Case study: 37 Signals (a small tech company taking on the big)

It's time for one more case, and we are going to jump right to it:

Where most software companies have growth metrics at the center of their goals, 37signals—best known for its project management tool Basecamp and email service HEY—stands out for all the right reasons. 

(Note: Their email service relies on local servers rather than large-scale providers like Amazon's AWS, which is famous for being the most polluting one, and that's one of the reasons we use HEY in Post Growth Guide) 

37signals is a great case study for anyone interested in exploring how to operate within planetary boundaries. That is surprising to most because 37signals doesn't mention sustainability itself, and its business model doesn't center around solving the greatest challenges of the green transition.

It's the way of organizing itself around small as a destination (not a stepping stone), resilience, and independence that we can learn from.

Founded in 1999, 37signals has chosen stability over scale from its early days. +20 years later, they have proved that a software company doesn't have to become a corporate giant to be a big player in the market. With only around 80 employees, they show that there is a strong power in operating within intentional limits. This is a big contrast compared to thousands of employees at competitors like Slack, Asana and Monday (ranging between approx 1,000 - 5,000).

They have managed to do this by asking the simple question: WHY GROW? 

The founders, Jason Fried and David Heinemeier Hansson, focus on building a "right-sized" company that prioritizes a few simple products to stay resilient with the ability to adapt as the market changes. They have defined a "Less Mass" philosophy, which involves minimizing layers of management and empowering employees as "Managers of One," giving them the autonomy to drive their own projects. 

A "static business model" is how Jason Fried describes their business. Serving a broad customer base instead of a few large clients is a big part of building resilience and independence.

3 Practical Takeaways

1. Ask, "Why Grow?": Challenge the assumption that growth is always beneficial. If you want to make a problem smaller, is growing your company the best way to do that?  As we discuss in Lesson 14 of our online course, Post Growth Business 101, there are ways to avoid Growth Tunnel Vision and find a better-fitting strategy for scaling impact.
2. Embrace "Less Mass": Embrace it within all aspects of the business. It helps reduce administrative burdens (unnecessary costs) and makes it easier for your company to adapt.
3. Ask, "What is the right size"? If, for example, you face the realities of resource limits, how much should your business use? What headcount is needed to deliver an impact and, at the same time, be profitable (and therefore independent and resilient)? As we examine in Lesson 15 of Post Growth Business 101, there are specific ways of assessing at what point bigger is no longer "better."