
The 37signals Effect - wheels
http://lbrandy.com/blog/2009/01/the-37signals-effect/
======
axod
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_fish
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.

~~~
axod
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.

~~~
tallanvor
I've always sort of wondered who uses Campfire... Don't get me wrong, I'm not
saying it's a bad product, but it's never struck me as something that was
really missing from either my work life or my personal life.

~~~
jbarciauskas
It only makes sense if you are in the 37Signals work universe already... If
you have Basecamp, and you spend a lot of your time on your Basecamp page,
using Campfire to chat with others who are in your Basecamp page makes a lot
of sense - especially if you are behind various corporate firewalls that might
block other chat/IM clients.

~~~
tptacek
Strong disagree; most of the Matasano people who use Campfire have little or
no exposure to other 37signals products.

It's just a very solid, inexpensive private web chat that we don't have to
host ourselves. It works everywhere, unlike IRC, SILC, and AIM, which almost
everyone filters. It is completely brilliant for conducting meetings. We're
all smart people; could we have built a substitute? Sure, if we wanted to be
in the chat business.

~~~
jbarciauskas
Fair enough, although it raises the question - is its obscurity its entire
comparative advantage? I suppose additionally, since it is a paid product
(with the free version having severe limitations) it is unlikely to be popular
enough to draw the ire of the IT folks, and everyone has a client installed
already (browser).

------
ThomPete
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
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
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.

~~~
joe_the_user
But all those factors come into only _after_ you have some measure of success.
So release after 80% still seems like sound advice.

------
cmos
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
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
Microsoft's made the case for them

------
webwright
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).

------
callmeed
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.

------
dennmart
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.

~~~
ryanwaggoner
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.

~~~
jasonfried
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...](http://gettingreal.37signals.com/ch01_Caveats_disclaimers_and_other_preemptive_strikes.php)

~~~
axod
I think it'd be really neat to have on that disclaimer page:

"We acknowledge a large part of our own success is due to our popular blog.
Unless you have a popular blog, some of the advice may not work for you"

From "Founders at work", Joel Spolsky when asked for advice for startups:

"I would recommend that you create a weblog and have millions of readers every
month from around the world that read it. That's not really necessarily
followable."

I thought that was a pretty cool honest answer.

~~~
jasonfried
No one gave us a popular blog, we built it over 10 years. No one gives you
anything, you have to spend the time to make it happen. This is another thing
we talk about every time we have the chance: All of this takes time. You have
to be in it for the long haul.

~~~
dabeeeenster
That is understandable, but you are still not answering the point. A large
part of the success of companies like 37s and fogbugz is due to their online
following, which is based on a blog and in your case the Rails framework.

Companies that write a blog with 5 subscribers are simply not playing in the
same league. Yes, of course, you have to start with 5, and I'm sure you did at
some point, but to suggest that you can apply X ideas to achieve Y without
discussing these _enormous_ 'external' conditions that are directly
attributable to this achievement is not telling the whole story.

------
gregstoll
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.

------
jhancock
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!!!

------
jrnkntl
"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...](http://www.readwriteweb.com/archives/huddlechat_campfire_rip.php))
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
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?

------
madmotive
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.

------
strlen
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.

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

------
Mistone
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
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.

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

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

~~~
josefresco
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.

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

------
ahoyhere
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.

~~~
davidw
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?

