37signals Earns Millions Each Year. Its CEO’s Model? His Cleaning Lady

http://www.fastcompany.com/3000852/37signals-earns-millions-each-year-its-ceo%E2%80%99s-model-his-cleaning-lady

by endtwist • 14 years ago

468 228 14 years ago

The long hours mostly has to do with the startup community. They get funding and VC wants to make a profit within a year and get out, at the expense of any long-term goals of the company.

The result is 70 or 80 hour work weeks and burnout. The VC don't care because they will be done in the short-term anyway.

It's the reason why I refuse to work for startups.

sabat5• 14 years ago

This company is not a startup; it's merely a successful small business.

the startup community ... get funding and VC wants to make a profit within a year and get out, at the expense of any long-term goals

This is not unheard of, but certainly not the norm. Successful VC firms invest of big growth, but over a longer term. Look at the huge VC-backed successes in SV (obvious examples like Google, LinkedIn) and you'll see anything but a build-it-and-flip-it mentality.

timjahn2• 14 years ago

"merely a successful small business."

Really? That small business is financially more successful than most crazy ass VC backed startups with the latest photo sharing solution will ever be.

</rant>

campnic2• 14 years ago

Wow, could we put the mythical "startup" on any more of a pedestal? '... merely a successful small business' as a diminutive to 37Signals? We've really jumped the shark here, haven't we?

saraid21614• 14 years ago

> This company is not a startup; it's merely a successful small business.

Startup, n.: A small business that is not successful yet.

MattRogish• 14 years ago

Startups don't have to be VC backed and don't have to work long hours. We aren't and we don't.

joshu• 14 years ago

> VC wants to make a profit within a year

Typical returns take 5-7 years for a VC. < 1 year returns tend to be low.

You are presenting things you believe as facts. Please don't do that.

physcab• 14 years ago

This isn't exclusive or indicative to startups. I have friends who work at large companies (Apple in particular) who work 90 hour work weeks and are completely miserable.

harryh• 14 years ago

Your understanding of VC timetables is wrong. It's almost unheard of for a VC to book a profit within a year.

andrewhillman• 14 years ago

Why does this say: 'Its CEO's Model' when it should be 'Its CEO's Role Model'? Seems like the writer is baiting for clicks. It's a little misleading to me.

ForrestN• 14 years ago

You can use "model" to mean an example to follow. For example, "37 signals was the model for my software business" or "she was a model employee."

Jd4• 14 years ago

"To me that’s far more interesting than a tech company that’s hiring a bunch of people, just got their fourth round of financing for 12 million dollars, and they’re still losing money. That’s what everyone talks about as being exciting, but I think that’s an absolutely disgusting scenario when it comes to business."

Hilarious given that Jason Fried was on the board of directors of Groupon (his comments on this "disgusting scenario" here: http://news.ycombinator.com/item?id=2617160).

spitfire• 14 years ago

Do as I say, not as I do.

Ego has this astonishing effect of completely bending[1] the space-time-reality fabric of the universe.

1. Or ripping it apart, depending on how well off you've become and how many sports cars you've bought.

tptacek6• 14 years ago

37signals does not reap millions of dollars of VC investment to staff up huge numbers of people while running their business in the red. But a reader of your comment would be left to wonder whether they do, because you wrote it carelessly.

wlll• 14 years ago

I can't speak for Jason or comment on his involvement on the board of Groupon, but he does do as he says within 37signals.

batista• 14 years ago

>Do as I say, not as I do.

Which is mighty fine.

I'f I'm telling you to be good and I'm bad, them I'm a hypocrite.

That doesn't mean that my advice is bad, or that you shouldn't follow it.

Follow an advice (or not) by the intrinsic value of it, not by who the one giving it is or what he does.

endtwist• 14 years ago

I don't know if it's really that odd. Jason's feelings about the way a company should be run may have been at odds with the way Groupon was run. However, that wasn't what Andrew asked Jason to provide guidance on.

