I want to start with what you told me last night, that you feel the best way to make a product, or the best way to make a product for you is by.
You are the actual customer.
You are making the products that you want to use.
Yeah, I don't know how to do it any other way.
Like, this is how I've always done it.
So back when I was...
15, 16.
I started in software making stuff, actually something called FileMaker Pro, which is like way back, when you can make these databases for yourself.
And I made this database to keep track of my music collection, because I was loaning out tapes and CDs to friends and never getting them back.
So I'm like, I need a way to keep track of this stuff because I keep losing these things.
I made this product, which I eventually called Audiophile, but I made it for myself.
It was just this database, right?
And I made a nice interface because I liked art, I liked making stuff, and so I made this thing.
And I eventually just decided that I'll put a little text file in this archive of the software.
That said if you like this, send me 20 bucks.
And I put up on AOL, so it's like pre-internet, right?
Put up on AOL and I got this envelope, actually an airmail envelope.
One of those with like the red and blue check marks, like old school, like envelope from and it's from Germany.
And I opened it up and someone had printed out this piece of paper which was the thing I included with the software and gave me a 20 crisp US bill, right.
And that was the moment I think it all clicked for me, which is 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, you, you.
And then there'll be other people just like you.
We're not all that unique.
There's plenty of people who like what we like, plenty of people who don't, and there's plenty of products for them too.
But there's enough that like what you like.
And so that's where I got started.
Yeah, you have this interesting idea where, if you're just making what you want right, doesn't matter.
You just have to go and collect more people that like the things that you like and kind of ignore the people that don't.
Yes.
And this is all tied into like keeping your costs low.
So you know, if you have a lot of costs, high cost big company, you have to find a lot of people like you.
But if you keep your costs low, keep your company small.
At the time it was just me, you know, when I was doing the software thing.
And I was making like I don't know 20 grand a year like selling software as a solo person when I was like 16 years old or something like that, or 17.
Then I went to college a little bit as well.
And it's like that's an amazing little small side business, a huge side business when you're that age right.
Because I had no expenses.
And so it's easy.
I only had to find like, you know, a few thousand people to pay me that money, 20 bucks, right?
To get that eventually.
But if I had a big business and I had a lot of people, a lot of overhead, I'd have to find a lot of people like me.
And that's harder.
So the whole game for me is to make things as simple as possible, as easy for me as possible.
So 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.
Like that is enough.
You can stop there, keep doing stuff.
But you can kind of stop there conceptually and go I'm going to make stuff for me, people like me.
I don't need the whole world to like what I like.
I need like enough of a small world to like what I like.
And we're golden.
You put it in a very interesting way.
You said your real competition is your costs.
Is that the line that you have?
Yeah.
It's your only competition.
Explain that.
Well, like a business is very simple.
You got to 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 if you're making more than you spend, your competition is your costs.
And that's what you're really in business against is how much it costs you to stay in business.
It's not all the other alternatives that are on the market.
Of course, they exist and they're real, but you can't do anything about them.
They're going to do what they're going to do.
You're going to do what you're going to do.
You can't control what they're going to put out there, what they're going to price it at.
All the things they're going to do, they're going to do what they're going to do.
What I can't control is how much it costs me to run my business, how much I sell my product for.
And as long as I make more than I spend, I get to stay in business.
And isn't that what this is all about, staying in business?
That's what it's all about because I like this.
We like this.
I want to keep doing this.
I can't keep doing it if I don't stay in business.
I can't keep doing it if I make less than it costs me to make the things that I make.
So I'm always thinking about.
The only competition I really have on an annual basis is to make sure that we make more as a company than it costs us to run the company.
That's my real competition.
This is something I talk about over and over again with my other podcast founders, where it's just like it is kind of weird how every single one of history's greatest entrepreneurs they were obsessed about watching their costs from Sam Walton to even Steve Jobs when he first started Apple.
Andrew Carnegie, Rockefeller.
Like, this theme reappears over and over and over again.
It's one of the reasons why, you know, my main partners ramp because they want to –
They want to help companies control their costs.
It was like the perfect alignment for the audience and what these history's greatest entrepreneurs are saying.
But we were talking the other day where it seems very fascinating how you know you can have a software company that has insane margins and still lose money.
And when I talk to these young founders, I'm like, just go study the early days of Microsoft.
It's like Bill Gates.
The first.
One of the most interesting stories was that the first 30.
It's probably the most successful, arguably the most successful software company of all time.
First software company to get to a billion dollars in sales of just pure software in a year.
But the first 30 years, employees of Microsoft were Bill Gates, his secretary, and 28 programmers.
There's no fat at all.
That's something we talk about a lot.
Can you talk about the importance of keeping costs low, small teams, and then you want essentially like no fat anywhere.
We have 62 people at 37signals.
And we've gotten as high as I think 80 at some point.
And then we're about 63 or 62 right now, which feels really good.
But we also built a lot of things when we were much smaller.
We had like 12 people way back in the day or four people way back in the way way, way days when we started out.
So I've always been comfortable with small teams.
I think that small teams work better, are better.
There's fewer, there's less room for miscommunication because I don't think companies really have communication problems.
They have miscommunication problems.
Like when you have too many people and too many layers and someone misses this and someone has to repeat something that happened like.
I want to avoid all of that.
Get rid of all the things that get in the way of making good stuff.
And I actually think too many people get in the way oftentimes and you actually end up making worse stuff the more people who are involved.
So we just try to keep the team small.
Any team we have making something is usually two people, like two people working on a feature one programmer, one designer.
That's pretty much it.
Sometimes someone else will come in here and there, but for the most part, it's two people.
And it also keeps us honest.
It prevents us from making things that we can't make with two people.
So it just keeps everything tight and simple and clear.
And you just keep parlaying that, keep adding that stuff up and you end up with a very tight product with a small surface area that you can see the whole thing, you can hold the whole thing.
You know how it all works.
Your customers can see the whole thing and hold the whole thing and know how it works.
And that's all people want.
People don't want complicated stuff.
They don't want software that's full of things they don't use.
People will sometimes buy things like that because they're sold things like that.
But when it really comes down to it, that's not what they actually want.
And people who buy software, who buy our software, are the people who use the product.
A lot of enterprise companies sell software to a buyer, who then makes other people use the product, and everyone hates those products.
But people who use our products buy our products and it's the same person.
So they're looking for stuff that just works really well.
And I just found there's no better way to do that than to keep the company small and tight.
And that goes everywhere.
Like we don't have any middle management.
We tried a little bit.
That's why we had 83 people at one point.
We hired a few more people to build out a little bit of a team and then pulled back from that and go.
That wasn't helpful.
What did you not like about that?
There's two people in the executive team, me and David, my business partner.
That's it.
We've had a COO for a while.
They were fine.
They were good people.
We just didn't, there wasn't enough work for them, frankly, to do the work.
So they were doing things that they didn't need to really do.
And then when you do stuff you don't really need to do, you feel bad for them in a sense, because they're like wasting their professional life doing things they don't really want to do.
That doesn't need to get done.
So that doesn't feel good.
We've had engineering managers and we found out again that there was too many levels in between David, who's the CTO, and the people doing the work.
He had to talk to someone else who talked to someone else, and it's like a game of telephone.
Things are lost in translation along the way.
We tried those things.
We had some thoughts that maybe this would be a better thing for us to do, and it turned out not to be a better thing to do.
How long does it take you to realize a year?
Okay.
Basically.
COO roles were longer.
They were three years.
We tried it twice.
For the most part, we give everybody about a year to prove themselves at 37signals.
And so we hire somebody and they have about a year until we decide if we're going to hire them again.
That's how I think of the second year.
It's a rehire.
It's not like a performance review where we look at numbers and it's like one simple question.
I always try to like if I can.
I always try to boil everything down to a question that answers all the other questions.
So the question we ask after the first year with any new employee is knowing what I know now, would I hire them again?
And that answers pretty much every question.
Answers every question about performance, about attitude, culture fit all the stuff.
If I know what I know now, would I hire them again?
And so it turned out with the management stuff we're like it wasn't even about the people.
I was more like now that we know what we know, now would we create this position again?
And the answer was no.
So we eliminated those positions and never rehired for them.
So that's how we kind of got back a little bit to a smaller size.
Does that work with products too?
Or features of products?
It can, it's harder.
You've rolled back people, you've rolled back entire products.
Do you ever roll back features?
We have done that in some ways, typically.
So every five, six years we kind of reinvent Basecamp, which is our main product, our biggest product.
Do you write it from scratch?
We have in the past.
So from Basecamp 1 to Basecamp 2 was our total rewrite.
From 2 to 3 was a total rewrite.
3 to 4 was not.
And 4 to 5, which we're working on now, is not.
But it's a chance to revisit a lot of fundamental assumptions about what the product does and how it works.
And I'm always trying to make, I'm trying to buck the trend, right?
The human nature is about expansion typically.
Like things tend to expand.
But in the physical world, there's also like limits that push back on those expansions.
Like if this mug was burning hot, like we would know that's a bad design.
