Fried: Taking Cash Out of a Business Reduces Compounding Downside Risk
Jason Fried · Musings of a Legendary Entrepreneur · Jan 5, 2024 · at 25:04
Jason Fried, co-founder of 37signals, argues against the tech industry norm of constantly reinvesting all profits back into business growth.
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“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 anything a year later, and if you keep pouring it all in, and never taking anything out, and putting it in your pocket, or putting it in the bank, and, you know, you're just adding more, and more risk every year. I, I'm a believer in taking risk off the table, and being paid for the work that you do, and understanding that the future is very uncertain, and the best outcome is probably not the one that's going to happen”
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