The Exchanges

Q but you said, um, the reason that most of us aren't happy most of the time is that we set goals, not for the person we're going to be when we reach them, but we set our goals for the person we are when we set them. And I don't think you explicitly said that the company doesn't set goals, but you sort of implied it. Is that the case?

A Yeah. By the way, that quote is from a fellow named Jim Kudal, who is a good friend of ours and runs field notes, which a lot of people know. You know, our goal, our only goal is to be profitable on a given year. We've been profitable every year for 25 years. That's the only thing we look at is we want to make sure that we make more money than we spend. Otherwise, we don't really set goals or have expectations other than just to do our best work. I'm not a fan of thinking that you're going to do better work if you set a goal. I think you should do your best work all the time as best you can. And again, let the chips fall where they may. You know, the way I think about this That I think helps people understand this more is if you want to go out for a run and run a six minute mile and you got to run a six minute mile and you end up running a six Oh four. You're, you're like, didn't hit the goal, and you're maybe upset, like, I almost got it, whatever. Now, some people might say you're going to work harder next time, but what if the goal was six oh five instead? Like, it's five seconds difference, and you would have beat it, and you would have felt differently. It's like five seconds. Does that matter? Like, to me, the right question is, like, was it worth it? Did I enjoy the run? Did I have a good time? Do I feel good now? Don't want to do that again. Am I injured? No. Great. Did…

AI assessment note: “our only goal is to be profitable on a given year... Otherwise, we don't really set goals”

Q Especially earlier on, right? Maybe in year 27, the answer is different than in year three or two.

A Yeah. So I can only tell you what we've done, which is again, a little bit unusual. We pull out everything at the end of the year. Now, first of all, we're an LLC. So we're taxed on everything at a personal level. So if I leave money in the business, I'm still paying personal income tax on that money. It doesn't really make sense to do that. So we have a recurring, you know, recurring revenue model. We have very predictable revenue. So we basically have a little bit of overlap. You know, we take some money out in quarterly distributions and there's some money left over in January and we kind of wait till April to take it all out. So there's some overlap and there's enough operating cash, right? When we were, when I first started the business in 1999, we were, uh, an agency and we, our first client, it was, uh, four of us, three partners, one sort of employee. We each put 10 grand in, so we had 30 grand, uh, to start the business. Um, and then our first customer was, was HP. HP was like giving everyone business way back then. HP was like the hot company to get a gig with because they paid a lot. And I think the gig was a few hundred grand to do some website design for them. This is 99 where people are paying numbers like that. And, um, from that point on, we were profitable because we only had a few people. We didn't take big salaries, and that was that. We were able to pull out…

AI assessment note: “We were able to pull out all the money every year because, actually, we started”

Q Okay, so let's say four, let's say four million of your profit. And I wanted to ask you, like, for you guys, is that a, ah, we wish we had kept it bad sale because it's now, A lot more profitable? Or is it, no, that was the right thing to do because it cleared us up to do other things? How do you think about that, that transaction?

A Well, it's easy to look back on it and make a different decision now. The reason we sold that at the time was because we were selling off a bunch of stuff or consolidating to kind of go all in on, on one thing on Basecamp, essentially. It's kind of around that time. We've since decided to make more things than just Basecamp. So we're kind of in a multi-product world again. Uh, I think they got a very good deal, let's just say. Um, and the thing that I will say bugs me about our decision about that is that that was the easiest month, not the sale, but the, the product was the easiest money. We built the job board in two weeks and it was generating at the time for us something like 30 grand a month, something like that with no work, like literally close next to nothing to do. It was all, you know, self-service automated. Maybe there's a customer service question here and there, but like essentially nothing. And, uh, I wish we still had that. We could still launch another one. Like, there's nothing that says we couldn't do it again.

AI assessment note: “the thing that I will say bugs me about our decision... I wish we still had that.”

Q ones. And Elon doesn't make those, but his critics often do. His mistakes are real and they have consequences, but they're rooted in forward motion. I'm glad there's someone who is out there unafraid of making those kinds of mistakes. And showing us all what hap- what is possible when you pierce the membrane that holds most things back. That's, that's pretty good. Uh, what made you feel that way?

A I would say reading the book made me, made me feel that way. Now, of course, it's a story. Well, it's, you know, a biography, but like, it's a story. There's a perspective on it, point of view. Um, a lot of the examples in the book are about, um, simplifying, are about cutting out waste, getting to the root of things, figuring out like what really matters, um, not getting caught up in what other people think it should be, uh, and also not being caught up in things you can't do. And It was that impression. And there's a, there's a multitude of examples. There's one, one of my favorite examples. I might be misquoting this slightly, but there's this example of, of, uh, there's a rocket, you know, SpaceX rocket ready to go launch. And they find like a crack in the, in the skirt that surrounds one of the engines. And I think, again, I'm going to get this, some of the details wrong, but like if NASA had found that, um, there's like a three month launch is scrapped. Multi-month delay, rebuild the whole engine, kind of that sort of thing. So, so there's, there's a crack in the skirt and, and Elon hears about it and they, they stop the launch or something and Elon hears about it. And, uh, he goes, what's the problem? He goes, there's a crack in the skirt. He goes, um, let's get rid of the crack. Can we get rid of the crack? And they go, well, if you get rid of the crack, you're gonna lo…

AI assessment note: “I would say reading the book made me, made me feel that way.”

Q What's this thing about loosening the grip on the stick?

A Oh yeah. So I got, I got a drum set recently. I used to kind of want to play drums. I kind of did for a little bit. I stopped for many years and I kind of just picked it up recently. My office is a bit of a mess, so I got to find a better place for it, but right now it's in the corner. And as I've been playing, I, I, I learned this very quick lesson. Um, and actually it's true when I try to learn how to play guitar, I say try again, cause I'm not very good at these things, but I enjoy them is when you're new at something, you tend to hold things too tightly. Like I, I hold the drumstick too tightly. I hold the neck of the guitar too tightly. Anyone who's played any instrument will understand kind of where I'm getting, where I'm coming from here.

AI assessment note: “when you're new at something, you tend to hold things too tightly”

Q Have you seen the big Lebowski? He goes, you're not wrong, dude. You're just an asshole.

A Yeah. So in my mind, I'm like, I, but I still struggle with it just because of how I was raised and how I was brought up and, and, and, and, and the imagined messages, like the whole point is like, I'm imagining that everyone's looking at that and going, what an asshole. It's like, most people probably don't care. They don't care. They know this, they know the score. They're fine with it. And if they're not, that's their problem. Like David's point is like, if they have a problem with me driving a nice car, that's their problem. It's not my problem. Like, I've earned this. I enjoy this car. I buy this car because I like the car. I'm not going to hide the car. And he's, he's right. But I, I just have a hard time with it still. Not anymore with, with him. This is like way back in the early, early years. Um, but, but it still is something that's in there. There's a residual, like, struggle with that degree of honesty around money in a similar way that people are like, you know, in America, like, who'd you vote for? Like, I don't talk about who I voted.

AI assessment note: “I'm imagining that everyone's looking at that and going, what an asshole.”