In this conversation, Jason Fried and David Heinemeier Hansson of 37signals explore the profound advantage of allowing ideas to cross-pollinate between their diverse product suite. The core thesis is that building multiple products isn't just about market diversification; it's a powerful engine for innovation, enabling the discovery and refinement of concepts that would otherwise remain dormant. The hidden consequence revealed is that a singular focus on one product can lead to stagnation and missed opportunities for breakthrough improvements. This discussion is crucial for product managers, designers, and engineers who seek to foster genuine creativity and build durable, evolving products. By understanding how to leverage a portfolio for concept multiplication, they can gain a significant competitive edge through continuous, organic innovation.

Making Things That Multiply: How 37signals Leverages Its Product Portfolio for Innovation

In the relentless pursuit of better software, the most obvious solutions often mask deeper systemic issues. We tend to believe that focusing all our energy on a single product will yield the most efficient and effective results. However, this conversation with Jason Fried and David Heinemeier Hansson, co-founders of 37signals, reveals a counterintuitive truth: the true engine of innovation and product evolution lies not in singular focus, but in the fertile ground created by a diverse product portfolio. They argue that by allowing ideas to travel freely across different applications, 37signals cultivates a unique environment where concepts multiply, leading to sustained competitive advantage and a more dynamic, engaging development process. The conventional wisdom of deep specialization misses the profound benefits of cross-pollination, failing to account for how new contexts can refine and elevate existing ideas, and how the very act of building new things can inject vitality into established products.

The Unforeseen Bounty of Building Multiple Products

Jason Fried begins by framing the core advantage of having multiple products: the serendipitous discovery of new ideas. "One of the biggest advantages of building multiple products is that you get to discover new things," he explains. "We don't set out to discover new things; you just do. And then you go, 'Oh, that's a good idea. We can maybe use that in other places.'" This isn't about a deliberate search for transferable features, but rather an organic emergence of insights born from the unique challenges and opportunities presented by each new product.

A prime example is the "stacks" interface in Hey, a feature that presents information as piles of cards that fan open. This concept, born from the specific needs of Hey's email management, has since been adapted and applied to other products like Fizzy and is now being explored for Basecamp 5. Fried emphasizes that this pattern wouldn't have likely surfaced if the team was solely focused on Basecamp. The exploration of a new product provides a "blank slate to explore," a fertile ground where novel interface paradigms can take root.

David Heinemeier Hansson (DHH) extends this idea to the technical realm, highlighting the benefits for developers. Working on a single, long-standing product often means being "saddled with a certain architecture" and a set of decisions that are difficult to change. Building a new product, however, offers a "lush green field of a clean codebase." This allows for the exploration of "entirely new frameworks" and the application of "very best ideas, your very best techniques." He likens this to Rails, which he sees as a history of 37signals' product launches, with new activity surging whenever a new product is introduced. This "greenfield" approach allows for innovation that might be too painful or expensive to implement within an established product.

The downstream consequence of this cross-pollination is a continuous cycle of refinement and innovation. Ideas discovered in one product laboratory can be brought back to energize and improve established offerings. DHH notes that even if a new product doesn't achieve the same needle-moving success as Basecamp, the process of building it is invaluable. It provides opportunities to "pioneer some of this stuff and experiment with it and expose it to customers" in a way that might be too risky for the flagship product. These "experimentation rooms" are crucial for keeping the entire ecosystem of products dynamic and evolving.

The Hidden Cost of Singular Focus: Stagnation and Technical Debt

The flip side of this advantage is the significant risk of stagnation inherent in focusing on a single product. DHH points out that if the only opportunity to experiment with core architecture was through major rewrites of a product like Basecamp (which happened only three times in over 20 years), the team would inevitably become "worse designers," "worse programmers," and likely "a little bored." The lack of fresh contexts and clean slates stifles creativity and prevents the natural evolution of best practices.

This stagnation isn't just about developer morale; it manifests as technical debt. When a codebase becomes too burdensome, developers may shy away from necessary refactoring or the adoption of new, more efficient approaches. DHH uses the analogy of "towers of complexity" that accumulate over time. The initial simplicity of early web development, he argues, was partly due to the lack of accumulated ideas and the necessity to build more from scratch. Decades later, the industry has accumulated many ideas that "don't always pan out" or are "not worth their weight." This leads to a gradual, almost imperceptible increase in complexity, akin to the "proverbial frog" being boiled slowly.

The "cloud exit" discussion is cited as an example. Looking back, DHH realized that "10 years ago, things were simpler, they were faster, and they were vastly cheaper." This retrospective analysis, enabled by the distance of time, revealed a significant detour in complexity and cost that might not have been apparent through shorter-term retrospectives. This highlights a critical point: the industry often lacks "long-scale retrospection." While short-term project retrospectives are common, they are insufficient for identifying fundamental shifts in efficiency and value. It takes "10 years of distance to be able to sift through what were the actual core great ideas."

The Wisdom of the Back Catalog: Reclaiming Lost Ideas

The concept of revisiting past product versions is presented not as a retreat into nostalgia, but as a strategic act of reclaiming valuable, time-tested ideas. Jason Fried notes that as they work on Basecamp 5, they are looking back at Basecamp 2 and finding "really good ideas" that were abandoned during subsequent iterations. These aren't necessarily aesthetic choices but fundamental concepts that provided genuine utility.

