Today software company: Much money is not necessarily good

With Web 2.0 technology (only applications distributed online as a service) and open source, many small companies have prospered with only a small amount of initial capital. While in the United States a few years ago, to succeed, businesses needed to attract investment of millions of dollars.

Normally, if you want to join and survive in the market, software companies will have to look for a few wealthy customers, willing to spend a large investment. However, an entrepreneur named Jason Fried has no intention of following that traditional model when opening 37Signals.

Fried does not try to assert the company's position by designing a complex and costly product. He and his colleagues focused on exploiting Web 2.0 emerging technology and distributing project management applications as a network service. " Enterprise software is dying because they're bulky, not very efficient and too expensive ," Fried stated.

Business software is a billion-dollar field but is showing signs of slowing down in the past two years. It is so harsh and challenging that it is considered the "arena" of giant corporations, while newly established businesses are moving to new attractive territories. The development direction of 37Signals is to build simple applications and collect monthly service fees for small businesses or financially unrestricted individuals. After 2 years, the company signed contracts with hundreds of thousands of customers and never lost money. " Through the Internet, you can reach millions of users, " Fried explained briefly his key to success.

Similarly, the founders of Upstarle, which provides the Writely online word processor, initially designated to build software for managing documents within the internal Intranet. But in the end, they conceived the idea of ​​putting this application online for everyone. Because the Internet is 'becoming an application platform', Writely can connect to web services such as blogs and other photo-sharing sites.

In particular, with the emergence of Ajax (interactive GUI user interface methods and websites that can automatically reload web server data), developers can design service versions Network with the ability to act as an application stored in computer hardware.

Free and open source software is also thriving, while strong hardware servers become relatively cheap (5 years ago, new companies have to spend tens, even hundreds of thousands of dollars, to charge possession of similar products). In addition, operational and management costs also decreased significantly. For example, 37Signals does not cost money to advertise but uses the 'virus-spread' technique, through personal websites. The company currently has only 7 employees and no business staff.

Salesforce.com, NetSuite and SAP are ready to give up on big projects to focus on web services. Even Microsoft, the king of 'closed-code' software, must also give in and participate.

' I think we can become one of the most significant companies in the world in 20 years. We are not interested in the Fortune 500 list, but the Fortune 5 million - the list of small businesses doing many wonderful things , 'Fried confidently said.