A few weeks ago, Matt Linderman asked the readers of 37signals' Signal vs. Noise blog for suggestions for a word or phrase to describe a certain type of small, focused company.
Sometimes I'm looking for a word to describe a certain kind of company. One that's small and cares about quality and is trying to do something great for a few customers instead of trying to mass produce crap in order to maximize profit. A company like Coudal Partners or Zingerman's.
Boutique was deemed too pretentious...small, indie, and QOQ didn't cut it either. Readers offered up craftsman, artisan, bespoke, cloudless, studio, atelier, long tail, agile, bonsai company, mom and pop, small scale, specialty, anatomic, big heart, GTD business, dojo, haus, temple, coterie, and disco business, but none of those seems quite right.
I've had this question rolling around in the back of my mind since Matt posted it and this morning, a potential answer came to me: small batch. As in: "37signals is a small batch business." The term is most commonly applied to bourbon whiskey:
A small batch bourbon is made for the true connoisseur, every sip a testament to the work and love that has gone into each handcrafted bottle.
but can also be used to describe small quantities of high quality products such as other spirits, baked goods, coffee, beer, and wine. When starting a small company that makes high quality web sites (Wikirank) and apps (Typekit), some friends of mine in San Francisco even picked the phrase for their company's name: Small Batch, Inc.
Sometimes all you need is a little text change to save your business a lot of money. Jared Spool once helped a major ecommerce site with their checkout process. The company ended up changing the text of a submit button and making the company an additional $300 million in one year.
The form, intended to make shopping easier, turned out to only help a small percentage of the customers who encountered it. (Even many of those customers weren't helped, since it took just as much effort to update any incorrect information, such as changed addresses or new credit cards.) Instead, the form just prevented sales -- a lot of sales.
37signals recently changed how they labelled charges on credit card statements and reduced chargebacks by 30%.
37signals is running some experiments with the goal of making people happy in the workplace. So far they have implemented shorter work weeks, funding people's passions, and discretionary spending accounts. The funding people's passions idea reminds me of my time as an internet developer at Nortel in the mid-90s. We set up informal lunch-time sessions where each of us would take turns teaching others something we knew. I learned more in my time there, because of that, than I have in any other work environment. Of course, our sessions were spontaneous and definitely not institutional. They were the result of a great boss and motivated people. The idea that this sort of innovation exists institutionally speaks strongly for the culture 37signals is creating and perhaps hints at why some companies survived the initial internet bubble and others didn't.
Update: This just in:
I am perfectly willing to acknowledge that not all of us excel at the same things, but I'm coming to believe more and more firmly that this whole "typical person" entity is a myth. I've never met a typical person. There are only people who are passionate about what they do, and people who aren't. When the latter become the former, they become "atypical", because suddenly they are self-motivated, insightful, excited, optimistic, and happy.
Every week, I get 3 or 4 inquiries from people looking for jobs in the web design/technology area or for employees (happily, it's more the latter than the former these days). When I hear about someone who needs some work done and I have a friend or friend of a friend who's available, I'm glad to make the connection. For the past couple of years, I've wanted to build a job board for kottke.org to make more of these connections possible, but I never got around to it. So when Jason Fried asked me if I wanted to put a link to the simple, focused 37signals Job Board on kottke.org (you'll find it on every page of the site, below The Deck ad), that seemed to be the next best thing to building my own. I've been referring people there anyway, so a stronger connection makes sense.
37signals recently polled the customers of their online project management application and one of the questions asked what Web 2.0 meant to them. They've posted 500 answers to that question on their site; it's an interesting read. I decided to do a quick and dirty analysis of the most frequently used words by the respondents, hoping that the result would provide a collective definition of sorts for the term Web 2.0. By the time I'd finished (with several timeouts and distractive blog-related detours), I went back to the thread and saw that Jacob Kaplan-Moss had already completed an analysis. Here are his top 15 words:
web - 348
ajax - 107
applications - 93
new - 78
user - 71
apps - 44
desktop - 40
sites - 37
people - 36
internet - 36
content - 34
think - 33
software - 31
services - 30
technologies - 29
Just for kicks, here's my top 30:
web: 347
ajax: 105
more: 99
applications: 92
new: 77
user: 69
use: 47
apps: 43
desktop: 39
sites: 38
internet: 35
people: 35
content: 33
think: 32
software: 30
using: 30
etc: 29
services: 29
next: 28
technologies: 28
interactive: 28
generation: 27
application: 25
marketing: 25
websites: 23
better: 23
social: 23
users: 22
hype: 22
buzzword: 21
interfaces: 20
For some reason (my shoddy programming skills are a likely culprit), my word counts are slightly different than Jacob's, but they're close. I also left in a few words that he removed but that I thought were relevant, like "more", "use", "using", and "etc". Here are a few more interesting words and their frequency counts:
community: 17
collaboration: 13
companies: 13
bubble: 10
ruby: 9
rounded: 9
gradients: 8
rails: 7
37signals: 6
tagging: 6
flickr: 5
wikis: 5
overused: 5
o'reilly: 5
hyped: 5
overhyped: 5
Not sure this provides much of a definition, but it's fun to play around with.
Big ol' obvious caveat: I performed a straight-up word frequency analysis which did not take into account the context of particular words (e.g. no distinction between different uses of words like "think": "I think Web 2.0 sucks" and "Web 2.0 products make users think"), phrase frequency ("web 2.0", "next generation", "rounded corners"), or anything like that. This obviously limits the utility of the analysis; hence "quick and dirty".
Update: Perhaps a better "definition" of Web 2.0 comes from the related tags at del.icio.us:
ajax
tools
web
blog
webdesign
software
design
social
programming
javascript
business
Not bad.
Update: del.icio.us did this analysis back in November 2005. (thx, maciej)
Jeff Bezos invests in 37signals, making them bigger and a little less Real. But seriously, I had always wondered how 37s was going to grow and this is a bit of an answer to that question. Congrats, guys. (thx, steve)
Update: Tom has some thoughts on Bezos' next investments, most likely 31functions.com, 25description.com, and 19options.com.
Rebutting Caterina, David says it's a great time to start a business. Good points by both, but they're ultimately arguing different things. ps. Staying small isn't the answer to everything, guys.
37signals has published their latest book, Getting Real, as a PDF download that they are distributing themselves. After more than a day, they've sold over 1750 copies at $19 apiece:
That's exciting. These numbers demolish the sales pace of our first book, Defensive Design for the Web, which was released through the traditional publisher/bookstore model. DIY publishing: There's a new sheriff in town.
If you do the math, that's ~$33,000 in sales in one day. I don't know what the advance would be on a book like that, but they've got to be approaching it, and if/when they reach that figure, the profit margin on subsequent sales will be much higher than the royalties paid by a publishing company. Interesting experiment.
Jason @ 37signals noticed a great feature of the new iMac with built-in iSight. The screen is the flash for the camera so just before you take a photo, the screen flashes a bright white. Fantastic.
Salon profile of 37signals and "the next web revolution". Also noted (for the first time in public, I think): Adaptive Path's secret web app is "a tool to help bloggers measure traffic and other stats on their site [and] will be out by the end of the year".
