Small is not a stepping stone


People ask, “How big is your company?” It’s small talk, but they’re not looking for a small answer. The bigger the number, the more impressive, professional, and powerful you sound. “Wow, nice!” they’ll say if you have a hundred-plus employees. If you’re small, you’ll get an “Oh . . . that’s nice.” The former is meant as a compliment; the latter is said just to be polite.

Why is that? What is it about growth and business? Why is expansion always the goal? What’s the attraction of big besides ego? (You’ll need a better answer than “economies of scale.”) What’s wrong with finding the right size and staying there?

Do we look at Harvard or Oxford and say, “If they’d only expand and branch out and hire thousands more professors and go global and open other campuses all over the world . . . then they’d be great schools.” Of course not. That’s not how we measure the value of these institutions. So why is it the way we measure businesses?

Maybe the right size for your company is five people. Maybe it’s forty. Maybe it’s two hundred. Or maybe it’s just you and a laptop. Don’t make assumptions about how big you should be ahead of time. Grow slow and see what feels right — premature hiring is the death of many companies. And avoid huge growth spurts too — they can cause you to skip right over your appropriate size.

Small is not just a stepping stone. Small is a great destination in itself.

Have you ever noticed that while small businesses wish they were bigger, big businesses dream about being more agile and flexible? And remember, once you get big, it’s really hard to shrink without firing people, damaging morale, and changing the entire way you do business.

Ramping up doesn’t have to be your goal. And we’re not talking just about the number of employees you have either. It’s also true for expenses, rent, IT infrastructure, furniture, etc. These things don’t just happen to you. You decide whether or not to take them on. And if you do take them on, you’ll be taking on new headaches, too. Lock in lots of expenses and you force yourself into building a complex businesss — one that’s a lot more difficult and stressful to run.

Don’t be insecure about aiming to be a small business. Anyone who runs a business that’s sustainable and profitable, whether it’s big or small, should be proud.


This essay and many others like it appear in the book REWORK, written by Jason Fried and yours truly. See what we’re up to with our 12 year-old business Basecamp, which just launched a brand-new version 3.

RECONSIDER

#WEBSUMMIT2015

About 12 years ago, I co-founded a startup called Basecamp: A simple project collaboration tool that helps people make progress together, sold on a monthly subscription.

It took a part of some people’s work life and made it a little better. A little nicer than trying to manage a project over email or by stringing together a bunch of separate chat, file sharing, and task systems. Along the way it made for a comfortable business to own for my partner and me, and a great place to work for our employees.

Keep reading “RECONSIDER”

What would it take to prove me wrong?

Good intuition propels progress. Listening to your gut is faster than rigourously exploring all possible options. The more you can get away with leaning on intuition, the more things you can improve in the same amount of time. The best product makers have excellent intuition.

But exactly because intuition on a roll is so powerful, it also invokes a sense of invicibility: Hey, if I was right about the gut take the last twenty times, why wouldn’t I be right about this too?

“Success is a lousy teacher. It seduces smart people into thinking they can’t lose” — Bill Gates

That’s no reason to give up on intuition, but it is cause to consider a fallback strategy. The primary of which should be having answers to the following: What evidence would prove me wrong? Is my gut take falsifiable? Will I have the courage to admit being wrong, if the data proves it so?

Some times there’s simply no way to know before you act. That’s the providence of A/B testing. If the data isn’t there upfront, then let’s just try it and see what happens!

Other times the answers are indeed already there, we just don’t have the confidence to look. It’s so easy to fall in love with an idea that makes intuitive sense. The theory is just too satisfying to give up. We don’t even want to entertain the idea of being wrong, at least not yet.

The golden path is to give almost all intuitive ideas the benefit of the doubt, but then articulate that doubt as clearly as possible. The quicker you determine which ideas are duds, the quicker you can load the next batch.


Check out what we’re up to at Basecamp.com.

Remove the stress, pick a deadline


October 20 was the internal deadline we picked for Basecamp 3 back in early Summer. It was computed by the highly scientific method of two-parts sussing, one-part calendar dart throwing, and the full awareness of its arbitrary nature.

