Early in your career, there was an air of picking fights. Over the years, that’s mellowed out. Where did that come from, both the fighting and mellowing out?
The internet brings the ass out in all of us. When we first got started no one knew about us. When no one knows about you, a good way to get some exposure is to pick a fight and go against an entrenched player or brand or company. We didn’t like what was going on back when we launched 37signals in 1999. If you go to 37signals.com/manifesto, you can read our original site. It’s a fight against the insanity of the industry at the time, of these agencies trying to promise they could do everything for you. Everyone was showing off their work in the same way, and we said, “We’re not going to show any work. We’re just going to do something black and white, and we’re just going to share ideas.”
We’ve always tried to do that. When Basecamp came out, we were fighting against the sense that shit’s too hard. There’s no reason for things to be so hard and complicated and expensive. We push hard against that, and we’ve done that over the years. Rails is another take on programming; it doesn’t have to be so hard.
At a certain point, as a brand, as a company, you mature. You’re not the young punk anymore who’s screaming at everybody. The rebel is still very much in our blood and what we’re about. We’re actually going to begin shortly to get back into that mode against some things. That’ll be fun.
When you want an industry to be a better place and you just don’t like how it is, a good way to do it is to go, “I don’t like it for these reasons. We’re doing it this way. Come and join us,” and start a movement that way.
I don’t like negativity. I used to, but I want to make more reasonable points. Thoughtful arguments is what I’ve come to.
A great example would be your recent post about group chat and how it’s broken. That wasn’t coming out and saying, “Hey, Slack or whatever, you suck.” It was, “I think there’s a problem here, and we should fix it.”
That’s how I prefer to make points nowadays. Those are points that I like to read and absorb myself. I want more things to exist in the world that way. If I can have an impact, I’m going to write up things like that.
You can still take strong angles and positions and have unique points of view, but you don’t need to call out anyone specifically. “This is a problem, and here’s how we would solve it, and here’s what we think’s better and why it’s better,” and try to make a reasoned argument about it. Some people agree, and some people won’t. That’s fine, but I do think it’s important to have strong opinions and have a point of view that’s clear versus being nonchalant about everything. That doesn’t really make a name for yourself.
You’ve been dropping down on negativity online, and you’ve been developing yourself more as a CEO. How has that impacted Basecamp?
When I would see people internally be snarky about something … People tend to pile on when there’s a lot of snark. I started to say, “Hey, let’s not act that way. We don’t need to act that way. I understand your point of view, but let’s take another one.” I try to inject a little bit more of a thoughtful dialogue about things that people are arguing about or pointing out.
Someone will jump on a software quality issue that Apple has and I’ll be like, “I can point out 20 bugs in our own shit right now. We know how hard this is. This is a hard thing to do. Imagine being Apple, when you have a billion people using your stuff. This is hard. It’s not that they don’t care. It’s not that they’re not paying attention. It’s just hard. We should know that ourselves.”
I always try to point back to us when I hear people making a comment about someone or something else. It’s a better environment when we’re not picking on anything, but instead we have a healthy point of view. I don’t want to spend my time in that environment. I don’t think it turns into anything healthy. I’m getting older. I’m 42 now so it’s like, “Okay. I’m a bit older. I’m a little more calm and measured. I’ve got a kid now.”
How has that affected the culture?
Culture changes as you add new people and people leave. It’s an ever-changing thing—it’s not a monolithic thing. There are many different cultures inside of a company culture. Our support team has their own mini culture. Programmers have their own, and designers have their own.
We don’t rush. I think a lot of companies right now are rushing, and they’re full of anxiety. Part of that is because all of the tools people are using encourage that. It’s not a sustainable or healthy place. We want to be here for another 10, 20 years if we can. We want people to be calm, be thoughtful; to have a peaceful place to work, a peaceful place to think.
When you’re smaller, everyone has a better sense of what everyone’s talking about. When you’re a little bit bigger, people don’t know each other quite as well, and someone can say something that’s snarky, or whatever it is. It’s not always clear what they actually mean. You have to be a little bit more protective of that because clarity is just reduced at a certain level, once you have a certain size. We have 50 people now, which is still relatively small, but that’s a bigger challenge now.