Jd4• 14 years ago

The problem is that Jason uses superlatives and buzz words in this interview and elsewhere. Either they just are marketing fluff for his "sustainable" (i.e. buzz word-laden) business, or he actually believes them.

However, if he actually believes them, and if Groupon really is "absolutely disgusting," why would have he not only given advice but retained shares in in the company? Personally, I don't even give free advice to things I think are "absolutely disgusting" unless it is to clean up before talking to me, and I'm not sure why we should expect anything different from Jason.

Like I said, I'm open to the idea that Jason is simply exaggerating to set his "slow company" apart from the pack, but if I'm going to write a critique it is going to have to be with the words on the page, not my idea of what is going on in Jason's head.

edit: will accept a third possibility, that Jason's ideas have grown stronger as he has witnessed Groupon from the inside.

2nd edit: "invested" -> "retained shares in"

twelvedigits• 14 years ago

I think you're overestimating the influence of board members. You can judge him based on how he runs his company, not how he participates on one company's board. That's "do as I do."

yesimahuman• 14 years ago

That sounded pretty honest to me and didn't refute that quote.

lincolnwebs• 14 years ago

Congratulations, you brought up JF's Groupon involvement the fastest on this 37Signals link. Well done.

sabat5• 14 years ago

It's relevant.

001sky• 14 years ago

Apparently raising $950M in your fourth round is two orders of magnitude more "interesting" that $12m. Losses notwitstanding. ;)

But all jokes aside, its not uncommon to have BOD compositions of mixed expertise. Having a design or product guy. A Politician, etc. As a group, they need to be effective. But singling out one individual, for "guilt by association" is perhaps stretching a bit. (edit: Unless he was on the audit comittee!)

The fact that he sold his shares, in some ways, also not per-se a bad sign if it reflected his views (it became public information). This is signalling to the public, and seems consistent with his other expressed opinions.

ovatsug252• 14 years ago

Groupon actually pivoted to cater to small business management now that I think about it. This dosen't mean they were successful at it, but I wonder whether Jason had anything to do with that. Groupon might be able to recover and survive as a company but I don't think the VC's will make it with a big return.

klochner• 14 years ago

Jason made it pretty clear that he was joining the Groupon board:

  * as a personal favor to Andrew Mason
  * to get some board experience

He emphasized:

  * he had not changed his stance on bootstrapping companies
  * his board involvement was not an endorsement of groupon
  * he sold his shares when given the chance

So I guess I'm missing the hilarity, other than seeing you try to pick another fight with Jason Fried.

justjimmy• 14 years ago

Thanks for bullet pointing, was going to do the same thing.

I wish people would at least read the link they paste, if they intend to use it for their arguments. The link answered/refuted his own 'claims'.

Evbn2• 14 years ago

Andrew Mason is generally not considered a very upstanding CEO. Why is Fried giving Mason personal favors? Are they cousins?

run4yourlives• 14 years ago

If anything, that comment just confirms his consistency.

mratzloff3• 14 years ago

Perhaps. But I don't think that invalidates what he's saying. The idea stands on its own.

zupreme• 14 years ago

Wow. It almost sounds like he runs his tech startup like a "real" company. Imagine that. ;-)

flyosity• 14 years ago

I think that 37signals has been in business since the late 90s, so I'm not sure I'd qualify a business that's been in business for 13+ years as a startup.

loumf• 14 years ago

I like Steve Blank's definition of a Startup -- it's an enterprise set up to search for a profitable business model. 37signals is long past that.

neeleshs• 14 years ago

I am in line with the thought process. Also, "There’s a great quote by a guy named Ricardo Semler, author of the book Maverick. He said that only two things grow for the sake of growth: businesses and tumors." funny and apt. I am striving to build a sustainable business, without going to VCs, providing tangible benefits to my customers, and without huge ambitions to become a billion dollar company (or even high millions)

whalesalad2• 14 years ago

"I won’t name names. I used to name names. But I think all you have to do is read TechCrunch. Look at what the top stories are, and they’re all about raising money, how many employees they have, and these are metrics that don’t matter. What matters is: Are you profitable? Are you building something great? Are you taking care of your people? Are you treating your customers well? In the coverage of our industry as a whole, you’ll rarely see stories about treating customers well, about people building a sustainable business. TechCrunch to me is the great place to look to see the sickness in our industry right now."

