37signals Losing Lustre? Why I Miss The Adoring Fans

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37signals Losing Lustre? Why I Miss The Adoring Fans


For some reason, when I woke up this morning, my non-caffeinated brain (had not had my morning coffee yet) began to wonder why I hadn't heard much lately about the smart folks over at 37signals.

For most of 2006, I couldn't help but trip over mentions of 37signals.  It seemed that the press and media couldn't get enough of them.  They got mentions in lots of major publications, written up about extensively on the blogosphere (including mentions here on OnStartups.com). 

I thought this buzz around 37signals was a great thing for startups, because unlike a lot of Web 2.0 companies, 37signals was a real business.  They wrote software that people liked and were willing to pay for.  I thought they were a ray of shining hope in the dark dungeons of Web 2.0 "we'll make money with advertising someday" hell.  [Note:  I have nothing against advertising-subsidized software, it's just that it seems there's a limit to how many startups can actually succeed with that model].

So, when the previously mentioned glimmer of thought struck me, I thought I'd look a little deeper and determine whether it was just me that had changed (i.e. was I subconsciously not looking for them as much as before) or had the hype and hysteria settled down a bit.  Since there are limited ways to figure this out, and I was not feeling particularly energetic, I thought I'd just use Alexa.  Though many characterize Alexa as "grossly inaccurate",  it was enough to satisfy my curiosity on this point. 

Here's the Alexa chart of the 37signals traffic (page views) since inception.  As you'll see, the "spike" was clearly in late 2006 and things have gone downhill from there -- relatively precipitously.  [Note to self:  Try not to use words like precipitously without morning coffee, that exercise hurt my brain].

So, what does this really mean?  For the 37signals folks, I'm guessing not all that much.  I'm sure they still have a great business, lots of adoring customers, etc.  I discontinued their service a while ago (the software's "less is more" approach wasn't really doing it for me), but my guess is I was precisely the kind of customer they didn't want in order to stay true to their vision.  So, chances are, they're still doing quite well.

The question is this:  Without the hype and hysteria in the media about the company, are they finding it more difficult to find new customers?  Did all that free press and PR have an appreciable impact on their business -- and did the loss of it hurt?  Or, was the PR useful at the time to build some critical momentum and they're just fine now.  I don't know.  Perhaps one of you does.

In the meantime, my continued best wishes to Jason and the rest of the 37signals team.  I miss those halcyon days when their pragmatic "get things done" approach stood in stark contrast to a lot of the misguided thinking that was out there at the time. 

Posted by Dharmesh Shah on Fri, Aug 24, 2007


Dharmesh, you know this business as well as anyone. Do you have a theory for these results?


posted on Friday, August 24, 2007 at 12:33 PM by Dan Tyre

Dharmesh, there are a few problems with your analysis. 1. You used Alexa. 2. You looked at 37signals.com (no product exists there, you should have looked at the individual product sites) 3. In the subscription business, traffic != revenue I agree with you that the hype has died down significantly. But there is no way to infer how the business itself is doing from that fact alone.

posted on Friday, August 24, 2007 at 12:50 PM by Michael

DHH: Thanks for responding. Glad to hear things are still going great over there at 37s. Michael: I agree that Alexa is not perfect -- but for these kinds of relative and macro-level things, it's actually ok. Although Alexa is slanted, unless that slant has changed for 37signals, it shouldn't affect things like that. Also, most of the PR and buzz was referencing the company website (not the product sites), so that's what I used.

posted on Friday, August 24, 2007 at 1:02 PM by

Dharmesh, it's turned to sensasionalism now has it? The last time I checked in on your 'articles' I posted a comment that it was a shame that your articles had no substance. Now though you post something like the above without even having the courtesy to contact the guys from 37signals and talk with them first. Even a basic hack journalist would do that before posting something which I personally considered to be negative towards the company. Sure you used a question mark in your title, but why don't you start writing decent business-focused articles again or.... dare I say it... not bother. Just about to unsubscribe - this kind of thing annoys me. Good luck with your own ventures - maybe you should concentrate on them

posted on Friday, August 24, 2007 at 1:02 PM by John Cage

John: Well, if this article was sensationalism than I think it's not that far from other things I've written in the past. I am not (and probably never be) a journalist. Not even a "hack" one. This blog has always been an outlet of opinion, not researched facts. Having said that, I didn't really think I had disparaged the company -- simply stated an observation. I thought most of the article was positive. In any case, one of the great things about the blogosphere is that there's no reason to endure mediocrity -- unsubscribing is easy. Though I'd love to keep all my readers, I understand (and accept) that I'm never going to make everyone happy. Cheers, Dharmesh

posted on Friday, August 24, 2007 at 1:15 PM by

The same thing happened with Paul Graham (and subsequently Y Combinator). They both had something really great to say, and a lot of people wanted to hear it. Everyone was really excited about that message, and so they talked a lot about it. But now, everybody has heard the message. They have nothing "new" to say. And so when 37signals writes an article like yesterday's "Who wants to live in The Real World?", everyone just kind of nods their heads and agrees. There's nothing revolutionary about something everybody agrees with and already knows about. That's also why I haven't read an article on your blog in nearly a year. There are a lot of implications for this throughout media and politics.

posted on Friday, August 24, 2007 at 1:41 PM by Erik Peterson

You miss the adoring fans? They are already coming here to flame you for blaspheming their god! I do agree with you though. I loved reading SvN because of the interesting articles, but more importantly to hear about how they were flaunting software engineering conventions and developing kick ass million dollar software with 5 people and no spec in no time at all... And then the flow of products and cool stuff kind of ground to a halt. They started hiring more staff and their products were getting delayed. Suddenly it seemed as if they really didn't have some brilliant new idea, and ended up with the same problems the rest of us have.

posted on Friday, August 24, 2007 at 1:50 PM by Phil

I think what you're observing is the natural consequence of the decision to eschew rapid growth in favor of simplicity or rebellion or whatever it is that makes them tick.