Over the past year or so, there’s been some people who’ve been concerned about some of the things that some people have said, their little off-color remarks or whatever. In the past, it just wouldn’t have been a thing. You do watch yourself a little more, and you’re more measured. Fundamentally, I want the culture to be calm and not stressful.
A few years ago, you decided to spin off one of your products, Highrise. How has that gone?
I think that Highrise has really influenced us actually. They have a full team and they work their own way. I’m really not involved there at all, unless the team wants me to look at something. That doesn’t happen often, they’re really an autonomous company running on their own.
They have a nice cadence of releases. Every month, they have a whole handful of new stuff. We used to work in 3-month increments, and now we work in 6-week increments because of their month releases. That helped influence our development cycles.
It was an unintended consequence to have Highrise encourage us. We have a bigger team now, and whenever you have a bigger team, you start to work a little bit slower. That’s just the nature of humans. You don’t speed up. You slow down a little bit.
It was cool when they got started on Highrise. We saw them just improving the product rapidly in the first 2 or 3 months. “Whoa. How are they doing that? We used to do that. We used to be able to do that when we had 4 people working on the product.” Now, when you have 12 people working on the product, or 15, things slow down. That was a good reminder that small teams can make a lot of progress quickly.
Basecamp the product gets rebuilt from the ground up every four years. With the more mature culture, how was building Basecamp 2 compared to Basecamp 3?
We felt less guilty. Highrise was our second most popular product, it’s just a great business in itself, multi-million dollar business. We were neglecting it. We had Highrise just sitting around, getting worse relatively. Software doesn’t decay necessarily, but decays relatively. I felt really guilty about the fact that we had our name on that product and we weren’t improving it. It was unfair. It was wonderful to have a great team take it over.
It helped eliminate the guilt. Now, we knew it was getting the attention it deserved, that the customers wanted it to get, and now it’s a much better product for it. It feels a lot better now, knowing that it’s in good hands.
We knew that everyone in the company now could focus on this. Now, we can make the most ambitious version of Basecamp we’ve ever made. We can make a product that is totally unique in the market and build this better than we’ve ever built it before. We’re building Basecamp, and not building Basecamp and holding on to other things that aren’t working so well for us.
We do still do a couple other things. We have our job board. We Work Remotely, but that doesn’t take any effort to maintain, probably 10 hours a year. It’s actually quite a good business. We’ve got close to 100 job postings. Those are per 30 days. It’s $200 to post one, so you’re talking $20,000 a month or so of revenue that’s 98% profit. It can run itself. The ideal thing is to have these money machines running that don’t require a lot of upkeep, but also don’t fall behind.
A secondary product like Highrise is different. It’s a complicated product. A job board is very straight forward.
37signals, now Basecamp, been around for 17 years. You mentioned you want to be around for another 10 or 20 years. What’s that look like? How do you plan for it?
It can get sad and depressing if you think about it, like life. “Well, we’re all going to die. We’re probably going to get ill when we’re older and have some miserable years at the end.” Companies are no different. I don’t like to think that far ahead.
Right now, I know the next six weeks worth of work that we’re doing. Every six weeks, we start a new cycle of work. I know what that looks like. I’ve got an idea for the product vision in general, where we want to go with it, and that’s it. I feel like you have control over the next month or two.
I think you can spend a lot of energy worrying about something you can’t control, and then you end up worrying. “Oh my God. I’m worried this is going to happen to me, or that’s going to happen to me.” Who knows what’s going to happen to you? You’ve got what’s in front of you and what’s around you and who’s around you, and that’s it.
I feel like as far as you can see is enough. If we really want the company to be around 10, 20, 30 more years … I’ll be 70. I can’t run a software company at 70. You could, I suppose, but highly unlikely. It’s a young person’s game in a lot of ways.
David’s in his late 30s. I’m in my early 40s. Realistically, we’d have to have some sort of succession planning if we could survive that long and wanted to stay in business that long. But I’m not really worried about that right now.