I love this quote. It reflects my sentiments to a T.

kevin_morrill• 14 years ago

I once got to see Jack Welch give a talk and he basically said the same, but about American labor unions. He said if you want job security, the answer is "customers". There is no other shortcut in business.

whalesalad2• 14 years ago

It's what every great organization I have ever been a part of has been about. My current gig, we put the customer first 24x7 and go out of the way to ensure they're comfortable. We're currently one of INC's fastest growing companies two years in a row and hiring new employees daily to meet demand.

I just spent 20 minutes writing an email with detailed screenshots of how to add a menu item to a CMS. I can't stand the CMS that this client uses. We inherited it and it blows. They're an awesome client though, nice people, and above else, they're my customer. I have no problem going out of my way to ensure that they've got detailed and easy-to-understand instructions.

A startup that some friends and I started a few years ago: schoolrack.com. Our users were teachers from elementary to high-school. You can imagine we dealt with TONS fo technical support requests from both confused parents and teachers. A lot of teachers are still forced to use IE6. Patience and always putting the customer first is what made us successful. Our users adored us. We'd start at a school and overnight every teacher there would be using us. Our users always had nice things to say about us because we always put them first.

When I worked in Apple retail, they reinforced the same principles. Understand the customer. Put yourself in their shoes. Frame your questions so that they are not misconstrued. Make technology friendly. Know your customer. If they're coming to you wanting Final Cut and a few Mac Pro's, don't try and offer them lessons on how to use a word processor (exaggeration). Of course not every Apple employee is a saint, and sometimes you have a bad experience. We're humans, after all. But the principles work.

Bend over backwards for your customer. Treat every single person you interact with on a day-to-day basis with respect and kindness. Even the UPS who comes to pick up your deliveries.

kenko4• 14 years ago

???

Customers won't give you, hapless employee, job security if your employers can easily replace you with someone cheaper because you have a flimsy (or no!) contract, nor will customers help you with disputes with management, or wrongful termination, or promotion from within, or even the too-little-emphasized increased potential for synergy between the ranks that unions afford, or any of the many other things that unions afford.

Customers might help prevent a company going out of business, and that, to be sure, is good for job security. But a company that's flourishing customerwise can still have rapacious or simply bad management.

sabat5• 14 years ago

He seems to forget that he's not in the same business as startups are; he's viewing startups through a small business lens.

see the sickness in our industry

He's not in "our" industry. He runs a small business that makes good money, and it happens to use technology. Not the same thing.

Are you profitable? Are you building something great?

These are not always relevant questions for a startup, depending on what phase of its life it's in. You certainly try to build something great—or better yet, solve a problem!—but you may very well have to change (yes, I mean "pivot"). See Inside the Tornado for info about having to not worry about treating customers well at some stages.

I'm not sure I'd call any of 37 Signals' services all that great, however, if by "great" we mean innovative. There's nothing special about them except that they were there early and they're simple. But that's not what I'd call innovation, and I don't think it makes them great. I think his cocky attitude has a lot to do with the constant feedback loop in the town he lives in. In SV, I don't see many founders praised for judging other people's work; usually, they're too busy trying to build something truly great, even if it's yet another photo-sharing site. Hell, Flickr was just another photo-sharing site, but I think of that as far, far greater than something like Basecamp.

officemonkey• 14 years ago

>I think his cocky attitude has a lot to do with the constant feedback loop in the town he lives in.

Pot, meet kettle.

jmathai4• 14 years ago

I think you're missing the point.

> He's not in "our" industry. He runs a small business that makes good money, and it happens to use technology. Not the same thing.

