37Signals has always been a different sort of a company. 15 years of existence has seen it launch a plethora of products and also create (and later open source) the immensely popular Ruby on Rails development framework. They’ve written books, blogged extensively and generally done things different to what we’d expect of a fast growing technology company.
It’s interesting to compare 37Signals with Atlassian, a not entirely dissimilar company that makes tools for developers. But while Atlassian has grown to several hundred people, attracted VC money and talk of an impending IPO, 37Signals is still, after all this time, a 43 person shop.
So doing things differently is well and truly in the DNA of the company. And so it is today with the surprise announcement that 37Signals is changing its name (to Basecamp, it’s most successful commercial product) but, more importantly, dropping all its products other than Basecamp.
In a blog post announcing the move, CEO Jason Fried claimed that all those different products, combined with a small team, have made things a bit scattered. Alongside that Fried clearly enjoys working with a small team:
…we’ve always enjoyed being a small company. Today we’re bigger than we’ve ever been, but we’re still relatively small at 43 people. So while we could hire a bunch more people to do a bunch more things, that kind of rapid expansion is at odds with our culture. We want to maintain the kind of company where everyone knows everyone’s name. That’s one of the reasons why so many of the people who work at 37signals stay at 37signals.
So today that all ends. All 43 staff will be solely focused on Basecamp the product – helping to support and grow the customer base (which already sits at a healthy 15 million customers).
In terms of what it means to the other products (in particular Campfire and Highrise), Fried advises that short term nothing will happen but that long term they will either spin them off into separate companies, sell the products outright or continue supporting existing customers indefinitely (but not take on new customers). According to Fried Campfire and Highrise will likely sell for single digit and tens of millions respectively and there are already discussion occurring with interested parties about acquisition potential.
It’s a ballsy decision – they’ve potentially created a fire-sale situation for their products, alongside some potential disquietude from customers – that said, 37Signals as it was known has always made strange decisions that they’ve been able to make work. Perhaps this is another one of those times.
In some ways its a sad day for 37Signals. but at the same time it’s an exciting day for the new Basecamp company. Onwards and upwards.