If this handle, if there's no handle here and I had to hold it this way, maybe not a good mug.
Like there's physics here.
Like you look at this.
If this thing was made of a really, really fragile material or something that would like melt if it got wet, you'd be like that's a bad design.
Like there's some things that are telling you this is a bad design.
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 then slides downhill.
So I'm conscious of that.
And I'm always trying to make sure that every new version we make of something is a little bit simpler in the fundamental ways than the previous version.
It might have more features, but the experience hopefully is simpler.
That's like the big challenge and actually the frankly, like the most fun part of building products over the long-term is can we buck the trend of having them slide downhill and instead like, maintain or make them even better over time?
Why is that fun?
It's hard and that's fun.
It's a bit of a puzzle.
It's a bit of pushing back against the forces of nature typically which again, it would be to expand.
It's forcing us to come up with clever solutions to problems, more creative solutions to problems.
It forces me to understand what something really is and not like what it could be or what I think other people think of it is.
But like, what is this really trying to do?
And it's fun to have these insights.
So like my favorite thing in life, frankly, is to like have an insight.
And I don't get to decide when I have them, right?
No one does.
You just like have one, right?
Maybe it's in the shower, maybe it's whatever.
You just have an insight.
And It's cool to work on a problem in software and then have an insight about how to make it simpler.
And I find that for me, for whatever reason I bounce into those insights, very frequently making software more so than pretty much anything else I do.
So it's fun to make something new because I get to have more insights into how to make it simpler and better.
And that's just like.
For whatever reason, that's where they come from, like the shower and the software.
A lot of the conversations that Jason and I have are about craft, about the importance of putting your soul into your work and making the best possible product that you can.
Our conversations remind me a lot of the conversations I have with my friend Kareem, who's the co-founder and CTO of Ramp.
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We were talking a lot about this conversation I just had with Toby Luque.
I know both you and I admire him.
Oh, yeah.
And what I love about Toby that you have in you as well is like when you talk to him, the next response out of his mouth is like not predictable.
Yeah.
And some of his like views are not correlated with one another, which also makes it really interesting.
So, like, for example, you've been running your company, started your company when you were 25.
Yeah.
You've been running for 27 years.
You guys have been profitable every single year.
Yeah.
You have made, you know, you have millions of customers over the lifetime of the business.
You've made... hundreds of millions of dollars.
And yet you told me that if you ever sell the company, you don't want to look at a computer again.
Yeah, I don't.
First of all, I don't like being consistent.
I'm not that interested in being consistent, first of all.
So your point about like saying something that kind of conflicts with something else you said to me, it's just like it's all about context.
It's not about consistency.
I don't find consistency interesting in any way, shape or form.
To me, it's all about the context, which is why I don't like to plan.
I don't have long-term plans.
I like to make things up as I go.
So that's all tied into that.
But yeah, I don't particularly like business.
I like running my business.
I figured out how to run my business, but the idea of me running another business, I don't want to do that.
I don't want to do that.
Maybe I could create another one that's mine and I would like it, but I don't think I could actually.
And I think that we're a product of timing and teams and the right people at the right time and the right ideas at the right time and all that stuff.
That's what made this thing and continues this thing.
But to start over again, to run a business, no thank you.
And frankly, the other thing is, I would never trade my business for anyone else's business.
I don't want anyone else's business.
I don't want to put myself in someone else's shoes.
I know how to do my thing.
And like, that's enough for me.
I don't need to like stroke the ego and go, I could do this again somewhere else.
I could turn something.
I don't think I could do this ever again, but I don't need to.
And that's okay.
Like this sense of just being comfortable with what you've built and what you're working on now.
Being enough is, for me, a very peaceful place to be.
And I think that that's unfortunately not something that's talked enough about in my industry, which is tech, which is grow grow grow, get as big as you can.
Sell valuations, do it again.
Serial entrepreneurship.
It's boring to me, all that's boring.
Okay, there's a million things I wanna unpack there.
You said a bunch of things.
The serial entrepreneurship.
I wanna hit on because you and I were talking about the conversation I had with John Mackey where he was referencing some of his friends.
Just love to like start.
And you're like oh, I actually have like this metaphor that I wanna start talking about, and it is envelopes and letters.
Envelopes and letters.
Then we'll go back to the fact that you don't like business.
It's really important too, don't let me forget, is you have no sense of envy.
I know you well enough now to other people's businesses.
I don't think that is an act.
No, I would not trade my business for anyone's business.
So I don't envy anyone's business.
In fact, it'd be a downgrade.
Anyone's, you could pick anyone.
If anyone, you've got to decide.
If you got to decide, you're like, Jason, would you trade this business?
No, any business I wouldn't take.
I'd take mine over anyone else's business.
So like, I don't have- What is the underlying thought there?
It's just like- I built the company I want to work at.
I built the business I want to be in.
Like-
No one else has that.
I have that.
That's my thing.
Now they have their thing.
I have my thing.
Like, I love what I've built.
It's great.
I'm very happy with it.
And it's a good fit for me.
You know, I don't wanna wear someone else's clothes.
I don't wanna do someone else's stuff.
I don't wanna live up to someone else's expectations.
Like, we have ours, we do our thing, we do our thing our way, and that's it.
And if I had to do my thing someone else's way, it would just be a game of charades.
And there's a lot of people, I think, playing entrepreneur.
I don't want to play entrepreneur.
What does playing entrepreneur mean to you?
It means a lot of things to me.
But I think there's a lot of people who this is let's get into the envelope thing, because this is kind of part of that.
Okay.
And I remember when I was getting started being an envelope guy.
So the envelope to me, there's this two sides of business, basically.
There's the envelope and there's the letter.
The envelope is the outside, the shell, the business, the vehicle that holds the letter.
And the letter is the product or products.
I'm a product guy.
I love product.
That's all I care about.
The business side just has to exist to hold the product.
Like it.
Just that's the vehicle in which the product travels in, but I don't care about the envelope so much, but there's lots of people.
I remember this early on, when I first started my business, I was thinking about the brand and the business and how big it could be.
And what, how do I describe it?
And what do I call it?
That's all envelope work.
That's like all on the outside.
And I think there's a number of people.
And by the way, it's fine.
All this is fine.
What I'm getting at is you gotta know who you are and what you want out of yourself and what you wanna do.
And if you're an envelope person, that's fine.
If you're a product letter person, that's fine.
But you gotta know who you are.
I know I'm not an envelope person.
I don't just wanna build shells that gets filled and then I sell it and build another shell.
It gets filled and I sell it and build another shell and gets filled and then sell it.
I wanna just work on a letter.
And the envelope is just the thinnest little thing that needs to be there. to hold the letter.
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 nothing of substance inside that yet.
Maybe there will be, but in a lot of cases, there's nothing.
There's just losses.
And then it's like a mad rush to get out at a certain valuation for other people who put money in.
That's like turning a business into an asset, a financial instrument.
It's just not interesting to me.
I want to make things.
I want to build products.
And that's what I do.
Again, that's what we do.
And just the idea of a business being a financial instrument is just like, It's anathema to me.
It's repellent, actually.
Why does it need to... You just used the word thin shell to describe the envelope.
Why do you want a thin shell?
I want it to be a thin shell.
Oh.
What does that mean?
Well, I would say this.
The more mass of an object, the more energy it takes to change its direction.
This is getting back to basic physics.
When I think of this stuff and sometimes these metaphors don't perfectly line up, but in my head I think of like a thick business
It's hard to change.
It's heavy.
It's massive.
There's too much distance between it and the customers, it and the product.
There's space, right?
You can imagine like, if you just imagine something very thick, this is the thing that matters.
And you got to go through all this and compress all this down to get to the thing that matters.
I don't like that.
I think the thing that matters should be big and the rest of it should be as thin as possible.
And so that's what we've tried to build at 37signals.
It's a very thin business with a thick set of products that are good and solid and real and generate real profits and are real businesses.
And then the rest of it is just enough to hold it all together.
That's like my vision for business.
It's not the only vision.
Plenty of people way more successful than me don't see it this way.
I don't care.
This is just how I see it and how I'm sharing it.
And it's mainly just to show people that you don't have to go big.
It doesn't have to be a big, thick, heavy thing. busy company.
It can be very thin and then focus on the product and get to a place where you can find out people like you.
Get to this place where enough is enough and then maintain.
Another way to think about this for me I always go back to these sort of weird metaphors is, like you know, there's the hockey stick, right.
Chart, right?
That is like unappealing to me.
I like more of like a metaphor where it's more like a rocket into orbit, right?
So you got to get off the ground and you got to 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 this comfortable place where you're just orbiting.
You're not breaking a force anymore.
You're not pushing super hard.
You're maintaining and maintaining a level of quality, maintaining a level of enjoyment and just orbiting now.
And I think that that's a really wonderful place for businesses to be.
But I wouldn't encourage you to be trying to get to orbit year two.
You got to be like on the ride up to break free of all the forces that are holding you back.
