We don't have any goals other than to remain profitable. We've been profitable every year for 24 years. We'll be profitable again this year. Now, those are the numbers that have to work out. I did go to business school. I did learn the standard sort of approach to business, and it never made sense to me. It's like, why is this so complicated? Even like writing a business plan, like what, why? Just do it. Just do the thing. The business plan does nothing.
Businesses are just a series of decisions and choices. choices and we've tried not to be stupid. The way I would think about stupid would be putting ourselves at significant risk of not being in business anymore. The Business Method Podcast featuring Chris Reynolds. Hey listeners, welcome to the Business Method Podcast today and we have the one and only Jason Freed on the show. If you don't know who Jason is, Google him right now. Just stop what you're doing and Google him.
He is one of the founders of 37signals, which created the company, Basecamp. Basecamp is one of the largest software project management solution tools that are out there today. And it's been around since 2004 and actually 37signals has been around since 1999. So they've been in the game a long time and one of the OGs in the game for sure. So we're going to talk about that. But first, Jason, welcome to the show. How are you, man?
I'm doing great. Thanks for having me on. Yeah, it's been great to have you. Well, it's been great getting to know you via your blog over the past few months, because we've been trying to get you on the show and finally found the time. And I like the way you think. One of the things I've really enjoyed about this series on the podcast is that people like yourself that have built companies at this scale are so down to earth.
The stereotype is like, oh, they have that much money. They've built a billion dollar company. They're going to be flaunting, hanging out in yachts and and flying in private jets and doing all the things, right? But I have found that the commonality there is that it's incredibly hard to build a company and you have so much responsibility and so many people's lives are based on your decision-making process and making good decisions.
So it's the weight of the world that are on your shoulders when doing that. And would you agree that's kind of true from what you've seen in your experience? Yeah, I mean, I think, you know, I went to this CEO group. It was like actually small agency owners a number of years ago. And they were going around the room and talking about things. And people are supposed to go around the room and say like, how many people, how many employees they had at their company. company.
And this one woman said, I have 42 mortgages. And I loved that. The point was not that she had 42 mortgages, but that she had 42 mortgages to worry about in a sense that she had 42 people working for her that depended on her and their company to be able to pay them to pay their mortgages. This idea that you build a company of humans who have, there's a big obligation, big responsibility to continue to deliver for your employees.
I know there's a lot of talk about delivering for customers, which of course you have to do as well, but you're really here for your employees first. And I think people who get that, I think have a more, I don't know, a better experience running a business than people who are just counting dollars. Do you ever have a time in, in throughout your career when you felt you lost sight of that and then had to regain kind of that, that core focus?
I don't think we have, primarily because we've intentionally stayed as small as we possibly can in terms of people who work here. So for us, it's always on our mind. I think had we just hired tons and tons, we have like 75 people at the company, which is the biggest we've ever been, but relatively small, all things considered, compared to the people we're competing with.
But had we gone out and hired hundreds or a thousand people or whatever, like, I think it'd be pretty easy to forget in some sense that those are all individuals with their own individual responsibilities. Because at that size, it becomes just a collection of humanity, like a number versus, you know, I know everybody's name. I know everyone who works here. You know, I know how long they've worked here, that sort of thing. So we haven't lost sight of that, but I could see it being very easy.
I know a number of entrepreneurs who have much larger companies and they wouldn't recognize someone walking down the hall if they work for them or not. They just wouldn't know. They can't possibly know. They have too many folks. So as long as you, I think, stay under, let's call it 100 or something, you probably have a pretty good, you're more to the, or anchored to the idea of individuals working at your company. I think it's quite fascinating how well you guys have, well,
how you've done that. that, like to stay so small, 75 employees or so over, you know, you're looking at 24 years in business. You're looking at a 10 figure valuation. Some people even say more depending on, you know, what article you read at the time, but it's, it's fascinating. Cause it's like, there's 80, 75 to 80 people there. Was that your intention? Like in the beginning? And did you continually strive to stay small over time?
Yeah we've always aimed to stay as small as possible when we first built base camp we had four people even today whenever we build any feature there's only two people who are allowed to work on that feature so one programmer one designer teams of two and so we have multiple teams of two working on things together but never three or four or five there's two people working on something together that's something that's fundamental to how we work and in a core belief of ours which is small
teams are the way to go they reduce all sorts of overhead financial overhead also communication overhead coordination overhead all the things that become hard when you have a lot of people are things we try to avoid so a big part of our business is actually avoidance, it's it's it's finding figuring out the things that are make business hard and staying away from those things that's and so there's a lot of other things like
that like we didn't take outside outside funding, because that makes things, I think, far more complicated. So it's in a collection of what makes things hard in business. Well, having a lot of people actually makes things hard. So let's have as few as we need. And, you know, that number fluctuates, but let's have as few as we need. And let's stay there and feel a little bit of the pain. Like, God, it'd be nice if we had six more people to do more things. But you know what?
We don't really need them. We can do what we can do with who we have. And if we can't do it, we either don't do it, where we find a simpler way to do it. And that way we don't find ourselves just sort of chasing our own ambition. And like, you have to kind of keep your own ambition in check to some degree. Yeah. Otherwise I think you can, your business can get out of control pretty quickly.
And that's another thing we don't want it to get out of control because wrangling it and getting it back in control is incredibly hard. Yeah. So you want to keep things sort of manageable the whole time. I'm going to read a bit from a recent blog post you have, just because it's in alignment with what we're talking about. And you had a blog post called Kill Overkill. I don't know if it was a blog post, but it came through your newsletter.