I presume you're defining "our" industry as consumer focused Internet services that plan to IPO or get acquired? Not sure everyone would agree with you, I don't.

Your comment actually reiterates what he's talking about. The mentality of what a "startup" is and how you go about building it is (in his opinion) a bit toxic.

To tell you the truth, the longer I live in Silicon Valley the more I agree with his point of view.

rimantas• 14 years ago

  > He runs a small business that makes good money, and it
  > happens to use technology. Not the same thing.

As opposed to what? Having no business (making no money), hyping everything out of proportion and having technology for technology's sake?

  > if by "great" we mean innovative

Any justification for this lame definition? I call the service great if it is really useful for customers and make money for the owners. Sure, inventing a way to put pants on over your head may be innovative, but how it is great and what's the point?

I got pretty tired of all that useless social hypeware with no purpose (other than burn VC's money) and business model.

tlogan• 14 years ago

It is all true, but honestly I don't think Jason's advise on running a company can apply for startups. As per Steve Blank startups are enterprises which are in search of scalable and profitable business model, so for many startups it is really race against time.

wamatt• 14 years ago

Jason Fried's article feels a bit preachy TBH, and the last paragraph about the cleaning lady being so awesome, seems rather cliched/trite.

I'm sure he's trying to tell us he values the little-guy/gal. Great!, we do too, but then don't pretend her job is more exciting than a whole industry, and you're just sitting around in gushy anticipation of your fresh flowers. ugh :p

Also, painting the valley as "sick" and "disgusting", feels one sided.

Sure there are problems with some startups being over-hyped, but bubble or not, companies are getting real shit done here, and it's pretty unique place, simply in terms of raw tech innovation density. Giving credit where due, doesn't need to take away from all the rest of the good stuff that goes on elsewhere in the world too, like at 37 Signals, Chicago IL.

pg3• 14 years ago

The reason the press writes about funding rather than revenues is not some kind of conspiracy to focus on the wrong things, but simply because reporters know about funding rounds and not about revenues.

It's clear that the press would write about revenues if they could, because they write a lot about the revenues of public companies. They're able to do that because public companies have to disclose their revenues.

Private companies never publish their revenues. Including 37signals. So if Jason really believes this is a terrible problem and wants to set things on the right course, he should set an example and start publishing 37signals' revenue numbers.

mvzink• 14 years ago

On the other hand, a "sickness in our industry" doesn't have to be the majority behavior. It may seem more common than it actually is since it's easier for the press to talk about the businesses that just care about quick exits, but there are still companies behaving that way.

Jason's problem doesn't seem to be with the reporting; it's only coincidental that it's easier for press to report on the businesses he finds fault with.

zhoutong• 14 years ago

The press loves to talk about changes, because news only comes out when something changes. The timeless pieces only exist in opinions section.

In startup's context, fund raising is definitely a change, and revenue numbers may be a change (when they are surprising or previously undisclosed). But building a sustainable business, treating customers well or even being profitable should be long-lasting and timeless. It's interesting to keep reading about these issues in Hacker News, but these are not exactly news.

It's like business fundamentals ("common sense"). The press never talks about them but it doesn't mean the industry doesn't care or doesn't treat them as important.

dlss3• 14 years ago

This is unusually straw-mannish of you pg.

From the article: "What matters is: Are you profitable? Are you building something great? Are you taking care of your people? Are you treating your customers well?"

All of those questions can be answered without needing access to a companies ledger. Jason answers those questions himself in the article.

I think his point was that stories about those questions don't get as much readership per unit of reporter effort, hence they aren't being written.

