History of Famous Startups. 37signals

same place, it’s

Mon, 17 Aug 2009 06:21:08 -0700

same place, it’s very easy to walk down the hall and interrupt somebody. If
you’re part of a distributed team that’s 7 hours off, you’re bound to have a good
portion of the day where you just get work done. There are no interruptions.
Another thing is that we communicate mainly through IM, which is a fairly
low-bandwidth way of communicating, so you’re not going to disrupt somebody
unless you’re going to say something that matters. If you meet in person, it’s
very easy to just talk for 30 minutes, and what was the information exchange
actually about?

going to be

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going to be and then drive that.
You need to drive both framework development and product development
with a strong vision, where you’re not afraid to turn somebody off. We’re not
afraid to say to a customer, “Maybe Basecamp is not for you. If you want those
five things, maybe you should go look for something else.”
Livingston: Now that you have received a lot of publicity, have you been wooed
by investors?
Heinemeier Hansson: Yeah. We’ve gotten quite a lot of VC calls. But one of
the things we’re seeing that we really don’t care too much for is…

the product is

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the product is to make sure that launch is not the end. We don’t say, “Whew,
we’re done now,” and then go on vacation. It’s then when you keep on pushing
to show this product is alive.
So that happened in February and then we had pretty much a finished
framework for Rails, but I didn’t want to release it yet, because I wanted to document
it. I’d been using open source software for so long that I was really
annoyed that a lot of it had terrible documentation. I didn’t want that to happen
to Rails, so I kept…

systems administrator on

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systems administrator on Basecamp.
Livingston: In addition to all your responsibilities, you were also starting the
Rails project. How did you manage it?
Heinemeier Hansson: When you have to do a project like Basecamp and you
only have 10 hours a week, you can’t spend your time on things that don’t produce
anything. So you get extremely aware of tools that aren’t necessarily helping
your productivity and you go seeking tools that can help.
That’s how I found Ruby. It was such a nice experience for me and a nice
productivity booster. I was coming from PHP. I had also…

money if we

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money if we went out of business a few months into a $500 agreement. They
wouldn’t allow that because we didn’t have a long history with them.
So now we had this extensive billing system focused on billing once a year
and we couldn’t use it. We had to go back and make it monthly instead. But this
turned out also to be a blessing. So we pushed back the launch about a month,
and now we charged monthly, but we charged twice as much. The plan that was
before $99 a year is now $19 a month, $224 a…

David Heinemeier Hansson

Mon, 17 Aug 2009 06:21:08 -0700

David Heinemeier Hansson 311
anything when you first sign up. If you just need to manage a single project, the
product is free for life. So a lot of people got in just testing it out for a certain
project.
As soon as they realize that they’d like to use it again on another project,
there’s an upgrade path for them to go down. They can buy the first paid version
that gives them three projects and gives them file uploading for $9 a
month. So we have a shallow upgrading curve where you can go from paying
nothing to…

the other stuff.”

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the other stuff.” There wasn’t time for us to say, “Wouldn’t it be cool to do this
and that?”
It turns out that when you build only software that you absolutely need, you
don’t get more software than you’ll actually use. And that’s why we didn’t fear
competition from the big guys. If Microsoft decided to go after Basecamp,
they’d say, “Get a team of 20 people to do this and we’ll give them 6 months to
come up with something.” Because when you’re in a big corporate environment,
you throw a lot of resources at projects. You just could…

companies to manage

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companies to manage projects. Microsoft Project and the other heavyweight
approaches to this relied on critical path management and things that might
work fine for a 200-person project on a construction site, but not well for 3 people
trying to deliver a web application.
So we started out just thinking, “This is going to help us solve our consultancy
needs.” And as we got more feedback, we realized it was a good time to
start thinking about how we could make this 37signals’s product.
Livingston: Do you remember the moment?
Heinemeier Hansson: It was more just a flow of the…

David Heinemeier Hansson

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David Heinemeier Hansson helped transform 37signals
from a consulting company to a product company in
early 2004. He wrote the company’s first product,
Basecamp, an online project management tool. He
also wrote companion products Backpack, Ta-da List,
and Campfire.
In July 2004, he released the layer of software that
underlies these applications as an open source web
development framework. Ruby on Rails has since
become one of the most popular tools among web
developers and won Heinemeier Hansson the Hacker
of the Year award at OSCON in 2005.
In July 2006 (after this interview), 37signals president Jason Fried
announced on…