Overkill. So it's just kind of what we're talking about here, right? Overkill is the dust that settles on the stuff that took a lot of energy to build or buy, but turned out not to be necessary. The over-engineered, over-designed, over hired, over litigated, over spent, over promised, over deliberated. Overkill is a policy that was written but never enacted. The technology that was purchased, that was never used.
The seven steps that could be handled in two, the nine people in a meeting made for three, the business equivalent of the 12 bedroom house for a family of four, the cooks when you don't even have a kitchen. And it goes on and on. And you talk about like in the 24 years, there's nothing that you've You've tried to avoid more than overkill. And it sounds like this is kind of a core principle for you as a person.
I wonder, your co-founder, David, and yourself, in the early days, did you know that that was something you guys wanted to implement over the long run? Or did you learn it? And also, is this something like, I strive to keep my own personal belongings very small for an easy, just a frictionless life. I don't have a lot of personal things. And I'm wondering if you guys apply that in your life as well. Well, I would say, first off, in business, we definitely apply it to our products as well.
So our company and our products, our products do less than other people's products in many ways. But we kind of try to figure out the things that really matter and focus on those and leave a lot of other stuff on the table for someone else to do if they choose. I think that we've just always seen and known that you don't need a lot of people to do something. thing. This is just early days again, base camp, building base camp with a few people.
David, in fact, wasn't even an employee at the time. He was a contractor. He's still going to Copenhagen Business School. And he had something like 10 hours a week to give us. I paid him like 25 bucks an hour or whatever it was way back in the day. So we had hardly any time where we were like, we can make a lot of progress with very few people. And in fact, the more people you add, the slower it seems to go. And we kind of realized that pretty early.
And you just realize that if If you can hire really clever, thoughtful people who understand what matters and what doesn't and who are self-driven and autonomous in a lot of ways so they don't need a lot of direction, they have a lot of agency over the work, and they're really thoughtful about what to not do, then you can get a lot done with very few people. And you just see that in the early days.
And then I think what happens with a lot of companies is they know this inherently and then they forget it. And so we try never to forget it and just try to keep that in mind that these things you know as a small business in the early, early days when people are able to do so many things, either with one person or just a few, you can maintain that approach as you get bigger by not getting too much bigger too quickly.
And if you do get bigger, you want to spread out in a way where you have a bunch of small teams working on things rather than having more people available to do something together because that just slows you down really fast. So we have a lot of small teams, as I mentioned, teams of two who are doing a lot of different things. And making those teams of three would slow it down, would ruin it. It wouldn't make it get done faster or better. It would make it worse.
And so we're just cognizant of that. And I think that came from the early days. As far as my personal life, I don't have that as much. I tend to collect things that I like. And I have a few too many watches. I have a few too many things sometimes. I strive to not, but then I find myself having them. And so I also try not to fight my own true nature. In business, I do want to keep it really tight. But in life, I do like surrounding myself with things that I...
Find beautiful and interesting. And it turns out that sometimes having some more of those around brings me some pleasure. But I also think that it definitely locks you in place in a way that is a trade-off. I mean, I also have two kids, a family, and a wife, two kids. And it's not like I can get up and go somewhere else tomorrow anyway. So you kind of settle in and then you sort of accumulate. So it is something
you got to keep an eye on, but I enjoy it. it. One of the, one of the things that I hate is just like the, uh, and I grew up like this, a basement just full of junk that never gets used, you know? And it's, it's clutter. Yeah. It's just a clutter of life, but we clutter, we, we accumulate that clutter in business. I like, if I have clothes that I haven't worn in a year, given, you know, seasonal, it's not just seasonal clothes, but if there's like a shirt, I haven't worn that shirt in a year.
I've like, got to toss it out and I've got to, you know, but I understand the infatuation with, or maybe it's like your hobby or your guilty pleasure with the watches. And you're like, oh, I can have an extra few of those watches and it's fine. It's interesting because I'm with you on that. I don't like clutter either. The nice thing about watches is you can put them in a drawer and you don't even
see them. So you can pull them out when you want to look at them and enjoy them and you can put them away. And so it's like, I don't collect a bunch of art or something that I don't don't have room for and just sort of piles up, you know? So I'm careful about that to some degree, but yeah, I don't know. I wish that I had some fewer, fewer things in some ways, but it's, it's become, it becomes hard to part with that. And this is, it's interesting because in business, I do not have this problem,
but the problem is the wrong word. I don't have this condition in business. Like I don't want to accumulate in business. We want to be extremely efficient in business. Perhaps that's my, that's my way of sort of taking it out in a sense, like on my My personal side, maybe not quite as much, so I can actually really exercise this on the business side. That makes sense. Just curious, what's your favorite brand of watches?
Well, I have a favorite brand. I don't have many of their watches, but my favorite brand would be Alang and Zone, which is a German brand. I think they make the most beautiful sort of, let's call it, they're not mass produced, but they make maybe like 10,000 watches a year. So I think that level or less, they're my favorite brand aesthetically, mechanically. I also like a brand called Laurent Ferrier, which I really like a lot. lot.
And then I like all sorts. I like Seiko, like Grand Seiko, like G-Shocks. I like a bunch of stuff. I'm all over the board. I want to check those out. So going back to business and employees, like when it comes to keeping it simple, do you guys have maybe like an SOP or something in your business? I don't know what that means. What does SOP mean? Maybe standard operation and procedure or something that says, hey, for this type of a project, we only need two and we'll never go to three people.
