Question: What is 37signals?
Jason Fried: The company started in ’99 as a web design company actually. And we were doing client work for hire, you know, redesigning people’s sites. And we started getting really busy. In about 2002-2003, we needed a better way to manage our client projects, and so because we were shooting things back and forth via email, which is what people typically do. And we said, you know, we looked around at some software that existed and we weren’t really happy with what we saw, so we decided to build our own product internally to use with our clients to share designs and ideas online with people. And it worked out pretty well. And we said, hey, maybe there’s a business here. If we need this thing, someone else needs it. And that was kind of the... that’s sort of what 37signals is all about, that we build stuff for ourselves and we recognize that if we need it, other people probably need it too. And so since then we’ve launched six different products, we’ve wrote a book, and we’ve done a variety of other things all based on the things that we need or we want for ourselves realizing that we’re not special and other people would like it too.
Question: How is your company different?
Jason Fried: We’re kind of a virtual company and a physical company. So we’re 20 people, half in Chicago and then half elsewhere in 10 other cities around the world. So we’re a little bit of a mix of the traditional and the sort of next-generation, new wave, or virtual sort of company. Our general feeling though is it’s best if people stay away from each other as much as possible, because when people are all together all the time, it’s really easy to interrupt each other. And we found that that’s kind of the biggest problem with the traditional workplace... is interruptions. So we’re trying to avoid that at all costs.
Question: How do you develop your ideas about how to run a business?
Jason Fried: Sure, well it kind of happened because originally, my partner in the business, a guy named David Hanssen—Heinemeier Hansson actually is his full name—he was working in Denmark and I was working in Chicago. And we got a lot of stuff done working together seven time zones apart. And then eventually he moved to Chicago. And we're like, "Man, he's in Chicago, this is going to be great, we’re going to get more work done together." And he comes to Chicago and we get less work done together. And we start to realize that because we are both in the same physical place in the same physical office, we’re just interrupting each other all the time by talking. And there's something good about talking and face time, you know, but too much of it is a bad thing. So we decided that we’re going to try to simulate the old way of working, which was he was in Denmark and I was in Chicago, so we wouldn’t see each other very often. So he worked at home and I worked at home and if we came into the office we came in at off times often. And we found out that we started getting more work done again when we were split up. And so we’ve sort of carried that through, throughout the business now. That, you know, we try to stay away from each other as much as we can. We have a physical office, we just built a new office, and I can talk about that a little bit ‘because we try to take this philosophy and build it into a physical space. But most of the time, we don’t talk to each other. We communicate over the Web using our products or email or a variety of other tools you can use. And then when you do that, someone can hide the thing when they don’t want to be bothered. But you can’t stop someone from like calling your name across the room, or pulling you into a meeting or something like that. That’s hard to stop. But if you communicate virtually through, you know, Base Camp or instant messaging or email, it’s easy for you to hide that and then get back to it later when you’re free. So then you decide when you want to be in communication with somebody else instead of someone deciding when they want you to talk to them.
Question: What are innovations in your actual office space?
Jason Fried: So a big part of it is the materials that we choose. So we choose very acoustically friendly materials. Lots of foam... or I should say felt, some foam, cork, stacked materials of different sizes in different, I don’t know how to put it, but they’re stacked at different levels, so the sound reflects instead of bouncing around and echoes and stuff like that. We get rid of the echoes. We have sound insulated rooms that we do use when we do need to talk to other people. So we have this idea of... we do have an open workspace, everyone has an open desk, but we also have these things called "team rooms." And when two or more people are talking, we say, "go get a room.” You know. “Go get a room.” They go get a room and they room is sound-isolated. So they can have a conversation, loud if they want, but not bother everyone else who is working. And that’s the big thing that’s really important about out space. That we do have places for people to get together and talk, but they are sound-isolated and insulated. So they don’t interrupt everybody else in the.
Question: What’s next for the workplace?
Jason Fried: think the modern sort of cool workplace is the open, loft, wood floors, everyone out in the open collaborating all the time, or talking all the time. And the thing that’s important to keep in mind that interruption and collaboration are different things. In the modern workplace with the open work space and lots of hard materials everywhere, and people cramped in, you know, really close to one another, it just encourages interruption, it doesn’t encourage collaboration. And so if you really want to get creative and really want to work on something, you need uninterrupted structures of time to get those things done. And if someone’s calling your name or your sitting really close to somebody else, it’s very hard to actually find that time. And I think that the trade.. while there’s some good stuff about being able to see some people all the time and walk past people and there’s some nice stuff that happens in those environments, I think that it should be more the exception than the rule
Question: When did you decide to record your office ideas into a book?
