37signals

37signals began as a web design agency in the late 1990s. Rather than remaining a services business, Jason Fried and David Heinemeier Hansson noticed patterns in client problems and decided to build reusable software solutions. In 2004, they launched Basecamp, a project management tool that became their flagship product. The move from agency to product company was driven by solving their own pain—the frustration of managing client work inefficiently.

The company's approach to product development is unconventional. They don't believe in long-term planning or formal goal-setting. Instead, they spend months "wandering" around ideas, exploring concepts until something feels right. For products like Campfire (their group chat tool launched in 2006), they would iterate on the UI first, letting the product gravity pull them toward the final shape. They work in 6-week sprints once they've committed to a direction, but the exploration phase can take months.

When launching new products, they use a signature tactic: a founder letter landing page. Rather than hype or mystery, they present a clear point of view. For example, when introducing ONCE (their one-time-purchase software brand), the letter asks: "Something happened to business software." It reframes the problem—that companies spend tens of thousands monthly on software they should own outright—then presents the solution with a story and philosophy, not just features.

37signals grew primarily through word-of-mouth and their own thought leadership. Jason has spoken at conferences (like E-Tech in 2005, where Jeff Bezos heard him speak), written books like *Rework*, and maintains a visible presence discussing business philosophy. The company has never done traditional paid advertising or aggressive outreach. Their books and blog posts serve as organic marketing, attracting customers to their products.

In 2006, they took a secondary investment from Jeff Bezos—he purchased shares directly from Jason and David for personal gain, not to fund the business. This was a deliberate move to reduce personal risk while maintaining complete independence. Bezos had become a fan after seeing Jason speak and using Basecamp in his portfolio companies.

What worked: **Profitability and independence.** By refusing outside investment (except Bezos's personal share purchase), 37signals maintained complete control. They kept costs extraordinarily low while building a diverse customer base of over 100,000 paying users. This combination of high revenue, low costs, and high margins gave them the freedom to "wander" and explore ideas without pressure.

What didn't work: They sold their remote work job board (We Work Remotely) to Andrew Wilkinson around 2009-2010. The board was generating ~$30k/month with almost no maintenance—"the easiest money we ever made," Jason says. But they sold it as part of a consolidation to focus exclusively on Basecamp. Today, that board generates around $4 million in annual profit for Wilkinson. Jason acknowledges this as a good-faith decision at the time (they wanted to go all-in on one thing) but says it "bugs" him in retrospect. He notes they could launch another one if they wanted—nothing prevents it.

Their philosophy of "no goals" took discipline to explain. They don't set revenue targets or growth metrics. Their only goal is annual profitability, which they've achieved for 25 years. This absence of goalpost-chasing allowed them to measure success by whether work was enjoyable, whether they felt good, and whether the business had healthy margins—not arbitrary milestones.

At 25 years, 37signals remains independent and self-funded. They generate "tens of millions in annual profits" (the only number they share publicly, and Jason emphasized it's net profit, not revenue). The company works four-day weeks during summers and spends almost nothing on marketing.

Recently, they've launched ONCE.com, an umbrella brand for one-time-purchase software. The first product, Campfire (a reinstalled chat tool), sells for $299 with unlimited users and full source code access. They've sold "hundreds of thousands of dollars" worth in the first few months. A second ONCE product related to writing is in development.

Jason is now 50 (turning 51 soon) and has no interest in starting from scratch again. He likes what he's built, likes doing it, and sees no reason to sell or change course. As long as David remains his co-founder, they'll continue—if either left, they'd likely have to sell. Their new products and philosophies feel fresh, but there's no long-term plan. As Jason says: "We really don't know. But right now it would feel like a loss to sell the company."