Jason Fried

Founder and CEO, 37signals

Merchant of Simplicity

Here's a bit of business advice you don't hear too often: do less than your competition, spend less money, hire fewer people, work fewer hours and offer fewer features. So says Jason Fried, merchant of simplicity.

As co-founder and CEO of popular web software company 37signals, Fried's unconventional thinking is gaining momentum among the small business community. With a crew of just eight employees, 37signals has created a string of well-received applications including Basecamp, an online project management system, Backpack, a personal information manager, and Campfire, a group-chat and collaboration tool. Their popular open source framework, Ruby on Rails, has more than 100,000 developers worldwide.

Fried's guiding philosophy: stay small and keep it simple. "There are too many options out there, too many features, and too many products that try to do too many things," he says. "Software has become complex and bloated. It grows for the benefit of the upgrade sales cycle, not the customer."

Instead of adhering to the bigger is better mentality, Fried purposefully constrains his company with limited resources and fewer people. In return, 37signals "executes on the basics brilliantly." His company's software is barebones. Its features and functions consist only of those that meet 37signals' needs. "We just build stuff we want to use. If we need it, there's a good chance thousands of companies just like ours need it too."

Fried's strategy is paying off big time. 37signals originally began as a boutique design shop. Managing multiple projects requires collaboration and when Fried and his team began investigating software options, they found there wasn't anything available that suited their needs. "If I was looking for complexity, there were plenty of options. But all the stuff they said we needed, well we didn't."

So the company began developing their own application. Instinct and common sense drove its creation. In the end, it was basic and simple and it worked. Clients discovered it and, with word-of-mouth, the application quickly spread. With the application's success, 37signals shed their creative shop skin to become a web application developer. Through a subscription-based model, thousands of paying users are providing the company with a steady stream of revenue. In the eight years since his company's inception, Fried has declined more than 30 offers of venture capital.

There are great advantages to being small because it forces people to focus only on what's most important, Fried says. It's really easy to hire a lot of people but then you have to keep them busy. "So you give them stuff to do," he says. "Unfortunately, most of that stuff doesn't matter but it ends up getting into your product which makes the product more complex."

His minimalist philosophy extends through everything he touches. The firm's design methodology, dubbed 'Getting Real,' removes all traces of the usual design process (Fried call it the abstract stuff) and replaces it with "actual real stuff." Instead of drawing boxes and arrows that represent a real screen, the team dives in and designs the real screen. The iterative process keeps them working on the actual product most of the time. "You never know what's real until you see real," he says, "and often times it's too late."

By leapfrogging the typical design process, Fried says that most of the busy work creating tons of diagrams and spending lots of time on documentation just doesn't matter. "We kept saying, 'If this stuff is so important, and we spend 50 percent-plus of our time on it, why do we forget about it later?"

You would think, given Fried's penchant for small team environments that he's surrounded himself with the most brilliant minds, but that's not the case. "I don't advocate building a small team of gurus. It's more about having a few good generalists. They need to be passionate, motivated, curious and willing to learn. We're all good at what we do, and we work well together. That's a good team."

His independent spirit and willingness to dole out advice, have given the man and his company a cult-like status among his growing group of fans. His contrarian opinions, which include, "kill all your meetings, they waste employees' time; interruption is the biggest enemy of productivity; all the things you think you need, you don't," have helped shape the 37signals brand. With more than 65,000 readers coming to his company's blog, Signal vs. Noise, it's safe to say that Fried has hit a nerve.