Jason Fried
Founder and CEO, 37signals
It’s Simple. Until You Make it Complicated.
BIF-6 marks Jason Fried’s third return to the BIF stage. Expect the unexpected. During his first outing in 2007, the 37signals co-founder went toe to toe with Wall Street Journal columnist and BIF-3 co-host Walt Mossberg. It was one of the best onstage conversations in BIF history.
In Fried’s second appearance, he gave a fresh perspective—wrapped in a culinary metaphor—on unexpected sources of inspiration for building his business. The decade-old company focuses on a string of well-received applications like Basecamp; an online project management system; Backpack, a personal information manager; Highrise, a contact manager and simple CRM; and Campfire, a group-chat and collaboration tool. Their popular open source framework, Ruby on Rails, has over 100,000 d developers worldwide. All tolled, more than 3 million people around the world use his products.
“Some people consider us an Internet company, but that makes us cringe,” says Fried. “Internet companies are known for hiring compulsively, spending wildly, and failing spectacularly. That’s not us. We’re small, frugal and profitable.”
Fried attributes the success of 37signals to an unconventional business philosophy that celebrates doing less than the competition. He, and co-founder David Heinemeier Hansson, purposefully keep their service offering barebones, avoiding the “feature creep” that bogs down so many other software companies. Instead, the duo takes a different route by focusing on the basics and, as Fried explains, “delivering at a higher level.”
Each application is built on Fried’s guiding philosophy: stay small and keep it simple. “There are too many options out there, too many features and too many products that try to do too many things,” he says. “Software has become complex and bloated. It grows for the benefit of the upgrade sales cycle, not the customer.”
Their target customer is small business enterprises. “I just love that small businesses don’t have to use crappy software anymore,” he says. “I love being able to build software for them.” Then, adding mirthfully, “‘They’ say you need to sell to the Fortune 500. Screw that. We sell to the Fortune 5,000,000.”
Doubters and nay-sayers should take heed. The 37signals strategy is paying off big time. Through its subscription-based model, thousands of paying users are providing the company with a steady stream of revenue.
After ten years, Fried often gets asked about the pesky concept of scale – how do you keep growing? How do you get bigger? His response: Why is bigger better? His penchant for small team environments, which began when he founded the firm, remains intact. With just 20 employees, perhaps the biggest decision Fried and his business partner make is when to add a new team member.
That independent spirit and willingness to dole out advice – which he’s been doing for years through his popular Signal vs. Noise blog - have given the man and his company a cult-like status among his legion of fans. His contrarian opinions—which also include “when good enough gets the job done, go for it; interruption is the biggest enemy of productivity; all the things you think you need, you don’t”—have helped shape the 37signals brand.
All this alternative thinking has culminated in a book called Rework – which is the topic of this year’s BIF story. Fried takes a critical look at everything from workoholics (“they create more problems then they solve”), to meetings (“toxic… often include at least one moron who inevitably gets his turn to waste everyone’s time with nonsense”) to venture capital (“spending other people’s money is addictive…and a bad idea”). He describes it as a cookbook for how to do business:
“I look to chefs for inspiration. Mario Batali is a great chef who invites a camera into his kitchen and shares his recipes. It's a great business model. In the business world, people are proprietary — they're afraid to share. Rework is our recipe for doing business.”
So can any company truly grow in the way 37signals has? Fried admits industries differ and what works for software companies may not work for manufacturing but in the end, “people tend to make business difficult by worrying about a lot of things that don’t matter.”
“The thing we always say is, getting to great starts by cutting out stuff that’s merely good,” he says. “The idea is whatever you’re doing, cut it in half and keep cutting things in half. Sacrifice some of your darlings for the greater good. You’re better off with a kick-ass half than a half-assed whole.”
