Basecamp is a clear example of Intentional Organisation. As with the Netflix Case Study, I have decided to start writing about a few organisations as examples of the Intentional organisation concept I have developed. As I just finished reading Jason Fried and David Heinemeier Hansson most recent book It Doesn’t Have to Be Crazy at Work I wanted to use the content of that book to draw a few lessons especially on the consistency of the organisation.
The Seed of Intentionality: Staying Small and Simple
As I have written commenting the book, the core element that seems to be contaminating all organisation choices at Basecamp is the conscious choice of its founders to keep the organisation small and simple. The company is fiercely rooted in one product Basecamp and only recently launched a second one, called Hey which claims to be an entirely fresh approach to email. Exactly because of its clear focus on one product, the company, originally called 37signals, was rebranded as Basecamp.
The company is privately owned, and one of the main choices the partners did was not to get lured by the start-up frenzy that brought many technology companies to get into artificial growth pumped by angel investors as a way to approach an IPO. They value their indepence, and one of the main choices has been exactly that of keeping small.
we’ve decided to stay as small as we can for as long as we can.Jason Fried and David Heinemeier Hansson, It Doesn’t Have to Be Crazy at Work, page 214
This choice can be traced as the origin of consistency across many organisational decisions that Basecamp has taken.
A counter-intuitive Business Model
There are several interesting aspects of Basecamp Business Model that are useful to highlight, and that go against the typical experience we see in many other high-technology tools.
- One Company, One Product. Most technology start-ups, even when starting with one product only, have differentiated their offering around time. Basecamp has instead simplified it, by focusing solely on one product: Basecamp. They did launch a second tool recently (Hey), to be seen if an how this will be successful.
- One Pricing Model. Basecamp is charged at 99 USD/month per user. No volume discount for a large client, which is normally the standard in the industry. The reason is explained in their book: independence. The company wants to concentrate on small and mid-size companies and does not want to have its product development agenda influenced by large accounts.
- It’s not a platform. One of the common trends of many successful applications is to apply a “platform” logic to their systems, especially in corporate environments. Most solutions now offer an “app store” where third party providers can create add-ons or integrate other solutions. Basecamp does not offer this. It does have API and WebHooks technologies, but it does not offer a platform to partners.
- It’s a Multi-Version. A characteristic of most technology app we are used to seeing is that they are updated frequently. How often did you have your app updated, just to have to get back into learning mode because functions and tools were moved around? Basecamp does not force users to move to new versions of its product, and still maintains its version 1 and 2 of the product. This may seem to go against the idea of simplicity and is against the standard trend in SAAS solution, where the idea is to maintain only one main version of coding. In reality, this is still fully consistent: it is simple for the customer, that can maintain control on which version to operate, and it is also simple for Basecamp that does not have to manage the pain of re-adoption by the customers, thus being able to plan their support function in better terms.
The Elements of Tension
Through the book, we can easily capture the many elements of tensions that need to exist as crucial ingredients for an Intentional Organisation. Aiming for pure consistency might drive the organisation into a corner of over-engineering, which brings negative energy and fragility—leaving everything to Emergence, on the other side, risks of letting the organisation be magmatic, but without focus. Thus, four tension elements serve as a catalyser of the necessary organisational energies.
It’s clear that Simplicity and Calmness are two elements of an obsession for Basecamp. How else would it be possible for the two founders of the company to publicly voice support to less work in their organisation?
The only way to get more done is to have less to do.Jason Fried and David Heinemeier Hansson, It Doesn’t Have to Be Crazy at Work, page 170
And the elements of choice, including that of saying no, are pillars of what has become a strong cultural sentiment within the organisation.
Simplicity becomes the cornerstone of coherence within the organisation, affecting organisation structure, remote working policy, the distributed organisation model the company advocates for. It is also evident in compensation policy, benefits structure, incentive model, hiring and retention policy. All is focused on making things simple for both the organisation and the customer.
We’re big believers in the power of keeping it simple. Every bet we’ve ever placed on making something easier for our customers has always paid off.
In the decades to come, we’ll continue to make big bets on simplicity, clarity, ease-of-use, and honesty. This goes for our products, our publications, and our company.Basecamp, About our company
The organisation is set up for success, and this can be traced in 15 years of continued profitability, which is not exactly common in the industry. It took Amazon 14 years to post a profit. This might be apparently a very traditional way of managing a company, being in the black, the authors argue, is a key stab to ensure calmness. So where’s the ambiguity? Well, in an industry where typically innovation is perceived as a “Must at all cost”, the company ensures a much greater degree of flexibility and adaptability, because it focuses on having the resources to manage its innovation.
Another key source of ambiguity seems the business model characteristics we have highlighted. No open-source, no platform, no SDK, no alignment with traditional SAAS solution, no push for the latest version. But this is also what offers the company a much more flexible approach in the making of its product. Yet, we also have to remember that David Heinemeier Hansson sits behind Ruby on Rail, an open-source web-application framework that today is used by many applications on the web, and has more than 5000 contributors.
There are several aspects that Basecamp does not accept as Truths just because they are standard on the market. Let’s mention two here:
- Work should not be crazy. This departure from the hyped overwork narrative that is still dominant, especially in the Silicon Valley culture, is a critical element for Basecamp. And the fact that it is made so visible through the books of the founders, but also the blog Signal v. Noise, makes it even more relevant as part of a mission that the two authors have given themselves of renovating views on work.
