The 37signals Way

February 16th, 2007 | Categories: marketing, social media, strategy, trends

37signals logoLet me tell you about a small Chicago company named 37signals. Not only have they created some of the most functional apps on the net (Backpack, Campfire, Basecamp, Ta-da List, Writeboard), but they’ve also managed to produce one of the most successful tech job boards and a corporate blog. Oh, did I mention they also pioneered Ruby On Rails, a highly popular, widely-touted, open-source web-application framework?

Why are they so successful at doing so many different things? It’s simple. The answer is… they’re simple.

They run a lean operation, both in terms of manpower and product specifications. This is not to say the products lack functionality or sophistication. It simply states that the interfaces and designs are clean, and that only the necessary features are included - nothing over the top or extraneous.

So how come no-one else is taking a similar approaching to web applications? Beats me…

Their simple, easy-to-use apps are setting the industry standard in an industry that doesn’t exist. Obviously, other companies are pitching their project management, collaborative writing, real-time chat, and organizational tools, but none seem to be competing on the same level. Or maybe 37signals has simply created a niche and taken 100% ownership of it.

Moving along…

Their revenue model is ingenious. They actually CHARGE people. Unlike many web 2.0 outfits that are monetized via Google AdSense and run-of-the-mill ads, 37signals actually charges users once they’ve tried the product and determined that the basic feature set is insufficient. In other words, no financial commitment is made until the user determines that the given product has a basic level of functionality, but that the premium version is the optimal choice. Only then, does 37signals achieve a transaction. Surprisingly, people WILL pay for a good product - even for software, in this day and age.

As I have said, I am still unsure as to why another company hasn’t come along and tried to accomplish the same thing as 37signals. Eventually, others will clue in. But in the short term, I think there is a very real opportunity for a small, lean start-up to step in and create simple web-based apps that are not only clean, but functional. Competing in a different realm than 37signals may be a good option, but there are countless other small niches to be conquered. In doing so, the venture may be able to achieve the web 2.0 unthinkable… revenues. Or in a utopian world… profits.


  1. web guru Says:

    hey man, love the writing style. i think you’re one of the new wave of web 2.0 masterminds, i love your blog keep up the good work.

    p.s. maybe you could write an article about government control of the internet and how privacy legislation will impact freedom of speech and the future of the internet.

  2. When Is 37signals Going To Get Acquired? Says:

    […] To read more about other company offerings, read The 37signals Way. […]

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