Today, Basecamp, a project management and collaboration tool, is a household name with an almost cult following among businesses and developers. But when it started in 2004, it was simply an internal tool that the team at 37signals, then a web design shop, used to manage their clients and communication.
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"If you want to make something great, you need to need it yourself," said Jason Fried, founder and CEO of Basecamp, formerly 37signals. Fried's team initially built Basecamp because they needed to scale their own business, but over time, "clients would ask us how we were doing it and then ask if they could buy it," he said. Initially the answer was "no," but demand for the web-based productivity tool proved so great, the company shifted its focus.
That was over a decade ago. Today, the company's pattern of growth continues, dictated by the same values and philosophies that shaped it back when it was a consulting business. "Your company is your best product," said Fried. "The way you work, your company process, how you set and manage expectations."
That's a unique perspective in a time where it seems like every idea is funded. Companies are flipped, merged, pivoted, and folded faster than you can say, "There's an app for that." But with investor money drying up and talk of the bubble bursting in Silicon Valley, the skills required to run lean and play the long game are more important than ever.
As a highly successful founder who's never taken venture capital (VC) funding, done marketing or hired more than 50 employees, Fried is no stranger to the lean methodology. He is a practitioner, advocate, author, and speaker (at events such as Lean Startup week this year). Below, he shares some of his thoughts on building a great business.
Never Be a Start-Up
Ironically, while Basecamp seems like the poster child for start-ups, its success is largely due to the fact that Fried is emphatically anti-start-up. To be clear, he's not against starting businesses, but believes the allure of funding and freedom often causes start-ups to postpone the important decisions they need to make. They inevitably lose sight of their most important goal—being profitable.
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Start-ups worry about the present, but a sustainable business needs to worry about now and later. Without the pressure turning an immediate profit, start-ups tend to "suspend the rules of physics for business." That's why, to this day, Basecamp has been self-funded and profitable, although the founders did sell a portion of the company to Amazon CEO Jeff Bezos in 2006.
Know Your Philosophy
Not only has Basecamp been pragmatically focused on the right priorities from a business perspective, they've also developed a clear philosophy. This has helped not only with product vision, but to differentiate from the competition. While Basecamp is the original standard in project management, companies like Asana and Slack have surfaced in the past few years, making communication and productivity a hot topic.
Fried said these alleged "Basecamp killers" come around every few years. He's far less concerned about this new roster of potential competitors than he is about building a product that counters what he considers "toxic" work cultures. He's emphatic that getting messages from work at 9pm on a Wednesday night or 2pm on a Saturday is no way to live. While other companies drive adoption and even addiction by delivering an always-on experience, Basecamp is going against the grain—and maybe even the zeitgeist –to help build workflows that get users closer the 40 hours work week than a 24/7 one.
Don't React to Every Trend
That said, there's a difference between capturing customer feedback and getting sucked into passing fads and impulses. Constantly engaged users may look good to companies and VCs, but a culture that expects people to be working all the time is "broken and toxic" for employees, said Fried.
He wants to promote a better way to work, which means being unafraid to take a unique stand on trends that don't align with it. For example, although chat is being hyped as the best new way to work, Fried and the team at Basecamp believe that while it's good for solving quick problems, but the immediacy comes at a price. Namely, as a culture, we've forgotten "what was good about taking time to think through things," he said.
Rather than feeding into that "always-on" mentality, the recently released Basecamp 3 incorporates chat functionality but includes a feature called "Work Can Wait." This ensures you only get chats during the work hours you set for yourself, and sets the expectation to other collaborators that you won't be answering in real-time. The idea for this feature wasn't a response to the competition, Fried said, but rather something the team at Basecamp felt they needed for themselves. The real point of a project management tool is not solely to manage the workload, but also to gauge time management for employees. No one should be bothered all day or on the weekend.
Be Your Own Power User
The Basecamp team is the driving force behind their own product roadmap, but they're also their own best customer. "You can't be sure if you've built something to make a pain go away unless you've felt it yourself," explained Fried.
Basecamp collects regular customer feedback and stays engaged with its user base, but when it comes to launching a new version of the platform (which they've done twice now, with Basecamp 2 in 2012 and Basecamp 3 in 2015), the company tends to develop a product employees themselves want to use. That makes them particularly sensitive to the overall user experience—informing decisions such as never forcing a customer to upgrade to the latest version of Basecamp.
"When you're in the middle of something, it's not the right time to switch tools, and people are always in the middle of something," said Fried.
So while according to Basecamp, its current Basecamp 3 version acquires nearly 8,000 new companies per week, there are still thousands of users on Basecamp 1. That's not a software insight so much as a human insight, and one they could only truly understand as power users of their own product. Furthermore, they understand that productivity is not about having the right tool, it's about building the right processes. That nuance is captured not only in what they build, but how they communicate.
Education, Not "Content"
Basecamp understands its own business, and the complex factors that contribute to a healthy work culture. Over the years, the philosophy and best practices have become almost as important as the product. Fried and other Basecampers have become thought leaders in the arena of work culture and productivity, without any of the hype or artifice we typically associate with the term "thought leadership."
Although the company's blog, Signal v. Noise is arguably one of the best examples of modern content marketing and community building out there, "for us, it's never been about content marketing, it's been about sharing," said Fried.
For Basecamp, it's not just about building the best product, it's about "out-teaching" the other companies out there. Fried says that too many companies keep things close to their chest, whereas transparency, sharing, and education have been key factors in Basecamp's growth.
Understand the Long Game
Education is also one of the things that has kept Basecamp's founders and employees engaged over the last decade or so. In addition to completely rebuilding the platform every few years, the team writes books and regularly shares workflow strategies. This gives the team a constant supply of new challenges, and keeps them in the trenches of the big problem they're trying to solve: broken work culture.
That problem is even more pervasive than it was when Basecamp first launched in 2004. "A lot of people are going to find themselves looking back in time and regretting this moment," says Fried. But if he's is successful at combating this trend, Basecamp users won't be among them.
Rachel Balik is a contributing writer at Lean Startup. Learn more about the Lean Startup methodology and hear Jason Fried speak at Lean Startup Week on Oct 31-Nov 6.