In 2005, I read a book called The Innovator’s Dilemma, by Clayton Christensen. It blew my mind, because it seemed to describe my business perfectly. 37signals had just released Basecamp, our Web-based project-management app. Aimed at small-business owners, Basecamp was designed to be affordable and easy to use. It did only a few things, but we made sure it did them well.
Our major competition at the time was Microsoft Project, which was expensive, complex, packed with features, and aimed at large organizations. It wasn’t particularly pleasant to use. I’ve yet to meet someone who is excited about Microsoft Project.
In The Innovator’s Dilemma, Christensen explains how successful companies with well-established products are constantly being threatened by newcomers. Winners, he argues, don’t lose when new rivals attack from the high end of market. They lose when start-ups attack from below. This, of course, was precisely what 37signals was trying to do to Microsoft. And it was working. Needless to say, I became a passionate fan.