Posting 37signals' revenue numbers would have zero impact on that.

loceng• 14 years ago

I would think that creating articles, or blog posts, talking about situations of how they specifically treat customers well, how and why they are building something great, how they take care of their people, etc.. would solve this more than posting revenues. Though that might come across too strongly as stroking your own ego.. Obviously being profitable allows you more benefits to how you treat people, the time you give or allow.

hsuresh• 14 years ago

Also, TC (and others) have a huge following from startup community. For early stage companies, funding and hiring have big impact, perhaps next only to customer acquisition (and that is usually not shared). So i wonder if they are only serving their big target segment well by reporting on these.

larrys10• 14 years ago

" So if Jason really believes this is a terrible problem and wants to set things on the right course"

Well you know that's not going to happen especially since he made this statement below:

"We have 35 employees at 37signals. We could have hundreds of employees if we wanted to--our revenues and profits support that--but I think we’d be worse off."

So he isn't simply saying that he feels he could expand his business and have "hundreds of employees". He is saying that his "revenues and profits" would support "hundreds of employees".

Think for a second how much profit you need to support "hundreds of employees".

I'll give him the benefit of the doubt that he was misquoted on that. If not, he's simply full of shit. This is BS to challenge Donald Trump.

hackinthebochs11• 14 years ago

It's interesting how you always seem to chime in at all the appropriate times. Get some work done, you!

nameuserc5• 14 years ago

This is a fair point. Journalists are just using available public information.

37Signals' numbers are not public. "Talk is cheap" as they say.

I don't disagree with what he is saying in the quotes - that people focus too much on raising money as "business success". This is without question. But then again I still do not understand the value of 37Signals (compared to any other software company with aggressive marketing), at least not from the press they get. How are they being any more transparent?

All I know from recent reports is employees supposedly work 4 days a week and they have some sort of brainstorming sessions to come up with new ideas. What does the 37Signals software do? Specifically, not just some marketing buzzword. What does it do that I can't otherwise do without it? Are there some YouTube videos showing the software in action?

How do I know it's not just a Ruby on Rails consulting business for a few steady clients (who have an inseparable attachment to Rails), as opposed to a "unique" software company with amazing products? How do I know they're not just selling a Rails framework? So I have to install Ruby, Rails and a gazilion of their custom scripts to use their "product"?

jakejake• 14 years ago

It certainly is true that reporters can't write about numbers that they don't have. But I also think that a startup going for broke is more exciting to read about - both when they succeed as well as when they crash. A race car is more exciting to watch than a tractor.

It's surprising that 37 signals isn't labeled a "lifestyle" company, which is practically like leprosy when it comes to funding and media attention.

dkrich2• 14 years ago

I think this is one of those cases that's akin to the famous quote by Supreme Court Justice Potter Stewart when he said "I can't define pornography, but I know it when I see it."

I think a lot of people are sick of the crap written on TechCrunch for reasons that are hard to define. Mostly they have turned the innovative process into a form of TMZ, which glamorizes a field that is meant to build things to make lives better. Very few articles have anything to do with companies building these types of innovations, and profits have nothing to do with it. A response might be, well Scientific American writes those stories. Yes, and that's precisely why Scientific American is a respected publication oft-cited by Steve Jobs.

Too many stories on TechCrunch are titled something like "[Insert clever startup name] raises [insert some absurd amount of money] to become the [Facebook, Twitter, Foursquare, Birchbox] for [Work, Finding a cab, Healthfood]. These stories are ridiculous and cover mostly crap ideas that don't solve any real problems.

Acne_Researcher6• 14 years ago

This guy could have built the next Salesforce / google. but he eschewed hiring a sales team. He didn't want that, but still. Failing to achieve your true potential is not something to be bragging about all over the web.

campnic2• 14 years ago

Is someone's "true potential" only reached when they chew up employees during 80 hour weeks? When they have a sales team that will do whatever it takes to land the sale including stretching the truth?

Is 'true potential' only evaluated based on attainment of maximum dollars per day of business? I don't see how he has failed anything but living up to your idea of achievement which, frankly, seems a lot more shallow then his.

ahoyhere• 14 years ago

Well it's pretty clear what he means, if you ask me: someone's true potential is only reached when a guy named Acne_Researcher says it is.

mratzloff3• 14 years ago

I suppose he doesn't really have to prove anything to anyone. Not everyone wants to run a 10,000 or 50,000 employee company. Not everyone would be happy with the stress or bureaucracy involved.

