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Innovate your business by doing less!

I’ve been on vacation this week (kind of) and have been reading Practically Radical, by William Taylor.

It’s a fantastic book on how creative successful companies have innovated. Taylor interviewed Jason Fried and David Heinemeier Hansson, the founders of one of my favorite companies, 37signals, which makes the CRM app, Highrise, and the project management app, Basecamp. My law firm uses both because they give us just what we need, are not bloated with bells and whistles we don’t need and are presented in an elegant, very easy to use framework.

In the interview, Fried and Hansson say some radical things which could rattle your approach to innovating your business:

“Conventional wisdom says that to beat your competitors, you need to one-up them. If their product has four features, you need five. If they are spending X on development, you have to spend two or three times X.

In fact, the right answer is to do less than your competitors to beat them. Instead of one-upping other companies, one-down them. Instead of outdoing other products, underdo them.”

Taylor responded, “I get it, less is more, right?” The two entrepreneurs shook their heads. “No, less is less – because more is not better!

Everyone tries to do too much: solve too many problems, build products with too many features. We say ‘no’ to almost everything. If you include every decent idea that comes along, you’ll just wind up with a half-assed version of your product. What you want to do to is build half a product that kicks ass.”

37signals stays lean and mean and limits what it provides its customers on purposes so it can be really good at what it does.

In this bad economy, there is a lot to apply here. Could you reduce what you do for your customers but be really good at what you keep? If so, you may be able to better distinguish your space in the market while cutting overhead and increase your profit margin.

Taylor continues on Fried and Hansson’s strategy:

As entrepreneurs, they push themselves to spend less money and add fewer colleagues than more conventional executives might. “Don’t hire people” they implore. Is the work that’s burdening you really necessary? What if you just don’t do it? Can you solve the problem with a slice of software or a change of practice instead?”

As young people running their own lives, Fried and Hansson insist on working fewer hours and holding as few meetings as possible. Forget the long days and all-nighters that are such a part of internet lore. 37signals has adopted a four-day work week, the better to keep everyone fresh, energized, and free of distractions.

Their approach is refreshing. How can it make you rethink how you run your business? If the main objective to starting your own business was to get control of your life and bend your work into the lifestyle you want, then there is much to learn from Fried and Hansson.

They have written my current favorite business book, which is a quick and powerful read organized into short topical chapters you can skip to and from.

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