This process is likened to other industries that draw from their "back catalogs." Watch and shoe companies, for instance, often reissue successful vintage designs. In technology, however, the challenge is to avoid mere aesthetic nostalgia. Fried clarifies: "it's not nostalgia in terms of like an aesthetic. It's more like that actually was a good idea. There's a reason behind that idea, and we lost that good idea, and we can bring the good idea back."

DHH uses the example of the "activity block" at the top of Basecamp 2's project pages, which showed the last few activities. While this might have been moved "below the fold" in later versions, the conceptual value of quickly orienting oneself to recent project activity is being reconsidered for Basecamp 5. Similarly, the idea of "no build" -- the ability to deploy without a complex build process -- is being brought back because it "makes more sense" and was a simpler, more efficient approach previously.

This act of retracing steps serves as a vital benchmark. By evaluating current designs against older ones on specific criteria -- like how quickly a user can understand project activity -- teams can objectively assess whether they have truly moved forward or simply added complexity. DHH states, "Suddenly it gives you a lens to see whether you've actually moved things forward or not." This intellectual honesty in back-tracing and re-evaluating past decisions is presented as a "completely human, normal way of learning and experimenting." Most experiments don't work, and the ability to look back at what did work, even if it was in a different context, is a powerful tool for course correction.

The "Fun" Factor: A Driver of Creativity and Talent Retention

Beyond the practical benefits of innovation and efficiency, the 37signals approach places a significant emphasis on "fun" as a guiding principle. This isn't frivolous enjoyment, but a recognition that a creative and engaging work environment is crucial for attracting and retaining talented individuals.

DHH argues that a rigid adherence to style guides, like those often found in large, established tech companies, can lead to a monotonous work experience. "I'd freaking jump off a bridge if that was what I had to do all the time," he exclaims, describing the task of merely applying pre-defined aesthetics. In contrast, 37signals' fluid approach, where products have distinct vibes and style guides are "living products" themselves, fosters a more dynamic and exciting environment. This allows for "little neurons to fire and spark" as designers and developers explore new expressions.

The example of the new 37signals.com website, which features a different, often vibrant color on each refresh, illustrates this point. While some might critique its readability based on strict usability metrics, the intention is to inject an element of surprise and delight. DHH argues that not every digital product needs to adhere to the highest possible readability standards, especially when the stakes are lower, as they are for a site offering philosophical insights. This willingness to prioritize "the sheer art of it," "the sheer fun of it," and "whimsical and philosophical" expression is what makes the digital world more interesting.

This is contrasted with the "apple-ification of design," which DHH describes as a trend towards a desaturated, uniform aesthetic. While acknowledging the effectiveness of Apple's approach for mass-market products with high stakes, he asserts that not all products need to carry that same burden of universal appeal and extreme readability. "We can have all these pockets that don't have to carry that weight," he suggests, allowing for more daring and unique design choices. This freedom to experiment with "crazy colors," "flamboyant designs," and even intentional readability compromises for the sake of artistic expression or a specific vibe is a key differentiator.

The inspiration for this often comes from unexpected places, like the design of the magazine Ray Gun in the 1990s, which prioritized artistic statement and unique layouts over strict readability. This willingness to break conventions and create something that is intentionally different, even if it draws criticism, is seen as a vital form of free expression that can inspire new directions. Ultimately, the pursuit of fun and creative freedom is not just a perk; it's a strategic advantage that keeps talent engaged and fuels the ongoing innovation across the 37signals product suite.

Key Action Items

• Embrace Portfolio-Driven Innovation: Actively seek opportunities to transfer successful concepts, patterns, and technical innovations from newer products to established ones. This requires a mindset shift from product silos to a connected ecosystem.
• Establish "Greenfield" Exploration Opportunities: Dedicate resources and time for building new products or significant new features on clean codebases. This provides the essential space for exploring novel technical approaches and design paradigms without the burden of legacy constraints. (Immediate Action)
• Implement Long-Scale Retrospectives: Beyond typical project retrospectives, conduct reviews with a 5-10 year horizon to assess the true impact of architectural decisions, complexity, and strategic choices. This helps identify detours and areas where simplicity and efficiency were lost. (Quarterly Review, Annual Deep Dive)
• Reclaim Valuable Past Ideas: Regularly audit the back catalogs of previous product versions for "good ideas" that were abandoned. Evaluate their conceptual merit, not just their aesthetic, for potential reintroduction. (Ongoing Process)
• Prioritize Developer Joy and Creative Freedom: Foster an environment where developers and designers are encouraged to experiment and express creativity. Minimize rigid style guides that stifle innovation and allow for distinct product identities. (Immediate Cultural Focus)
• Benchmark Against Past Successes: Use older, successful designs or technical approaches as benchmarks to evaluate current progress. This provides an objective measure of whether new iterations are genuinely improving on key criteria like usability, speed, or simplicity. (Project Planning & Review)
• Allow New Concepts Time to Marinate: When introducing new features or products, resist the urge for immediate validation or rapid adoption of all elements into other products. Let new ideas "breathe and live," allowing time to naturally surface which ones are truly valuable. (Product Launch Strategy)