Jason Fried: So, the way we’ve kind of done it, for the past 10 years we’ve been writing on our blog. We have a blog called "Signal Vs. Noise." And we’ve been writing all of our ideas down and sharing them with everybody else. Because I figure, if they’re valuable for us, I’m sure someone else can benefit from them. It doesn’t cost as much to write these things down. We talk about them or write them down internally, so why not share them externally too. And so over 10 years, we’ve been writing down these things about design and programming and business and marketing and sales and all the stuff that we have to do every day. And then we looked back on it and said, maybe we can turn all these blog posts into a book. Maybe we can take the stuff we’ve already written and turn it into a book and polish it up and give it a single voice, but let’s do that instead. So, "Rework" and "Getting Real" before it, which is our other book, are not things we sat down and decided to write, they’re actually things we sat down and looked back and found the things we’ve already written and then compiled them together. So these aren’t new ideas, these are old ideas. These are ideas we’ve tried and we tested and we put out there and that’s why I think the books are valuable because they’re not theoretical, they’re not academic. They’re not... in a perfect world this is how it should work. Actually, this is how it has worked for us and they’re time tested and that’s why we share them.
Question: How do you take an idea from conception to reality?
Jason Fried: Our whole thing is actually just about keeping things as simple as possible. I know this is sort of a, it’s become a cliché... the word “simple” has become as cliché that I try not to use it anymore. But it ultimately, the point is that things are pretty easy and simple until you make them hard and complicated. So we’re always trying to keep them as simple and as easy as they naturally are. So if we have a big idea, let’s chop that idea in half. Let’s chop it in half again. Let’s figure out what the core thing is, what like the three things you need to do are and let’s do those things really, really well. So instead of focusing on everything and the bells and whistles, it’s more about the basics. And that’s really what our whole philosophy is all about. So people ask us, there’s a lot of competition in our business. A lot of people build software like ours. People say, "What’s different about our products?" And our answer is always, "Our products less than the competition." And I think that’s really what people want, is just a few things done really, really well. And if you think about ever day of your life, the things you really appreciate aren’t the complicated things. They’re the simple things that work just the way you expect them to. So that’s sort of our way of building products, that’s our way of building this office, that’s our way of communicating, that’s the way of hiring, all that stuff comes down to what are the basics. What are the things that really matter and then just doing those really well?
Question: How is your company's approach different from that of other firms in Silicon Valley?
Jason Fried: A lot of those companies in Silicon Valley and even on the East Coast now are VC-funded, venture-funded. And I have a fundamental problem with raising money upfront because I think it sets the wrong... it puts you in the wrong set of—or frame of mind. Basically the difference is this. A ventured-backed company on day one has to spend money. They have money in the bank and they have to spend it. A bootstrap company, like ours, we are self-funded, has to make money. And I think on day one, if you have a choice, do you want to make money or do you want to spend money, you’re better off as an entrepreneur learning how to make money and not learning how to spend it. Because just like anything, the things you do more often are the things you’re going to get good at. So if you get really good at spending money, you’re going to be really good at spending money. If you have to work on making money from day one, day two, on year two, year three, you’re going to be really damn good a making money. And that’s what you need to be as an entrepreneur. You now, this is a business. So that’s why I think the whole venture-backed thing is the wrong way to start. I think if you have a great idea that’s working well and down the road you want to get some money to do something or take some money off the table or whatever. Okay. But upfront, you need to have that... I believe you should have that pressure on you to learn how to make money. And just like anything, just like playing the piano or anything. The earlier you start the better off you’re going to be and it just takes practice and I think making money is that sort of thing. Same sort of skill.
Question: How does 37signals compare with Google and Facebook?