Three is always too much. Or is there a trigger or something that tells you guys, oh, we need to just stay small with this and three is too many or five is too many or 20 is too many sort of thing? Yeah. We don't have a lot of written rules. It's more like what we do is what defines what we do next. What we're doing now is what we We define what we do next in a sense.
So if we're able to work efficiently with two people and get a lot of work done in a short period of time, like why would we even consider adding more? We've had more in the past and we've seen it hasn't worked well. So our thing is like context is really what we look at. It's not about consistency in a sense. It's not about like we only do this because we said so. We do it because this is actually what works really well for us.
And we have had larger teams in the past. They have not worked as well. So we've sort of settled into this place where two is right. A few years ago, it was actually, it was three. It was two programmers and one designer. We kind of realized like, we don't need that. One-on-one would be fine too. The other thing it does is it keeps you honest in terms of not making things too complicated. And that's a huge advantage because humans are quite good at making things complicated.
And so by just limiting the ability to do that, in a sense, we end up with these sort of free gains by just having small teams. So, you know, but there's also there's not a Bible for us in a sense, like we might decide five years from now that we're going to change the way we do something, you know, we're open to those changes. But we also look at like what actually works well for us. and we kind of make sure that we're doing that.
And we wouldn't push a conceptual change that just wasn't working because someone else was doing it. We're going to do what actually ultimately works for us. And this is also, I should say. It's unfolded over the years. We didn't go into this early on deciding anything about the future. I still don't think about the future. I think about now and a few weeks out.
We don't have a plan for a year or two years or five years never have never will we look at it basically the next six weeks at a time yeah and make it up as we go yeah so you know this is what works for us this is what we're doing now and it seems to have been working for us for a while so we're going to continue to do it we do explore here and there but only when things something doesn't work do we start to think about doing it a different way versus
like trying a bunch of of things unnecessarily, I think is also sort of a very inefficient approach. If you find something that works for you, I would say, keep going and keep doing it. And don't think too much about, well, what's going to happen? Like people often say like, well, will this scale? Like, what if you had 500 people? Like, I don't know. We wouldn't go from 70 to 500. We'd go from 70 to 73 to 78 to 81 to 85.
And at some point, we might see that this doesn't work anymore. We have to make a change. But the idea of thinking too much about what might be later on, I think is kind of a waste of energy, in my opinion. I think worry about now, get now right so you can have a chance at later. A lot of people thinking about later, they don't have now right. So they're not going to even get to later. Why put the energy into that. So that sort of stays as close to now as possible.
So business-wise, are you not setting your goals? Are you setting quarterly goals every quarter or monthly goals? No. None? We're very unusual. Yes, you are. So we don't have any goals other than to remain profitable. We've been profitable every year for 24 years. We'll be profitable again this year. Those are the numbers does it have to work out in the end? We have to make more money than we spend.
In terms of quarterly, no. In terms of user growth per week, per day, per month, no. We don't have any OKRs or KPIs or big picture goals as long as we're, I mean, other than like, we have to operate this company profitably. Because if we don't, then we don't get to stick around. Like we want to keep doing what we're doing. No one else is giving us money. No one else is feeding us fuel. We have to to make our own. So that means we have to be profitable.
And so it's an unusual approach in a sense, but also it's a very honest approach. But it's not like if we make these 12 things work, the 13th thing will work, which is the company. It's like one way or another, it all has to work. And it's a very amorphous thing. We don't assign budgets to individual projects or products. We We just don't do any of that.
We just have to kind of make sure that we make a good product that over time generates a good amount of revenue that covers our costs, So it's that simple, even though it seems like, well, how do you do that without planning week to week or month to month or year to year? You just do it by doing a good job, doing the best work you can and letting the chips fall where they may truly is how we approach it. And by keeping our costs low, which is why we only have 75 or so people versus.
We could afford to have hundreds. But then you put yourself in a position where if you have hundreds, you've got a huge massive payroll and you have less margin for error there. I like a big cushion, a big margin for error so we can explore things and not have to pinch pennies. We can play. There's more room to play and know that we have enough room that if this doesn't work, it's okay. I don't like thin margins. I like thick margins. So that's kind of how we've
set up the business. Thick margins are nice. Hey, listeners, real quick for those established entrepreneurs out out there that want to be involved in a community that is curated specifically for seasoned business minds, then we have a group for you. Inside this group, we have private live events in different locations around the world specifically for our members.
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Okay. So this is almost like against the grain of typical business strategy other than the remain profitable part. Right. And sometimes that's not even, that's not normal.
Right. Right. But I'm certain, like, I know you guys haven't, you've taken only a small amount of investments over the years, but, or outside capital, I'm certain you've had people or, you know, even in your early days, you know, people that were your mentors or people you looked up to or other successful business people say, Hey, you guys, you guys need a structure. You need yearly goals. What's your five-year plan?
You know, all this traditional basic business advice that, that we hear all the time. What made you guys, if you did hear that, or do you have an example of hearing, you know, that type of advice and what made you kind of not listen to it? Yeah. So just first to be clear, no outside investment has ever gone into our business. We've been a hundred percent funded by customer revenues the whole time. So we did in, in 2006 sell, David and I sold some of our own personal shares to, to Jeff Bezos.
