When Is 37signals Going To Get Acquired?
March 23rd, 2007 | Categories: acquisitions, markets, strategy
Is it just me or is anyone else puzzled as to why 37signals hasn’t been bought over yet? Their compelling story, ingenious management team, and legendary product line are more than enough to wet the appetite of any major investor or large company. Let’s take a look at their current state:
Their product suite looks as follows:
- Basecamp - Project management and collaboration
- Highrise - Track leads, clients, vendors, and more
- Campfire - Real-time group chat
- Backpack - Information organizer and calendar
- Ta-da List - Simple to-do lists
- Writeboard - Collaborative writing
To read more about other company offerings, read The 37signals Way.
With such a diverse suite of productive offerings (that actually produce revenues) it’s no wonder a large software application company like Microsoft, SAP, or Computer Associates hasn’t scooped them up already.
Several software giants have tried to create web-based apps, but failed miserably. The simple, clean approach taken by 37signals seems to be forming the basis for a new generation of web-based software.
Furthermore, the interfacing is congruent among 37signals products, decreasing the learning curve and familiarization time for existing users of their new products. Hence, this is a great way to garner a loyal user base and maintain their business.
One reason the company hasn’t been acquired thusfar may lie in an expensive price tag. My guess is that this new web gem would be looking for several hundred million dollars in order to seal a deal. What’s funny about this is that they may actually deserve it. As opposed to many hyped web 2.0 fly-by-nighters, 37signals has:
- A loyal customer base
- Industry acclaim and credibility
- A diversified, compelling product line
- An actual revenue generation model that doesn’t involve Google AdSense
All of this points to one thing: this is an ACTUAL company with ACTUAL products. The same cannot be said for a majority of new web start-ups.
Once again, the prospects and future of this company look salivating, even to the most amateur observer. Their formula has worked time and time again. With all this momentum, it is only a matter of time before someone steps in and makes them an offer they can’t refuse.
March 23rd, 2007 at 5:37 am
I don’t think we will ever see this happen. I don’t doubt that there have been many offers for an acquisition, but I really don’t think that any company will want to offer the pricetag of what they are really worth.
Even if the offer is good, I still can’t see it happening.
March 23rd, 2007 at 6:05 am
I think you may need to do a little more research on 37Sig. Anyone that knows anything at all about 37Sig, knows that acquisition is not something that they are aiming for. Their whole philosophy and style is about building a foundation that lasts, not one to flip. Companies such as these don’t get acquired, they do the acquiring.
What Jason Fried and DHH have built there in Chicago is a company that is customer centric and built around the idea of solid, quality products, not get rich quick schemes. When a company takes on a partner like Jeff Bezos for his knowledge instead of his wallet, you best believe that that is a company that is trying to truly innovate in it’s space. Innovate and dominate.
Disclosure: I am in no way, shape or form affiliated with 37Signals although I am a user of their Backpack product.
March 25th, 2007 at 4:30 pm
Aidan - Interesting question, but if you think of why most companies cash “out” it is usually because they hit a wall. That is far from the case with the 37Sig crew - after all Jeff Bezos invested his personal money into the company to allow it to grow to the next level. They have a stable base of customers and products that customers around the world love. So what would they have to gain right now? My guess is not much.
March 25th, 2007 at 7:27 pm
Guys,
All I can say is that anyone will sell if the price is right. Don’t kid yourselves
If another company were to offer (theoretically) 50X their valuation, it would be pretty hard to turn down…
Cheers,
Aidan
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