Not to put too fine a point on it, but your attitude is exactly the kind of thing he's talking about in the linked interview. Mega growth and mega profits are one measure of success. A life with low stress and plenty of time for your family (and by the way, making all that possible for your employees, too) is another one.

Acne_Researcher6• 14 years ago

I agree with what you. His style of running a business as likely maximized his personal happiness, and possibly his employees.

But I would have liked to see him say "we could have been far more profitable, but we didn't care about that, so we limited hours and didn't hire salespeople." Instead what I hear him saying is "we are the best business we could be, because we limit hours."

timsally• 14 years ago

The company brings in several millions dollars a year [1]. They have one of the nicest offices in Chicago [2]. One of the partners had a super car commissioned a few years ago which on a technical level is more sophisticated than the machinery available to your average military [3]. So how aren't they "living up to their true potential"?

[1] From the article.

[2] http://37signals.com/svn/posts/2593-official-pictures-of-our...

[3] http://en.wikipedia.org/wiki/Pagani_Zonda#HH

Acne_Researcher6• 14 years ago

Their true potential was to be a 50 billion dollar public company, in my opinion. I could be wrong. There are more important things in life than money, of course. But I felt they chose to leave too many chips on the table.

larrys10• 14 years ago

What are you exactly using to determine that in the city of Chicago "they have one of the nicest offices"? Impossible to say that from the pictures.

As far as the car goes, very little info on that and additionally you are drawing a conclusion as far as DHH's money which could have come from other sources as well as 37signals.

r00fus• 14 years ago

He built up his hill of customers and you're slagging him because he didn't strip-mine the local quarry to build it into a skyscraper/mountain?

I'd say it's equally likely that 37Signals could have failed utterly in rapid expansion as they could have succeeded if they made their moon-shot.

Acne_Researcher6• 14 years ago

Good point. But I don't think hiring a sales team could have lead to a failed moon-shot attempt.

Confusion• 14 years ago

You could have built the next Salesforce, but unfortunately you wasted your time complaining on the internet about how extraordinarily succesful people have not 'lived up to their full potential'.

Everyone has infinite potential.

taphangum• 14 years ago

Awesome

davidw9• 14 years ago

> Actually, my cleaning lady, for example, she’s great.

There's something a bit... I don't know quite how to put it. Let's just say that I bet she'd willingly trade places with him, cash out, and go enjoy herself instead of cleaning up after other people day in and day out. (Edit to change the wording just a bit)

> The other interesting thing about restaurants is you could have a dozen Italian restaurants in the city and they can all be successful. It’s not like in the tech world, where everyone wants to beat each other up, and there’s one winner.

That's because the economics of a highly local business are very different from one that can have customers all over the world.

Also: restaurants fail all the time - it's a stressful business to be in, and not generally the sort of relaxed, easy-going picture he makes it sound like. You can bet that most restaurants do not have the option of doing 4 days a week, unless they have big margins the other days, which means they probably have something very special about them.

I admire and respect those guys, but there's something too glib about some of their communications that turns my cynic sense on.

Edit: furthermore... live and let live, no? I'm more interested in a 37 signals style business myself, but let the people in Silicon Valley do their thing even if it doesn't float your boat. It'll all work out. As one example, I think the world is better off with PG running Y Combinator instead of having slogged on with Viaweb.

citricsquid• 14 years ago

> There's something a bit... I don't know quite how to put it. Let's just say that I bet she'd willingly trade places with him, cash out, and go enjoy herself instead of cleaning up other people's crap day in and day out.

My mother isn't a cleaner (she's a nurse) but I talked with her before about whether or not if she had the chance she would quit her job and sit on the beach all day doing whatever she wanted and she said that no, she would never be able to stop working because it has been a part of her entire life and if she was going to quit her job and do anything she would open a book shop (I think it was a book shop).

