What about the brand equity we've built into the name 37signals over 15 years? A lot of people, mostly in the tech community, value the name. But when you zoom out, far more people in the world know Basecamp. So while we were attached to the old name, we knew that Basecamp was the bigger bet.
We talked about how focusing on Basecamp would allow us to do more things with fewer people. We started riffing on all the things we would be able to do. We could expand Basecamp's reach: Basecamp for the Web, Basecamp for iPhone, Basecamp for iPad, Basecamp for Android. We were getting fired up. Every time we pushed back on the idea, we were able to push forward harder. It just made sense.
Many big questions remained: how to communicate the vision to everyone at the company, how to communicate it to customers, what to do with our other products and their users. By the time you read this column, the changes will have been announced, and in future columns, I'll talk about how we deal with some of these open questions. One thing is certain: We'll be able to give them the attention they deserve.