Yeah. That money went in our pockets to take some risk off the table, but never into the business. So we don't have any investors in a sense, just to sort of clear that out. Got it. I don't really, I don't know, like, I don't really care so much about what what people tell you to do. I don't know.
Like for me, it's like, what, what works for us is, is, is in some ways I know I give a lot of advice and I actually, it kind of makes me ill sometimes, frankly, to give advice to other people, even though I do it because it's all contextual and it's really like what, whatever works for you. Like, you know, you can, you can, you can take the same advice in a million different directions and you have a million different outcomes.
And it's, it's, it's, there's a, there's so many different variables you don't control to begin So I think everyone's got to settle in to figure out what works for them. I did go to business school. I did learn the standard sort of approach to business and it never made sense to me. It just, it's like, why is this so complicated? I just kept wondering, why is this so complicated? What was this? Even like writing a business plan. Like what, what, why just do, just do it, just do the thing.
Like the business plan does nothing. You can say, well, it helps you focus. No, I don't even think it does that. I think it helps you procrastinate. So like my whole thing is like, just make the thing. I've always been like, just make the thing and let that guide you that either is going to work or it's not going to work. It doesn't matter what you plan, what you say, what you hope you build the best thing you can, you put it on the market, you communicate Communicate about it
the best way you can. You tell stories around it the best way you can. And the market will decide whether or not this thing works or not. Not really you. So all of the work that goes into creating a latticework of expectations and things you're supposed to do, none of that actually matters. What matters is, are you making something people want? And are they willing to pay for it? And does that cover your costs? Like, it is that simple.
That's how I've always seen it. And that's how we've always done it. I it it's it's very relieving to hear you say that to be honest because I've always built simple business models and and I always get advice I get advice all the time on how I should change things and over complicate it or you know hire some more people and and to hear somebody else that's like no we we keep it simple and we keep it clear and we do it this way because it's about what works is very, it's very refreshing.
My good friend of mine sent me his business plan. He's working on a venture studio and it was a 72 page business plan. And when I got it, he sent it over to me, I almost gasped. And I was like, who has time to read this thing? Like, this is a book in of itself, you know, but he, he enjoyed writing it and that's what he does. And it works for him. Yeah, look, I mean, it can be fun to imagine, you know, things. I've just always been someone who'd rather just make the thing. Yeah.
I mean, it's not that I don't have like ideas for future products. And I actually have plenty of ideas. But really, practically, it's like, it doesn't really matter. Like, can we make the thing or not make the thing? And let's just make the thing. Let's put all of our effort and energy. It's so hard to make a business work, period. period. And the hardest way to make it work is to make a really complex one that's actually extra hard.
You can think about all these knobs and dials and levers and complications. You got to pull and turn and all that. It's like, yeah, you can do it that way, but man, you're making it really hard on yourself. Really hard. How do we make it easy on ourselves? And I think there's no shame in that. Strangely, it seems like there's shame in it for people. It's actually, in some ways, we take the lazy way, which is like, how do we make it easy on ourselves?
I think it's the a smart way to do it, but it seems for some people that like, nah, that's lazy or something like you're not ambitious enough or, you know, think about what you could have been. It's like, yeah, I'm really happy with what we are. I don't. No, I don't care what we could have been. And by the way, that's just a counterfactual that's impossible to prove anyway.
Like we may have also been broke by now. We may have also taken a bunch of money early on and had to sell the business and then been out of it. I mean, that would have sucked. I love doing this. Like, why would I want to get forced out in seven years?
Even if I had a massive paycheck, like, or a liquidity event or whatever, like, what if at that point, I'm like, Like the best thing in my life is this, you know, why would I want to have to give it up because of some investment I made seven years earlier? I just don't want to have these things that get in the way of things we actually want to do. Yeah, absolutely.
I, and I also can appreciate that as well, because knowing what you have, like I've got, I got involved in a business venture recently and there was a lot of compliance in this business venture, investment money, multiple investors. investors. Then on top of that, what happens is you get multiple, not only perspectives, but different needs and wants and desires from each of those investors on what they see the project, the direction they see the project and how they see everything unfolding.
Even if you have great corporate documents that are set up to give you boundaries with things. But you're right. I've really learned to appreciate my smaller business that I have a lot of control in. And if there's a fire, I put it out pretty quickly. I don't have a huge team. I can get them to manage things pretty relatively. I'm involved in their lives. I care about them.
But what stands out with you guys versus the average business, say online business or software business or SaaS business, is that you guys have been running it and doing it for 24 years, which most people don't last that long. And I've noticed that amongst another commonality with people we've interviewed in this series is that they have the ability to focus on one business and do it for the long haul over and over because they love it.
They know it. They feel it truly provides value and helps the world. They just like they're not worried about side hustles or crypto or, you know, getting into the AI game. You know, they're keeping focused. And, and I'm curious about you and David, like, what do you think it is about you two that has kept you in this, this, I want to say like singular path, but in, in involved in one business over the entire 24 year period?
Well, we've done a lot of different things in our business. And I think that's a big part of it. Because we're independent. I think what it is, is our independence, actually. So we're staunchly independent. We don't have a board of directors. We don't have any investors that can tell us what to do. We don't have to have to ask anyone for permission.
We can do a whole bunch of things. We've built, I don't know, depending on how you count 10 different products, we've written a bunch of books, we've done a bunch of things.