I think for a lot of people work is a part of who they are and it's not as simple as just taking money and spending life on a beach, I'm sure the cleaner would love financial freedom but I would suspect she would keep working. For a lot of people they don't have things they enjoy that have some sort of output (for most of HN that's programming, or design) so working is all they have to feel like they have value in the world.

Maybe his cleaner has financial freedom already (saving, inheritance etc) and chooses to work.

davidw9• 14 years ago

I can't stand going to the beach myself, and if I were wealthy, would see myself continuing to work on things. I'd probably have more 'projects' though, things where there might not be any way of making money off it. And I sure as hell would be spending a lot more time riding my bicycle instead of getting fat sitting at a desk.

To each his own, but would someone really want to keep cleaning professionally even if they were wealthy? I could easily seeing less-than-profitable but creative hobbies being way more interesting for hypothetical cleaners who were wealthy and wanted to stay busy.

The reality though, is that unless the cleaning lady is good at hiring and managing other cleaners, she's never going to get the chance to cash out, or sell the company or any of the other avenues the 37 signals guys have.

Evbn2• 14 years ago

Running a book shop with your FU money is completely different from running a book shop to put food onnthr table.

saraid21614• 14 years ago

> There's something a bit... I don't know quite how to put it. Let's just say that I bet she'd willingly trade places with him, cash out, and go enjoy herself instead of cleaning up after other people day in and day out.

See, the typical problem with claims like Fried made is that they're idealizing lives they don't know much about. But Fried didn't walk into that trap.

He doesn't remark on her home life. He doesn't remark on her happiness. He doesn't remark on her hopes and dreams. He says she's "respectful, nice, and awesome". His point is that her business is sustainable, adds value, and does good. He doesn't say, "I wish I was a cleaning lady." All he says is that her business model is a good business model, and he's inspired by it.

davidw9• 14 years ago

Her business model is providing a service: exchanging her time for money.

37signals used to be in that business, but moved towards providing products, rather than services. Presumably because it scales better and makes more money, even though doing design/programming/sites certainly makes good money in a sustainable way.

larrys10• 14 years ago

"All he says is that her business model is a good business model, and he's inspired by it."

He says:

"She’s been doing it some twenty-odd years, and that’s just an incredible success story. To me that’s far more interesting"

I have absolutely no idea why he feels that someone who has cleaned homes for 20 years is an incredible success story. It's almost as patronizing as it is naive.

What would be at least somewhat interesting is if she figured out a way to get paid 2x the hourly rate and/or get houses cleaned in 1/2 the time. Her station in life is to be happy cleaning homes. So she's a happy person. Great. What I'm not hearing is that he's living in her neighborhood or having her over for dinner etc. I hate this "I'm just a simple person let me go visit an ashram and live in nature" crap.

larrys10• 14 years ago

"There's something a bit... I don't know quite how to put it."

Let me help you. But first I have to get my shovel. Because that's the typical shit that is heaved by the "haves" on the "have not's" try and make them seem humble and not anything special. Take Oprah. She just loves to talk about how this and that are so expensive as if she's just an ordinary person like the rest of us. He laid it on a little to thick with the cleaning lady spiel.

Particularly this part about the cleaning lady:

"she’s just respectful and nice and awesome. Why can’t more people be like that? "

Well for one thing he could start and figure out why in particular DHH is such a, well, asshole:

From wikipedia:

"Hansson is an outspoken character known for the crude and brutal way he expresses his opinions, both online and in real life. Hansson and his company have been accused of arrogance,[7][8][9], which he does not deny"

And of course I can't believe the example of why restaurants last 30 years (the ones that do that is) and tech companies don't last or whatever the point he was making.

Why not just compare cars which change every year vs. a burberry coat which is essentially the same?

davidw9• 14 years ago

Calling people names is not really ok with the spirit or guidelines of Hacker News: if that's not something you'd say to DHH (who often pops in to comment here) in person, you shouldn't be writing it.

nicholassmith• 14 years ago

When my Dad decided to start his own business his goal was to work for himself and make enough money to live comfortably. He's achieved that, he could push and try stretch it to the next level and make even more money and become more successful but he realised he's happy with the money he's got and not having to deal with anything extra.

