The 37signals Effect

http://lbrandy.com/blog/2009/01/the-37signals-effect/

by wheels • 18 years ago

171 75 18 years ago

jrnkntl• 18 years ago

"37signals can cry foul, but they're discovering the downside of making products with low barriers to entry." according to the first comment on the 37Signals issue on readwriteweb (http://www.readwriteweb.com/archives/huddlechat_campfire_rip...) That and "you can't btch about it because you don't have the fanbase"; pretty much sums up this article :) But still a nice read.

11ren• 18 years ago

I think the layout similarity was an issue; but it seems to me that they just have demonstrated a barrier to entry (a non-product one).

For a product company, 37Signals does a lot of blogging, conferences, a book and so on. I think the guys are good at this, and they really enjoy it. It makes me think that, in a way, 37SIgnals is really an educational/PR company, that happens to make money from their software. If you want something like what they make, you'll need to pay someone to host it - why not them, since they are nice guys?

dennmart• 18 years ago

I'm a huge fan of 37signals, their products and their philosophy, but not to the point that I blindly follow their 'Getting Real' philosophy like a lot of people seem to do. I have followed and applied some of their ideas - some worked like a charm, others failed horribly. It's been written and mentioned countless times that this isn't a 'one size fits all' philosophy, and what works for them doesn't necessarily work for all, or even the majority, of people out there.

ryanwaggoner2• 18 years ago

Yeah, but I think many people's problem with 37signals is that their attitude is that one-size-fits-all and that because something worked for them, that's the only correct way of doing it.

jasonfried2• 18 years ago

If there's one thing we've said more than any other thing it's that our ideas are not one size-fit-all.

There are a lot of different ways to do things. We only have the answers that work for us. We don't pretend to have your answers. That said, we don't preempt everything we say with "it depends." Reasonable people understand that everything depends.

We simply share our way based on our experience. Take whatever value you find and leave the rest behind.

From the front pages of our book: http://gettingreal.37signals.com/ch01_Caveats_disclaimers_an...

GHFigs• 18 years ago

You're wrong. You've noticed the omission of weasel words, and misinterpreted that as a disagreeable attitude. That is generally the drawback of writing with conviction, but ultimately the benefits to both the writer and the reader make it worthwhile. The alternative is to use smileys. :-(

e.g. saying "My problem with 37signals is..." instead of "I think many people's problem with 37signals is..."

The former gives you possession over your subject, the latter is both redundant in saying "I think" (you wrote it, of course it's what you think!) and uses "many people" as a crutch that requires the ability to read minds to verify. It isn't that it's an false thing to say, it's just empty of meaning, and should be omitted.

axod13• 18 years ago

You know what good developers do when a competitor launches?

Add new features. Improve the product. Make it do more. Make it kick ass. Put more work in. Make it scale better. Make sure your product is far better than the competition. Integrate it with other useful tools... etc etc. Maybe tackle a few "hard" problems.

Bad developers whine and complain that their product has been stolen.

mechanical_fish3• 18 years ago

The funniest thing about 37signals' Campfire coup is watching people trying to deny that it worked, or complaining about how unfair it was. As if there was some sort of moral obligation to remain meek and silent in the face of your competition.

Many people seem obsessed with the fact that Campfire is so much easier to write than, say, Mathematica. And so it is, particularly after 37signals gave away the toolkit to do so. But if you're trying to make money with a chat app, building it is the least of your problems: There's probably thirty or forty chat apps sitting on Sourceforge right now. Your biggest problem is Metcalfe's Law: nobody wants to use a chat app which their friends aren't using. What you need is publicity. Ideally, you want to convince half the readers of Techcrunch to try out your chat app in the course of a single week.

Google handed 37signals that publicity on a plate, and they ran with it. Complaining about your product's imminent extinction at the hands of a mean, nasty corporate behemoth might be a good idea even if your competition is Microsoft -- obviously, your odds of getting those guys to back down are infinitesimal, but at least people might hear of your existence, it might be better to burn out than to fade away, and you never know: Maybe there will be room for more than one company in your product space, and if you play your PR cards right you might emerge with a reputation as the "classic", "alternative" brand and be able to ride Microsoft's coattails to fabulous wealth. Or modest wealth, anyway. This is how Apple Computer managed to stay alive long enough to be rescued by Steve Jobs.

But 37signals got extra lucky because their opponent was Google, which treasures its reputation as a kinder, gentler company that is certainly not mean like Microsoft, and is unwilling to tarnish that reputation over what (to them) is a simple demo app. So, when challenged, Google folded immediately and left 37signals in possession of the field. More importantly, Campfire is now a household word, at least in households where people read Techcrunch or Digg.