Jason Fried: Well, I don’t really compare anybody to us or us to anybody because I don’t think it really matters. But, since you asked the question, let me kind of go into it. I mean, to me, companies like Google and Facebook, and even Apple, which I love, those are exceptions to the rule. These are phenomenally successful, sort of—I mean, you could say, is Facebook successful? I don’t really know yet. I mean, there’s rumors that they’ve generated a lot of revenue, but are there profits, I don’t know yet. Google’s clearly profitable, Apple’s clearly profitable, Amazon, those kinds of companies, but those are really the exceptions to the rule. Most companies are not mega huge massive companies. Most companies are small. And so the rules that govern these big huge companies and people look to Google as the example. And Google did it this way and it worked. And it probably doesn’t apply if you’re four people. You know? It doesn’t apply if you have a lot of outside funding. It doesn’t apply if you don’t have the most brilliant search algorithm in the past 10 years, you know. So those lessons aren’t, I think, valuable lessons for entrepreneurs for small businesses. So to compare, I mean, my point is that you should look for a sort of, if you’re going to look for, not heroes, but people you think you should sort of learn something from, look at people who are sort of in your realm and don't try to compare, like cross-compare a small company with a big company and try to draw lessons. I think if you’re small, look to other small companies who are doing well. If you’re big, look to other big companies who are doing well because the strategies are totally different.
Question: Is Web entrepreneurship now primarily a “start it and flip it” enterprise?
Jason Fried: For me, like I love the business I’m in so I want to do it. If I sell the business then I am not doing the business anymore. So, okay, so I have $20 million, or $100 million or half a billion, whatever you get. What are you going to do now? What you end up seeing... first of all, it’s great to that that money, so I’m not like discounting money like that, but what are you going to do next? A lot of these people go back to starting another business. They can’t stay out on Mojito Island very long. They go back to starting another business and in a lot of cases their second idea is not as good as their first idea. And so I think our idea, this might be my best idea. So why should I give it up? Why shouldn’t I ride my best idea for 30 or 40 or 50 years if I can? So, that’s sort of the problem I have with people flipping, because maybe they have a great idea and maybe that was their best idea with then were 27 and not like they’re searching for something new and meaning in their life and they can’t find it because they had that great thing and now it’s gone. The other problem I have with generally flipping, but building to flip is that you really only have a few customers. You have Google, Apple—and Apple doesn’t buy many people—Yahoo’s not buying anyone anymore. I mean, Microsoft, maybe. There aren’t a lot of buyers, really, for software companies. So if you don’t win the lottery, then what? And the answer is, you’re probably going to go out of business because you were only planning on that. So I think you’re better off building a business that can stick around, it’s sustainable, it can last for 20 years, 30 years, and then if someone wants to buy you and you want to sell, you have that option, but it’s not your only option. And that’s why I think it’s great to build a company on your own with your own revenue.
Question: Can IT business ideas work for brick-and-mortar businesses?
Jason Fried: Some of them certainly can. But what I think is interesting is, is that the main thing that we were just talking about, which is profits, applies to every business except, for whatever reason, these technology businesses. So what I’m actually suggesting is not radical. It’s how most businesses are run. It seems to be radical in my industry where people think, "Wow, you can actually make money by selling things?" Like that’s a radical notion in our industry. But in most industries that’s how it actually is. So I do think a lot of these ideas apply. As far as, you know, being in the office or working remotely, obviously if you’re a cashier you’ve got to be there and things like that. But if you’re in the back office, you know, or you are a consultant or something like that, I think a lot of these stay away from people, don’t interrupt people, those sorts of ideas apply regardless of the industry that you’re in.
And I should say that one of the really cool things has been "Rework" has been received, our book, by a lot of people all across the spectrum. So we knew technology companies would like it, but we’re hearing from, you know, people in their 80s, we’re hearing from—we heard from some hairdressers actually who’ve read it and loved it. A lot of restaurant owners from big huge manufacturers. There’s a spring company out in Chicago that just sort of, they make springs. They’re like an industrial manufacturer and they’re like, "These ideas are great. We’re going to try working on some of these." And other people have written this and saying, "I’m glad I’m not the only one who thinks this way. You know, I’ve had this business for 20 years now making this, that and the other thing and we’ve been working this way too, and everyone’s been telling me we’ve been crazy." So it’s great to sort of hear from all these other different people in different industries who think these ideas do work for them as well.
Question: What are the common mistakes new businesses make?