And so we have this we've created this this environment where you can explore be intellectually stimulated creatively stimulated make a good deal of money create a great environment for other people to have great careers this is this is like a vehicle actually for exploring a lot of things and doing a lot of things and working with incredibly talented people that are just inspiring and i admire them and and i look up to them and i'm in awe of what they're able
to do and And it's more of like we sort of create this bubble that's a pretty comfortable place to be. But it all comes back, I think, to the fact that we're very strongly independent. And we're allowed to do whatever we want to do, however we want to do it, because no one can tell us otherwise, other than the market, ultimately. If the market doesn't like what we're doing and they don't buy what we're selling, they've spoken.
Spoken, but no one else can speak in a sense, you know, in a way where like, I I've been on boards of directors and, and, and, and, you know, I've seen CEOs want to do things and want to take their business in certain directions. And I know plenty of entrepreneurs who also do, but their VC wouldn't let them, or they say that's too risky and they, they just can't, they can't actually do what they want. They went into business to work for themselves, but they don't work for themselves.
They work for someone with more money than they have. And who's going to tell them what what to do because they're in a fund that has to pay off in five years or seven, whatever it might be. They have a lot less flexibility and freedom than they thought. We just value it so much that we've kept it that way. So I don't know. The thing is, is that businesses are just a series of decisions and choices. And we've tried not to be stupid, basically.
The way I would think about stupid would be putting ourselves at significant risk of not being in business anymore. So having a company that's too big that we can't afford, making products that no one wants to buy, you know, taking investment from the outside world that would make us unhappy. And if we're unhappy, we're not going to do the best work we can, you know, where we're fully remote always have been basically.
So hiring great people, wherever they are, if we'd only hired people within a 20 mile radius of where we were based, I think we wouldn't have been as good. So all these decisions allow us to do this. I love that, man. Talking about being remote, I've ran a remote business for 13 years now or so, multiple ones. And I watched your TED Talk or your TEDx talk. And in 2010, you're talking about why work doesn't happen at work and where people can get work done. And you're talking about this in 2010.
We were talking before the show, I live in Barcelona, but I became a digital nomad in 2011. Not too long after reading a four-hour workweek. And it's interesting. I interviewed a guy named Drayton McLean. And Drayton built a $19 billion wholesale grocery distribution business. And he came on the podcast and talking with him afterwards, he was talking about how he thinks remote work doesn't work, how he thinks it's a disaster to business and corporations.
And it's just not a smart idea in general. Now, given this, Drayton's 88 years old, so he didn't grow up in this technological era that we did, right?
So do you mind delving down into more about your talk and why work doesn't happen at work and why you guys decided to kind of stay remote all over these years, even when it would have been really cool to have a corporate headquarters headquarters and central point where everybody could come in and do all the things they do at Google and Facebook, but you decided not to.
We did have an office. We've had a few different offices over the years, but the majority of people who work for us have always been outside of Chicago, which is where we were based at the time. So we had a space, and if you lived in Chicago, you could come to the office if you wanted to. But the majority has always been all over the world. Even when I first met David, David lived in Denmark, I lived in Chicago. We built Basecamp remotely. remotely. So we've always worked this way.
It's worked out well for us, but it's not for everybody and different kinds of businesses benefit from it and others don't. I mean, if you're making a car in a factory, obviously you got to be there. If you're making software, not so much. If you're making hardware, more so. It just kind of depends. Of course, if you're going to open a pizza restaurant, someone's got to be there to take care of people and cook the food.
You know so it depends right but i do think it's it's very possible to run a really wonderful software slash information slash consulting style business remotely i don't think there's anything that magical about being together although i think it's it's important to do it occasionally.
So as we chatted a little bit earlier our company we get together twice a year for a week at a time so just two weeks a year but we all fly to a city barcelona was the last one we did and we, we hang out for a week and as a company. So it's very helpful to have that face time to share meals, to see smiles, to understand everyone's humanity, you know, together. But then when you go back that there's an afterglow that, that hangs with you for a long time.
And you, you know, the people you work with, even though you don't see them every day, but as long as you see them a little bit, it's, it's plenty is what we found. Yeah. So, but the talk, the TED talk that I gave that long ago, which is wild now, was about the office tends to be a very big distraction for a lot of people. People would go into the office and find that they're not actually getting work done.
They're going there and they're doing busy work. But most of the time they're pulled into this meeting or that meeting, or there's this distraction or that distraction. So you show up at eight, you leave at five. You're like, man, I was busy today, but I got nothing done. done. And so you end up working late at night or early in the mornings or on the weekends or on the plane or whatever it is, because those are the times when you actually have, or you're able to focus.
So that was the fundamental premise of the talk. And I think a lot of people identified with it. They go, yeah, I go to work and I don't get anything done. That's why I'm working on Sundays. I'm working on Sunday afternoon before Monday, because all the stuff I was supposed to get done during the week I couldn't do.
And now I've got to take time out of my life and my family life or my friend's life or whatever life, my personal life, and I've gotta do this work at nights and I gotta do it on the weekends, and that's a shame. And so I think that's still a problem. And actually, frankly, remote work hasn't solved that because it's very easy to distract people remotely as well.
There's a lot of technology these days where people are being pulled into meetings and having chats and chatting in real time constantly all day long and the whole thing. Not that these things are bad inherently. Real-time chat is helpful sometimes. Zoom is helpful sometimes. But to be on those things all day is a problem. And so those problems are inherent in remote work as well.
So it's more of a mindset of trying to eliminate distractions and recognize that people should long stretches of uninterrupted time to themselves in a given day if you really want people to do a lot of work and do it well. Wherever that is locally or remotely, you've got to give people long stretches of uninterrupted time. Otherwise, it's just going to be chaos.
