After a six-month review of its operations, Jason Fried's 37signals has decided on a wholesale liposuction of its business: it plans to offload all of its products but one, and assume the name of that product, Basecamp.
The decade-old Basecamp is the staple of collaborative project management for 285,000 companies (and sparked a market category that still spawns startups). However, outside the Basecamp circle, 37signals is also known as the outfit that created and open-sourced Ruby on Rails.
However, like Bilbo Baggins, 37signals' successes seem to have left it thin and stretched, “like butter spread over too much toast”. Fried's blog post says “we've become a bit scattered, a bit diluted. Nobody does their best work when they're spread too thin.”
According to Fried, the outfit is now considering the future of other products like Highrise and Campfire. They might be sold off completely or spun off into subsidiaries in which
37signals Basecamp will retain an interest. If no buyers are found, the products will still exist, but won't be offered to new customers.
“Basecamp is our best idea and our biggest winner,” Fried writes. “Over 15 million people have Basecamp accounts, and just last week another 6,622 companies signed up for new Basecamp accounts.”
Fried notes that it would not be the first time the company has put products into eternal maintenance mode: “We did this successfully in 2012 with Ta-da List, Writeboard, and Backpack, so we know how to make it work”.
The company expects Campfire to be worth “single digit millions” and Highrise “in the tens of millions”, and says it's in discussion with some interested parties.
It's interesting to note that 37signals hasn't taken the standard advice of the VC world and taken itself to wholesale IPO. “We want to maintain the kind of company where everyone knows everyone's name,” Fried writes. ®