But then you should also find a place where you can settle in an orbit versus people who I think are just busy, constantly trying to grow grow, grow and get as big as they possibly can.
And I always say like, why?
I'm like, so what if you're massive and you're twice as massive?
Like, so what?
Why?
What's that all about?
And they may have an answer for you.
I don't.
I don't know what the answer would be other than like just growing for growth's sake.
But I'm a big fan of getting somewhere and then holding.
When I think of you, I think one of your maxims that you repeat the most is that idea.
I hear you say, so what, all the time.
Yeah, so what?
All those questions.
Yeah.
Explain more about that.
Well, you'd have to ask a question.
That would be like, so what?
I don't know.
Like, why grow?
I mean, maybe that's not a good one, but for example, like 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 growth, more revenue, more whatever, more whatever.
And my answer is like, so what?
Like I'm very comfortable with where we are.
We've got a great business, high margins, very predictable.
We make new stuff all the time.
We enjoy ourselves.
We have a great time.
Like, I don't wanna fuck that up.
I think people fuck it up all the time.
You get to the right size and for whatever reason, you can't be content there.
And you push a little bit too much, too hard, and you lost what was great about what you were doing.
And so this whole thing about there's money on the table and maybe there isn't, maybe there isn't, maybe there's a way to optimize, maybe there isn't.
I just, it doesn't interest me.
So it's so what to that?
I don't really care.
Tell me if this observation that I have about you is correct.
Yeah.
You seem to have this inherent natural revulsion against optimization.
Yeah, I don't like optimization.
Okay.
Actually, okay, so here's the consistency thing.
It's all about context.
I don't like optimization around numbers.
Like, I'm just picking, we can make 5 million on this.
Well, it'd be amazing if we could make 51, if we did X Y Z I don't care about the X Y Z to make 51.
But I am interested in optimizing a product to make it better.
That to me is a worthwhile optimization.
Like it's better for me because I use it.
It's better for our customers because they use it.
That's fun.
But like squeezing out an extra 100 grand off 5 million or something is just like not fun.
It's boring, not fun.
Boring like, actually beyond not fun boring.
I don't even know what would be beyond that, but i'm not interested in that at all.
I'd rather spend the money making the thing i make better.
That is the thing i'm here for, not to squeeze an extra hundred grand out of something or an extra million out of something.
I i don't care, it doesn't matter.
Like there's a point where you're doing well enough, where it shouldn't matter anymore.
Um now, that might make me a bad ceo.
Maybe someone else would come in my business and double the business overnight.
That might be totally true.
And I'm willing to accept that that's the case.
My answer would be, so what?
I don't care.
I don't even think you think of yourself as a CEO.
And there goes the so what again.
You asked for it.
No, I don't think you can help yourself.
I don't think you think of yourself as a CEO.
I don't.
I don't actually even like the term, frankly.
Okay.
Like executive officer.
What?
Of what?
Like I make products.
I run the company with David.
David and I run it together.
Okay.
I don't need the CEO.
How do you say?
Chief.
Chief executive officer.
Of what again?
Like of what?
Like we make decisions.
That's what we do.
We make decisions.
We make products.
We hire great people that we like.
We find people with zero drama.
Like we put together a team.
We set out to make things.
We take really good care of people, really good care of our customers.
We make good products that we really like.
Great products hopefully, right?
I got to leave a little bit of room there for some humility.
Like we can always make better products.
So I'm not going to call our products fantastic.
They are good, great.
There's always room for making those better.
But as far as like being a CEO and whatever that's supposed to mean, I don't know what the hell that means.
Yesterday I answered like 200 emails from my customers.
Is that, like some people would say, that's irresponsible for a CEO to spend their time emailing customers.
Like, I think it's the best thing you can do.
But I don't think of myself as a CEO.
I would say whoever says it's not a good use of your time.
A lot of people say it, dude.
Yeah, but, like, they need to listen to founders because they're all like this.
The best entrepreneurs and founders in history.
And I think what me and you bond over is exactly that.
Like, all I care about is products.
I don't care about anything else.
Yes.
I think the way you think of yourself as a designer.
Yeah.
Is that correct?
Yes.
Sure.
Okay.
A little presumptuous.
Like, I think of it, yes, fine.
You're not a presumptuous person.
I didn't mean it that way.
No, you didn't.
Yeah.
But when I talk to you, it's like you've just designed everything in your life.
I like to make things.
Yeah.
Let's just say that.
But you put a lot of.
You're a very thoughtful guy and you see how much thought you put into the design of everything in your life.
It just happens.
You've also put a lot of thought into designing products in the business.
Again, to fit exactly who you are as a person.
Yeah, as best I can.
I mean, I have a family and I have kids and you don't always get things the way you want them to be right.
But you do your best and you live within a system that you're proud of and happy with.
And that's, I think, a big part of it.
The best founders, I see this over and over again.
You said something about the thickness of the envelope and all this stuff that's between the person running the company and the customer.
You have to make that as small, almost non-existent as possible.
One of my favorite examples is this example from over 100 years ago, Jim Casey, the founder of UPS.
What he realized is he had all these executives.
He paid attention to incentives.
He realized they would, over time, just tell him what he wants to hear.
And so therefore, he was only getting.
He was getting his ass kissed all the time, not getting useful information.
So he's like, forget this.
I'm not, I don't want to talk to them.
He would have.
He had a driver and they would drive on the streets and he just says every time you see a brown truck, brown UPS truck, you pull over and he would just talk directly to the drivers.
He spent all his time talking to the person that's actually doing the work for the customer.
So I don't think- They know the most.
I don't think anybody's saying, Jeff Bezos, I know he's a partner of yours.
He owns a percentage of your company.
You know, he railed about this forever.
Right.
And he made every single executive.
You'd have to spend a day or a week or a month on customer support.
Yeah.
We do the same thing.
We haven't done that for a bit, but we used to do that.
We should do it again, actually.
We used to have this thing called everyone on support, where people do it for a day, rotate through the company.
Right.
Mostly so I would do it, and so David would do it, and now I do it anyway.
But it's very important.
I think you know, when I lived in Chicago there was a grocery store down the street called Olivia's.
There still is.
And I got to know the owner.
And I appreciated the fact that he got to know his customers personally, because they'd walk in the store and he would say hello, right.
That's how I got to know him.
I don't unfortunately have that opportunity.
Like.
We have hundreds of thousands of people who use our products and it actually frustrates me that I don't know all of our customers.
Like I could walk past on the street.
I could walk past 75 of our customers on a given day and I wouldn't know that.
He would know, cause he would know who they are and he knew their family and the whole thing.
So I've always tried as best I can to get as close to, I can't get as close to our customers.
We have too many of them in that sense.
But whenever you sign up for Basecamp, the first thing you see is a letter from me with my email address and my signature and my email address.
And I want my customers to email me.
I don't want to hide from anybody.
There's no AI, there's no assistant, there's no levels between at all.
Just write me.
And people do all the time.
And we have in our books as well.
We have our email address in our books.
I want to get as close as possible to the people who use the things that we make, not just to make them happy, because I want to make myself happy too.
We are the first customer of our products.
But to understand what they're doing with them, to understand the language they use, how they describe them, who they are,
I want to know these things because somehow it permeates me and I just I get to feel what it's like to be them and get to understand what it's like for them to use the lever that we've made for them to move something.
And there's no other way to do that for me than to just share my email address, because I don't get to meet people in person, like this guy who runs a grocery store.
But I love businesses like that.
People who, I love, the dry cleaner has been there for 40 years.
I love the local grocery store.
I just love businesses.
Those to me are so much more interesting than the billion dollar whatever.
I just don't, That's a great question.
I feel like they're more real.
I like real things for whatever that means.
Define it however you'd like, but a billion dollar business or a 10 billion business, just it doesn't feel like a real thing to me.
It feels like a concept.
Meanwhile, the dry cleaner down the street, I can drop off my shirt.
I get it cleaned.
I bring it up.
I pick it up from the person who owns the place.
This is her living.
This is what they do.
There's something for me that I connect with, something that's real, that I feel like I can hold in my head and I can understand.
I keep coming back to this.
Well, not keep, but I have already in this interview once this idea of surface area and like a business as an object.
I want to be able to see the whole thing, understand the whole thing a massive entity with tens of thousands of people and billions of dollars and whatever.
I just i don't understand it and that's maybe my own shortcoming or whatever, i don't really care.
Again, like i don't need to understand that, it's not my thing.
Um, but i just prefer smaller businesses And that's – our customers are small business owners.
And I don't care about enterprise customers.
I don't want them.
I like small, medium-sized businesses.
They're more like me.
I understand who they are.
I understand what they do.
I like that kind of stuff.
So a business that can't be beyond a single person's comprehension, like you can understand.
Dry cleaner is very – you have this great story.
I don't remember if it was in one of your books or not.
There was like this – you have like a love of craftsmanship that I get from your writing.
Sure yeah, there's like a pizza place where it's like he will only sell.
Is it the fresh dough?
And he has?
No, it's a sandwich place.
Okay, sandwich.
Can you tell this?
