Hey guys, welcome to the high performance clip for today. We're talking with Jason Freed and we're honing in on his money mindset. Now, Jason built one of the largest software companies in the world. They started building software in actually 1999. He's the co-founder of Basecamp and it is a multi-billion dollar company at this point.
And what we actually did is took all of the clips from the podcast where he talks about money, money, investments, how he manages money, how he maintains goals, and put it into this clip. Because I really think he has a very insightful and powerful way of looking at business and money. And whether you're an entrepreneur or not, you can get a lot of value out of what Jason recommends here. So let's hop into it with Jason Fried and his money mindset. set.
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 to do because they're in a fund that has to, you know, pay off in five years or seven, whatever it might be.
They have a lot less flexibility and freedom than they thought. 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 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 that have to work out in the end. We have to make more money than we spend. In terms of quarterly, 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. 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 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 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. 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. And the hardest way to make it work is to make a really complex one that's actually extra hard. Like 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.
Yeah. Really hard. Like, 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. Like, it's actually in some ways we take the lazy way, which is like, how do we make it easy on ourselves? ourselves. I think it's the 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 know. 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. Why would I want to get forced out in seven years, even if I had a massive paycheck or a liquidity event or whatever?
What if at that point, I'm like, the best thing in my life is this. 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 that would make us unhappy. And if we're unhappy, we're not going to do the best work we can. We're fully remote, always have been, basically. 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. 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. Like 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. All right, guys. What did you think of that? What did you take away from that is the key question.
Jason reiterates a few things. One, he thinks outside money, they believe outside money, takes away a significant amount amount of control and freedom that you have in a business. I've talked to many entrepreneurs that have taken investment before. Some people love it and some people just frankly don't. They just kind of become an employee. They kind of built themselves into a job. There may be some more money there.
They may be worth X, Y, or Z, but they don't necessarily have the freedom that they used to. And I love Jason always says, we just tried not to be stupid. And the definition of stupid stupid being, take a risk that's so big that allows them not to be in business anymore. I love his growth model of slow growth into big business while keeping it simple. It's a very powerful way to build business.
And I think if we can look at the long-term as opposed to the short-term, quite often investment money or those big risks that could put us in significant financial trouble are more the short-term gains. Not that you can't learn a lot and not that there's a good amount of people that. Succeed doing those and they get the story. But I think more often than not, that would be the exception versus the rule.
You think about all the startups in the world that took investment money and how many of them flopped, probably the vast majority of them versus the ones that succeed. We hear the stories, we watch the stories on Netflix of the ones that succeed versus the the failures that are out there. So what do you take away from that? I love Jason's mindset on this. If you haven't listened to the full episode yet, I highly recommend it guys.
Episode number 559, no goals, no outside money and small teams of two built this billion dollar company with Jason Fried. If you like what you're hearing and you want to make sure you don't miss any of these tips, please subscribe, leave us a review and share with your friends. See you on the next episode.