In fact, 37signals turns the old ways upside down. For starters, its applications are delivered on the Web for a monthly fee, not sold in boxes. The company's seven employees don't believe in planning, either. They just start creating and trying things out. And rather than loading products with bells and whistles, they design them to do a few things well. "The way to get really good software is to make the simplest thing you can as fast as you can and get reaction, then see where it goes from there," says Paul Graham, a pioneer in Web-based software and now a guru for software entrepreneurs who operate like those at 37signals.
The story behind 37signals' Backpack product shows how the company innovates. Fried and two colleagues were at a restaurant in Seattle at the end of 2004, griping about the difficulty of keeping track of their travel, meeting, and contact info while on the road. They asked themselves: Why not handle it with a simple Web application?
Back in Chicago in mid-January, Fried launched the project by sketching out what it might look like. Then he and his colleagues spent the next few weeks tapping out ideas on their computers and firing them back and forth to one another on e-mail and Web chat. It's stressful. One of the designers, Ryan Singer, chills out during design binges by twisting himself into yoga positions.
The company takes advantage of the latest Net technologies to hasten innovation. They use a quick-and-easy programming language called Ruby. Then they tap into a set of premade software pieces, called Rails, which was designed by 37signals programmer David Heinemeier Hansson, to build the foundation of their application. That frees them to spend their precious hours writing code for the parts of their programs that are unique. Ruby and Rails are open-source packages used free of charge by Web developers.
By mid-April the team had created a simple, smooth-functioning application. Fried declared it done, and they stopped adding features -- spending the time before a May 3 launch testing the software and building a marketing Web site. Three weeks after the launch, they added a version for cell phones.
There's a downside to this way of doing business. If one upstart can deliver a new product in a snap, so can others. The guys at 37signals aren't sweating it. In fact, between projects they travel the country giving seminars and promoting their book, Getting Real, about how they build applications. Unlike many dot-comers who followed the get-big-fast credo, Fried has no plans to add to his staff. The goal: Stay small and agile -- and keep pumping out those programs.