Basecamp Founder Jason Fried: His Journey to Product-Market Fit

[Music] you welcome to today's episode of the only thing that matters getting your startup to product market fit here on Chicago founders TV why do we call it the only thing that matters because when product market fit was first popularized as a term by Marc Andreessen he titles blog posts the only thing that matters explaining that if you don't get your startup the product market fit it's dead we bring you clips from our founder stories interviews with Hall of Fame level entrepreneurs providing the insights and expertise that allowed them to achieve product market fit so you can - today's episode features Jayson freed founder of 37signals now known as base camp Jason is a great entrepreneur a great guy and a really great writer you may know his blog signal versus noise or have read one of his best-selling books Y Combinator founder Paul Graham often talks about all the best companies the biggest and most successful companies start his projects and one of the themes we see in our founder stories interviews is that the best companies deeply and personally understand the problem they're solving Basecamp started as an internal project at 37signals and Jason attributes a lot of their success to that fact here's Jason telling that story Basecamp as a product came from us we were originally a web design company and we were doing work for hire for web design so companies would hire us to redesign their site or make a site form and we got really we served the company in 99 got really busy in 2002 and 2003 and we were basically managing projects like a lot of people still do today which is the email right they would be sending an email back and forth we'd deliver work via email and it's fine but in a certain point especially long running projects it turns into comma mess right right people don't know who saw what and what the latest version of this isn't the whole thing right so we looked around at the time at project management software and it was it was not solving the problems that we had we didn't have problems where we needed to broadcast project schedules or make Gantt charts or numbers and it was more about we need to talk to our client and deliver stuff and get feedback and know where they stand in or where we stand I have stuff on the record that kind of stuff so we couldn't find something so we built something for ourselves but we didn't really know that it was gonna be a product at the time just we need something to run our own project management and it turned out that once we built it for ourselves in a few months we started using with with clients that we had and they really liked it and I said what is this thing and we said it's this thing we made I don't know it's this thing it didn't have a name it's just this thing and so you know we kept hearing that and then like you know the light bulb goes on you're like maybe there's something here let's turn it into a product and see what happens and so it turned out that we put some prices on it which we just guessed that I I was sort of getting sick of clients like client work it wasn't really I was enjoying it I could do a big project you pass it off it doesn't get implemented the way you thought people here I'm sure know that who are in that business and eventually it knows that you know as is not that satisfying for me and so I started thinking about making products for a while I'm like well we could make these customs like we're making like maybe we can make a blog for people were going on a trip and they could they could write up their travels and share it with their friends and I don't know this is like really early but we didn't do any of that and we just kept doing client work because that's what paid the bills you were thinking product thinking a little bit about part because I remember my FileMaker days when I enjoyed making a product and if you make a product and it's your opinions and you put it out there and people come by or they don't compared to client work where you're basically being told with ultimately you're being told what to do and I I just like you know I just think it the product again but we didn't know what to do and I don't know I just kept doing work and we just got busier and busier and busier and we needed some way to manage the project and that's how that whole you're giving this your vision you're busy with work you weren't really that into it well I we started doing a whole new thing so I'm surprised the industry has not really taken this on as an idea because I think it's a great idea it worked really well for us I realized at a certain point that one of the reasons client works sucks is because it's a bad deal so a client you pitch a client on this big project they are already nervous they would have to put up 50 60 70 100 grand whatever they're not gonna get they don't know what they're buying it's gonna take six months to do it that's a shitty deal like that's not something a lot of people are happy about going into and so and I wasn't happy about it because they weren't it was just weird I don't those big long projects they end up just boring anyway so we we launched this thing called 37 Express which was I'm like I don't do big projects tomorrow and do small projects I want to do one-page projects so the deal was you hires to do one page in your site 3,500 bucks will deliver in a week there's nothing to talk about so it's not about there's no revisions show you almost paid a product I made a made web design a product and and it's start getting really popular so where people would say is like hey you know I'd be like you don't need a whole site redesign you just like someone needs to look at your search results page or your shopping cart page or your home page like it's two page at a time you'll get in a week you know exactly you're getting you know I'm just gonna cause you know we're gonna get it and you know you really know these things and it started lighting up like a lot of people start buying these things from us so we were doing dozens of these things which was when we