According to Industry Reports, Global Project Management Software Market is expected to grow from $2.3 billion in 2007 to $7 billion by 2026 at a CAGR of 14.93%. Basecamp is a mostly bootstrapped business that provides cloud-based project management and collaboration systems to small businesses.
Chicago-based Basecamp was started in 1999 by Jason Fried, Carlos Segura, David Heinemeier Hansson, and Ernest Kim as a web design company called 37signals. It launched its flagship project management application Basecamp in 2004. David used the then-obscure Ruby programming language to develop a custom web framework for internal use at 37signals. He released the framework as the open source project Ruby on Rails in 2004. Today, Rails is one of the most popular programming frameworks that is used by sites like Twitter, GitHub, and Shopify.
By 2005, the company pivoted to focus exclusively on web applications. The company went on to release commercial applications like Backpack, Campfire, and Highrise. In 2014, the company decided to focus exclusively on Basecamp and renamed the company as Basecamp.
Basecamp offers project management and collaboration features such as Schedule for setting important dates on a shared schedule; To-Do Lists; File Storage for sharing documents, files, images, and spreadsheets; Message Board for posting announcements, pitching ideas, and progress updates; and a chat room called Campfire for informal interaction with the team. Its Automatic Check-in feature enables you to create recurring questions and replaces status meetings.
Basecamp is priced at $99 per month for unlimited users and projects. It is free for teachers and students and is discounted for non-profits. It offers a 30-day free trial. It currently has over 100,000 paying customers and over 3 million accounts signed up. It competes with Slack, Asana, Dropbox, Google’s Gsuite
Basecamp is privately held and doesn’t disclose details of its financials. It has been profitable from the very beginning of its journey. It is estimated to have annual revenue of $25 million. The company prefers slow, consistent, and profitable growth of at least 5%. It has a lean team of over 50 remote employees spread out across 32 cities around the world.
In 2006, Jeff Bezos bought a minority, no-control stake from Jason and David for a few million dollars. Bezos’ personal investment firm Bezos Expeditions simply took the role of a member in the LLC and a share in the profits. They took the funding merely to hedge their bets and ensured that the investor had minimum control. They were modestly profitable at that time and had no interest in giving up whatever little success they had. But since it was possible that Basecamp could peter out, they didn’t want to end up with nothing to show for their success. So, they decided to go for no-control deal with Jeff who still owns that stake.
Since then, Basecamp has not taken any funding. It has apparently turned down over 100 investment offers from venture capitalists and private equity firms.
Basecamp’s secret recipe for success is that they don’t spend more than they earn, don’t waste money on things that don’t matter, don’t give away everything for free and hope to figure it out before running out of cash. That’s a logical and useful tip for any startup.
This segment is a part in the series : Best of Bootstrapping