Chicago Production: Software to Produce

37signals | Founded in 1999 | 36 employees

RH: When was 37signals created?

JF: 37signals started in 1999, doing work for hire with firms that needed website redesigns. But it wasn’t until 2004 that we became a software company and released basecamp.

RH: What was your original intent for 37signals?

JF: When we made basecamp, we really made it for ourselves. We needed a way to manage our client projects. We were getting busier and busier and managing projects with email and other things and none of them were working well for us. So, we built basecamp to allow us to keep our clients in the loop and get feedback from them and to keep things in one central place, so everyone knew where it was. And that was really the intent: just to kinda build it for ourselves. But then, after we started using it with some clients, they began to say, “Hey, where can I get this? I can use this for my own projects.” And that’s when the light bulb went off. We thought, “There have to be a lot of other firms just like us, using email,” or at the time, Microsoft Projects was really popular, but it wasn’t really working for people. So, we decided to put it on the market and about a year later, it was doing more business for us than our consulting business, so we stopped consulting and focused only on software.

RH: Do you feel like if you’re in need of a service or product that other people out there will need it too? The idea that your problems and needs = other peoples’ problems and needs. Is that what keeps pushing you to create new software?

JF: Whenever you build something to scratch your own itch, you’re probably scratching a lot of other itches at the same time. Now, maybe 10 years ago, it would’ve been harder to scratch all those other itches for all those other people, because it would’ve been harder to reach them. But now, with the Internet, you can reach millions of people for next to nothing, and so that itch that you have is probably shared by thousand, or tens of thousands, hundreds of thousands, millions of other people, too. The trick now is how to get the word out to them so they know. Before, you’d have to buy a bunch of ads or try and get software on a shelf somewhere, and that seems really expensive and hard to do. So everyone has a really big advantage these days. I think that when you solve your own problems with software, you have a much better understanding of quality and whether something actually really solves the problem, rather than trying to solve problems for other people, where you’re not quite connected to the problem. You can do a lot of research and talk to a lot of people, but you’ll never really know how well that solves the problem, because its not solving your own. If you really care about delivering something great, you should probably look to yourself first and solve your own problems. And in fact, if you look at a lot of great products out there, a lot of them are built by people who built those products for themselves.

RH: How many people work at 37 signals? How many work remotely?

JF: We have 36 people. 13 in Chicago and the rest remote, in 23 separate cities around the world. Most are in the US, but we have some in Canada, a couple in the UK, there’s one in Russia and we just hired someone in Berlin. Even the people who live in Chicago work remotely, too, so they don’t come into the office everyday.

RH: Do you think that a physical office space is as important as it once was for operating a business?

JF: It’s certainly less important that it once was, but I still think it’s really nice to have a central place to meet together when you need to. But our office is really the exception to the rule, not the norm. I think one of the problems with having an office is that if you’ve spent money on it, you think everyone should be there. And then everyone comes in all time, and then when everyone’s all together all the time, you interrupt each other and things get off track, and you waste time during the day, and that’s why a lot of people end up doing work from home, or work late at night or early in the morning because no one else is around. So the downsides of the office sound like the upside to most people. The upsides are easy collaboration and you can jump into a meeting room and chat and riff on stuff. But, actually, I think most of the time those are downsides. The way we use our office is actually the exception to the rule.

RH: In your book REWORK, I love the chapter “interruption is the enemy of productivity.” That’s something that I don’t think a lot of people realize in an office, how you stay reachable, yet unreachable, to be productive.

JF: We have what we call library rules. Be quiet, respect everyone else’s privacy and space, don’t make a lot of noise and don’t distract people. When you have that understanding, a lot of things just fall into place. So if someone wants to talk to someone, they’ll whisper, and maybe they’ll pull them into a separate room. If someone was at the library and pulled out their cell phone and started talking, everyone would be like, ‘what the hell, this is totally inappropriate!’ But in an office, that’s not the case. Except in our office. It’s not an office, it’s actually like a work library. We built it that way. Most libraries have private rooms where you can go and have conversations at normal volumes. We have five of these spaces. I think it has to be part of your culture to in order for this to work. It’s very hard to change an office that has traditional office rules to library rules if people are using the office as a place to just interrupt each other and talk a lot. It’s an important thing to set up in the culture very early on.

RH: Is this something that people typically adhere to?

JF: People are generally cool with this. Sometimes things get a little rowdy here and there, but it’s totally fine, because it’s the exception. Exceptions are totally fine with me. It’s more about the norm. When the norm becomes interruptions and loudness and distractibility and the inability for people to focus, that’s the problem. Also, we have a big communal table in the kitchen which seats 20 people. It’s this huge, wooden, heavy table and a lot of people will work around that table. In the kitchen people will talk at normal volumes and that’s totally fine. We also built our office to have a lot of acoustical materials and a layout that’s all about having open space, but also reducing sound transmission. That was a key requirement for the new office: keep it open, but keep it quiet. There’s a lot of soft materials, we used felt, and some stacked materials that deflect sound and some sound absorbing panels and things like that to really reduce sound transmission.

RH: Obviously open source software and creative commons have helped a lot of people. What do you think about this shift to transparency from proprietary /trademarked ideas? Do you think it increases productivity in general, or does it hinder the creation of new ideas/things because people are scared of imitators?

JF: I think anyone who’s scared of having his idea ripped off is probably not going to make anything great anyways. I think people who make great things are making things great because they can’t do anything else. And that’s one of the things I love about open source. I’m mostly a designer, so I don’t really participate in open source per se, but I love the ethos of it. A lot of our infrastructure is based on open source. The idea that you build something great, put it out there, give it back to the community and let them make it even better, that’s great because infrastructure is really hard to build, technological infrastructure. So having dozens of people, potentially even hundreds, contributing back to a project, each one of them running into different problems in their own business and solving them and contributing those ideas back to the world, I find that just to be such a valuable, special way to move ahead. Compared to locking everything down, making things proprietary, protecting everything so closely that new ideas don’t happen and people are afraid to build things because they’re afraid of being sued.

RH: Where did the name 37signals come from?

JF: One of my original business partners, Carlos Segura, a designer in Chicago, was watching the PBS show NOVA. They were talking about SETI (Search for Extra Terrestrial Intelligence) and had analyzed all these signals from space—radio waves, microwaves, frequencies, you name it—there was just a bunch of noise out there. And they’d analyzed these signals, but at the time, this was 1999, there were 37 signals that couldn’t be explained. We all loved it, there were just four of us at the time, and the domain name was available, so we said let’s do it.

Editors’ note

This article is part of our Chicago Production series. See also our articles on Horween Leather Company, Heritage Bicycles General Store, and Threadless.