Is 37signals making a web platform play?
We all thought the web platform would come from one of the big players, most notably Google. It was going to be the Google OS that would compete with Microsoft and prevent Yahoo or eBay or Amazon from dominating the ‘net. With thousands of the smartest minds around Google has the intelligence to create the platform of the future, with their vast server farms and tremendous reach they have the technology, and with its stock flying high Google undoubtedly has the money.
I think the investment by Jeff Bezos shows that 37signals is making their own play at the web platform, however, and they’re using a fundamentally different strategy. 37signals is working to change how we think about ourselves, our place in the world, and how we work - not just provide tools or an API to tie our products to.
On their blog post announcing the Bezos investment Jason states:
“It will be great learning from Jeff as we build 37signals into one the great companies of the next 20 years.”
With the success of Basecamp, Backpack, Campfire, Writeboard, and Ta-da List we have seen the signals winning strategy for web app development. Ruby on Rails is a hot framework that is empowering the community to follow in their footsteps. And, as the quote above shows, they have the ambition.
The 37signals approach includes a final unique element that Microsoft (and, to a lesser extent, Google), have lost. The signals are winning the hearts and minds of developers. Every day thousands of people across the world are heavily influenced by the signals blog and live by the philosophy encapsulated in their book, Getting Real.
Package all of this together and it’s clear that 37signals is a pioneer in the frontier of web applications, provides a framework for cutting-edge development, and, most importantly, is changing the way we think about ourselves and how we work. They have won the hearts and minds of many smart, eager, focused shops across the world that are at the forefront of “Web 2.0” development.
It’s not an OS strategy like Microsoft used in the ‘80s and ‘90s, but I think that 37signals has a greater chance at impacting how a web platform develops than than Google, Yahoo, eBay, or even Jeff’s little company, Amazon. Their challenge is to keep hold of those hearts and minds. Staying small is an important step toward maintaining that place, but presents its own difficulties (especially keeping good people, maintaining influence, and not becoming smothered in an increasingly populated arena).
Let’s see how this all plays out.



July 28th, 2006 at 12:46 pm
I agree that 37Signals is positioning itself as the web equivalent of the MS Office suite. This will be tough as they will be going up against the two 800 pound gorillas in this space - Microsoft and Google. We’ll be watching this with interest.
July 28th, 2006 at 3:01 pm
Jason Fried and the boys over at 37 signals are definitely up to something. Numerous times I have heard them refer to “20 years from now….”.
They are a big picture company as can be seen from their naming of basecamp, then consequent backpack and campfire apps. It’s obvious to me that they go about their development in well branded, planned steps.
Through their accessible API’s the applications have also taken a life of their own via 3rd party development, which just adds to the barreling mass that is their entire product suite.
Numerous times they have spoken that there is no “magic” number at which they could be bought out at and it seems they have no inclination to. However, with the sheer number of users they claim use their applications they MUST be making profit hand over fist. For them to team up with Bezos is an interesting move for sure. If their stock ever goes public, I’ll be the first to hand over my savings…
July 28th, 2006 at 3:58 pm
Hi, Richard.
I agree, they are going up against big players. I’m interested to see if the ‘hearts and minds’ strategy will circumvent their more limited reach and technology offering.
July 28th, 2006 at 4:00 pm
Kyle, we all seem to have a secret ambition. This might be theirs. Do you think they’ll be more successful if they officially promote this as a strategy, or keep it quiet?
July 28th, 2006 at 4:58 pm
Interesting post. I see 37 Signals as a bit like the Palm Pilot - they have pioneered an easy to use, new platform but if they aren’t careful about keeping up with the needs/demands of their customers they will be left behind. Much as I like Basecamp, it has a lot of limitations once you start using it heavily and I don’t see much evidence that they recognize that.
My guess is that someone will follow in their footsteps with more powerful and sophisticated platforms, much like the iPod followed the many pioneering MP3 players. We are in the Diamond Rio days of Web-based apps so it’s a bit early to start calling winners.