And so if I give that talk again today, I would basically give roughly the same talk, but I would include things like Slack and things like Zoom in the conversation and say like, these things are just as bad as the the constant being pulled into a meeting or the constant chatter in the office where you just can't focus well and this is what exactly what all the top neuroscientists are talking about today you know getting into flow
states you know the brain chemicals and and what works and when you get into alpha and theta state and how much productive you are and when you're distracted how long it takes your brain actually to get back into that zone so yeah i compared it to sleep yeah Yeah, that's right. Yeah, like REM sleep or deep sleep, these are different states, but you don't just get into them. And if you get out of them, you don't just get right back into them.
You have to get into them eventually and then you stay in them. And then when you leave them, you have to get back into them again. And so if your day is chunked up, the way I put it was like, no one would think you'd have a good night's sleep if you were interrupted every 15, 20 minutes. Like everyone would go, yeah, that'd be a terrible night's sleep. Like everyone knows that. Yet that's what it's like at work for people. Yeah. And yet we think that that's
a good day's work. It's not. It's as bad as a bad night's sleep. You know? Which makes you feel miserable the next day, right? Yes. For the others that have come on the podcast, I asked them about if they could name chapters in their companies. You know, so you've had 24 years with 37 Signals, roughly Basecamp. If you could break down, you know, period and maybe it's five years, 10 years for you, seven years, whatever, in chapters, what would you name those chapters over the career of Basecamp?
Yeah, it's really interesting because I... I don't look at things that way. I can go through the exercise, but I don't look at things that way. I kind of look at everything from when I was 13. I'm 49 now. So the moment I started working was when I was 13, I got a part-time job. I feel like it's the same career. Yeah. I feel like everything's the same. I mean, I was doing, I was selling, I was at the grocery store, stocking shelves and stuff.
Obviously, it's not what I'm doing today, but I still kind of feel like it's all just one continuous career, which is like, doing the best job you can with whatever it is that you're doing. And, you know, I was selling, like, you know, in my teens, I was like selling stereo equipment to my friends. And I was just kind of like always making something. I always had this, this independent streak of trying to do my own thing.
Yeah. So I just think it's one long thing. That said, there was a point in our business. So we, we, at one point early on, we, we, we basically, we made four products at the, Not at the same time, but we had four products. We had Basecamp, Campfire, High-Rise, and Backpack. So first came Basecamp, then came Backpack, and then came Campfire, then came High-Rise. So in four years, we built four products. We ran four products for many years simultaneously.
And then, I don't know when this was. I can't quite remember now. I don't know if it was 2014. I can't quite actually remember when we did this move. But we changed the company name from 37signals to Basecamp. Yeah. And we said, we're going all in on Basecamp.
We're just gonna do one thing because we're doing too many things it was getting harder to get your point about like or my point or our point about like don't do the hard things it was hard to maintain four products at a high level with a small team we had like 20 some people at that time i think it was or 30 or whatever it was and so it just became harder than mobile made made its made its way in the scene and we had to like you know make multiple versions of each product it was become
became very hard so we said we're gonna go all in on one thing base camp change change the name to company, the base camp to reiterate that this is what we're doing. And then a few years ago, again, we switched the company name back to 37 Signals and we've become a multi-product company again. Now we have Basecamp, we have Hay, which is H-E-Y.com, which is an email service. We're about to launch a whole new line of products called Once.
And we decided that we're makers and we just want to get back to making more things. And we have more people now and we've become more and more efficient and gotten better and better at making things. So we can make and manage multiple things at once again. And so we're back to this thing again.
So you could say there's sort of been three chapters, essentially, I think would be fair to say, although even there was an earlier chapter, when we weren't a software company, we were a web design company from 1999 to about 2004, 2005. Then we became a software company. Then we went through these other three phases. So maybe there's four phases in the business, but I really mentally think about them as just one long career making stuff.
Do you think you would have been as as successful with Basecamp or the company in general, if you didn't take that time to focus solely on Basecamp? Well, Basecamp was very successful right from the start. It turned out like about a year in, it was doing generally more money than our consulting business, which is what we were doing before that web design. So Basecamp was a huge hit right from the start and remains a a big hit for us. And it's our biggest hit, the biggest thing we've ever done.
So I don't, we, and we continue to improve Basecamp while we made the other products as well. But that was a different time. There was like very little competition. We were one of the brand new first SaaS companies. I mean, SaaS was even a term, but like this idea of software as a service, as selling subscription to software, that was like radical and strange.
A lot of people didn't get it in the early days. So we had this long period of time where we were We're sort of kind of had a very, very different offering than anybody else. Could we launch Basecamp as is today and have a big impact? I don't know. I have no idea. I think everything's a product of its time. There's a ton of luck involved, ton of timing, a ton of other market conditions which you don't control.
It's not even clear why things were successful. I think it's very easy for people to take credit for things, but you don't really know if that was why. It's like a convenient story. I mean, I don't, I feel like we're in the right place at the right time. We said things the right way. We had a really good product that did a few things and we understood it because we built it for ourselves. Could have been some other reason too that we're unaware of, you know?
So I don't want to give us credit in fact that we could do it all again. I think it's worked out really well for us. We were in the right place at the right time, did things what I think is the right way and didn't make a lot of stupid decisions that could have put us out of business. Yeah. And therefore, you know, we've been able to maintain this thing and grow this thing over the years.