Basecamp’s Performance Profile
I have introduced the concept of the Performance Profile as a way to collate together the elements that compose the Organisation Evolution Framework. The idea is that for an organisation to be Intentional, all questions need to have an answer. Some answers might be less explicit because they derive from emergent phenomena rather than intentional design. The critical aspect is that they all collaborate to create a coherent system of reference.
The table below shows, in the last column, a high-level evaluation of each element, based on the level of Intentionality in its design. A 5 means that the critical factor is entirely intentional in its design, while a one means that is fully emergent. I will explain the ratings after the table.
|Building Block||Critical Element||Performance Profile Question||Netflix Profile|
|1. Business Model||Value Proposition||What makes us Unique?||(3 / 5)|
|2. Strategy||Strategic Choices||What are our Priorities?||(5 / 5)|
|3. Operating Model||Value Delivery Chain||How do we create Value?||(3 / 5)|
|4. Organisation Model||Definition of Work||How do we get things done?||(4 / 5)|
|5. Leadership||Intentional Design||How do we stitch it all together?||(4 / 5)|
|6. Purpose||Definition of Value||What is our definition of Good?||(2 / 5)|
|7. Culture||Consistency||How do we make it work?||(4 / 5)|
|8. Ecosystem||Sustainability||How do we know it will last?||(2 / 5)|
The Critical Elements in Detail
- Value Proposition. The Business Model of Basecamp is in a certain way pretty traditional if it would be applied to a non-technology firm. It is, however, innovative in terms of a technology product, as we have seen in the dedicated paragraph. There are many coherent choices that are made, but I still assess this as a “3” in terms of Intentionality.
- Strategic Choices. It is clear from the book that there is one fundamental strategic imperative at Basecamp: being simple. This is then applied to all choices, sometimes ditching traditional paradigms such as overwork and the concentration on one key product. The book was written before the release of Hey, so some aspects might have changed. The most interesting aspect, however, is in the deliberate choice of not having goals setting. This deliberate aspect clearly distinguishes Basecamp from its peers and the standard in management.
- Value Delivery Chain. It is clear from the book that many aspects of the Operating Model are defined in terms of respect for the strategic choices and the cultural imperatives built. The examples of removing control policies are paramount of the Intentionality in reviewing each aspect of the business operations.
- Definition of Work: Basecamp adopts a pretty flat organisation model, yet it still uses traditional hierarchy. Jobs exist and are defined, with a specific focus on skills and competence. At the same time, the organisation reflects an idea of work that is truly results-focused, with a strong emphasis on effectiveness. As such I see this as a true contribution to the New Discourse of Work, and the fact that the authors are engaged in disseminating this concept is a clear sign of intentionality.
- Intentional Design. Basecamp does not adopt a clearly defined Leadership style. The organisation is small, and the two founding partners definitely set direction, yet there seems to be a strong collaborative vibe. It is the role of the two founders that guarantees a continuous check and balance in terms of intentionality.
- Definition of Value. Basecamp does not have a written Purpose in terms of sustainability. It apparently has a pretty traditional, for-profit view, yet the engagement on elements such as Good Work as well as its clear focus on customer satisfaction and service, show a strong awareness of the concept of Value as an emerging asset.
- Consistency. Culture is definitely an asset for Basecamp but is not its prime driver. The consistency in which the authors claim the company is not “a family”, make the attention on culture-building strongly intentional, especially also considering the remote nature of most of its work.
- Sustainability. As mentioned above, you would expect Basecamp to be on the basis of a large ecosystem. It is, instead, pretty traditional in not delivering a platform organisation. It is strongly conscious of the importance of other platforms (and is one of the leaders in the battle on a renewal of the terms of service of the iOS App Store). I see this, however, more as an emerging feature of Basecamp profile.
Due to the small size of the team, and the high level of exposure of its leader, I expect to have a high degree of acknowledgement of the above elements by the Basecamp’s team. One element that the company also fosters is transparency, as can be seen, for example, by the public availability of its Employee Handbook.
The table above works on the assumption that not all elements can be entirely intentionally designed. On the contrary, a full design would most probably create too much structure. The system needs flexibility, which is developed by blending Emergence and Intentionality. The extent by which people in the organisation are aware of each of these components is the element that drives more towards Intentionality.
At Basecamp, the culture of simplicity, calmness and transparency is definitely contributing to a strong intentional framework. The maturity in remote work, for example, is only possible due to the consistency in its vibe. The absence of formal goal-setting process is another distinctive feature, that surely forces a continuous dialogue on the direction. The spirit of Simplicity means also that not all elements are formalised, yet all are congruent.
Basecamp is definitely a great example of an organisation that is intentional. Its “Intentional Seed” os simplicity might seem not truly related to business results, but it effectively allowed the company to achieve strong business results over a comparatively long period of time. Using it a leverage point, allowed the company to avoid bureaucratic derives, and to constantly question best decision-making practices focused on effectiveness.
Intentionality is clearly visible in the choice of focusing on one main product, on its pricing structure, on the fact of still catering for multiple versions of its software. A key component of this intentionality can also be traced in Getting Real, a guide to “build better web applications”, based on Basecamp experience, but that also lies down a few suggestions in terms of organisation and ways of working. Another great example is Shape Up, another book by Basecamp focused on the way it does Product Development, again with some interesting advice on the organisation.
This case-study is built practically on the information collected through the book It Doesn’t Have to Be Crazy at Work by Jason Fried and David Heinemeier Hansson plus materials present on the Basecamp website and the Signal v. Noise Blog. As such, it is an early draft. I aim to collect more information to validate and fact-check the assertions above. Any feedback is highly welcome.