When anyone starts a business you can shoot for living a nice comfortable life (and lets be honest if you're running a business making millions per year, you've nailed it), or you can push and push to become the business. Both have chance of failure, both require devotion. I'd take the same route as 37signals. Having enough money to live comfortably and enjoy life sound much better than the constant grind to get to the next boss level.

medinismo• 14 years ago

love the term "we are reaching Peak Talent". It think we are already there

phatbyte• 14 years ago

I can totally subscribe what Jason said here. One time someone said that I wasn't "startup" material because I wasn't open to work 80 hours per week. They said that like it was a bad thing :), fast forward a few years and their company is now dead and I'm now doing my own thing steady and profitable.

dr_• 14 years ago

Profits are without question important. Bootstrapping I'm not so sure about. There are many profitable companies today that were never bootstrapped, like Apple and Google and tons of others. I'd be concerned that bootstrapping in this day and age might limit how big a company you actually do become, esp since you are competing against entrenched players.

stanfordkid• 14 years ago

lifestyle businesses are great. but to make real money you need to scale -- I think this stuff is okay for the size of business they are aiming for but if you want to build something that can be acquired for 500m+ or IPO then you need to do some more strategic thinking.

aswanson• 14 years ago

Several million a year isn't 'real' money?

xenen• 14 years ago

Absolutely amazing and a rare voice of reason in our industry. If only more companies would adopt this kind of mentality of building sustainable businesses.

apetkov• 14 years ago

So nice there are more and more companies which understand that keeping their employees in comfort is so essential for the long-term success. Giving more freedom and spare time, makes people more productive during work time. No stress, no pressure = more job done. I also admire companies, that have understood that a 6-hour working day, would be more productive than the 8-hour, since time for distraction is reduced to significantly.

jamwt• 14 years ago

I've read a lot of Jason's stuff and he has a lot of insightful things to say about running a successful small technology business. He probably understands it about as well as anyone on earth.

The part of the rhetoric I'm not as fond of is this false dichotomy that he often raises of "either small business is right or big-startups are right". Both can be right--they just have different goals. And there are strong relationships and dependencies between each type that make it particularly disingenuous to slander each other.

It reminds me a bit of the "you didn't build that" hubbub happening in American politics lately. There seems to be a "I did this" hubris, as you create high-quality web services catering to small teams.

Let's get real: you are building web services consumed by a browser (Netscape) on someone's Macbook Pro (Apple); your data found its way there over some serious switching infrastructure (Cisco); you stock your offices with goods from the best online retailers--oh yeah, and they host a bunch of your bulk data too (Amazon); your site is indexed by the major search engines and you expose your brand to potential customers via sophisticated advertising networks (Google); your keep your friends and fans in the loop on what your business is up to via massive social networks (Twitter).

Many of these companies were ambitious, they had low probabilities of success, they had much higher capital needs and a tighter window to hit the market.. than a slightly better product management system for small teams. But these VC-powered longshots--the lucky few winners--now form the beating heart of our industry. They provide good jobs to hundreds of thousands of people. And.. would 37 signals even exist without them?

Jason wants to make great money and have a good business and take Friday off. That is fine, that is seriously great. I'm not sure why the tone is so defensive, b/c, really, who's attacking that? That's a damn good way to go.

But some people want to "make a dent in the world". They need some money to do that! And they might fail! And rich guys are willing to gamble on the outcome! Who cares? It's audacious fucking fun to try to change the world, and sometimes it works. Afterwards, we can take a shower and feel clean and wholesome about the birth of 38 signals.

zizee• 14 years ago

I'm not sure why the tone is so defensive, b/c, really, who's attacking that?

My guess it is in response to some quarters not respecting "lifestyle business" startups. There ARE (or were) people attacking that.

37signals Earns Millions Each Year. Its CEO’s Model? His Cleaning Lady

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