Ontiveros @ Textdriven

37signals most prominent write up to date probably has to be as inclusion in the Business Week cover story entitled “Speed Demons”. I’ll attempt to elaborate on a few points made in the write up. All of their product offerings utilize open source software, including Ruby, as a platform so it is a given that 37signals doesn’t have the “not created here” syndrome. The framework, which was developed in house by Hansson, in order to cut down on repetitive code would become known as “Rails”.

My interpretation of the framework was that it was created as a process improvement method during the developing of their first web application entitled “Basecamp”. The framework was itself released as Open Source software by Hansson and 37signals for the world to use and improve. By doing so, Ruby on Rails itself became a product. The feedback from Basecamp is from consumers, while the feedback for Rails is from other developers.

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What does it take to run a successful web-application business during the Web 2.0 growth era? Can you just build it? Will they come? As we know, the barriers to starting web based businesses are at an all time low, due to hyper competition in the hosting industry among other factors. As such, web-applications are being introduced at a very rapid rate. While these “new” services are very exciting, the economics of web 2.0 have not been tested yet. Many have tried to quantify the economic validity of some of the more popular on-line picture and web storage providers.

What they don’t understand is that none of these new business “start-ups” will matter, let alone succeed, if they cannot manage the value chain. Ah yes! Sound management techniques and practices have their place with Web 2.0. Why write about 37signals? Because they have a deep interest in solid management techniques as is evident on their “Signal vs. Noise” blog.
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