Jason Fried: When you borrow money from somebody else, you’re on their schedule, you’re renting time. When you have your own money, or when you’re generating money through customers, you own your own time, you own your own schedule, and so you can take your time. We can take 10 years to do something because we have revenue coming in and there’s not someone saying your loan's due in three years, you know. So I think a lot of people struggle because they start of by borrowing money and then they’re sort of on someone else's schedule and they don’t have time to sort of get in the groove. So there’s some of that. I think people just typically just try too hard, actually. That’s weird because you have to try hard to succeed, but I mean try hard on the wrong things. You focus on the wrong things too early. And those can range, depending on the business you’re in. But I don’t think it’s... I guess my point is, I don’t think it’s competition that puts these businesses out of business, I think it’s the business themselves putting themselves out of business by hiring the wrong people, being afraid of making money, spending too much money early on, maybe getting a storefront that's too big if you’re a physical store. You know. Doing all that stuff when you really got to focus on the product first and keep it as small as you can and if you’re going to open a bakery, open it out of your house first. Just make – I mean, that’s probably technically illegal in some place, but make some... if you want to open a cupcake bakery, make some cupcakes and sell them at the Farmer’s market for six months, for a year first, on the weekends. See if it works. If it works, okay, now you have some people who like your cupcakes, you’re selling out every weekend. Now maybe you can move into something else. Instead of saying, "I’m going to open a bakery" and go buy a storefront and some expensive machinery and stuff like that. So I think people kind of start a little bit too quickly sometimes too and they should just make their time and starts something on the side and see where it goes.
Question: How did 37signals transition between business models?
Jason Fried: The big thing for us was that, we started out as a web design firm. And we were doing client work for hire—web design work for hire. And it was great. We were doing really well and things were going all right. And then we hit on this idea to make project management software. Right? But we didn't stop our client work business to build software. We started building software on the side. So we treated the new product like Base Camp, which was our first product, as a client. So we still were doing client work. So there was an overlap. So we kind of treated Base Camp as a side project, as a side business and let’s see what happens. And it turned out in a year or a year and a half later, it was making more money for us than our consulting business. So then we could stop doing consulting—which was a great day—and sell software instead. But we didn’t say, like we’re going to stop doing consulting and start doing software the next day because that’s very risky. And I’m not a big fan of risk. I know like the whole entrepreneurial myth is like you know, the risk, take on risk and the entrepreneur with the risk. I just don’t buy that. So I think side businesses, trying something on the side, spending a few hours a week, seeing where things go first is the right way to do it. And especially if you have a day job. People dream of starting their own business, I don’t recommend people quit their day job and start their business. I think you should start your business on the side a couple of hours a night, a couple of hours a week, see what happens. You know, use your day job salary to pay the bills, to fund your new idea, and then maybe a year later you’ll be all right and you can do that. So, the business model shift for us was a slow and gradual shift making sure we were able to sustain ourselves on the new model before we give up the old model
Question: What milestones should a start-up reach as it grows?
Jason Fried: Our new business model, the model we have today is a subscription model. So people pay us on a monthly basis to use our products. And we had this idea that if we can make $5,000 a month on Base Camp after the first year, so $60,000 a year, that would be good because as a side project, we didn’t have this vision of changing the company. We hit that in about six weeks, I think it was that we were making $5,000 a month. And so we realized at that point that something... there was something there. Didn’t know how big it was going to get. It’s gotten much better than we ever imagined. But that’s when we sort of knew that things were going to be okay. But at that point, we didn’t change. And so we didn’t say, oh my god, we got to quit this thing and start something... and change our business or we’re going to be successful so let’s buy a bunch of servers and... We had one server the first year and when we needed two, we bought two, when we needed three, we bought three. You now, it wasn’t about, "Wow, I think this is going to work, wow let’s spend money and get crazy." It was about, "Let’s slowly grow, just like everything in nature, slowly grows." Things get stronger and better slowly over time. And that’s how we try to run our business. So it’s not about the big plan, it’s about a day by day by day by day and seeing where things go and just kind of making decisions as we go.
And the main reason why I think this is important is because people often make decisions with the wrong information. So they make decisions far into the future, based on information they have today. You’re better off making decisions today based on information you have today because that’s when you make your best decisions. You make your best decisions when you have the best information. That’s always right now. You and I know more about this interview right now then we did three months ago. So, you can ask me a new question right now. If you had all your questions, you have some written now, but if you had all of them written out and never changed your ideas on the questions you might want to ask, the interview wouldn’t be as good as you can say, "Jason just said something now I can ask something else." So, that’s why... that’s the agile side of it. So there’s a little bit of planning, but there’s the agile side of paying attention to the information you have right now. And that’s why I don’t like the big long plans because you’re saying in two years you’re going to be here and in three years you’re going to be here. Well you’re just saying that based on information you have today. It’s not really going to be any good in two years. The best information today is the information you have today and that’s the information you have to make decisions.