The purpose of a self-imposed deadline is to sharpen the edge of your prioritization sword and stake a flag of coordination for the team. It’s not a hill to die on. It’s not a justification for weeks of death marching. It’s a voluntary constraint on scope.

Yes, deadlines are wonderful! They’re the tie-breaker on feature debates. They suck all the excess heat out of the prioritization joust: “Hey, I’d love to get your additional pet feature into the first release, but, you know: THE DEADLINE”.

The opposite of the deadline, the once much heralded When It’s Done, is the oppression of a blank canvas. Unless your system has fewer moving parts than you can count on two hands, objective perfection is impossible. It’s always a trade-off, but one that now needs to happen in the uncharted territory of a team-sized illusion of agreements.

Putting in a good day’s work relies on the knowledge that you just moved a little bit closer to the finish line. If the finish line is constantly moving and constantly in dispute, it’s impossible to reap that satisfaction. Which in turn leads to stress and misery.

Don’t let the self-imposed deadline kill you, let it free you.


Check out what we’re up to at Basecamp.com.

Poaching is for animals, not employees

The language of hiring is broken. From the cog-like “human resources” to the scalp-trophy chase of “head-hunting”. Yuck. But no term gets me more riled up than “poaching”. It’s shockingly revealing: You’re an animal, our animal, and other hunters better keep their hands off our property.

WTF.

Employees should go wherever they can get the best deal for themselves. I would! Better deal in the holistic sense of everything that’s involved with working for someone else: Most interesting and rewarding work, most freedom in living arrangements, autonomy/responsibility, and, yes, pay and benefits.

If you can only retain employees by fencing them in with non-competes, hiding them away from your about page, or blocking competitive deals from even reaching their attention, well, then you suck.

All your energy should be poured into making sure you have the better deal. That work aligns perfectly with having a better business in general, so it’s not like you’re taking a detour here.

If you’ve done all you can, if you sleep sound with a smile knowing you’re offering a great deal, then the sting of someone leaving should be manageable too. They found something that was better for them. Be happy! You helped someone get to a better place, and you’ll surely be able to find someone else to fill their shoes.

You can’t keep everyone forever, and you shouldn’t try. That’s called captivity. Some people will want to try something else regardless of how good your deal is. That’s natural, and fighting it is only going to make matters worse.

So stop nurturing your poaching fears with defensive moves and start putting in the work to make your deal better instead.


Check out what we’re up to at Basecamp.com.

There’s always time to launch your dream

“I’d love to start a company / become a great programmer / write an awesome blog, but there’s just not enough time in the day!”

Bullshit. There’s always enough time, you’re just not spending it right.

Now that’s some tough love, but I’m sick and tired of hearing “no time” as an excuse for why you can’t be great. It really doesn’t take that much time to get started, but it does take wanting it really bad. Most people just doesn’t want it bad enough and protect their ego with the excuse of time.

This excuse is particularly depressing when it comes from students.

“Oh, I have so many classes. Oh, I have so much home work. There’s simply no time to learn outside of school.”

Then you’re doing it wrong!

Never let your schooling interfere with your education, someone clever once said. Being willing to sacrifice at the edges is one of the most important skills you’ll ever learn.

I’ve received plenty of Bs and even Cs for classes that I was incredibly proud of because they came from hardly no time spent at all. Time that I could then spend on reading my own curriculum, starting my own projects, and running my own businesses.

And I did. During my undergrad, I created Instiki, Rails, Basecamp, and got on the path to being a partner at 37signals. Do you think I could fit all that and still get straight As and have lots of time left over for playing World of Warcraft? No.

If you want it bad enough, you’ll make the time, regardless of your other obligations. Don’t let yourself off the hook with excuses. It’s too easy and, to be honest, nobody cares on the other side.

It’s entirely your responsibility to make your dreams come through.


Check out what we’re up to at Basecamp.com.