When they ran out of bread?
I'm not there.
I don't know if they're in business anymore.
They're in chicago uh vinnie's, i think, was the name of the place on chicago avenue.
If anyone wants to look it up, sandwich place, sub italian joint, you know, whatever you go in and and the set, they're open as long as they have bread And they just sell out and they're closed.
That's it.
They're done.
They're not making, like, they're not, that's anti-optimization.
Yeah, they could, I'm sure, get more sacks of bread from that.
It actually comes like in a sack, you know, like the big baguettes or whatever.
And like, they just went out, they're done.
And maybe usually it's like 230 or something.
There's no hours on the door.
They close when they close, when they're done for the day.
I just, there's something to me very poetic and beautiful about that.
And like, again, enough.
It's just, it comes back to this idea of there's enough in that.
They're done for the day.
It's enough.
They sold enough.
But he does that because- They could sell more, but then where do you stop?
But this is the thing- But it's the quality though, right?
Because then- I mean, you're right.
It is the quality too, but they could get more quality bread also.
But there's the- Okay, so where do you stop?
Like, where does this end?
Well, you could stay open until 6.30.
I mean, 7 probably.
We could do 7.30.
Someone's still at the door.
We could do 8.
Like, you could see how this doesn't end and how a business like that could consume everything.
And then you begin to not like it because there's nothing else in your life but that.
Then you're so attached to it.
Like, you can see how this could expand to that degree.
I just think this idea of, like, well, you're done at 2.30 is healthy, right?
I think the business lasts longer because of that.
I think if you think about, you don't probably get bored of a business like that.
There's something about that versus this idea of a business that you have to maximize and fully fill all your time, all your energy, everything.
I can understand the appeal there for a while, but I also think there's something very just simply beautiful about enough.
Now, I don't own that business.
They might wish they had a lot more revenue and sold a lot more sandwiches.
So I also want to recognize the fact that I'm looking at this from the outside.
I'm an objective observer.
I don't know the realities of that business, but I'm just observing what I think is a beautiful thing, which is a business that's been around for a long time, family owned.
Does enough business for them to support themselves, and their employees make great food for their customers.
Like, isn't that what this is about?
Are you proud of how long that you've been able to stay in business?
I'm not proud of it.
Like I'm not, I didn't mean that like in a negative way.
It's like pride is not a, I feel fortunate.
Is the time important to you?
Like if I could tell you okay, you can make the same exact amount of money that you made in 27 years, but you made it in 15 and you're done.
You'd take the 27.
I would take the 27.
Because I'd like to, but the money is a side effect of all of this, right?
So all the money does, like Patrick, who you interviewed, was Shaughnessy, right?
Yeah.
I love what he said about work.
It's like, I think something like, I work so I could work more or something like that, right?
The reward for good work is more work.
There you go.
It's to keep going.
Great way to phrase it.
And so that's why 27 years is more interesting than 15.
I like this stuff.
Like.
The beauty about this for me is that somehow we've managed to build this system, this thing, this company, these products that sustain over a long period of time, that allow us to enjoy our craft and our work over a long period of time.
And we are in control of that as much as we can be.
The market can change.
Anything can happen at any time.
But I can control my costs.
I can control my quality.
I can control my messaging as best I can.
And we can make the best thing we can over time and keep making that thing.
That's what I wanna do.
This is my whole point.
I don't wanna trade my position with anybody for anything.
I can love what other people do too.
I do.
There's great products all over the place.
And I'm like, wow, that's an amazing thing that someone made.
Like for example, One of my favorite products is the Concept2 Rower.
Are you familiar with this?
Yes.
I don't know anything about the company, but I can reverse engineer that.
I bet it's a badass killer company too.
Because that's how I look at things, by the way.
I look at the products, not the companies.
I look at the products and go, oh, that's a great product.
I bet that's a great company.
Or this product is, nah, I don't like this product.
I bet the company's kind of- I do this for people.
If you can make a great product, you're probably an interesting person to talk to.
Yeah, I could see that reverse thing as well.
I mean, again, look to the inside to figure out what forms on the outside.
So concept two probably one of my favorite products of all time the concept to a rower.
Their bikes are good too, and they make a ski machine too.
But the rower is like my favorite machine and i love it because it is so well built.
First of all, it's under a thousand bucks and it's been under a thousand bucks, i think forever, and it's been around forever.
There's been different variations of it, but they're always improving on a theme.
It's roughly the same thing every iteration, but slightly better.
It comes in a big box, very easy to assemble.
It's a big machine, but it's very easy to assemble.
The display is black and white LCD, not even LED, LCD with like five rubberized buttons.
And then I think there's two other ones.
It runs on C or D batteries.
No electricity, no plugging in, no recharge.
Oh shit, like it's done, get some new batteries.
Like it just works.
The buttons you press, there's no touch screens.
The thing is reliable.
It always works.
It's incredibly durable.
It does exactly what it's supposed to do with nothing else.
And I look at that and I go, that is a perfect product.
One of the few perfect products I've ever seen, like a paper clipped and a Concept2 rower.
Like hard to improve on both of those things.
Like I have deep admiration for that kind of thing.
I still wouldn't want to trade my company for theirs, because I don't know anything about what they do.
I know what I do.
But I can still like, respect and admire all sorts of things and all sorts of companies, but I still wouldn't want to be them.
I like what we do.
I like that I can do it for a long period of time.
And hopefully I'll do it for as long as I feel like I want to do it.
And then at some point, we'll decide that we're not going to do it anymore.
And I don't know when that'll be.
I'm always a year-to-year guy.
I'm a day-to-day guy when it comes to planning.
Like I talked about a little bit earlier, I don't believe in long-term planning.
I believe in being around for the long term.
But I think the best way to do that is day by day, not like quarter by quarter or year by year.
Just figure out today and figure out tomorrow and figure out tomorrow.
I've always been like mystified by people who think they can figure out the next three years today, but they're afraid of figuring out tomorrow, tomorrow.
Like I need to plan the next three years.
So I can do that.
I can plan like what, 900 or a thousand days in advance but, like tomorrow, I can't figure things out if I don't have a plan.
Like you can figure things out tomorrow if you can figure things out for the next thousand days.
Explain how you plan day by day.
There's no plan.
I mean, like we have a direction.
So the way I think about this and this is like again another weird metaphor, perhaps I think of our business and maybe me, even like I'm a squirrel.
Probably weren't expecting this.
So you watch a squirrel run across a field.
What does it do?
Like it knows where it wants to go, roughly and it runs and it scurries and it stops and it looks around.
And then it scurries some more and it stops and it looks around and scurries some more.
It doesn't need to get exactly where it wants to go.
It knows roughly where it wants to go.
And it clearly doesn't know how exactly it's going to get there, but it knows like, where it's headed.
And then it course corrects.
That's how I do it.
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're running our own stuff now in data centers.
That was like a much bigger project.
Okay.
But most projects, 99% of them at our company take six weeks or less.
And most of them take just much less than that.
But six weeks is the most we're willing to think ahead.
And then day to day, like the six weeks is like where the squirrel is headed.
So it's not super clearly defined.
It's generally defined.
And then we figure it out as we go.
We just figure it out as we go on a day-to-day basis.
Like the teams figure it out as they go.
Like I kind of set, or David or someone sets, like the target generally, not like financial targets, but like generally.
We're headed in this direction with this idea.
Figure out how to get there on your own.
We'll check in when we need to.
You ask if you want some help, happy to come in.
I'll review stuff as we go.
But it's a bunch of course correction to get us there.
And I find that that is the most honest, real way to get somewhere.
Good, because in general, you know more about things the closer they are to you.
So i don't know what's going to happen five mondays from now, but well today's, not today's thursday, so let's just take friday.
Five fridays from now or tomorrow.
I probably have a better idea of what might happen tomorrow than I do.
Five tomorrows or five Fridays from now.
So I'll worry about those when I get there.
Let me worry about tomorrow.
Let me nail tomorrow.
Let me get tomorrow right.
Let's do the right stuff tomorrow.
Let's make the right decisions tomorrow.
And then we'll make some more on Monday, and make some more on Tuesday, and make some more on Wednesday.
Like, just make small decisions all the time and don't put yourself in a place where you're making huge ones you're afraid of.
And you can sort of get wherever you want to go for 27 plus years.
There's a question that I keep getting asked by different people, so it must be a popular question, and I'm always perplexed by it.
They're like, you seem to have something good going right now.
What does success look like five years from now?
So you hate the question.
I'm going to ask what your answer is, and I'm going to tell you what my answer to that question is.
I don't know.
That's the answer.
I don't care.
So what?
So what?
I don't even know five years from now.
What's the difference?
It's an interesting question because it's a directional question, but I don't care.
I don't have an answer.
My answer is boring.
Just more of this.
Yeah, sure.
Exactly.
I mean, that's essentially what it is.
Until... So here's the thing about those questions.
People answer those questions today for who they think they're going to be then.
You don't know who you're going to be then.
So, like... it's a kind of a silly thing to answer or even to ponder.