Question: What advice do you have for Web developers thinking of starting a business?
Jason Fried: I think it is important if a developer is going to start a business that they understand business at some level. And I think business should be taught in design schools, it should be taught to engineers; it should be taught at every level because a lot of people when moving into the future are going to be doing things on their own. So I’ve seen a lot of software built by developers and they put on the market and they don’t understand about pricing, they don’t understand anything about customer service, they don’t like customers, you know, there’s all that stuff that can happen. So... and the lucky thing about David, especially is that David actually has a great business background. So David’s a developer with a business background so we make a lot of business decisions together and that’s a really valuable asset. To have somebody who’s leading developers who also understands business. So it’s not just about technology, it’s not just about code. It’s about; we’re building this because it has to do this, because we have customers that pay us and that sort of thing. So, I would just recommend anyone that is going into business as a developer, for example, have some business background or team up with somebody who understand business
Question: How do you balance the business side with the technical side?
Jason Fried: I’m not technical myself. I do design and I do business stuff. But it’s important that I have someone like David or some other partner, some other person on the team who is making those technology decisions because I don’t know anything about that. And so if I try to know things... if I tried to guide people who are doing the work like that, I’d probably upset them, they wouldn’t be happy and they wouldn’t do good work. So I think it’s important to know your limits. Know what you're good at and what you're not, and what you’re not you should find someone that can help with that because it seems like a lot of technology decisions made by people who don’t understand technology are typically bad decisions. Now when we built Base Camp, this is actually sort of a little quick story I will tell you. When we built Base Camp, I was learning how to code something called PHP, which is a language a lot of people use. And we hired David to build Base Camp, and David was a PHP programmer. But he learned about this new language called Ruby. And it was out of Japan, it was relatively new, I think. And he said we should build Base Camp in Ruby. And I’d never heard of Ruby. I’d heard of PHP. And so if I was so stuck in my ways, I don’t know technology, but if I’m like "I know PHP and so PHP’s got to be the way because that’s what Yahoo uses, or that’s"—and forced David to use PHP, Base Camp wouldn’t have been as good because he wouldn’t have been as happy writing it. And so I trusted David because he’s the one who knows technology to say, if you think Ruby is the right language, then you should use Ruby. And that turned out to be a great thing. Ruby on Rails came out of that and all that stuff, but the point there is that I was familiar with something and unfamiliar with something else, but I said, "Let’s go with the unfamiliar thing because the person that’s really familiar with it picked that one." And that’s where it’s important to know what you’re really good at. And I wasn’t really good at making that technology choice, David was and that really worked out for the better.
Question: Where do you see free playing into the business model?
Jason Fried: Free is fine. So we have some free stuff. We have free versions of all of our products. We have a couple of free products. We gave away one of our books for free. But, we also charge for stuff. And we charge for some of the things that we also give away for free. So you have to be careful not to give away too much. We like to liken it to emulating drug dealers, basically. So, drug dealers give people a little taste, they get them hooked and then people buy more. And, you know, I hope our products are as addictive as crack. They may not be, but I hope they are. But the idea is that, that model works really well. And so our products, you can try them for free. You can try them as long as you want for free. And then if you need some more of our products, more features or more capacity, then you can pay for them. The problem I have is when companies, like their business model is free only, and then they say, "We’ll figure out how to make money later." As if there’s going to be this magic switch they can flip. And it gets back to one of these original things I was talking about that if you’re not practicing making money, you’re not going to be able to flip that switch and just know how to do it really well, you need to have some time. You need to have some experience at making money. And so, free is like... Ruby on Rails, we open sourced. So that’s free. That’s a framework that anyone can use to develop products. And the reason we did that was because we think infrastructure in general should be free. A lot of the things we base our products, our infrastructure on are free. You know, my XQL are for database, you know different free servers and Ruby’s an open language that's open. There’s a lot of open source that we depend on to build our products and we wanted to give back that as well. So, that was really important to us. And even more so, we knew Rails would get better if hundreds or thousands of people were using it and contributing back to it than if we held it to ourselves and had to make all the improvements on our own because that wasn’t our core competency. We’re focused on products. Not our infrastructure. So by open sourcing our infrastructure, other people can make it better for us and make it better for them. And I think that’s a really valuable way to do it.
Question: What rules should companies follow when they're hiring?
