Jason Fried describes how Basecamp became a product.
We went looking for a tool to do this. What we found were ancient relics from a time when project management meant blasting people with gantt charts, stats, and graphs. To us project management was all about communication. None of the software makers at the time seemed to agree. So we decided to make our own.
We focused on a very specific of bundle of integrated tools — a message board to post updates, work, and get feedback. To-do lists to keep track of all the work that had to get done. And milestones to keep track of big picture deadlines. This was all the first version of Basecamp did. It’s all we needed and nothing we didn’t.
We started using it internally with our clients and they all kept asking “What is this thing? Can we use it to run our own projects?” Once you hear that enough, a lightbulb turns on and you say “Maybe we’ve got something here”. This idea, this thing we made for ourselves, perhaps it’s a product. If we need it, surely hundreds of thousands of businesses just like ours need it too.
So we spent a few more months tightening it up, improving it on every dimension, and then, on February 4, 2004, we released the first version of Basecamp.
We decided early on that if we were able to generate around $5000/month after a year (or about $60,000 in annual revenue), we’d have a good thing going. Turns out, we hit that number in about 6 weeks. So we absolutely were on to something.
source: Basecamp: The origin story