I think most people in their shoes would have raised huge sums of cash, developed more robust (and to me, interesting) products, and grown considerably by now. Nine out of 10 entrepreneurs prefers cash over purity. I suppose that makes 37 signals the 10th.

I, for one, am thankful for their obsession. Ruby on Rails really is quite remarkable. I doubt it would exist today without the pecuilarity of the 37 signals crowd.

Every hype cycle seems to have a backlash, and we may be seeing that here. I suspect they will work their way through it. But who knows? Perhaps the "simplicity" emperor has no clothes and everyone will be talking about ways to add "cool useful features" in a few months.

posted on Friday, August 24, 2007 at 2:55 PM by Damon

While the buzz has certainly died down a bit for the 37 Signaler's, they did launch a new product this year. I've been wondering how things are going with HighRise. As an early stage software company we certainly admire the approach, focus, and buzz generation of 37 Signals. I wish they would write more about the business of software and web apps though.

posted on Friday, August 24, 2007 at 3:04 PM by Hasan Luongo

The 37Signals theories are all exciting and seductive... starting simple, saying 'no' more often to client requests and options. It all appeals to those who have built gigantic applications and had to maintain them. What developer doesn't get excited about starting a new project, telling the client 'sorry, we don't want to do that' or eliminating all the bells and whistles that fine tune an application to be flexible enough to meet the needs of a particular market? Simplification is a great thing to strive for. Unfortunately, generic applications with limited options are much like buying 'one-size-fits-all' clothes. Value comes from getting software that most closely meets your needs. For those with very basic needs, simple software may be adequate. But I'd venture to say that there are at least two flaws in that approach: 1) Your generic application will have a hard time distinguishing itself from other competitors... and thus you will have little brand loyalty and little to brag about, and... 2) Sooner or later someone will come along offer a slightly more market-specific application and the 'thousands' of customers that you were bragging about will flip over to that application. We shouldn't all be striving to be 'Google Calendar' or 'Google Shreadsheet' or 'Basecamp'... when all of those generic applications are being given away and are in plentiful supply. Instead, we should seek out specific market niches and offer precisely what those niches need. Look at how Adobe came out with LightRoom for photographers and Photoshop for scientists. They didn't get rid of features to create a better product for these niches. Instead they honed in on what each market needed and made the products easier to use for them. There's real value. Not just oversimplification of products, as I read the 37Signals core mantra to be.

posted on Friday, August 24, 2007 at 3:19 PM by Tom Snide

"I've been wondering how things are going with Highrise."

Wonderfully. Highrise is our fastest growing product ever. And we have a lot of great stuff planned.

As DHH said above, we're signing up more people today than we've ever signed up before. Each new month brings new records.

The Alexa traffic trend does not mirror our sales or signup triends.

So while we may be out-of-fashion for some in-fashion bloggers, there's a much bigger world out there. There's a lot more talk, sharing, and word-spreading outside the bloggosphere than inside it.

posted on Friday, August 24, 2007 at 7:05 PM by Jason Fried

Jason: Great to hear that things are still trending upwards. Congrats on the success of Highrise. I am not surprised that there is more activity outside the blogosphere than inside it. It's a good sign that you folks have been move into the mainstream. One of the challenges many startups deal with is the classic "crossing the chasm" problem. In any case, thanks for taking the time to respond and wish you continued success. Regards, Dharmesh

posted on Friday, August 24, 2007 at 7:16 PM by

The way the hype was being built up last year I had a feeling that they want to sell the whole thingamagic while it was still shiny.... in retrospect I feel they should have.....

posted on Friday, August 24, 2007 at 10:42 PM by Tarique Sani

I can't comment on the buzz around 37 signals now as compared to 2006 since I wasn't aware of the buzz back then. But what I can say is that I use their products every day to run two websites using a host of employees around the world. Hype or no hype, I know I am infinitely more productive, effective and efficient using their products, especially Basecamp. I'm not sure what else matters.

posted on Friday, August 24, 2007 at 11:28 PM by Mark Kaufmann

I dunno, D. Onstartups.com doesn't appear to be burning up the charts at alexa.com either. "People in glass houses..."

posted on Monday, August 27, 2007 at 12:47 PM by Rob

Rob: Though I'm flattered to be compared to the 37s site, the fact is that OnStartups.com has never had that kind of traffic so it comes as no surprise that I'm not burning up the traffic charts. They probably get more traffic in a day than I see in an entire year.

posted on Monday, August 27, 2007 at 12:55 PM by

Alexa data is garbage. See: http://siteanalytics.compete.com/37signals.com

posted on Friday, August 31, 2007 at 1:52 PM by Fried Jason

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