Jason Fried: So fundamentally I think it’s important to hire late. So hire when it really hurts. So the reason I think that’s important is a lot of companies, I’ve seen especially in our world, the tech world, hire in anticipation of needing people. And when you do that it’s really hard to judge their skills because you don’t really know what they’re going to be doing yet. That’s one problem with it. The other problem with it is you have to keep them busy on things that don’t matter until the thing that comes around that you need them for matters. And that’s insulting. It’s insulting to somebody who’s really good to say, "What you’re doing now doesn’t really matter, but we’re going to find something to you that matters in six months." That’s just an insulting way to hire people and to treat people. So we’re always hiring after we need somebody, not before. And that’s the high-level pitch that we talk about when we talk about hiring is, hire after it hurts, don’t hire in anticipation of people. Don’t hire for pleasure. And there’s companies that ramp up really fast and just, you know, I think that’s just a really hard... it’s hard to judge. It’s hard to hire anyone good, really hard to hire anyone good. To hire 10 people good a month, a 100 people good a month, you can’t really. I think maybe if you’re lucky you can do that, but I think it’s very, very rare. Unless you’re a company that everybody wants to work at, a company like Google or something like that, where a lot of people want to work and they can maybe attract the best of the best of the best, but most companies don’t have that luxury. So hire slowly, one at a time only after you need to.
Try them out. So we try to try people out, we give them a project. When we hire designers, we give them a project to do for us, a one-week project to do for us and we pay them for their time. So because, when you look at someone's resume or the work that they’ve done, you don’t really know like, was this just them or did they work on a team, it’s very hard to tell. And a lot of work, especially with developers, you can’t see their code because it’s written for proprietary product that’s owned by a company. So we looked at the open source world, because that code's available. We can look at their actual code submissions and look at their documentation, look at all the stuff that they’ve actually contributed, not said they’ve contributed. So we want to try to get to real as soon as we can. So real code, a real design. If we have to hire someone temporarily on a project basis to show us what they can do, that’s far more valuable than looking at their resume or looking at their portfolio because that’s usually not a great representation of who they are today.
Question: Are resumes and cover letters still useful?
Jason Fried: I love cover letters. Resumes are just kind of ridiculous things. They really are. They’re full of just lies and abstractions and it’s not that people are being malicious, it’s just like, that’s the culture around resumes. And ultimately, everyone’s resume looks good enough. Bullet points make people... equalize people. The other problem with resumes is like, you know seven years experience with Microsoft Word, I mean, what does that mean? What do these things mean? They don’t mean anything. So, cover letters are great because you can tell someone wrote them for you. A resume is typically a general... it’s spam, first of all. But it’s generally a general purpose document that you give out to a lot of people. If a cover letter is generic, I don’t want to talk to that person. If a cover letter is written for us clearly, and you can tell in a cover letter, then you definitely want to consider that person because they actually want your job, not just a job, but your job. And I think that’s really valuable.
Question: How do you find the right person for a business?
Jason Fried: One of the things we’ve been seeing is that we really like it when people really personalize their job pitch to us. Like, "I want to work for you, here’s why." Some people make a Web site, a specialized Web site just for us. Some people speak our language. You know, they’ll do research on the company and they’ll understand what we’re all about. And those sorts of efforts really show to me that someone really wants the job. And again, not just a job, but our job. So I look for things like that. And I would say, if anybody out there is looking for work, and really wants to work for a company, you’ve got to do something special to get that job. And that just means... that’s not about you, it’s about the company. What can you show this company that tells the company that you really want to work for them? So maybe it’s learning something about their history and bringing it up, some abstract thing that someone else might not bring up to set you apart. Maybe it is showing off your work in a special way, in a different way that's customized to that company. I mean, you’ve got to go beyond just sending a resume. And you’ve got to go beyond even just a good interview and you’ve got to go beyond just a good cover letter today. You’ve got to really show them that you really want the work, and this comes down to really being personal in your approach. One of our designers that we hired, I think it was about a year or a year-and-a-half ago, Jason Zimdars. Built a beautiful site showcasing his work for us. But not just, here’s the work that I’ve done for anybody, but here’s the work that I think is applicable to the work that you guys do. And here’s some words that I think matter. And I know you guys appreciate good writing so I’m going to take the time to write something well. And that really had a huge impact on us. And everybody who does that really has a big impact on us. We get a few hundred resumes every time we post a job, you know. And there’s only a handful of people who really go the extra mile and it’s sad. I think you know, it’s not that hard probably to get a great job if you make an effort. But if you just kind of blast out resumes and blast out generic cover letters, forget it. You’re not going to get a great job.