So yeah, I'm with you, which is like this.
This is the answer, basically.
I've read all your books.
I've listened to almost all your episodes.
We've shared a bunch of meals together.
And I never even knew that you just did the day thing, too, because that's what I was like.
I just feel like I try to make a good 24 hours.
And then I was like, oh, I like this day.
So, like, I'll do it again tomorrow.
And I had this line that I said by accident.
I was like, well, all a great life is is just a string of great days.
So like all you focus on is just let me make a great day.
And I told you last night where it's like the way I think about very similar to what you're doing, or what I'm doing is like I'm just laying bricks.
And like today I'm making a podcast and tomorrow I'll make another one.
And a few days later I'll make another one.
And then I'll let the score take care of itself, because I just like it doing this and I do it the way I want to do it.
And I want to make a great product.
And so my answer to that question is just like this like five years from now, I just want to be making more podcasts.
I know I'm going to be reading books forever.
That's the only unbroken habit I've ever had in my entire life over 30 something years.
I can't stop reading.
So I'm going to be reading books.
So that's what my other podcast is about.
And I like talking to smart, interesting people that do great shit.
And I don't think I'm ever going to stop doing that.
So that's what this is.
Yeah.
Great answer.
And if one day you decide you don't want to do this anymore, then you just change.
That's where me and you start to separate a little bit.
I don't know.
I said if.
There might be a time that I'll jump off a cliff. very disappointed.
That would be the thing you start doing.
I don't know.
Well, with parachutes, hopefully, but I mean, I'd be very disappointed in myself.
You might find another interest in your life.
Something Jeff Bezos told me which I've always kept close at heart, because I've examined the things I've come into enjoying doing.
He says, you don't find your passions, they find you.
And I've always believed that.
And I didn't know that. but I've always believed it, but I didn't really know that I believed it.
Like then when he said I'm like yeah, I have always felt that way because, like I'm into things now that I wasn't into 10 years ago, that I didn't know about 10 years ago.
And so I'm hopeful for you that there's other things too, even though you can do this too.
But like, who knows?
Like I think There's another beauty in just being empty and open to the world and how it presents itself to you.
And you might find that you love this and you love something else.
And there might come a time where you don't like this anymore.
And that's okay.
It's like, okay.
I can tell you don't believe me.
No, I don't believe you.
Maybe we do this till 80, right?
Hopefully.
But, and I hope you do too because you're damn good at it, right?
But like, who knows?
And it's like, it's okay.
It's okay.
This is why like the whole idea of a five-year plan, it's like it's kind of a ridiculous thing.
How about just get tomorrow right?
Get tomorrow right.
And then, and by the way, if tomorrow wasn't right, this is the thing.
I think this gets back to like in some ways tying it back to the thinness.
You want to find tiny units.
Find small units.
So a day is a good small unit, right?
A simple decision is a good small unit.
And the good thing about that is if you screw up, it's not a big deal.
Like if tomorrow sucks because whatever happened and okay, it's behind you in 24 hours, it's over.
Like versus big, huge decisions where you take eight months to think about it and pulling all these people and set up all these contingencies and you make the big decision and it goes sour, it goes south, whatever, maybe it works out, but maybe it doesn't.
And then it's like, it's so hard to make those calls.
It's so hard to deal with the ramifications of those things if they don't work out.
Make things small, tiny little units that you can throw them away.
It doesn't matter.
It's like what you basically want then is enough good things, enough good units in a year, right?
Not like one great year, one great plan, but enough good little things.
Because you know you're going to miss a few things.
So who cares?
Throw them away.
It doesn't matter.
Small units, bricks, build that way.
And I think that you just, you're... you become like more anti-fragile basically in that way.
You know, when you're just like little things and they can't throw you off too much, if you get something wrong and it's small.
Now, someone could say, well, you're gonna miss big opportunities.
And yes, maybe so, so what?
So what?
Like if I can stay alive, doing the thing I'm doing and running the business I want to run, I don't need the other big opportunities.
Like stop worrying about all the other things you can maybe do and just focus on the thing that you're doing and like make that work over and over and over and over as long as you want to do it.
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Do you feel you have like a narrow aperture with the world?
I feel like you're like...
I don't.
Okay.
Well, actually, what do you mean by that, first of all?
Well, you just said, like why are you worried about all these other opportunities out there in the world?
Like, you just seem to be focused on, like, I'm building the business the way I want.
It's a perfect business for myself.
You're kind of not oblivious.
I don't mean this, obviously, in a disrespectful way by any means.
Like yeah, you just – you don't really care what – other people in your industry are doing.
You have a like a narrow focus on.
Yeah, I don't know if it's narrow or wide.
It just is like I'm doing what I'm doing.
And it doesn't matter what they're doing.
How often are you like breaking like paying attention to how other people are making their products?
Very rarely.
I don't actually want to pay attention to it.
Why?
I think what ends up happening is when you see this in my world, you see it everywhere.
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.
And then you get people, People then build out of fear.
Like, gosh, they're doing this.
They're launching this.
I have to meet them.
There has to be parity between my product and theirs.
Then you end up following everybody.
I don't like that.
I'd like to take inspiration.
If I'm going to take inspiration from anything product-wise, it's going to be outside my it's the Concept2 rower.
It's not another piece of software.
I'm not inspired by their software.
I like buildings.
I like furniture.
I like Concept2.
I like watches.
I like other things outside of my world that I can sort of admire and understand and sort of get fired up about.
And I don't know if those things come back.
I don't think they need to come back.
Like everyone's always like, how does that come back and help you build your business?
Like, I don't know, I don't care.
Why does it have to?
Why does everything have to come back to business?
Why does everybody have to influence your decisions?
It's like, these are all things that just happen.
They exist in your world.
They happen to you and they form you and you're not even aware of most of it.
And you just like, I think, if you admire a variety of different things and pay attention to different things and enjoy a walk in the woods like a few days ago I was just, it's like 445.
You know California.
Here the light is just beautiful at the end of the day.
I'm just sitting outside looking at the way the sun is raking over the hills.
Like, I'd rather look at that than this piece of software.
I'm learning more from that.
I'm getting more from that than I am a competitor's product.
I don't wanna look at that.
I wanna look at the sun.
I wanna look at the ocean.
I wanna go for a walk.
I wanna look at nature.
I wanna look at great furniture.
I wanna be in great architecture.
Like that fills me up in a way.
I'm getting enough of the software world by being in it.
I don't wanna soak in it.
I wanna soak outside of it.
And then my only soaking in the software world is my own stuff.
That's enough.
It's enough for me to focus on.
Tell me about your idea of Galapagos Island product design.
I just, like, there's something really cool about islands that, like, have evolved on their own.
I just, like, I don't know.
I've never been to Galapagos.
My wife's been.
She asked me if I wanted to go.
I didn't want to go because it's too far.
But I should have gone, probably.
But actually, I didn't want to go, frankly, because part of that was it was too far.
I also felt like, like, can we let it be?
Although it's gotta be.
I mean, she loved it and I'm so glad she went and the pictures are incredible and it seems like an amazing experience.
But there's something very cool about things that have just evolved on their own, that are not influenced by other things, and i try to think of us as the galapagos.
I don't think of us this way really, but like conceptually, there's i don't like to use the word the galapagos island of the software and i don't use that, but i do think of us as um, actually an insular group focused on solving a problem our own way, without paying too much attention to what everyone else is doing.
I'm like aware of it because I live in it, but I'm not seeking out ideas from other companies in our field.
I think that that's actually a slippery slope.
It is because we see so much copying in our industry.
Like someone has a successful product and then all future products for the next three years look just like theirs.
That says to me that there's danger here.
Don't fall into that trap.
Our stuff looks different than everybody else's stuff.
Our stuff works differently than everybody else's stuff.
Nothing works like Basecamp.
Hey, Fizzy, it's all different.
And some people hate the way our stuff looks and works.
Fine.
Don't care.
We have enough people who love what we do.
And it's an expanding pie of people who are into what we do.
And we love what we do.
And again, that's like enough for us.
Even your landing pages look different.
They're essentially a letter from you describing what the product is and why it exists.
I always try to build things that I would want to see.
I build the company I want to work at.
I hire the people I want to work with.
I try to write, I do all of our writing.
So all of our, I don't do the design on the land.
I work with our designer to do a lot of that, but he's sort of the visual person there, but I do all the writing.
And I want every word to land with meaning.
This is again, like thin, thick.
I don't like thick stuff, thin.
How can I just get to the right point but not be sterile?
It's a problem sometimes when you get to the point and you need to be sterile.
So, like, there should be a little bit of bounce, a little bit of rhythm in the writing.
It should feel nice.
You should be carried through it.
There should be some momentum in there.
And I just love doing it.
That's my favorite thing to do, actually, at the company is write.
We just do stuff that we like.
I like that style.
If you look at my product demos, I always do the demo for the product, like the launch.
They're long and they're unedited and I screw up a bunch and I don't care.
If I was sitting with you.