Don’t base your business on a paid app

The App and Play stores have turned out to be exceptionally poor places to run a software product business for most developers. They’re great distribution channels for service makers, like Facebook or Lyft or Basecamp, but they’re terrible places to try to make a living (or better) selling software products.

At a buck or few per app, how could it be otherwise? That type of pricing will work for Angry Birds and a handful of other games, but very poorly for most other types of software products. The scale you need, the sustained influx of new customers, well, it’s a place for mega stars, and people who think they can beat the odds at becoming just that.

That’s why I’ve been discouraging people from chasing dreams of a successful, sustainable software product business by pursuing paid apps. Far better be your odds at succeeding with a service where the app is simply a gateway, not the destination.

Watching users of Tweetbot heckle the team for daring to charge $5 for a 8-month upgrade only reaffirms that belief. It’s a sad sight of entitlement, but at this point also entirely predictable.

Apple and Google both benefit from having apps be as cheap as possible. For Apple, that means people will buy an iPhone more readily when the cost to fill it with software is near nil. For Google, it means app makers have to shove ads into products to make them pay. Win-win-lose.

What’s good for platform makers is often not good for those who build upon it. That’s where the whole picking up pennies in front of a steamroller comes from. Yes, a few may be quick enough to pickup enough pennies to fill a jar, but for most, it’s not a wise trade of risk vs reward.

Forget the paid app.


Check out what we’re up to at Basecamp.com.

What’s more important: An extra gig of RAM or 3D Touch?

The hardware engineering and software coordination behind 3D Touch in the iPhone 6S is impressive. It’s such an Apple feature. Executed with exquisite diligence because they control the whole stack. Marvelous.

But you know what, it’s not my favorite feature of the 6S. That honor belongs to the low-tech, behind-the-curve addition of an extra gigabyte of RAM. Something that probably cost Apple just a few extra dollars per phone and almost no engineering prowess. (Compare that to the probably hundreds of millions in revised tooling, advanced development, and more needed for 3D Touch.)

Doubling the RAM means apps aren’t constantly being swapped in and out. Which means switching between them is super fast more of the time. Which in turn makes the whole phone feel much better over the course of a day.

It’s been repeated ad nauseam, but it’s still so hard to internalize for most product people: Speed is a feature.

Usually, it’s one of the most important features. Yet it’s also one of the hardest to get right. Chiefly because every other feature is generally at war with speed. Any excess CPU cycles are quickly captured by new, advanced, and ultimately slowing features. Extra cycles are like a surplus government budget: The constituency is going to have a thousand ideas for how to spend it.

It’s not easy to get this balance just so. You have to be fast at what people want and expect. Being the fastest phone running iOS5 or Window OS isn’t going to get you any business.

Comparing this RAM apple and that 3D Touch orange, though, is also a worthwhile reminder that good product design doesn’t deal in distinct categories. It’s all a fruit salad! Customers just want it to be delicious and nutritious.


Check out what we’re up to at Basecamp.com.

Service sunsets aren’t the least bit pretty

Software makers are obsessed with new. And of course we are, that’s our job: making more, newer, better! But as a lot, we’d be well-served to remember this affliction is generally not shared by our users and customers.

Sure, some people love upgrading to the latest version the minute it lands. It’s also a lot easier when it’s a personal device, like an iPhone, where the focus isn’t purely productivity.

But remember all those companies holding on to IE6 for their dear life? That’s the other side of ‘upgrading fun’. Disrupting workflow, processes, and institutional knowledge because the damn fax machine won’t send the important contract until the firmware is upgraded. What possible utility could a firmware upgrade to the fax machine provide that’s worth keeping a document from sending?

It’s ok not to LOVE, LOVE all software

It’s so easy to get self-righteous about IE6 laggards and the fax machine that cries for a firmware upgrade, but they’re two sides of the same coin.

For some of our customers, Basecamp is an appliance. It does the job, and it does it well, but they don’t have to LOVE, LOVE, LOVE IT to be happy customers. I’m at peace with that.

