Outlasting

You in business? What are you doing to last? Not to grow. Not to gain. Not to take. Not to win. But to last?

I wouldn’t advocate spending much time worrying about the competition — you really shouldn’t waste attention worrying about things you can’t control — but if it helps make the point relatable, the best way to beat the competition is to last longer than they do.

Duh? Yes, duh. Exactly. Business is duh simple as long as you don’t make it duhking complicated.

So how do you last?

Obviously you need to take in enough revenue to pay your bills. But we’ve always tried to reverse that statement: How many bills do you need to pay to limit your revenue requirements?

Rather than thinking about how much you need to make to cover your costs, think about how little you need to help you survive as long as you want.

Yes, we’re talking about costs. The rarely talked about side of the equation. I’m honestly shocked how little attention costs get in the realm of entrepreneurial literature.

Whenever a startup goes out of business, the first thing I get curious about are their costs, not their revenues. If their revenues are non-existent, or barely there, then they were fucked anyway. But beyond that, the first thing I look at is their employee count. Your startup with 38 people didn’t make it? No wonder. Your startup that was paying $52,000/month rent didn’t make it? No wonder. Your startup that spend 6 figures on your brand didn’t make it? No wonder.

Even today… Some of the biggest names in our industry are hemorrhaging money. How is that possible? Simple: Their costs are too high! You don’t lose money by making it, you lose it by spending too much of it! Duh! I know!

So keep your costs as low as possible. And it’s likely that true number is even lower than you think possible. That’s how you last through the leanest times. The leanest times are often the earliest times, when you don’t have customers yet, when you don’t have revenue yet. Why would you tank your odds of survival by spending money you don’t have on things you don’t need? Beats me, but people do it all the time. ALL THE TIME. Dreaming of all the amazing things you’ll do in year three doesn’t matter if you can’t get past year two.

2018 will be our 19th year in business. That means we’ve survived a couple of major downturns — 2001, and 2008, specifically. I’ve been asked how. It’s simple: It didn’t cost us much to stay in business. In 2001 we had 4 employees. We were competing against companies that had 40, 400, even 4000. We had 4. We made it through, many did not. In 2008 we had around 20. We had millions in revenue coming in, but we still didn’t spend money on marketing, and we still sublet a corner of someone else’s office. Business was amazing, but we continued to keep our costs low. Keeping a handle on your costs must be a habit, not an occasion. Diets don’t work, eating responsibly does.

Try it for a year. Think less about revenues and more about costs. In many cases they’re easier to control, easier to predict (seek out fixed costs that’ll stay the same as you grow, vs things that get more expensive as you grow), and easier to manage. But only if you keep them in mind as you make decisions about how you’re going to last — and outlast.


Fired up about a new idea, but can’t seem to get traction to make it happen? Chat rooms aren’t traction, they’re treadmills. Lots of talk without going anywhere. You need Basecamp 3 — discussions, to-do lists, schedules, the ability to hold people accountable. Don’t just talk about it, do it with Basecamp.

If you’re reading this, you probably don’t do hard work

Actual hard work

Designers, programmers, tech entrepreneurs, and investors love talking about how hard their work is.

Let’s get real.

Hard work is picking lettuce 8 hours a day in 90 degree heat.

Hard work is being a single mother or father who has to work two minimum wage jobs back to back with nary a recuperative break all day.

Hard work is heaving dirt and rock on a construction site. Or working with industrial equipment that could crush you if you make the wrong move.

Rule of thumb: If it’s hard you’ll have trouble finding people who want to do it. There’s no shortage of people who want to be programmers, designers, strategists, social media consultants, entrepreneurs, investors, etc… But try finding people to work the farm. Hard work is doing the work other people don’t want to do.