Meanwhile, you're welcome to try to compete with Campfire yourself. Bolt on features, make it do more, add plenty of nifty-looking toggle switches and a skinnable interface, make it scale so well that it runs on a netbook, etc. Go nuts. Don't skimp on the work if you don't want to: Work day and night! Just don't come crying when you can't make any headway in the market because it turns out you've been working on the wrong things.

axod13• 18 years ago

In what way did it work?

http://www.quantcast.com/campfirenow.com

In the world of chat, Campfire is pretty small. It's pretty funny for you to say they are in possession of the field - they've only done 10m chat messages since they started!

Some random math: Been going almost 3 years - 1000 days odd 10m messages sent! (From website)

That's an average of ONE message every 10 seconds.

axod13• 18 years ago

"Meanwhile, you're welcome to try to compete with Campfire yourself. Bolt on features, make it do more, add plenty of nifty-looking toggle switches and a skinnable interface, make it scale so well that it runs on a netbook, etc. Go nuts. Don't skimp on the work if you don't want to: Work day and night! Just don't come crying when you can't make any headway in the market because it turns out you've been working on the wrong things."

Umm I'll bear that in mind thanks ;)

tptacek15• 18 years ago

There's almost no discernable network effect for Campfire; a Campfire room can only support a limited number of users, so even if your friends use Campfire, you're probably not talking to them over it.

laut• 18 years ago

For those who don't know what this Campfire-coup-Google talk is about, here's an explanation: http://www.readwriteweb.com/archives/google_takes_down_huddl...

walterk• 18 years ago

> Bad developers whine and complain that their product has been stolen.

"Bad" as in "being a bad sport", not incompetent.

joe_the_user2• 18 years ago

"You know what good developers do when a competitor launches?..."

Good Internet entrepreneurs might do this. Good developers might be good Internet entrepreneurs but then again , they might not be. I know I'm a pretty good developer and I have some ideas about cool web applications which might make some money and some ideas about the most effective ways to compete. But, you know something? I won't kid myself that my development skills or my native intelligence would automatically tell me how to respond to competition. I respect marketers, managers and investors who literally make it their business to know how to compete.

ahoyhere• 18 years ago

Good points, but this analysis is also overly simplified.

"Add features!" vs "Don't add features!" "More is more!" and "Less is more!"

All are wrong/overly simplified.

Just because "Less is more!" is not right, doesn't mean "More is more!" is right.

davidw3• 18 years ago

From the article:

"If you don’t make the full effort to understand what is going on, and you just believe imitating some subset is going to reproduce the results, you’ve entered cargo cult territory."

Uh, that is exactly what he's saying, no?

cmos• 18 years ago

I guess I'm not understanding why google took the app down. It just sounds pathetic.

They made a sample application to show off their new product. Is the problem that it's too 'similar'?

I'm guessing the exposure would have been far less if 37signals just kept quiet and ignored the google app. I sure would have not known about the google sample app, and if I had I would have assumed that it was just a barebones concept, not something I could depend on or get support from if it didn't work.

My general rule of thumb is to always act as though any competition does not exist, because otherwise your simply advertising them. This means having features that 'no one else has' so you don't even have to name the competition.

mrduncan• 18 years ago

Apple's switch advertisements are the other side of the coin however. They have been pretty effective in talking about their competition (Microsoft) and making a case for their product.

shiranaihito• 18 years ago

Microsoft's made the case for them

eli• 18 years ago

Because it really was just a demo and was generating no direct revenue for Google, so why antagonize 37signals?

Why risk PR problems for a silly sample application?

jhancock• 18 years ago

good read. As far as "Getting Real" goes, uh ;) that's yet another thing that's been done in Smalltalk years before.

Here's the archives for the magazine "The Smalltalk Report" which featured an article series "Getting Real" http://www.macqueen.us/stIndex.html

Here's a great article to get you started: http://www.macqueen.us/smalltalkReport/ST/ST01/15al.pdf

[EDIT] this is not bashing _anyone_. Just recalled the article series while reading this blog post and thought there may be some people here that have never read The Smalltalk Report. Good stuff!!!

madmotive• 18 years ago

If you want to take the path of 37signals / FogCreek you need to strike the right balance between building your product and growing a community around your business.

It might therefore be a good start to read Seth Godin's Tribes as well as Getting Real rather than just Getting Real on it's own.

ThomPete• 18 years ago

I believe people miss the point about 37 signals do less. It's not that you shouldn't make any effort to make your product stand out, it's that you should work harder to optimize your base features than just add new features. Programmers often think to simplistically about functionality.

ericwaller• 18 years ago

Another big part of doing less is releasing once you've got an 80% application for 20% of the work. Any additional time spent adding features will be at a lower ROI.