kind of busy cuz we're just four people the time so doing dozens these things was difficult and that's when we really need to manage these things that's how that happened and then we're still doing some longer term client projects but we turned web design into a product the product became a big help your but you're a pretty good size web design business I think we're probably doing maybe a million bucks a year at that point yeah but we've been around for that's a lot of $35 price yes well they weren't all that so we had a few big ones and then quantity wise that we're doing a lot of these smaller ones and with maybe three more big ones a year a couple hundred grand or something each I don't know what it was and then like we did a bunch of these small ones small ones are fun because we got this whole a very specific problem we get to delivered on Friday and then we'd have to hear from the client ever again and that was awesome unless they wanted another page and then we would do another page for $30 bucks and you know I just I still believe that that's a great model and I think the client services industry should adopt that and think a little bit more about prioritizing their work in that way I don't think everybody needs big huge massive redesigns and massive projects all the time I mean as a client you do say to yourself you're kind of getting married this whole big project you don't know you don't know I mean it's and you really know how long it's going to take and you really don't know how much it's gonna cost and you really don't know where you're buying you really don't know what you're gonna get so make it a week 35 bucks if you like it we'll do another one if you don't that's fine and maybe you just need one page so no wait that's how that happened so you so then you work on the base camp as a project that I I'd love you to talk for a minute about you know you built base camp for yourselves yes and talk about why you think that was important yeah and this is how I've always done everything so um audio file that FileMaker Pro thing to collect music was from base camp was for me I made something before that called single file which was a book collection thing that was for me the reason why is because I think that you know you just know when it's good enough if you're that's an important point you know what it's good enough because if you're building something for somebody else you're always guessing you're trying to read their mind they're telling you this but everything gets lost in translation a little bits like a game a telephone I tell you one thing and you interpret a different way and you can never feel you can know you have to feel through someone else and that's just hard it's very hard to do it's possible but very hard to do but when you build something for yourself you know when you're done because you know when it works and it solves the problem that you had does the job that you're hiring it to do and you're like it's done and that's how we built Basecamp we had a problem we knew we needed to do and we knew what was done and we didn't go off and imagine all the other things that can do because we didn't need all those other things we knew exactly what we needed and so I think that you're you can judge quality at a much more precise level you're not judging it by proxy you're judging it because you're using it I think it's more satisfying and I think that that you're more excited about it and do better work that way personally there's no question but we we do better product work when it's a problem we can relate to we can relate to it yeah yeah holy well so your web design for me very successful but your services business they're trying to productize some of the things in there you've got this product that goes out there talk about that transition because they're two totally different kind of company yeah talk about that transition how it went what was it like we didn't we didn't know it was gonna happen we thought that so we made this Basecamp thing or like IRA this is a product we called a base camp we polish it up we threw some prices on it that we thought were reasonable $19 3959 and 79 this is a subscription service and we're very few at the time we were really early this is 2004 ten years ago there was I don't know hardly any SAS SAS was in a term and no one knew subscription software is a subscription not for many people thought about that so we did that threw it out there announced it on her blog to 2000 readers and we had this thing in mind that we weren't thinking about switching from service yet I just knew I didn't like service or like alright if Basecamp makes five thousand bucks a month after the first year so ultimately we be doing 60,000 a year that's a nice that's like five percent of our income it'd be like a nice side thing it'd be killer we need it anyway so why not turned out that it was doing five thousand was a month in about six weeks and so we realized we're onto something here like this is real and then it just kept it steady growth it's grown every quarter since then and like last quarter is always the last quarter the best burger had and hopefully the next one I mean at certain point it might not be but so far it's been great to ten years and but we didn't know and it took about a year or so for it to do be generating more money than our services business and at that moment it's still pretty fast yeah it was fast we were there's nothing else like at the time it was just it was fresh it was different it was fairly priced it made sense we understood the market we it was good good fit all around and then about a year and a half here year and a half it was making more money so we stopped doing client services in 2005 they have not taken on one of those since and we're the breed became a software company in that point you

Channel: Chicago Founders TV

Views: 7,514

Keywords: Jason Fried, 37 Signals, Basecamp, Chicago, Pat Ryan, 1871, Startups, Tech, Founders, Product-market fit, Chicago Ventures, INCISENT Labs

Id: OB7B9IHF-K4

Length: 11min 29sec (689 seconds)

Published: Tue Nov 07 2017