Coding, or designing, or writing pitch decks, or making sales calls, or preparing spreadsheets, or writing blog posts, or social media marketing, or buying ads, or choosing the right color, or picking the right paper, or making a layout responsive, or investing in companies, or doing due diligence, or making decisions, or coming up with a strategy, or allocating capital, or figuring out how to spend the budget, or reading up on a subject is not hard work. That’s just work. If you can do it in an air conditioned room, with no physical threat to you or someone else, while seated, it ain’t hard work.

It may be challenging work. It may be creative work. It may be skilled work. It may require multiple tries to get it right. You may have to learn new things. You may be rejected a bunch. You may get hung up on. You may not know how to get from A to B. You may have to persuade. You may have to deal with people you don’t like. You may have to sell something someone doesn’t know they want. You may have to be creative. You may have to build something that hasn’t been built before. You may have to battle entrenched interests. You may have to put in a few days or weeks in a row to figure something out you’re stuck on. You may have to make tradeoffs. But that’s the work. Not achieving the outcome you wanted doesn’t make it hard, it means you have more work to do.

If you enjoy it most of the time, it’s probably not hard.

Solving a problem doesn’t mean you worked hard. It means you decided to put in the work to solve the problem. Maybe you thought about it differently. Maybe you came at it from an angle no one else did. Maybe you just decided to take something on other people couldn’t see. None of those things make it hard.

And maybe you’re really good at something, while other people are very very bad at it. But that doesn’t make it hard either.

Long hours don’t equal hard work. They just equal long hours. The time you put in has nothing to do with how hard something is.

Brainstorming isn’t hard work. Riffing isn’t hard work. Networking isn’t hard work. Going to conferences isn’t hard work. Dodging traffic isn’t hard work — it’s commuting. It may be shitty, but it isn’t hard.

And please, giving your opinion isn’t hard work. Bouncing from meeting to meeting giving advice isn’t hard work.

I get why people love calling their work hard. It feels good. It feels important. It makes you feel like you’re doing something that some other people would choose not to do. I absolutely get that.

But none of that makes it hard.

We all have work to do. Do good work. Do creative work. Do thoughtful work. Do your best. But there’s no need to flatter yourself about how hard it was.

A static business is a healthy business

Is that the sun? No, it’s our business. Read on…

Aim for many nondescript dots, not a few obvious ones

Last year I wrote an article suggesting that you shouldn’t let any one (or small group) of customers overpay you.

If you have a small handful of customers paying you significantly more than most of your customers, you’re no longer a product company — you’re actually a consulting company working for those big payers. You’ll do what they say — often at the detriment of your smaller customers — because the big guys pay the big bucks.

And if you don’t follow their money with your effort, an exodus of just one or two big customers could seriously impact your bottom line. It could put you at major risk.

So instead we take the other approach — a broad customer base where nearly everyone pays us roughly the same amount per month, all things considered. Over 100,000 companies pay for Basecamp, and we don’t play favorites.

Remember that picture up at the top of this article? This one…

Our star

That chart represents the lifetime revenue per Basecamp account. Each dot represents the lifetime $billings of a single account.

See how uniform that is? It looks like static. Static is a healthy business. No outliers, no major splotches. If you removed any one dot — or even any 10, 20, or 100 dots — you’d barely notice. You could probably remove 1000 random dots and it would still look the same.

You know what else it looks like? Insulation. Because it is insulation — insulation from risk. We wouldn’t want this to happen, but because our revenue is so equally distributed across a large number of independent customers, if a random 10% of our customers left tomorrow, we’d be fine. We’d never have to cross our fingers and hope that “Customer X” wasn’t part of that 10%. Can you say that about your business?

If you mapped your customers like this, what would your your star look like? If you started pulling away your 10 biggest customers, would you see big gaps, or would the holes be swallowed up by the whole? Would it be obvious with a few removed or would you be able to even tell the difference? Are you diversified or dangerously dedicated to a few big bets?


Over 100,000 companies pay for Basecamp. If you’re still running your business on email, text, chat, and meetings, come on over and see how much better things can be with Basecamp 3. There’s nothing else out there like it.