Opinion
Fried: Treating Startups as Financial Instruments for Exits Is 'Repellent'
“I think playing entrepreneur is like spinning up businesses all the time, making all sorts of stuff, and giving it a name, and giving it a logo, and trying to raise money, and coming up with valuations, and talking about all this stuff, and there's like nothin…”
Insight
Fried: Companies Should Settle Into Orbit Rather Than Pursuing Endless Growth
“You gotta get off the ground, and you gotta break free of gravity, but then there's a point where you actually just want to sit in orbit and sort of maintain. You want to be within a certain range and fluctuate a little bit up, a little bit down, but be in thi…”
Opinion
Fried: Startup Stock Options and RSUs Are Largely Bullshit
“No options, no RSUs, no stock, no, like, any of that BS. I find almost all that to be pretty much BS, unless you're like a really well-established public company.”
Insight
Fried: Raising Venture Capital Eliminates Almost All Exit Options and Off-Ramps
“The moment they go raise money, they've cut off almost every option. They think they've expanded their experience and their opportunities, but they've cut off almost every possible off-ramp outcome because now they have to be in big business or they fail. That…”
Insight
Fried: Minimal Costs and Small Teams Eliminate the Need for Mass Scale
“Keep your costs low, keep your company as small as you possibly can and make great stuff. And then you don't have to find as many people just like you, but the ones you find really love what you do. And that's like, that's enough.”
Insight
Fried: A Company's Only True Competition Is Its Own Operating Costs
“Well, like, a business is very simple. You gotta make more than you spend. That's a business, basically. Like, I mean, you can keep borrowing money, and then you can, you know, borrow more than you spend, and eventually you got to make more than you spend. So …”
Insight
Fried: Lacking Physical Constraints, Software Inevitably Expands and Degrades
“In software, you don't get that. Software can be anything. It's infinitely malleable. And what ends up happening is because there's nothing pushing back, it just expands forever and gets worse. Software slides downhill. It gets better for a while than slides d…”
Disclosure
Fried: 37signals Intentionally Leaves Money on the Table by Skipping A/B Testing
“We're definitely leaving money on the table. I'm sure of it. Like, we don't optimize our pricing. I'm not testing pricing, not constantly. We're not A-B testing constantly. I'm certain there's some formula that we're not following that could lead to more growt…”
Disclosure
Fried: 37signals Left AWS and the Cloud to Run Physical Data Centers
“We just recently left the cloud, left AWS, and we're running our own stuff now in data centers.”
Assertion Supported
Fried: Moving 37signals Off the Cloud Will Save Roughly $10 Million
“David wrote this great article about like getting off the cloud. It's going to save us something like ten million bucks and whatever it is.”
Insight
Fried: Business Post-Mortems Are Useless Because Outcomes Cannot Be Truly Explained
“The reason I don't like the postmortems in business, and I know a lot of businesses do this, they do, they launch something, they spend all this time and energy looking back on it, trying to figure out why it did what it did, and my general sense is you'll hav…”
Insight
Fried: Founders Should Build Products for Themselves to Guarantee an Audience
“Make stuff for yourself. There's probably other people out there like you who want what you want, and make it available to sell. So you are the customer, you are the audience, it's you, and then there'll be other people just like you. We're not all that unique…”
Insight
Fried: Heavy Corporate Structures Create Distance From Customers and Products
“The more massive an object, the more energy it takes to change its direction, right? This is just like, this is getting back to basic physics. A thick, when I think of this stuff, and sometimes these metaphors don't perfectly line up, but in my head, I think o…”
Disclosure
Fried: 37signals Intentionally Avoids Enterprise Customers to Focus Exclusively on SMBs
“Our customers are small business owners, and I just, I don't care about enterprise customers. I don't want them. I like small, medium-sized businesses. They're more like me.”
Insight
Fried: Setting Clear Daily Output Limits Increases Long-Term Business Longevity
“I just think this idea of like, well, you're done at two 30 is healthy. I think the business lasts longer because of that. I think, like, if you think about, like, you don't probably get bored of a business like that. There's something about that versus this i…”
Disclosure
Fried: 37signals Caps All Project Planning Horizons at Just Six Weeks
“So at our company, we typically think about six weeks in advance and that's about it. There's some occasional projects, maybe a few over the 27 years that we've done, that we needed to think further ahead. Like we just recently left the cloud, left AWS, and we…”
Insight
Fried: Paying Attention to Competitors Forces Fear-Driven Feature Parity and Copying
“Everyone follows everybody else because when you're paying so much attention to what everyone else is doing, you tend to just, that's the way you think it has to be done or can be done. You're not open to like alternatives because you don't see them anywhere. …”
Opinion
Fried: Apple, Google, Yahoo, and Microsoft Ruined Email With Neglected Products
“I blame Apple. I blame Google. I blame Yahoo. I blame Microsoft for making shit email products that they just don't care about. Now, they've started to care more about them, but they didn't care about them for a long time, and everybody knows that nobody cared…”
Insight
Fried: Many Founders Build Businesses to Meet External Expectations, Not Self-Knowledge
“A lot of people don't know what they like. They like what other people like. They like what they're supposed to like. They live up to other people's expectations. They kind of run someone else's business in a sense. Not like an executive running their business…”
Assertion Not checkable as stated
Fried: Roughly 20 of 62 Employees at 37signals Received Six-Figure Cash Bonuses
“Our bonuses are based on profits. We've been profitable for 27 years, and they're distributed every year, and they're meaningful. They're, I looked this up before the show about 20 out of the 62 people Last year, or twenty-twenty-four, because we haven't close…”
Disclosure
Fried: 37signals Sets Zero Sales, Revenue, or User Growth Targets
“We don't have revenue targets, except for like, I want to be profitable. I don't have sales targets, revenue targets, user targets. I don't have any of these things. We just do the best work we can.”
Insight
Fried: Most Founders Who Sell a Successful Startup Fail to Repeat It
“And it's not arrogance. It's just like belief, like, oh, I can do that again. And some people can't. Most people cannot. Or if they can, they don't reach the same height.”
Disclosure
Fried: I Lack the Stamina and Hunger to Build Another Software Startup
“I wouldn't want to try to do this again, because I don't think I could. I don't think I could. And I think it's totally fair to admit, like, I don't think I'm good enough again to do what I did before. I don't have the stamina. I don't have the drive. I don't …”
Insight
Fried: Equal Pricing Protects Software Businesses From Dangerous Customer Concentration Risk
“What you don't want are a bunch of outlier companies that you cannot afford to lose. You don't want customers that you cannot afford to lose. And so by equalizing our pricing and not letting anyone pay us more than anybody else, we create a bunch of small unit…”