What I want to try to get to with this kind of stuff is, if I'm showing you something, our product literally, you're like behind me or sitting next to me and we're looking at this thing together.
If I screw up two minutes in, I'm not gonna go, let's start over.
I'm just gonna keep going.
And so that's how I want these to feel.
I wanna like connect with people in a real way.
This is like a real person showing off a real product.
This is a real person writing a real thing.
My name's on it, my signature's on it, my email's on it.
We are who we are.
We represent ourselves as we are.
We are not a corporate entity hiding behind a structure.
We're not a CEO or we're a CTO hiding from our customers.
We don't have a board.
We don't have any of these things.
It's just us running the show.
And the show is open for anyone to see.
And we open source most of our work.
We're very open about sharing everything we know as best we possibly can.
I just feel like there's no reason not to.
I just wanna be direct and clear with people.
And hopefully they like that.
And some people don't.
Some people are like, oh, you guys are too small.
I can't trust you.
I'm not out to convince anybody of anything.
That's the other thing.
I don't want to convince anyone.
I don't like marketing language.
I don't like tricks.
Here we are.
Here's what we do.
Here's what our product does.
That's the best we can do.
And that's the best I want to do.
And I think it's the honest way to be.
And take it or leave it.
Like, some people don't like it.
That's totally fine.
I get it.
I love the idea of doubling down on authenticity and leaving the mistakes in.
I remember reading one of your essays a long time ago.
It was—I can't remember the culture, but they would do— Natural rugs.
Okay.
I'll tell you the story.
I was in Wisconsin in this little town called Mineral Point, Wisconsin.
Small little town about 50 miles west of Madison, and I was wandering through this gallery.
Strange.
It's like—
It was this weird building.
It looked like a junkyard inside.
Like you peered in, it's like, what is going on in here?
Something, and I saw some like old man on the back.
Like, there's gonna be something cool here.
So I knock on his door, I walk in, there's some rugs hanging, but there's also like junk everywhere.
Anyway, he comes out and you're like, okay, this guy's a character.
I love characters.
I love old people.
There's something going on there, right?
I'm like, who is this guy?
So he's a Navajo, he collects Navajo, he's dead now, but he collects Navajo rugs.
So anyone can't go there today is what I'm saying, but he collects Navajo rugs.
And I was looking and I find them very beautiful.
They're very simply patterned and the colors are very vibrant and they're very interesting.
And there's just, I don't know what it was that they spoke to me, right?
And I don't want to analyze why either, because I find that that's a great way to ruin any experience is to try to figure out why.
Does it or does it not?
It does.
I love these things for whatever reason.
So I go in talking to the guy and I noticed that they have a lot of errors on them.
Like there's what I thought was an error.
Like there's geometric shapes.
So their rugs are very geometric.
They're stripes, they're squares, they're triangles, they're all sorts of different shapes.
And a lot of them like weren't quite right.
You know you can like look at a shape and go, it's not.
They're trying to make a perfect triangle, but it's like not quite right.
And I asked him about that.
Or there's a stitch that's off, very clearly off.
I'm like they could have just taken that out and redone it.
And he said to me he said you know and again i don't know if this is true, but this is what he told me um, which is the navajo like they don't see those as mistakes, they're just like a moment in time.
And he related this way he's like if you're walking on a path, if you're climbing a mountain or something, and you're going a path and you trip or you stumble or whatever, like you don't Start back.
You can't take that stumble back.
It just happened.
The Navajo leave these in their rugs because they just happened.
And this is a record of what happened.
I love that.
I just thought it was like so lovely.
And I've tried to do that with the things that I do.
I mean, I don't like want to leave typos and stuff like that.
That's not quite the same thing.
But like, if I make a mistake on a video or something or whatever, like whatever, that's what you would do in the real world.
So I'm comfortable with that.
I've always found that to be very just again, a very beautiful thing that, like these, are not mistakes.
Mistakes are a concept we put on ourselves when we do something that wasn't what we intended.
Why does that have so much weight?
Maybe what we intended was wrong too.
I don't know.
Are these rugs worse because there's a stitch off?
No, they're not worse.
They're better.
And that's kind of what I'm striving for with this stuff is not to take things so damn seriously and build a company that's afraid of itself and afraid to do anything wrong and afraid to have an opinion.
You know, all these companies, not all.
That's a very broad statement.
All these companies, you know, like everyone's afraid.
Companies are afraid like that.
PR people and they got to talk to lawyers before they publish.
Everyone's afraid of everything of saying something wrong, doing something wrong, being wrong in some way.
That is not endearing.
I think people want to do business with people.
And they have to do business with companies because companies provide a lot of product.
But I think they really want to do business with people.
And maybe this is why I like the dry cleaner.
Maybe this is why I like the grocery store.
Maybe this is why I like running my business my way.
I feel like people are dealing with people.
We don't have a big corporate structure.
We're just 62 people currently doing the things that we're doing.
We're all accessible, all reachable.
No one's hiding from anybody.
This is what we do.
And I just find that to be.
There's again a thinness, a directness to that which just has an aesthetic valued to me that I can't quite explain.
It's like the quality that cannot be explained.
I think it might've been Christopher Alexander or something who was an architect, who talked about this.
I might be totally off on this, but I think conceptually the idea was you can go see buildings in native villages and there's no architect that made any of this stuff.
They didn't have any architects.
They had people making places for them to live and work and worship.
And there's a certain quality to that which is not textbook high quality but is beyond high quality because it's a perfect fit for what they wanted for themselves.
That's the kind of stuff I like to build.
It's kind of how you're designing your company.
Yeah.
Perfect fit for us, for what we want and what we need.
And again, getting back to the original thing, how many other people are there out there like us?
Enough.
That's the business model.
This is exactly how I started doing the podcast.
I think I'm drawn to that too.
I think of people, not companies, right?
And this is why I was drawn to podcasts to begin with because it's impossible.
Some of these podcasters that I was fans of before I had a podcast.
I've heard them speak for hundreds of hours.
Like, You can't hide who you are at that point.
You're going to like the good, you're going to hear the mistakes.
And I use the word endearing.
And that's exactly how I feel for like some of the people that I admire.
There's like something about them that is endearing.
In fact, a friend of mine just texted me this morning, my friend Lulu.
She was listening to one of my old podcasts on, like Napoleon's maxims on Founders, episode 337, if I remember correctly.
And she was like...
I thought it was hilarious that I didn't edit out the fact that I was mispronouncing all these French names.
And I'm just like, I don't know.
I'm like reading from the book.
I'm like, I don't know what this is.
I don't speak French.
So I'm just going to do this phonetically.
Do it your way.
But it was endearing to her that I didn't like, you know, look up how, like act like I speak French or anything else.
Like this is, I read books and I'm just guessing how this is pronounced.
You're not putting on airs.
Like, I guess like, I admire anyone who is truly themselves.
And that's what that was for you.
You're like, I could have probably faked the accent.
You know, like you watch TV news and it's like the guy like uses the Hispanic accent for like some you know Spanish word.
And you're like, that's weird.
Like, you're trying too hard.
Like, just like you don't need to like, if you don't speak Spanish, you don't need to fake the accent to try to speak Spanish is what I was trying to get at.
And it's like, but you see it all the time.
It's like, just, I don't know how to pronounce French words either.
Like, I'm not even going to try.
I'll just say what I say and read it phonetically.
And, like, you could even say, like, I would even go, like, I don't know how to say this.
I do say.
Like, I don't know what this is.
You're gonna laugh at me, but this is what.
And then you move on and no one gives a damn, because you're you.
And that's not the point of the story.
The point of the story is not perfect French pronunciation, like with seven words out of 5,000.
It's like, what is the story and who's telling it and why are you telling it?
That's what matters.
Figuring out the stuff that actually matters is what's important about that process.
And I think again, running a business and making decisions about product.
It's like what matters, what doesn't matter.
That's fun.
Going back to you writing these letters for the landing page.
Yeah.
Do you do it like Bezos, where they write it before the product is created, or you're doing it after the fact?
In the middle, usually.
So like with Hay, I wrote one for Hay, which is our email service.
And before we launched, before the product was even anywhere near done, I wrote the letter.
I need to interrupt you.
I was a fan of your writing.
The first time we met, I showed you the Amazon.
I was like, listen, I have receipts here.
I've been reading your stuff for 13, 15 years.
I bought Hay just because I wanted to give you money.
Because I'd buy your books, but I didn't have a team.
And Basecamp's project management, and I'm working by myself.
And so I couldn't ever give you money.
And then you built up so much goodwill by teaching me so much through your writing that I was like oh, I use email.
I'm going to buy that product.
I'm a proud subscriber of Hay just because I was like, I got to pay you back somehow.
Thank you.
I do that with other products too, where I'm not going to use them, but I just love the people behind them and you want to support them.
It happens so much.
And it's cool.
It's a cool way.
This goes back to we identify with people, not companies.
Yes, yes.
And it's a cool way to purchase something.
Sometimes the use is the support, not the actual use of the product.
But anyway, during the development of Hay, we launched this pre-launch page months before Hay was done.
