Basecamp (formerly 37signals)
Basecamp began as a tool for the people who built it. Jason Fried and his co-founder DHH had been blogging and writing since 1999, and the audience they built was primarily web designers and design firms. In Fried's words, 'Our audience was primarily like us, which were web designers at the time and design firms and that sort of thing. And so every single one of them could use Basecamp. Like it was built for them because it was built for us and they are us and we are them.'
The product launched in 2004 and was built to keep projects, clients and teams in one place. Its collaborative design was central to how it grew. The company later described its own sister product High Rise in similar terms, saying 'it was built for us,' which reflects the same approach of solving the founders' own problems first. The company kept the product focused and simple, and Fried argues that a clear purpose and a simple explanation mattered as much as the features.
Growth came without advertising. Fried explains that a user would invite a team member or a client, and that client would then see the value and sign up for their own projects. In his words, 'it kind of spreads virally in that way.' Account numbers rose from 45 in 2004 to 100,974 in 2006, and the company passed three million signups by 2019. Fried is candid that luck and timing played a large role, saying 'a big dose of luck and for timing is for two of us.'
Basecamp was the company's clear outlier. Backpack, a personal product at five to nine dollars a month, found an audience but was hard to sustain financially. Campfire, an early group chat product, was ahead of its time and never took off in 2006, though its ideas were later folded into Basecamp 3. High Rise, a CRM built for the company's own sales and partnership conversations, became a multi-million-dollar profitable business but never matched Basecamp's reach. The company also built a job board that became We Work Remotely, which was sold later; the article reports it reached $40,000 a month in revenue, though that figure belongs to that separate product rather than Basecamp itself.
Basecamp remained self-funded and profitable, with the company reporting tens of millions of dollars in profit each year and over 100,000 paying customers. The company had 54 employees at the time of the interview and was building a new product while continuing to improve Basecamp 3.
- •Building for an audience that was the founders themselves meant their product fit their users exactly, which made each satisfied user a natural recommender.
- •Collaboration built distribution into the product itself, since every invited team member or client became a potential new account.
- •Years of blogging before launch gave Basecamp a ready, trusting audience, so the product did not need paid acquisition to get started.
- •Basecamp succeeded partly because its simple, clearly explained purpose matched the market's appetite at the time, while its sibling products with less clear purposes struggled.
- •Staying self-funded gave the founders the freedom to iterate on a single product for years rather than chase fast growth.
- 1.Build the product for a specific audience you already know well, ideally people who share your daily work problems.
- 2.Start building an audience through consistent writing or blogging before you launch, so you have people ready to try the product.
- 3.Design the product so that using it naturally involves inviting others, such as clients or teammates, creating built-in referral loops.
- 4.Explain the product's purpose simply and clearly, and focus on one core problem rather than many features.
- 5.Fund growth from revenue where possible and avoid rushing to launch multiple products before the first one is stable.
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