Not worrying about the future—is that something you’ve had since the beginning, or is that a thing that has come with the privilege of making it as opposed to, “Oh, we’re barely making payroll this month. Hooray!”
I’ve always been very short-term focused. I was at this invite-only conference this last week called Owner Camp—a three day summit of small business owners. 30 different owners are there and we were all talking about our businesses and things we’re struggling with, things that are going well. We were going around the room, and I was hearing a lot of people talk about things that seemed extremely complicated to me, the way they sell and the way they charge. How they’re tracking time extensively, long-term planning, all this stuff.
I’m sitting there thinking, “I’m either an idiot or I’m really smart.” To be honest, I don’t actually know which it is but I’ve always kept the business very simple.
I got out of college in ’96. I came back to Chicago and started working on my own. I would just look at my expenses and go, “I need to cover those.” My rent was $900 a month, and I had a car payment of $150. I needed to make a $1,000 just to cover my basics, and then I’d like to make a few more bucks. I would do that. That was it.
It wasn’t about tracking time and, “Was that profitable on this project or not?” I’ve never cared about that stuff. It’s more of the big picture in terms of, “How much are my expenses, and what do I need to cover over the year.” I feel like a lot of people are tracking a lot of things that just don’t matter. This is my perspective and maybe I’m just completely ignorant, but it’s served me well for 20 years. Just keep things as simple as you can, in terms of how you manage things. Don’t let things get out of control.
I think that’s the biggest thing: don’t let things get out of control. Make sure you can wrap your whole head around your business at all times, and if you can’t, then don’t go there yet.
In 2002, I didn’t know we’d make something called Basecamp in 2004 that would change a lot of things for me and for the industry. In 2004, when we were building Basecamp, we didn’t know that this thing called Rails would come out of it that would change the industry in a lot of ways. Who knew any of this stuff? I haven’t worried too much about the things beyond what I know I can deal with.
When I do, I just feel like I start to worry. When I do think longer-term, I just start to get worried because your mind just start to make things up. Mine does at least. I think most people’s do. It tends to think about bad things that can go wrong.
It’ll go to worst case instead of, “Oh, I’m probably still going to be in business,” as opposed to, “How could our business die?”
There are so many things that could kill us. Maybe something will. I learned something from my cofounder David. David’s big into Stoicism, which is a philosophy. I don’t know much about it, but I do know that a big part of it is the idea of negative visualization, which is something David’s really into. He taught me a little bit about it: in any situation you’re in, just figure out what the worst thing that could happen is right now, and come to terms with it. Let’s say the business was to die in 5 years. Who knows why, but it died. It would be bad. People would lose their jobs.
Let’s call that a 20-year run. That’s not so bad. We would have had a chance to work on some amazing things. We would have changed the industry in a few ways perhaps. A lot of other companies to flourish with Rails. Even smaller things, like if we took this risk, if we spent X amount of dollars on this idea and it didn’t pan out, we’re still going to eat lunch. Everything’s going to be okay.
We’re not putting ourselves at risk when we try this. We’re taking a risk, but there’s a difference between taking a risk and putting yourself at risk. We’ll all be fine. Everything will be fine.
It’s important, for indie founders especially, to remember: the easiest thing to do is to launch a product or make a product. The hardest part is maintaining it and staying in business and dealing with the fact that this thing is alive and you have to keep it alive.
Launching is not hard. Coming up with an idea is not hard. Making something is not hard. It’s everything that comes after that.
For example, over the course of 12 years, we’ve made 6 or 7 different products. Because of that, a few of them languished because it was easy to launch them, but then to maintain them and continue to improve them over time was hard. I think founders and people who are interested in making stuff, they actually will fall back to, “I want to make something new. I want to make another thing, and another thing, and another thing.”
I love that drive in people, but that’s the easy part. I think it’s easy to get overextended and stretched too thin as you fall back to your standard pattern of “Let’s make the next thing now.” Everything gets harder when you have 2 things in the air, and then 3 things in the air, and 4 things in the air. I had to learn this lesson a few different times.