Jason Fried of 37Signals has taken the stage at Y-Combinator’s Startup School this morning at UC Berkeley. I’m taking my notes below on his talk.
Fried has started off by talking about bootstrapping startups. Startups that bootstrap are more “money hungry” then companies that are funded. If you are a funded company, you generally have money to spend that investors encourage you to spend as well. If you’re a bootstrapped company, you’re hungry to make money.
37signals founder Jason Fried probably had the post of the day today mocking Twitter’s $1 billion valuation on its latest rumored round of funding. The post, titled “PRESS RELEASE: 37SIGNALS VALUATION TOPS $100 BILLION AFTER BOLD VC INVESTMENT” is very funny. But it’s also disingenuous.
By way of sarcasm, Fried raises a number of points. But the key ones he hits on are valuations, revenues (or lack thereof), business models, and hype. And he chose an easy target in Twitter, which has no shortage of naysayers who simply cannot believe the amount of funding and valuation the service keeps getting. But Fried undoubtedly knows how the game is played, and by picking on the current “it” company, a few people noted that his post looked more like a case of sour grapes. But his points are still definitely worth talking about.
College students now have their own Yammer. Last week, Wiggio came out of beta with a new look and a slew of group messaging and group management features. For each private group that you create, Wiggio provides a Twitter-like message stream from all the group members. But it also includes a slew of other features such as a shared calendar, mass text and voice messaging, file-sharing (including online docs and spreadheets), polling, and more.
Many of these features can be found in other products such as Yammer, Basecamp, WizeHive, and Producteev. But Wiggio is a solid addition to the group messaging family, and it is already gaining some traction by targeting college students and their particular group dynamics (academic, extracurricular, social, committees, sports teams, music/dance, religious, charity, etc.). Wiggio, which has been in closed beta for a year, already has 45,000 users, about 80 percent of which are college students and faculty members.
This is my last post at TechCrunch as a full time writer (I may yet do the occasional guest post). It’s exactly 12 months to the day since I started writing here and the date seemed like a good time to go. I won’t bore you with a self indulgent retrospective; if you are interested in my reasons and thoughts I did a podcast with my old site The Blog Herald yesterday – listen to here.
We cover some amazing startups here at TechCrunch, and for every service we cover there’s probably a dozen we miss as well, given the hyper-inflated nature of the second great web boom. You can appreciate a service without ever actually going on to use it, but the better ones can change the way you interact with the web or run your working day. I thought as this is my last major post here that I’d share some of the services that I actually use. I started using most of them based on posts at TechCrunch, so if you like these turned out to be my practical standouts in the sea of noise.
Evernote has completely changed the way I deal with paper (yes, old fashioned paper). Its been described as everything from a scrap collection through to a bookmarking service, but at its core its a database service with industrial strength OCR capabilities. To use, you can clip data or a link, type a note, add a photo (with support for webcams) or scan info in. Everything added can be tagged and indexed, and is searchable via the text within each document, for example a wine label with no other information becomes searchable by every word on the label itself. I scan every paper bill or letter I receive, allowing me to shred/ dispose of them cutting down on the need to file things manually. More importantly it cuts out the need to have to go through my filing cabinet searching for the bill later. The service has a desktop client and web interface, so you have the security of knowing that your scanned documents always have a local copy, but if you’re at another computer or on the go, you can easily access the same data.
Central Desktop has taken a first round of $7 million from OpenView Venture Partners.
Central Desktop offers a web-based SaaS collaboration platform that allows business teams of all sizes to work virtually and seamlessly online. Central Desktop is pitched as providing “the richest set-of-tools available for business users with ease-of-use at a price-point, leveling the playing field for small and mid-size companies wishing to do business with enterprise partners and customers.”
The company has over 125,000 users and business teams currently using its tools. Central Desktop said it would use the funding to accelerate R&D, marketing and sales efforts into the SMB market.
Competitors include 37signals, JotSpot, Microsoft, WebEx, Daikana and Huddle.
Google showcased HuddleChat, a real-time chat application, as one of many test applications (directory here) to show off their new Google App Engine platform last night.
Some bloggers noted that the application was a rip off of Campfire, a 37Signals product. And 37Signals CEO Jason Fried used HuddleChat as a PR opportunity, telling ReadWriteWeb “We’re flattered Google thinks Campfire is a great product, we’re just disappointed that they stooped so low to basically copy it feature for feature, layout for layout…We thought that would be beneath Google, but maybe its time to reevaluate what they stand for.”
Frankly, the reaction is fairly ridiculous. But this is apparently a fight that Google doesn’t want to be involved in. They pulled the application and replaced it with the above notice.
I wonder if Darren Delaye, Braden Kowitz, and Kyle Consalus, the Google developers who created HuddleChat, had much of a say in the decision. And why, since HuddleChat is not an official Google product, was it Google that made the decision to pull it down and not the developers who created it? Google was very careful to say that they were not affiliated with HuddleChat while it was up – that, apparently, wasn’t the case.
