Interviewer (3:28)

That is so funny. So you wanted to charge by the year, but like you said, if someone pays up front and then you're out of business in two months, there's 10 months worth of money that now Chase would owe them. And, and so the whole monthly recurring revenue model came because the bank wouldn't let you charge on the annual basis. That's, that's ridiculous.

Jason Fried (3:46)

That was it. So we're like, what about if we do it monthly? They're like, we could probably do that because now we're talking about, you know, 19 bucks a month or 29 bucks a month or something. And. And we just like had to beg, really, to make them see that this was okay. Or like magazines have subscriptions and like, subscriptions aren't new. It's just, yeah, their software subscriptions are kind of new.

Interviewer (4:07)

If they had said no, we might have weekly. It might be wrr might have been the thing.

Jason Fried (4:13)

Who knows, right? I mean, eventually I'm assuming this would have changed, but initially we just were like, we have to do whatever we can. And the funny part about this is that we were ready to launch the product, but because we had to change the way billing worked, we didn't actually even have a billing system. So we shipped Basecamp. We launched Basecamp to customers with actually no way to bill them. So we had 30 days in which to build a billing system so we could begin to charge them on a monthly basis. So it's kind of a fun, like the ultimate constraint driven process. Like, okay, we're shipping this product, we're selling it, although we're not collecting. So we don't ask for people's credit cards. We didn't build anyone for 30 days. I think we did ask for their credit cards, but we didn't build them for 30 days. So we had 30 days. Otherwise it was on us. We'd be losing money. So it's kind of a fun, fun little challenge there.

John Davids (4:58)

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Interviewer (5:29)

How did the company evolve? So you have this product, and I should say for context, you describe when we say how big is your company, you say tens of millions in revenues and profits. So it's a big company.

John Davids (5:40)

How did you get to that level?

Interviewer (5:42)

Was that basically one product that took you there, or was it a few different products that. That got you there?

Jason Fried (5:47)

Yeah, I mean, Basecamp is our big winner. So that's kind of a 10x product, but we've had a number of decent ones. So Highrise is our second biggest product, which is a CRM tool which we launched back in 2007. We still offer to existing customers, but we don't sell it anymore. But that became a more than $10 million business for a while. It's not anymore because we don't sell it anymore. So there's just natural churn over, over time. But it's still a multimillion dollar business. Backpack was a multimillion dollar business, which was another early product of ours. But many of those aren't around anymore in terms of selling them. We still exist. We still support them for existing customers, but we don't. We don't improve them, and we haven't sold them for years.

Interviewer (6:23)

How do you decide what to keep going, what to cut off? Like, is there a lot of thought in there or it just kind of happens?

Jason Fried (6:29)

So the company used to be called 37 signals. It is again today, but for a number of years, I think it was about six years in the middle. It was called Basecamp. And what we decided was at some point, we're like, you know what? Let's just focus on Basecamp. We had four products at the time, actually, a few others to. We had a relatively small company. We were 20, 30 people, I think it was maybe. Yeah, something like that at the time. And we're like, we just can't do four things at once. We're not doing them well. We're letting some of these die in the vine in a way where we're not getting back to them. It doesn't feel good. So let's consolidate and get back into Basecamp. So we kind of made that decision all at once. We, like, took Campfire, which was our chat tool at the time, rolled that into Basecamp. So that became part of Basecamp. We actually spun off a couple products. Know youw Company, which is now called Canopy, we spun that off to. To a different team. We spun off High Rise. We eventually reabsorbed that. And then we decided, like, Backpack, we're just going to support, but we're not going to sell anymore. So we made all these decisions at once, which actually made it a lot easier to make. Just here's the plan. Basecamps, we're going all in. We're going to change the name of the company to Basecamp. So everyone knows we're all about Basecamp. So we know we're all about Basecamp, and that's all we're going to do. Let's fold these other things in, spin these other things out. Let's just make a grand change now. Since then, we launched hey. Which is doing Very, very well multimillion dollar business. And because of that, we went back and renamed the company to 37signals again. So we're now a multi product company. Now we have Campfire again as a standalone thing. We're going to make more products and more products and more products. So now it makes sense to, to jettison the Basecamp name as the name of the company. And, and, and now we're back to 37 signals. But I had this, this, this idea to, to, to consolidate around Basecamp. And I just called in a few people from like our. We don't have an executive team in, in the traditional sense, but like three or four of the other kind of long timers at the company. And I just made this pitch. I'm like, look, let's just simplify. Like we're just doing. We know, we all know, like, let's just be honest. We can't get back to this, we can't get back to that. We're doing too many things at once. We don't have enough people. But we don't want to grow in a big way to service all the products and the customers. Could we just consolidate? And it was like this big sigh of relief. So it was a huge decision, but it was also like, there's oftentimes these decisions everybody is ready to make, but no one is willing to make. So I just made it and everyone's like, yes, that makes sense. You know, it was like all this weight off our shoulders.

Interviewer (8:48)

So that's the job of the CEO to make. I love. I should write that down.

Jason Fried (8:52)

It's actually the job of the founder.

Interviewer (8:54)

The founder.

Jason Fried (8:54)

I think this would have been a hard decision, I think for a CEO to make. This was a decision that a founder could make in a sense because it was pretty radical. I've had, I wrote this thing about founder. The job of a founder is to inject risk into a company. The job of the CEO is to sort of mitigate risk. I think in most cases, CEOs typically don't take big risks. They sort of manage risk. A founder should be like, no, we're going in this direction. I've got this gut instinct, I'm letting it ride. I have the most to risk here. If a founder who owns most of the company makes a call, they have the most to lose too. So they just have a certain position in which they can force big changes through. That would be very hard for other people to stomach in a sense. But because they still have most of the risk on their own plate, people are willing to follow.

John Davids (9:45)

Thanks for listening. Get my best stuff to your inbox@johndavid.com.

Interviewer (9:49)

I'll talk to you next time.

Jason Fried (9:50)

10.