But also growth is not our goal. So this is not about like taking market share from anybody or I don't care what other competitors are doing. Let them do their own thing their own way. All we need to do is find enough business to support our business and our cost structure. Like they can find, figure out how to support their business and their cost structure. And we can all be successful or not all be successful.
Some of them are going to work and some of them aren't. but I can't concern myself with how other people are doing things. It really doesn't affect us that much. We have to make sure we have our business under control and in control and can make more money than we spend. For example, pay, which is our email service. We have tens of thousands of paying customers, which for us is wonderful.
If Google had tens of thousands of paying customers for an email service, they would shut it down in five seconds and say it was a huge flop because their cost structure is just different. They need millions of people to make anything that they do work. We don't, we need tens of thousands. So does it matter that there's other email services out there? It doesn't really matter. As long as we have enough to do what we want to do, that's what matters to us. So that's what we're focused on.
You know, it goes back to earlier in the podcast, which you were mentioning is just like, are we profitable? Are we on the right path for the next few months? Does everything look good? You reiterated kind of this earlier in our email exchange. I think the first time I I sent you an email telling you we were doing this billion-dollar series. You replied, I don't have any idea what we're worth and I don't care. Happy to talk about it.
Which is great. I was like, I want to learn more about that mindset. The evaluation is just never something I've ever thought about, don't care about. I don't think it matters at all. Unless you're selling, it matters when it matters. But guess what? It doesn't matter today for me. I don't care what we're worth. It has no effect on what we do. Yeah. If we were going to sell the business, then you figure out what your valuation is.
Yeah until then it means nothing to me means nothing to our customers so i just don't i don't concern myself with things that don't matter in that way yeah i know there's like there's some ego puffery people like i'm got i'm running a billion dollar whatever fine that's all if that's what you need fine totally cool i i that doesn't do it for me so we just don't care about the things that don't matter to us right now and when they matter then you deal with them like when we did the bezos
thing back in 2006 we had to come up with a valuation because he's putting some money buying some shares and we had to value the shares. So it was this ridiculous fake math problem. You just make some number up. We didn't really have much revenue at the time, but we were up and coming and going somewhere. And you make these fake projections and you come up with a fake number and you give it to him and he goes, yeah, that's kind of bullshit.
But yeah, whatever, I'm fine with it. Because it's like, you got to make something up. And so that's kind of what what these things are. And so I've done this, I did this post years ago. Which was like, it was, it was a dollar. I don't know if you've seen this post. It was like, if not, I'll send it to you. You put it in the show notes or something.
It was like, someone paid us a dollar for 0.000000001% of our business, which makes us worth, you know, a hundred billion dollars or whatever the ridiculous thing was. It was just like, that's what evaluate, like, that's how valuations are typically determined. Someone puts in money, they buy shares at what percentage do they get? That's how I just, it's just a kind of a big game and I'm not going to play it.
Again, if at one point we decide we want to sell the business or whatever, we'll have to do that. Until then, it means nothing. So I just stay away from it. Yeah, I did see that post and it was a good one for sure. It was a fun one. Another thing that I wanted to chat about is another recent email newsletter you sent out talking about looking back less. And it kind of coincides with not looking too far forward as well.
And maybe that's the ideal mindset set or a premise, a lesson that we're getting here. And you talked about, you know, not looking back too much, but also not being held back by your recent past or even a long-term past, right? So you can continue to move forward. And I've experienced this recently. You know, I've got a business I've been running for pretty much three years.
And within, you know, the past six months, We kind of like completely overhauled it and rebranded a bit and brought on two other co-founders. And it was like, it's got this fresh new baby start like it did three years ago, all because we just changed it, mixed it up a bit. And I'm curious to chat more about that mindset of not looking back all too often and not looking and letting that limit you and the things you're doing moving forward. Yeah.
So that post came about because I was talking to some other business owners about retrospectives and postmortems and stuff, which people do after a project. It does goes well or does it goes poorly or whatever. And we used to do some of these where you kind of like, you have this big meeting afterwards, like that didn't go as well as planned. Let's like, see what we can learn from it, which is a good, you know, in theory, it's a, yeah, let's see what we can learn from it.
My sense is not that much, actually. I think you learn more from doing something again. You just like, you absorb the lessons because you experience the lessons in real time, essentially. And then you just, you kind of should know. And next time you try something different or you do it the same way and you kind of figure things out as you go.
And I just don't think a lot of things apply again in the sense that, hey, if we break this down and look at this again and try to hone in on the things that didn't work, if we avoid those same things again, we're going to be okay. I just don't think that that's – first of all, you don't really know what – just like I said earlier, you don't really know necessarily why you were successful.
I don't think you know why something didn't work. work you can i mean there can be some things like if you are on a factory floor and a piece of metals being stamped and the stamping is wrong like you can isolate that to the machine that presses the steel and go okay but but that's not how most like that's certainly not how software products are or human products in a sense like human involved consulting and like it's like if we wouldn't have said this to the client we would have like it would
have been fine like i don't maybe you would have said something else too later that wouldn't have been fine. Like who really knows? So my sense is like, just get back in there and like, you can peek back a little bit, but don't stare. Don't sit there and think you're going to find the thing. If you just keep looking at it and go off, we just don't do that again. Everything would have been fine.
You just don't really know. So my sense is like, just keep moving forward and keep trying more things and, and just keep improving inherently by doing more. You're going to get better. Yeah. Play the guitar more. more. You're going to get better. Yeah. You can figure out like why you weren't good and what you did wrong, but like, you just got to keep playing to get better. You can't just study the mistakes and think you're going to get better. You've got to keep doing the thing.
