So, one of the major changes that Alex and I are making to 30x500 is to teach our students to create an educational product first. What’s an educational product, or infoproduct? Anything small that teaches (which isn’t software): an ebook, a report, a white paper, a screencast, a video series, a workshop.

Why? Well… let me tell you a little story.

(I say “story” because this is part memory, part extrapolation from their blog, part what I’ve heard, and part what I imagined.)

How 37signals got their start

You’ve heard of 37signals, right? They’re the makers of Basecamp, Campfire, and Highrise. The authors of the New York Times best-selling Getting Real and Rework. They’re a bootstrapped product dream team, with a monthly revenue in the millions…and it has been that way for years.

But on January 1, 2003, 37signals rang in the New Year as a tiny consultancy — just a few people. They had no apps, no books. Basecamp wasn’t even a glimmer in Jason Fried’s eye. Certainly, 37signals had a small measure of industry name recognition, and good clients. Software-and-publishing juggernauts, however, they were not.

That was all about to change.

Their first product wasn’t what you’d think

You’d think: Basecamp. We all know Basecamp came first, right? Wellll… yes, it came first among their software. But it went live a year after their first product, an industry whitepaper they called Evaluating 25 E-Commerce Search Engines. It was 45 pages and sold for $79. (Two years later, they decided to give it away for free.)

That’s right: 37signals started with an ebook.

An ebook? Why?! They could design & build software!

Certainly, 37signals was capable of designing & developing their own web app right away. So why didn’t they?

Well, if only I were psychic! I’d love to delve into the depths of Jason Fried’s no doubt immense brain and report the exact scenario. But because I’m not, I can, instead, do the next best thing — quote their blog:

We’re not designers, or programmers, or information architects, or copywriters, or customer experience consultants, or whatever else people want to call themselves these days… Bottom line: We’re risk managers. Designers who sell “design,” programmers who sell “code,” information architects who sell “diagrams” are selling the wrong thing. The thing to sell is reduced risk for the client. That’s what people want.

That was from a post titled Eureka, dated August 13, 2003 (7 months after their report launched, 6 months before Basecamp launched). It sounds to me like the Signals were figuring out that the outcome for the customer was more important than the tool, process, or skill used to create it.

If a 45-page report can solve a problem, why wouldn’t they start there?

Of course, that wasn’t the only benefit for them (or their customers)

And that’s why I recommend that everyone start with screencasts, an ebook, a workshop, a report, a white paper — yes, everyone, that includes you.

Think about it: How long does it take to create your first software product? It seems to me, based on my excavacation of their old blog posts, that it took 8-10 months for them to build Basecamp. How long would a 45-page report take, by comparison? Not long at all.

And while a $79 report certainly wouldn’t make millions a month, it probably made the 37signals guys a few grand…at least .

Which probably wasn’t all that remarkable considering they were consulting for big companies at the same time. But the first time you make $1,000 in product dollars, you will be forever transformed. It is entirely unlike consulting or working for a paycheck. So, for this small product, and small investment of time & resources, the 37signals guys got their first taste of product life. And it seems they were hooked.

They got to see results within days or weeks: build, then sell. And when they sold, they learned all kinds of things: What it takes to deliver a product. How many questions people ask before. What conversion rates are. How much support people need after. How most customers are happy (and silent). How (not) badly it hurts to give a refund. And as a bonus, ebooks don’t crash or require special servers.

Plus, they started to learn how to sell a low-touch product instead of a high-touch personal service.

Speaking of service, their report did one more thing…

Who’s more trustworthy on a design topic: a general design firm, or a design firm who wrote a white paper on that exact topic and who sells it for a rather healthy price? No contest. Any client who needed ecommerce search results designed would pick 37signals over another consulting agency, all other things being equal.

So while the 37signals guys were gaining product experience, they were also attracting clients. That’s a lot of bang for your buck.

Again, I’m speculating about the specifics of their experience. But I’ve seen this pattern over & over in my own work and so many of my friends & students who have taken this path: Create a product to break away from consulting, and it brings you more & better clients while you work your way to that goal.

That’s why you should copy from the best

Make your first product an infoproduct, like 37signals did.

Now, you might be thinking: “But, Amy, I’m hardly 37signals.” To which I would say: “Exactly!” When 37signals started out in products, neither were they . They weren’t the 37signals we think of today, not hardly. They were a good little design firm. They were passionate. They had very good (but not incredible) work and very good (but not earthshattering) clients. And they made it work.

If they could do it, so can you.

And heck, as far as we know, if they didn’t start small… maybe they never would have grown so big. Maybe Basecamp never would have happened, if they missed out on the lessons delivered by a tiny little 45-page white paper at $79 a pop.

There’s a video, too.

This blog post is derived from a video I made ages ago… that seems to be the thing that resonates most with folks. In the video, I talk about 37signals’ Origin Story, and also those of other product people I know (who took my class). It’s rougher than this post (and older, and less complete!) but it’s still a good watch!

Watch it now, here, or download it. Rip the audio and listen to it on your commute. Just don’t fave it for later, because we both know that means never.

Click here to download the MOV file

It’s 43 minutes long, and there’s a blip in the audio part way through. (Sorry about that, but it’s too important to get out there, rather than waiting forever to re-record.) Obviously this lesson is about a year old so the relative dates are a little off, but c’est la vie.

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