And so I wrote this letter about like why email is a beautiful thing.
And for the longest time people have hated email because they despise it, because the email has gone off the rails.
I'm like, we can bring it back on.
Do you remember when you used to get an email from someone you loved, or like your grandparent, or like an old friend?
Like it's a wonderful thing to get an email from someone who you care about.
Problem is that most emails now are like spam and sales and garbage and like meetings and shit.
So I just got to this.
Anyway, we can get into that.
But the point was, to your question was like, I wrote that in the middle.
I didn't know what the product was going to be yet.
We're going one day at a time.
I didn't know what it was going to be.
Was that the why behind the product?
How would you describe it?
It was the love behind the product.
Love.
Yes.
Say more about that.
Well, I don't want to get like silly about it, because it's not.
You don't really?
I can't really love.
I know, but like- it's a different version of love.
No, no, I love like podcasts.
So I know exactly what you're talking about.
Yeah.
No, I love them.
Yes.
And the way and when I make one, and I listen to it before anybody else does, and I'm like, I'm happy with this.
That is love.
Yes.
That.
You're not silly.
It's not silly.
No, I don't mean, yeah, I know.
I know.
But like, okay.
So there's a certain warmth and tone that comes through when you make something you're really proud of in that way.
We got to proud about running the business for 27 years.
I'm really proud of the products we make.
The business, again, is like the envelope.
I'm not proud of the envelope.
I'm proud of the things that sustain the business, which are the products.
And I love getting them as right as I possibly can.
And there is a warmth comes to you when you're really proud to share something that you're done with, that you finished, that you want to put out there in the world.
And it could be a letter, it could be a line, it could be the right word in the right place, it could be an entire product and it can also be a company in a sense.
Um, but there is, there is love reserved for that, for sure.
So this is a love for the decentralized i.
I think i read, i remember reading this you're talking about, like if the actual creation of email is actually a miracle.
We've just kind of fucked that up.
Yeah.
It's amazing that anybody in the world can get in touch with anybody else.
There's no like platforms.
Like everything else is a platform.
You want to write someone on WhatsApp, well, they have to have WhatsApp.
Signal, they have to have Signal, whatever, right?
Email, beautiful thing.
It's like as beautiful as the web.
The web is beautiful because anyone in the world with a web browser made by any company can use HTTP and like connect to some other website.
Same thing is true with basic email.
These are wonders of the world.
And how did they become so despised?
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.
And so we care.
I live in email sometimes.
We don't use email inside our company.
We use Basecamp, but for the outside world, we use email.
And I want to use tools I love.
Like I want to use tools that matter to me.
And if I'm going to spend most of my day in Basecamp, I want to make Basecamp.
If I'm going to spend the other part of my day in Hey in email, I want to make an email tool that I'm proud of, that I want to use, that I have a certain love for.
And that's what that is.
And that letter, it was a love letter.
In fact, it ended, if I remember correctly, like this is a love letter.
Hey is our love letter to email.
And I meant it.
It's a great thing.
It's an amazing thing.
You just used the word tool a few times.
Yeah.
Do you identify with Toby Luque?
Toolmaker.
Yeah, I'm a toolmaker.
That's all I make, too.
I make tools.
That's how you think about it.
Yeah.
So people are like, what do you do?
I'm in the software business, so they understand what I do.
But I don't like that term.
I also don't like I'm in the tech industry.
I'm not a tech person.
Like, I don't like that.
I make tools.
They just happen to be made of software.
That's all I know how to do.
I don't know how to make things out of wood, but I know how to make things out of software and code and design and conceptual ideas.
And so, yeah, I make tools.
We make tools.
We make levers.
It's just a lever.
It's a lever that lets you do more with it than you could without it.
That's all it is.
You can move more things.
You can organize more people.
You can come up with better ideas.
You can see those ideas through.
You can make progress with the products that we make.
That's what a tool is for, to make progress.
I'm fascinated by a lot of your time spent out of the business, and a lot of the inspiration that you derive in life seem to be from physical things.
You just named a bunch.
You have a love of architecture, which we talked about.
Watches, cars, the concept rower.
When you said, you know, you could change your mind, David.
Maybe you're not podcasting in the future.
What I know for sure is, if I ever do anything else, it's going to be physical, because the same phenomenon where, like I, barely look at numbers
I know you barely look at numbers, but it's just numbers on a screen.
And those numbers happen to be big, but like you don't understand that.
Yeah.
It doesn't feel it.
I remember there was a, Mark Leonard of Constellation Software did this podcast.
He talked about one of his most fulfilling experiences.
Jobs he ever had was not, you know, starting and compounding, you know whatever it was 50 million to 80 billion or whatever he's done with pure software.
It was, he was building stone walls.
And even to this day he said he could go.
I think it was like a kid or a young man maybe he was in his twenties, thirties back then but you can go to where the stone wall that he worked on 30 years ago.
And he's like, point at it.
It's like, I did that.
I made that.
Why do you draw so much inspiration from physical things?
Take some guesses, because i don't know, just like i don't know why i like certain flavors, i just do right.
You can't really explain these things, but if i had to guess again, it comes back to.
There's something real about them.
Um, i like being able to hold things, touch things.
I like texture.
Something you'll see in a lot of our software products is actually texture, which is it's not real, it's simulated.
But a lot of software these days is very flat.
I like gradients and colors and lines and some texture.
I just find it to be very fulfilling and real to like rub your finger over something and feel it.
I like patina.
I like age on things.
Software doesn't age.
I mean, it does age.
It can look old or whatever, but like the software looks the same over time.
A great building, a great brick to get back to bricks.
Bricks are beautiful because they look even better as they get older.
They collect age on them.
They get stronger.
They're just, they build into other things.
I just, there's something about the physical world to me that is just, we're from it.
Okay, like we are it, we are part of it.
Like there's something so fundamental about it that I try never to get too far away from it.
I would much rather lay on the ground than like fly in the air.
You know, I just wanna be closer to things that are real.
Not flying in the air is real too, of course, but you know what I'm saying?
Like I'd rather walk somewhere.
I'd rather drive.
I'd like to be closer to the ground.
I've begun to collect like rocks that I think are cool looking.
Oh, now you've moved to Balibu.
Are these rocks crystals?
They're not crystals.
I was going to save that in case you asked me.
They're not crystals.
I'll just find something at the beach or I'll find something interesting with a cool pattern in it.
And I just like it.
I don't know.
I love nature.
I love all the textures and patterns and colors.
Like, for example, you know, when you're coming up as a designer, in the early days when I was designing like identities, like logos and stuff, you'd go through these like logo books or like corporate identity books, right.
I think there was an organization called, I wanna call it brand, but maybe I'm wrong.
Print actually was this magazine that had all these pictures of business cards and stuff.
Every designer I know would look through other business cards for inspiration, for like color patterns and palettes and layouts.
And like, I'm like, go outside.
Like the best designs ever are right there.
That leaf is the best it's ever been.
Obviously it's like survived and evolved.
This is a great thing.
And so I like, if you want to find great colors, look at a bird.
Don't look at a book.
Like, look at a leaf, right?
Look at the ocean.
Look, go to a tide pool and just look at the colors in that tide pool.
Look at the way the light reflects.
Like, that's the real stuff.
And I have goosebumps.
Like, for me, whatever it is, whenever I talk about this, like, it's just fundamentally real to me.
And I just love it.
And like, I love the screen too.
I love making software too.
But Probably because I'm in that a lot.
I really like not being in that too.
I don't think you love the screen.
You said if you sell your business.
Right now I do.
If I, we never, let's get into this.
Yes.
You said if you sold your business, you're never going to use a computer again.
Well, I said I would never start another business again.
What I would like to do is I'd like to shut my laptop.
I'd like to turn off.
Yeah.
Okay.
I don't need a screen to survive my days.
I'd like to close my laptop for a year and just not use it.
I'll use my phone because like I get in touch with people, right?
But I don't want to like compute.
I don't need to compute.
Let me just close it and walk away.
I have again like this isn't one of the.
The computers are some of the most, probably the most amazing tool humans have ever made.
So like, I don't despise them, hate them, but I could take some time away from them.
But I think time away from nature would bug me a whole lot more.
If I couldn't go outside for a year, it'd bug me way more.
You'd go insane.
Yes.
I'd jump off the cliff.
I think people have gone insane.
They have for sure.
Right.
Exactly.
So like, you know, I want to be out.
I want to be out there.
I think it's just wonderful.
So the screen is wonderful.
Software is wonderful.
Computers are incredible things.
And right now is like an amazing time for computers.
Like one of the most amazing times since the web back in the late 90s or mid 90s, really.
And it's cool to live through both of these moments.
But I'd still rather play with some bricks and work on a stone wall, even though I don't know how.
But that wouldn't pay my bills either.
So I have to be practical.
I built a great software company.
I like this stuff a lot.
I don't know how to build stone walls, but I wouldn't mind playing with them.
The bills are taken care of.
I don't think you have to worry about that anymore.