And there's so limited time. To do anything. I don't want to spend it looking back. I want to spend it pointed forward and just making something again. So I also think, I know I'm kind of being abstract here, but really it is that. I just think in general, also most mistakes, like the ideal place to be is to find, it's to put yourself in a position where most mistakes don't matter anyway.
Like if the decisions are relatively small and the cycles are relatively tight, if you just blew four weeks because you just made something that didn't work it's not that big of a deal what sucks is if you spent four years on something that didn't work yeah that's a problem so like we don't that's why we only spend a maximum of six weeks on any feature that we build and most are shorter than that because if we just if we blow it because we just blow it we
don't even know why like you just move on and you just you put that time and it's in the past just move on do something else and try and do a better job next time i don't know that i think that's how how most things are. I mean, I attribute this in some ways to this experience I had many years ago. I was in a Navajo rug gallery. And I noticed that on these rugs, there was clearly these errors. Like there's a lot of patterns. They're very patterned typically, or they're striped.
And I noticed that some of the stripes were kind of wavier than others. And there's some patterns that like geometrically weren't clearly like they were aiming for some sort of triangle that was sort of out of proportion and whatever. And I asked the gallery owner, I'm like, why are these full of errors? That's what I said. And he goes, the Navajo, and this is his interpretation. I've heard other people talk about this too, because I looked it up a little bit, but who knows really,
but they don't see these as mistakes. They're just moments in time. And they said, just like if you were walking, trying to go up a mountain and you took sort of a little bit of a wrong path, path but you could find your way forward from that path you wouldn't because when you realize you took the wrong path you wouldn't always backtrack right to the place where you took the wrong step and then then went the right way you'd be like okay i think we went the wrong way like we can find our way back
to where we need to go and you do that by going forward you don't do that by going backwards now in some cases you can definitely find yourself in a dead end where you have to back out but like he's like when you weave the rug it's not a dead end you just keep going and i think the The same thing is true for software development. Like you just kind of keep going. You just keep moving forward and you fix what you can, but you don't linger too much, even though that was a very long answer.
But hopefully it gives people some flavor and some color as to how we think about things. Well, and not just software development, but really any business and in life in general, you know, you just keep moving forward. I mean, yeah. Practically, you're walking down the sidewalk and you trip. The next sidewalk is a couple millimeters high and you stub your toe and you kind of trip. You might feel foolish and you might look back and go, what the hell was that?
But what you don't do is walk backwards and re-walk. You just go, oh, that was stupid. Maybe I'll pay more attention next time and look down more. I don't know, whatever, right? There's an uneven thing coming up. Maybe I'll just notice. You just just go, you just keep going. And I think that, that it doesn't need to be more complicated than that. Yeah. I, I think you should, I think this should be taught in business school and I think we should make a masterclass out of this.
Cause this is, this is, this is the type of business knowledge that I, you know, it's just, they, they want to make it. I like you, I have a graduate degree, MBA and I don't have an MBA by the way. So, okay. Well, I just wanted to, yeah, business Business school. Bachelors. But they, you know, they made it so complicated and then going into the corporate world and, and, and everything is just so overly complicated where it doesn't have to be.
You've got a product and a service, you make it simple and clean. You guys had the same pricing model for how many years? I don't know, like many years with Basecamp, right? Yep. And, and it's still like, you know, you still have two tiers that, that you offer with Basecamp, which is most people say, no, you need three tiers and it needs to look like this. and and you're like no we're not we're not buying into that i love that this man i i.
I'm going to end it here. There's more I can talk about, but I'm going to end it here. We'll do a part two at some point if you want. Yeah, because this is just such great information. And I know you want to share real quick, you guys have a new business product that you're releasing once, which goes in alignment with keeping business simple. Yeah. I mean, you can just go to once.com, O-N-C-E.com and check it out. Basically, it's going to be a new collection of products for us.
So it's like a new brand, brand, a new line of products that are going to be non-SaaS, so meaning not subscription-based, and you just pay for them once, and you download them and install them on your own server, or you can do a shared server like DigitalOcean or one of those, any cloud thing, it can be hosted anywhere, basically. But it's yours. You download it, you even get the code, and you pay for it once. And we have some basic updates that you can grab if new versions come out.
But it's a very very different approach to, you know, compared to the past 15 years, which has been basically SaaS and SaaS only, that everyone basically has to rent software. And you're not even renting software, you're renting software that's a service. What we want to make, again, are software products that you buy and that you essentially own. And so the first one's going to be out in a few weeks. Once.com is the brand, but the first product will be called something else.
And we're hopefully going to do a few of those over the next few years and see how it shakes out. I don't know know if the market's going to be ready for it. I don't know if people are going to like it. I have no idea, but it's going to be a really fun experiment. And if it doesn't work, to get back to an earlier point, we're not putting ourselves at risk. We have enough margin here to play and we'll see what happens. And we really don't know, but we're very excited about it. It's beautiful.
I love it. Keep it simple. Keep it simple. Jason, thank you so much for coming on the show. Listeners, thank you for tuning in. I'm thoroughly refreshed by your mindset around round business. It makes me feel so good. So thank you so much. Let's do it again. Appreciate it. All right. Listeners, thank you guys for tuning in once again, and we'll see you on the next episode. Goodbye, everybody.
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