A few days ago I received an email from Jason Fried, CEO and founder of 37Signals. The small company from Chicago develops web applications, i.e. software that runs completely in the browser (today one would also say “in the cloud”). I use myself (with increasing enthusiasm) some programs of 37signals, because they follow a clear principle: They are easy to use, reliable and focus on the relevant functions needed by most users.
In the said mail Jason Fried wrote that the company only wants to be a “one product company”. In the future, the company will fully concentrate on the project management software “Basecamp” and use all capacities to improve this software. All other projects will be submitted and the company name will be changed to “Basecamp”, i.e. the name of the only product in the future.
Now you have to know that 37Signals has developed in the 15 years of its existence next to “Basecamp” a number of very successful products, including a CRM software called “Highrise” and the collaboration tool “Campfire”, a software for virtual team collaboration. The company now has more than 15 million software users, but still only 43 employees.
A common management decision would certainly be a clear growth strategy to develop the existing potential of the products. Not for the management of 37Signals.
Jason Fried gives 2 reasons for the decision to concentrate on one product which I find quite remarkable:
“After the company has developed so many different products, this has weakened the focus. Nobody does the best work when they have too many different things to do. We deliver the best work when we focus on one thing”
“With 43 employees, we have a special culture in our company. This culture has led to the good results of recent years and is one of the reasons why so many people stay at 37signals permanently. That’s what we’d like to preserve.”
How performance-enhancing the effect of a clear goal orientation can be on teams was already described in an article last year. Anyone who has ever experienced team sports knows the energy that comes from committing to a common goal. In this respect, this approach can certainly be a strategy for success for (small) teams.
Of course, this decision is not a recommendation for any company. There are enough examples of organizations that can show great development through a growth strategy and skillful diversification. On the other hand, however, there is a whole series of corporate leaders who have gotten bogged down here.
One thing is also certain: Focusing on core competencies is an undisputed success principle, not only for teams but for everyone. Another is also certain: Focusing on core competencies is an undisputed success principle, not only for teams but for everyone.
“What do we have to stop doing to have time for the things we should do” is a question we should ask ourselves more often. Perhaps it will be heard more frequently in the future.