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September 14, 2004

Basecamp: Eat your own dogfood for health, wealth, massive popularity

Just had a very illuminating conversation with Jason Fried. He's
behind Basecamp™, the growing project management phenomenon, the very cool and very respected web design firm 37Signals, the wide ranging and
widely read blog Signal vs. Noise and co-author of the new book, Defensive Design For the Web.

Their story is a strong example of how great marketing doesn't have to be some big mystery. It shows how following your instincts, listening to your customers (and being one) and sticking to principles while executing like crazy, actually go a heck of a long way. A couple of key principles really stuck in my mind:
• Don't just eat your own dogfood. Be the dog, make the dogfood you want, eat it, and then tell the other dogs like yourself.
• Build your audience first, then give them something to buy and sell. If you can gain respect and trust and interest first (e.g. in your blog) then you have not only a receptive initial audience for your product but a group of potential evangelists.
• Keep things simple. You don't always have to have the most features or options. Less really can be more. Let the competition try to beat you on complexity - see how their customers like it.

Here's the full text of our conversation, in two parts:

Marketing Playbook:
How did you decide to build and launch Basecamp? Did you look at what we call your "Marketing Playing Field?" Did you do a gap analysis on your customers, competition, and competencies? What did you find?

Jason Fried:
Whenever we decide to build a product/service we first make sure it's something that we'd actually use ourselves. Just as you should invest in what you know, we think you should build what you'll use. When you build something you are going to use yourself you'll build it better. So that's where we started.

The competitive analysis phase revolved around shopping, not competition. Originally we weren't looking for something to compete against -- rather we were looking for something we could buy and use to manage our clients and projects. Once we couldn't find anything that satisfied our needs we decided to go out on our own and build Basecamp.

We also knew that we weren't special -- if we needed something better there had to be tens of thousands of other companies just like ours that were equally fed up with the current options on the market. And while we felt the assumption was correct, we did ask a fair number of our colleagues what they used, what they needed, and what they wanted. Our assumptions were confirmed -- there was nothing simple enough, fast enough, elegant enough, and flexible enough for a small firm to trust, use, and expose their clients to.

We also discovered that in many ways the size of your firm is inversely proportional to your expectations. The smaller and tighter your team, the higher your expectations for the products you purchase with your limited resources (you really need to make your expenditures count). We
knew this market would take notice and be loyal to a quality product.
So, while we didn't perform a formal gap analysis, we did go through a
similar, albeit more organic process.

Marketing Playbook:
So you really started with your own needs as a company. How did you go from there? How did you think about the competition?

Jason Fried:
Yeah, we originally built Basecamp as our own internal project management tool. It wasn't until we started showing early beta versions to some colleagues and clients that we started hearing "wow, I need something just like this" or "can we use this too?" or "you read our mind," etc. So, after a couple of days of brainstorming, we decided that we would turn Basecamp into a full-fledged ASP-model product/service.

We checked out the competition a little more, but we didn't feel like we were trying to beat any specific product -- rather we were trying to beat the general level of clutter, complexity, and misplaced priorities that we felt existed in the marketplace. We saw a lot of project management apps focused on stats and charts and graphs. We knew from experience that projects don't fail from a lack of graphs and charts, they fail from a lack of communication. So we decided that Basecamp was going to be built around making internal and client communication as simple and effective as possible. One of our development mantras is "Project management is communication."

You know, it's not that the other products out there were bad, it's just that we felt they were overkill and confusing. We wanted to build something focused, simple, and clear. So, I guess you could say we were competing with a different point of view of what makes project management software useful.

Finally, we wanted to get the clients involved in the management of their projects. A lot of software project management apps (like Microsoft Project, for example) are one-sided -- the firm handles the entire project management process. We wanted to give the clients a tool that they could use as well. When they're involved in the management of their project they feel a greater sense of ownership, and that often leads to a better experience and product in the end. Plus, a great project management tool increases client loyalty.

Stay tuned for the second half of this discussion...

Posted by johnza at September 14, 2004 11:36 PM

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