Question: What’s the role of higher education in the new economy?
Jason Fried: We don’t care about higher education. Don’t care about formal education. I think maybe... I think, I don’t remember the stats, but it might be like 40% of the company never graduated college. Things like that. Some people went, some people didn’t go. I don’t care about that. It doesn’t say anything to me. I actually like when people drop out because if they drop out and follow their passion, I love that. Like some guys are programmers – I don’t want to be at school for four years because I can’t program at school. I can program for a company and I can learn more in those two years that I would have gone to school and I can program instead. So I’m far more interested in real world experience and doing things and building stuff instead of theoretical stuff, which I think is taught in most schools. I also find in people who come out of school are a bit behind, actually on what’s really going on out there compared to people who have just been in the field for a while. So I just think experience is far more valuable to us than your GPA or where you went to school.
Question: Are there generational trends you see when hiring?
Jason Fried: Everyone we hire we make sure that they’re just good people. If someone feels... if there’s an entitlement complex, I’m not interested, you know, if people feel like they’re owed something, forget it, you can go away. So if there’s any of that, we just dismiss it offhand and they’re not... but I haven’t really seen a whole lot of that. So, but again, I haven’t really had a lot of experience. I think someone who maybe hires a hundred people a year probably has a much better perspective on it than I do, but, you know, our youngest employee now is 21 and he’s just awesome. Completely dedicated, great mind, great hard worker, I don’t see any sort of different between like his generation and someone who's 30, you know. Saying well the young guys these days, they don’t do anything. It’s not like that at all. I see a lot of drive and, you know, the other thing is, people just are just ahead today. I mean people; someone who's 21 today is so much further ahead than somebody who was 21, 10 years ago. And I think that’s great.
Question: What would you do differently if you started your company now?
Jason Fried: I would only build the things that I need. So I’m really a big proponent of building products that we’re going to use. So I would only... if we weren’t going to use something like Basecamp or something like Highrise, which is our online contact management tool, I wouldn’t have built them, but we needed them so we built them. We’re working on some new ideas now for new things that we need as a company grows, we have different needs and as things happen, we change. So I wouldn’t have built the product we are about the start working on and we started sort of working on. I wouldn’t have built that 10 years ago because we didn’t need it, but we sort of are gonna need it now. So, there are always new ideas based on our own needs that are coming up and those are things we’re focused on, including improving our existing products.
Question: What’s your approach to marketing?
Jason Fried: Our products are mostly for small businesses. So we’re a lot better known maybe in the small business world then we would be in the sort of consumer, who’s your neighbor, sort of world. And that’s fine. We’re not into this for a popularity contest sort of thing. I don’t care if people... if 37signals is a household name. It would be cool if it was, but that’s not really the driving force for us.
Our marketing approach is, first of all to make something great because that’s the best marketing you’ll ever have. When people talk about your products and we don’t really spend, we've spent maybe $10,000, $20,000 over five, 10 years advertising, or so, our whole thing is word of mouth. And you only get that if you make something great. You don’t get that by faking it, you don’t get that by seeding viral marketing stuff. I mean, you get that by making something great. And so we’re focused on that first and foremost. And then sharing. So we try to share everything that we know and we learn and that’s a great way to get the word out. Just like chefs share. Chefs have cooking shows, which ultimately leads people to their restaurants; ultimately it leads people to buy their chips or their salsa at the stores, because they get to know the people when they teach them something on TV, or in a book. So, we’re big in to sharing. Sharing, building something great, and...
My thing also, I will say one more thing about marketing is I don’t believe in a marketing department. I don’t believe marketing is a department. I think marketing is in everything you do. It’s from the error message in your product when something goes wrong, what does it say? It’s from the sign-up form, are you asking too much from somebody? If you ask too much from someone, that’s not good marketing. It’s in, you know the customer service response times, it’s in the customer service friendliness, it’s in the designs and the copywriting, its on the button, what does the button say, it’s clarity, it’s all of those things. That’s marketing. And if you only think of marketing as this thing that these people over here do, I think you’re going to have... you’re not going to be as well off as you could be if you thought of everything you do as marketing.
Recorded on July 22, 2010
Interviewed by Peter Hopkins