Lessons Learned at 37 Signals

From Sean Ammirati's summary on ReadWriteWeb of a talk by Jason Fried of 37signals at SXSW 2008:

37signals is a software company headquartered in Chicago that started as a interactive design company and has since become one of the leading software companies for personal productivity software. Currently over one million people and businesses use their productivity applications... They also are responsible for creating and then open sourcing the popular web developer language [sic] Ruby on Rails. Jason Fried is the company's founder.

Lesson 1: Ignore The Great Unknown

"...often as entrepreneurs, we worry about the impact of our decisions rather than just making the right decision. ...this is crazy, because decisions made today don't have to last forever - we 'must optimize for today.'"

Lesson 2: Watch Out for Red Flags

Red flags are ... words or phrases that end up causing problems in communications. For example: need, can't, easy, only, fast.

Lesson 3: Be Successful and Make Money by Helping Other People be Successful and Make Money

...This has become part of [37signals'] philosophy, looking for opportunities in the marketplace to "spot chain reactions and be the catalyst" around helping others.

Lesson 4: Target Nonconsumers and Nonconsumption

...The idea [from Clayton Christensen of Harvard Business School] is that there exists an entire market of nonconsumers, or people who have a need but existing players aren't targeting these people. The advantage of targeting this segment is that you minimize the chance for competition from entrenched players.

Lesson 5: Question Your Work Regularly

• why are we doing this?
• what problem are we solving?
• is this actually useful?
• are we adding value?
• will this change behavior?
• is there an easier way?
• what's the opportunity cost?
• is it really worth it?

Lesson 6: Read your Product

"The biggest sin on the internet right now is bad copywriting ... paying too much attention to pixels and not enough attention to words."

Lesson 7: Err on the Side of Simple

...always "start with the easy way."

Lesson 8: Invest in What Doesn't Change

Lesson 9: Follow the Chefs

Jason called chefs the smartest business professionals. ...they are aware that you become famous and successful by giving knowledge away. For example, chefs have cooking shows and write cook books. Yet it doesn't stop their restaurants from being successful. In fact, he claimed they are probably more successful because of their sharing.

Lesson 10: Interruption is the Enemy of Productivity

Lesson 11: Road Maps Send You in the Wrong Direction

When talking about business plans, financial projections, or features for products 37signals believes road maps are bad, because "they lock you into the past." The only exception is APIs, because people are counting on it. ..."do the right thing at the right time."

Lesson 12: Be Clear in Crisis

At the beginning of this year, 37signals had some infrastructure problems that resulted in a few hours of unscheduled downtime. This was widely discussed on the internet. They quickly posted about what had happened and during the technical problems they kept their homepage updated with status messages. Through this experience, it reinforced their belief that people love you even more if you are open, honest, public and responsive during a crisis.

Lesson 13: Make Tiny Decisions

Rather than trying to make major decisions, when possible, Jason encouraged entrepreneurs to break problems down to the atomic level. In web properties, this is especially powerful because they've been able to break features down to the atomic level and then launch them one at a time. This is good because the team can gain momentum and celebrate little launches. However, it's also good because "when you make tiny decisions, you can't make big mistakes."

Lesson 14: Make it Matter

Jason ended his presentation by encouraging the audience to make sure their work was significant. He talked about how meaningful he felt the products they were creating were for individuals. ..."everything you do should matter."