As far as I’m concerned, this is the first case of censorship on the new Google App Engine platform, and a bad precedent.
Our test application for Google App Engine is here.
Update: If you are as outraged as I am over this 
, join this Facebook group demanding that Google bring back HuddleChat.
37Signals is having a bad morning, according to their current home page image above. They’re pointing fingers at their service provider, which was (and we believe still is) Rackspace. Last November they suffered a three hour outage along with other Rackspace customers.
Update: It’s back up, total outage was about 2 hours. Per the comments, 37Signals doesn’t seem super duper happy with Rackspace these days.
Ok, the title is a bit ridiculous. But 37Signals has been urging developers for years now to charge for their software, and attacking anyone who suggests a business can be made from giving that software away for free instead. Their model works for their own products, at least so far. But I believe they are responsible for influencing a number of startups to charge for products that were already commoditized by the time they launched. Which is suicide.
Feedlounge, a subscription-based online RSS reader, is the most recent casualty. They launched in 2005 and offered a web based feed RSS feed reader for a monthly subscription fee. There were a number of free competitors at the time, including Bloglines and NewsGator, which had dominant market share. FeedLounge planned to carve a niche for itself by offering speedier and slightly better service.
The reader was good but not great, and came out in the middle of the pack when we reviewed the competition in mid 2006. But the company defended its business model until the end – hear our podcast interview at TalkCrunch with founder Alex King where he defended his business model.
They shut down over two months ago, canceled everyone’s subscriptions, and no one seemed to notice until now. FeedLounge is now in the deadpool, although they may re-emerge as a free service at some point.
If you are in a position to charge for your software and you aren’t that concerned with dominating your category, by all means go for it. But to blindly follow the idea that software must not be free because, damnit, people put a lot of time and effort into it, means you probably shouldn’t be making the business decisions for your company. And if you are entering what is already a commoditized business (online feed readers in this case) that has a price point of zero, you are absolutely crazy to try to charge for that product.
Offering your product for free isn’t always the right choice, either. Often, the right choice is to never have entered the market to begin with. But just because 37Signals tell you you are dumb to go the free route doesn’t mean you have to be a lemming and walk over the cliff.
Thanks Smaran for the tip.
37Signals has added an online contact manager to their online productivity suite. The new product, Highrise, to keep track of all the contacts you’ve inevitably made while drumming up clients for your Basecamp projects. The customer resource management (CRM) space is packed with a lot of big players, Salesforce and NetSuite being two of the largest.
37Signals is taking a more streamlined approach from the big guys, opting for a laser focus on only online contact management, serving as a good companion to Outlook. Contacts can be added manually or imported from Basecamp and vCards. Each of the contacts you add to Highrise gets a bio complete with photo and can be assigned task to-do lists and labeled with notes (including images and files). Each of these contacts can be locked down through user permissions, and dropped into project groups that keep your contacts, notes and files all together. If logging on is too much, you can also CC email notes to Highrise, which it will attach to the right contact.
Their basic business accounts start at $24/month for 6 users and 5,000 contacts, and work their way up to $149/month for unlimited users and 50,000 contacts.
Zoho has a similar CRM application that’s free with all features for 3 users and $12/month for each additional user. However, Zoho CRM is better suited for the sales pipeline, tracking leads from potentials to completed sales and forecasts. Zoho CRM also integrates with your web forms so leads can go right from your site to the form your database, and back out again as a .csv export.
37Signals, the poster child of consumer facing software as a service, is making another move that’s sure to please their customers and demonstrate again the advantages of hosted services over desktop-bound software. The popular personal productivity tool Backpack is now offering an online calendar with all paid Backpack plans. The the calendar page was just linked to the Upgrade page and blogger Rex Hamock, the author of the recent MyBusiness article about 37Signals founder Jason Fried, wrote tonight that the calendar feature is on its way.
The Backpack calendar looks a lot like Google Calendar (our review) and includes iCal synching and natural language input but SMS alerts as well.
Just days ago 37Signals officially embraced outside developers CellTell and their service that sends phone messages to your Backpack account.
When we wrote a few weeks ago about ActiveCollab, a free and open source competitor to 37Signals’ flagship enterprise offering Basecamp, debate was fierce over hosted software as a service vs. software downloads to be placed on your own server. Many people contended that the nominal cost of paying a hosted service for maintenance was more than worth it. [Note: Even ActiveCollab announced yesterday a one-click hosting option with DreamHost.]
Now the addition of one new major feature and one cool supported feature to a 37Signals product is a tangible example of the other primary advantage of software as a service – your system got upgraded and you didn’t even know it was happening. Even the next version of Internet Explorer will be delivered by automatic update, it was announced today.
Whether or not you’re a cynic about user generated content, tagging or ajax – it’s becoming increasingly clear that the web service centric part of the Web 2.0 equation is a keeper.