Retric• 18 years ago

ROI relates to profit not just cost. Going from 80% to 95% might cost 5x as much, but if you get 5x as many customers it's probably worth it. Heck depending on the profit margin spending 5x as much for 10% more customers might be worth it.

After a while adding features is more about keeping customers and killing off the competition than it is growing the market. Most users probably use 25% of Photoshop, but they don't all use the same 25%. Which makes it much harder to compete with Photoshop.

webwright• 18 years ago

I think the point here isn't that 37s doesn't have GREAT software dev and product dev advice. They certainly do.

It's that their marketing advice (like Joel's) can be a little off-base. Both created a HUGE cult following with great writing. This cult was a perfect match with their products (webdev geeks for 37s and all dev geeks for Fog Creek). It's a beautiful sales engine, but it isn't particularly repeatable unless you are charismatic, a great writer, and are dedicated to creating a community like this.

In absence of this particular bottled lightning, you have to build a sales/marketing engine with some combination of sales guys, adwords, print ads, SEO, viral, whatever... AND (of course) a great product that keeps getting better.

(this is all assuming you sell stuff to businesses).

tptacek15• 18 years ago

Most of 37signals' customers probably don't care that they wrote Rails. Their products don't exactly target the Hacker News crowd.

josefresco• 18 years ago

That's EXACTLY who and where they are targeting their apps to. We are the 'geeks' of the business world who reccomend to 'real' business what they should be using online. We're the gateway from 37 Signals' world to the traditional biz world.

tptacek15• 18 years ago

Yeah, I think this is exactly not what they're doing; their feature sets are almost geek-hostile, as is their non-blog PR.

lbrandy• 18 years ago

As already pointed out, you severely underestimate the value of winning the hearts of IT. If you are an IT guy at some company, and they want an internal chat app, they are going to ask you.

Even if what you are saying is true, you've missed an all-important middle step. They won the hearts of the nerds. The nerds wrote blog posts, subscribed to their blog. They got picked up by the nerd media outlets. This turned into actual media attention. Their page rank is high. They have numerous "real media" write ups. They have their own wikipedia page. To your average "boss", they are "legit".

gregstoll• 18 years ago

This is kinda typical of the whole "be successful like I was by doing exactly what I did!" genre of books, etc. Of course, we don't usually hear from the 99% of people who did the exact same thing but didn't succeed because of luck or whatever. I try to take such advice with a huge grain of salt - 37signals's philosophy is certainly interesting but it's certainly no panacea.

timtrueman• 18 years ago

Did the gorilla gain 100 pounds? Perhaps I missed something…

strlen• 18 years ago

I am not sure I buy the "simplicity uber alles" creed either. It may hold true for the UI features (i.e. Google vs. Yahoo) but in general -- if you're solving easy problems, you're readily replaceable by somebody who can solve them either faster or cheaper.

sgman• 18 years ago

Isn't competition good? Isn't that what makes products better?

Mistone• 18 years ago

a bit obvious...when you have a huge install base and lots of fans you can so things a startup cant. how the company got there is far more important then the advantages they have now, thats what startups can take from 37Signals and other prominent software companies.

the RoR advantage is not really copyable, and provided them with a huge advantage in terms of fans and press. But it did not win them most of their customers and going beyond a niche of small web dev shops its meaningless. My guess is most of their customers dont know what RoR is.

on a side note it would be nice to do a 37signals moratorium for a month or so, seems like all I see lately on HN lately.

Shadow84• 18 years ago

in my opinion this article (and maybe the book written by the 37signals guys) only looks at part of the equation. To what it boils down for them is being better than your competition. The old credo was being better in total which the article describes as one-up the other. The 37signals approach is being better at a subset. They say you have to focus on things where you can be better.

What this leaves out completely is the approach of being different. Why do it the way everybody else is doing it? IMHO there is a huge potential in a lot of areas which could be used by a different approach to solving problems that have already been solved.

callmeed• 18 years ago

Not really keen on this post. The "minimalism" that 37signals preaches has to do with feature creep–NOT the difficulty of the core problem you're app is solving.

If you choose to build an app that is a "simple solution to an obvious problem" then, yes, obviously it will be easy for competitors to emerge.

The author starts on the right track, but ended with an extremely weak conclusion. Of course developing RoR has helped them. That doesn't mean another developer can't reap similar benefits from releasing open source software. Heck, I bet there are developers who have benefited from releasing rails plugins.

IMO, 37s hit home run by (a) building and releasing rails and (b) initially creating products that are targeted at many of the people who use rails (basecamp & campfire are for developers/freelancers).

If they built rails and then came out with an app for insurance agents, well ... there obviously wouldn't be the same amount of overlap

Instead of articles like this, I'd like to see someone say "here's how to translate Getting Real methodologies" into X industry.

The 37signals Effect

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