Insight
Fried: Never dismiss a good idea because prior founders executed poorly
“Never dismiss a good idea because of poor execution. And five people could have gotten it wrong in a row. It doesn't mean it's bad. They just may have gotten it wrong.”
Insight
Fried: Gathering too many early opinions wrecks product development
“One of the ways to wreck new product development is to get too many opinions too early. Everyone's got an opinion, and especially when something's new, they're gonna tell you what they think, and then you end up having to sort of field and explain your reasons…”
Disclosure
Fried: 37signals does not offer equity compensation to its employees
“We don't offer equity to employees.”
Insight
Fried: Ambition should mean sustaining a business, not destroying competition
“The ambition typically, or ambition is typically a word used to talk about, like, amassing, and collecting, and growing. You know, it can also mean, in my opinion, like, it should mean existing, sustaining. I'm ambitious at that level, but I don't need to go d…”
Disclosure
Fried: Midwest location helped 37signals reject VC money and peer pressure
“It was easier for us to reject VC money because we didn't live in that world. We lived in the Midwest and that's not how people do things over there, you know? And we also didn't go to the parties and didn't go to the events and didn't like get influenced by t…”
Insight
Fried: Approaching projects with zero domain knowledge yields more original work
“One of the reasons why I don't go looking at other people's work is because once I have their work in my head, it's hard to have original ideas. I actually prefer the newbie approach. Like, I don't know what the hell I'm doing. I think people who go into somet…”
Insight
Fried: Taking Cash Out of a Business Reduces Compounding Downside Risk
“Taking cash out of a business, I think is a really healthy thing. In our industry, it seems like people are always pouring money back into the business. You know, shit can hit the fan at any time, and a lot of businesses that were worth something aren't worth …”
Disclosure
Fried: 37signals does not run public betas or broad pre-launch testing
“So we don't do public betas. We don't pull people in, you know, we launch something. Sometimes we have a few people look at it first right before we launch to make sure we didn't miss anything really material. But like we finished the thing and launched the th…”
Insight
Fried: Startups cannot rely on volume to compensate for giving products away
“Don't give things away and think that volume is going to help you. Like, you know, the pizza shop in the corner is not giving away pizzas for free.”
Insight
Fried: Bootstrapping is superior to venture capital for most software businesses
“Software businesses that have, you know, basically humans and Some tech, which is cheap, either in the cloud or, you know, people just need a few laptops here and there. And there's not much that you need to get going and building a software business or tech b…”
Insight
Fried: Venture capital forces low-overhead tech startups into a single exit path
“I think a lot of tech companies act as if they are companies with huge capital expenditures, and they're not, and they put themselves in a hole. Because now they're beholden to someone else on someone else's time frame. They have to become a certain kind of co…”
Insight
Fried: B2B software companies do not need Uber-style venture capital aggression
“So yeah,
that's an exception, but like your B to B accounting software, you know, whatever, like, no, not that that can't be a great business.
It can be, but it doesn't need the same kind of approach as Airbnb or Uber.”
Insight
Fried: Predicting a software company's three-year trajectory offers no real advantage
“I think businesses really, truly just unfold. And I'm here for that. I'm not here to predict where we're going to be in three years. I don't know, don't care, frankly. There's no real advantage to me predicting that.”
Insight
Fried: Micromanaging founders create passive employees rather than independent thinkers
“When you're that involved in every decision, and this, by the way, is very common for founders, right? You're like, this is my baby, this is my thing, I want it done this way. What you end up doing is you just create a bunch of people who are waiting to hear w…”
Disclosure
Fried: 37signals gives teams autonomy to decide scope cuts during cycles
“Our six-week cycle process is very much like this. We kind of, you know, orient people in a certain direction around an idea and go, here, you figure it out. You make the decisions about what work needs to happen, and you make the decisions about if we're not …”
Disclosure
Fried: 37signals Distributes 10% of Annual Profits as Cash
“We have a 10% profit share plan. So we hold aside 10% of our annual profits and distribute them to our employees as real money, not equity, not options, not based on what the fluctuations of the market is, but like cash you can spend tomorrow on a mortgage or …”
Assertion Not checkable as stated
Fried: 37signals Generates Tens of Millions in Annual Profit
“And since we've been a profitable business for a long time, we generate tens of millions currently in annual profits.”
Disclosure
Fried: 37signals usually gives new employees one year to find their way
“So at 37 signals, we basically give people a year to find their way. Sometimes not a year, but usually a year to find their way.”
Assertion Partly supported
Fried: Basecamp was one of the first SaaS and freemium tools
“We were one of the first SAS, SAS tools, and also first freemium tools, actually, in fact.”
Assertion Not checkable as stated
Fried: 37signals has approximately 100,000 paying customers across its software products
“So we've got a 100,000 or so paying customers across base camp and hay, and also high rise.”
Assertion Not checkable as stated
Fried: Tens of thousands of paying customers subscribe to HEY email
“Hey is super weird when it comes to email. Hey.com. It's just an unusual way to use email. But it resonates with tens of thousands of people who are paying for it.”
Disclosure
Fried: 37signals ran its agency and Basecamp in parallel for a year
“And we ran them in parallel for about a year. And the idea wasn't that Basecamp was going to replace that. It just happened to do that. It happened to become so popular so quickly that we're like, you know, what do we rather do? We have limited time. We'd rath…”
Assertion Supported
Fried: Early Groupon hired comedians to write product descriptions
“My friend of mine ran as a Chicago based company. He would hire a lot of comedians and basically show writers to write their one, their descriptions of products that they were selling on Groupon.”
Disclosure
Fried: 37signals launched with just $30,000 pooled from its three founders
“Like when we started our business, There was three founders initially, and we each put in 10 grand. So we had 30 grand, you know, just to kind of make us, make our way for a few months before we picked up some clients to pay our way after that.”
Jason Fried