Clearly the person who came up with “sunset” as a euphemism for kicking people off their service was not at peace. Whether the reason was a shiny new version or simply losing interest in maintaining legacy, “sunset” encapsulates all the misconceptions software makers have about why their users upgrade.

It’s not beautiful to lose access to your data. And no, that gobbledegook XML or JSON export doesn’t help anything. It’s not beautiful to have a trusted tool or service ripped from your hands because the maker found it an inconvenience to keep it around. It’s nasty, it’s annoying, and apologizing for ANY INCONVENIENCE THIS MIGHT CAUSE is just a further slap in the face.

No more sunsets at Basecamp, ever

So Basecamp 3 is not going to sunset anything. Not the current version of Basecamp, not the classic, original version of Basecamp. Either of those work well for you? Awesome! Please keep using them until the end of the internet! We’ll make sure they’re fast, secure, and always available.

But, but, but isn’t that expensive? Isn’t that hard? What about security? What about legacy code bases? Yes, what about it? Taking care of customers — even if they’re not interested in upgrading on our schedule — is what we do here. Cost of business, as they say.

At launch, Basecamp 3 is not going to have all the same features as previous versions, so some existing customers may well just want to continue with whatever version they’re on. That’s great! All the new, exciting features will still be there when (or if) they choose to upgrade.

For those existing customers who do want to upgrade, we’re going to roll out the red carpet: Big discount on a new trial, and we’ll store your old Basecamp data in the existing versions for free, forever, as long as you’re a paying customer of the latest.

It’s really not rocket science. People like change on their own schedule, they detest it when forced according to someone else’s. That’s just human nature, and it’s rarely good business to fight it.


Check out what we’re up to at Basecamp.com.

Making money along the way: Did Dropbox and Evernote heed the lessons of Flip?

Remember the Flip camera? From its premiere in 2006 until the business was sold to Cisco in 2009, the little video recorder was killing it. Lavish praise, booming sales, flying high. And then cell phones got good enough at recording video, and that was the end of that.

If you disregard the acquisition proceeds, was Flip a terrible business? Well, that depends: Were they taking profits along the way?

There’s no natural law that states all products and services must endure forever and always. Some companies are glorious sprints, others are slugging marathons. Both can work, but the former is especially sensitive to making money along the way.

The problem is that everyone thinks they’re going to run a spectacular marathon in technology these days. There’s no amount too great to be invested in future growth, because the future is infinite, and you’d be a fool not to capture as much of that as you possibly can.

But what if the time allotted to your capture looks more like Flip? What if your product is going to have a great, booming run, but not for the next 30 years, just the next five?

Case studies: Dropbox and Evernote

Two companies come to mind when I think of Flip: Evernote and Dropbox. Both have had tremendous success with users, both were seen and perceived themselves as “long-term sure bets”, and both are starting to look a lot less shiny these days.

Both Evernote and Dropbox are facing increasing indifference from customers and competition from simply Good Enough features in someone else’s more complete offering. “You’re a feature, not a product”, as Steve Jobs famously dismissed Dropbox (see The case against Dropbox and Evernote, The First Dead Unicorn for but two deeper analyses).

I bet you that neither heeded the lessons of Flip. I bet you that both thought they were going to be around forever, so no amount of investment in the future would be too great. I bet you that even the mere suggestion that they should be taking profits during their first, seven fat years of prosperity would have been laughed out of the boardrooms.

Don’t put it all on growth

A lot of business administration is about managing risk. Thinking about how things might pan out if you’re not as clever as you think you are, or as lucky forever as you currently seem.

Yes, investing in growth when you got a good thing going is smart. But so is thinking that you might currently be enjoying the very best years of the business, not just “the beginning of an amazing journey”.

The smart choice is making sure you win in both cases. Don’t just keep putting it all on red and rolling. Eventually, everyone’s luck or skill runs out, and then it’s awfully nice if the entire time spent playing wasn’t all for nothing.


Check out what we’re up to at Basecamp.com.