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Innovate or Die is a series that focuses on inspiring businesses through generating ideas to create new markets, products or services.

Chicago-based software firm 37Signals, better known as the company that created the web-based project management tool called Basecamp, formally announced that they will no longer be calling themselves 37Signals, instead they will now go by the name, Basecamp.

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On the surface this may not sound like exciting news, but the way they got to this point a story all companies can learn from.

37 Signals was founded in 1999 as a web design firm developing websites – just as thousands of other companies did in their space. In their desire for growth and differentiation, they developed a piece of software called Basecamp in 2004. It didn't take long for them to realize that innovation was the best thing they could have possibly done as revenue for Basecamp surpassed that of web design revenue a mere year later.

When I look at Basecamp and their path from web design company to successful software company, with a meaningfully unique innovation, three key takeaways come to mind.

Lesson 1: Confront reality and have the guts to change. Web design companies can be very successful, but it's is a highly commoditized and competitive industry, no matter how you spin it. There can be slight changes as technology advances, such as responsive design and touch interface, but for the most part web design isn't meaningfully unique.

Until you can distinguish your innovative products and services from those that are commodities, you'll never actively change.

The folks at Basecamp understood that their futures didn't sit with developing websites, so they took action and started creating new products.

Lesson 2: ABC is your key to the next big innovation. In the movie Glengarry Glen Ross Alec Baldwin tells his sales team to, "ABC. Always Be Closing." I take a different spin on this and like to say organizations should Always Be Creating (not clever I know, but go with it).

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As mentioned, the company now known as Basecamp built an assortment of products to address perceived problems in the marketplace. Some were hits and others mises, but what's important is that they were dedicated to creating a steady flow of ideas that could potentially drive the organization's next wave of growth.

How do you create ideas for new products and services? The answer is in mining stimulus that forces you to think in new directions.

There are six different types of stimulus you can use to drive that next big spark:

1. Market stimulus that looks at your competitors 2. Insight stimulus that looks at your customers 3. Wisdom stimulus that looks at gurus, experts, and their observations 4. Patent mining that looks at patent databases for ideas 5. Future stimulus which looks at the mega shifts on the horizon or trends 6. Unrelated stimulus that forces you to think completely outside of our current paradigm Through exploring different sources of stimulus, you'll open your mind to information that can spark a divergent or disruptive thought patterns.

Lesson 3: Look beyond the obvious. So many businesses make the mistake of focusing solely on what they do and not on the benefits they provide. This prevents them from seeing beyond what they currently do and exploring that next game changing innovation.

Not sure what I mean? Let me dig a little deeper. Back in 1999, Basecamp developed websites so their clients could better communicate with their own customers. At first glance, they built website and their innovation was faster, better-looking and optimized websites, and so on. But ultimately they were still building websites.

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Now, if we consider the benefits, and not actually at what they do, we open ourselves up to a while new world of possibilities. Instead of building websites, Basecamp helped clients communicate with their own customers.

So now that we come at it from that perspective, what else could they do to help their clients better communicate with their own customers? This is where Basecamp – the product – comes in. Basecamp users are able to communicate more effectively with their own customers and, using a variety of features, users are able to achieve a high level of communication as they collaborate to execute projects and initiatives together. As the team looked at the benefits and tried to take that to another level they were able to open up to a whole new world of thinking that didn't lock them in to just doing websites.

For anyone looking to drive innovation in their company, looking at what you do and trying to make that better will help increase your value proposition to your clients, but it won't drive the next significant wave of growth in your company.

Basecamp provides plenty of lessons for organizations looking to drive innovation. And now that you're armed with these lessons and insights – what are you going to do about it?

Ryan Caligiuri is an associate and innovation engineering practitioner with inVision Edge – an innovation and growth company. inVision Edge is also the leader of the Canadian Innovation Engineering Network. Learn more about Innovation Engineering by attending a day and a half executive experience in June, email Ryan for more information on this session.

Email Ryan Caligiuri
Follow Ryan Caligiuri on Twitter: @RyanCaligiuri

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