And I don't do it for that reason.
I know you don't.
But yeah, I mean I still like my point is, had I built Stonewalls for 27 years, I'm not sure where I would be.
The bills would be piling up.
My hands would be very sore.
The bills would be piling up.
Yeah, yeah, yeah.
One of the people I most hope to get on the show and I want to talk to is Christopher Nolan.
Have you ever, like, looked into his personal philosophy at all?
No, I just like his movies.
Okay, so there's something that me, you, and him, I think, have in common.
He, you know, he desires to live in an analog world.
I'm almost positive that's a direct quote.
It might be me summarizing reading his biography.
And so if you think about the juxtaposition between like, you make software but you want to be on a hike outside,
You know, you want to look at the ocean, right?
He makes some of the most technologically advanced films that have ever been created.
And yet he doesn't have a cell phone.
Like you can't get in touch with him.
You have to like email his assistant.
He has to track him down.
He will purposely put himself into like a difficult position.
So like he'll drop into a new city.
He doesn't have a smartphone.
So no GPS.
He's got to go up to somebody like, how do I get to the deli or whatever?
Yeah.
If he wants you to be in his movie, like, oh, email me the script.
He's not emailing you the script.
He is printing it out physically, flying to you.
So I'm Christopher Nolan, and I want you, Jason, in my movie.
I'm showing up at your door.
Here's the script.
And you're like, great, I'll read it.
And I'm sitting here until you're done reading it.
And then when you're done, I'm taking it back.
Amazing.
That's cool.
And I feel that exact same way where it's like You know, your entire product is delivered digitally.
Mine is too, but I like to read physical books.
I like to be in person.
I will not do a remote podcast.
Now I've got to the point where I won't even go on other people's podcasts remote.
I was like, no, no, let's go meet and hang out.
I want to talk on the phone.
If I can't be with you in person, I don't want to text you.
I want to live in an analog world.
I just feel better being outside, reading physical books, not looking at a goddamn screen.
I'm with you.
And what's important about that is not actually, whatever you said doesn't matter, actually.
It's that you know who you are.
That's what matters, that you know that you like that, that you've you figured out that you like that.
It's good to figure out what you like eventually.
Like, so a lot of people don't know what they like.
They like what other people like.
They like what they're supposed to like.
Um, 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, but people grow businesses that they think they have to grow because that's what you do.
Um, They make decisions they think other people would make.
They don't even have a sense of who they are and what they're all about yet.
And I hope all of them find it because it's a wonderful thing when you know what you're into.
And also that you know maybe that might change too, but you know right now you're into that.
The other thing is you don't need to pick sides.
You can love digital and you can love physical.
They're all the same thing.
We live on this like speck of dust, you know, in space.
Like it's all the same thing, right?
So it doesn't like really any of it matter.
Like what you like and why you like it, just that you do and that you know that you do.
You don't even know why that you do, but that you do and you respect and treat yourself to those things that you find beautiful.
All of the founders and extreme winners that I have studied have this one trait in common.
They have excessively high energy levels.
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So you told the story earlier.
When you're making products here at like in high school and you're designing it just for you, you're the first user.
That is an indication that you're comfortable trusting your own judgment.
You just said it's really important to know who you are.
At what age do you really think that you finally figured out who you are?
I think probably more recently, frankly, than then.
I don't think I, I think I knew what I liked like to do.
But I don't think I.
I'm not sure I still know fully who I am, but I, that's the big question, right?
Like, who are we and the whole thing, right?
I don't totally feel like I should, no one should be certain about that.
But I feel like I've come more into my own actually since getting married and having kids.
Looking back on who I maybe, how I was, how I acted, how I was in the world, I'm glad I am who I am now than who I wouldn't want to be that person again.
Why?
Didn't you say you used to have like anger?
I think I was, yeah, I was definitely like more of a punk, you know, like a young-
I don't know.
I think I probably resented things for some reason.
I was sort of, I had a chip on my shoulder.
I mean, maybe that's part, maybe that was good.
Like you got to prove yourself when you're getting, when you're new into something and you're young and you're breaking in and people don't think you're any good at what you do.
The only time I'm ever competitive is when someone slights me.
Otherwise, I don't, I'm not competitive.
So, for whatever reason, like if someone's like you can't do that, or you guys aren't good enough, or I remember this actually early on in my career, when I was a web designer before I made software, I just designed websites.
I submitted a website design to an award thing.
And I'm trying to remember what, it might've been called the high five award or something.
I can't quite remember what it was.
And I can't remember the guy's name right now.
Dave Siegel actually was his name.
I do remember now.
Back in the day, getting an award from Dave Siegel, I think was his name, was like a big deal in the design community.
So I submitted to design and he wrote me back saying like, you suck.
Literally, you suck.
Find another day job.
And I loved that.
I loved that.
That was like, I loved that.
I love when someone says you can't do something, you're not good at something.
Maybe this comes from being like I'm 5'7 and I'm pretty good at basketball and you walk on the court and people don't think you're very good.
I love that kind of stuff, right?
So that just fired me up.
So, as far as finding confidence, I think I probably had a lot of that early on where people are like you're just one guy.
Like, how could you do this?
Or how could you do that?
Or you don't know what you're doing.
You don't have a degree in this.
Like that kind of fired me up for a while.
But there was a point where you want this is like again to the point of like kind of like you want to sort of launch, and then you want to find a place to settle where you kind of just, I think, come into your own at a certain point.
And, um, I think I probably did that in my 40s.
I'm 51 now.
So I think like in my 40s, I probably came into my own actually.
Settled into my own.
Had some psychedelic experiences, which helped as well.
Did you?
Yeah.
John Mackey.
I don't know if it was in the episode.
I can't remember.
But this guy keeps trying to get me to do psychedelics.
I think we talked about it at the end.
I was like, I'm not doing psychedelics.
What did you do?
Why not?
I... Let's turn this interview around.
Let's go.
It's a conversation.
You can do whatever you want.
I don't...
I think me and you both bond over, like, there's some positive things.
Obviously the tech industry in the Bay Area and San Francisco have created, you know, great companies and great products and stuff.
But there's also a lot of, like, just wacko shit.
And a lot of them are like, there's just too much drug use, in my opinion.
I don't do drugs.
And I like the way my mind is, and I don't want it to change.
And, yeah, and I just—
I'm very resistant to doing drugs because I've also had like, my cousin died of a heroin overdose.
My dad did drugs his whole life.
He went to jail for selling drugs.
I've never seen somebody high on cocaine make a great decision.
So it's like we carry all the stuff that we experienced earlier.
And I'm like, well, what's the opposite of that?
The opposite of that is not doing drugs.
So I'll just not do drugs.
I'm not here to convince you to do drugs.
No, no, go for it.
For me, the experience was very okay.
As I think I mentioned earlier, my favorite thing in life is to have an insight.
And so psychedelics for me were an avalanche of insights.
And that was fascinating to know that, like my mind, could see things and understand things in ways I didn't know were possible.
I could see like this doesn't make any sense, will not make any sense, but maybe people who've done this will understand.
Like you think of an idea And like I never thought an idea was like a three-dimensional object that I could turn around and see from the other side.
Not like a different perspective on an idea, but literally I could turn it around and see what was behind it.
Things like that, like that fascinated me.
Having insights about the nature of existence and all this other stuff was fascinating too.
But just having, I remember that I've done this a few times and the experiences are always wow.
Like, wow.
Like, while I'm doing it, like I never thought about it that way or I've never seen it, So for me, like it's just, it's candy and this sounds like maybe candy and drugs.
I don't want to mix them, but like there's a sweetness to Having an insight that you've never had before, about something that you think you knew that psychedelics have have shown me, and but I don't.
I've done this three times.
How does it help you know yourself better?
Well, that's not why I did it.
Okay.
I don't think I know myself better, but I feel more expansive now that that there's more than I thought I knew.
Like, um, here's how I kind of thought about it afterwards.
Um, have to picture an old car radio from maybe like the 50s or something you know like an old pickup truck had a car radio with a needle and you could move you know move the dial and the needle moves right get the little glass window with all the channels and you're you're in one of the channels that's where you are all the time you're in this channel 95.7 is is is you and psychedelics like let me turn the knob a little bit and tune into something else that's always been there but i couldn't i couldn't hear that frequency like it's amazing and then you're like i if you look at a radio and you turn the knob you're picking up things that are there that you can't hear until you turn the knob that's what it was like for me and how does it make me a better whatever or know myself better?
I think all experiences help you know yourself better.
So it's just a mirror and a reflection and a detail and a crumb that creates the pile of you.
I don't really know.
It's not like that was a huge breakthrough for me, but it was fascinating enough to do it a few more times and learn a few more things.
That were just fascinating.
Like one thing I'll just share.
It's a little bit of an aside, but again it comes back to this object thing.
And maybe this is like, maybe this is me seeing how my mind works that way, because we talked about objects before.
But I remember having this experience where I was just like puzzling through this like three-dimensional puzzle and being stumped by it, but enjoying the problem solving.
And then I finally like just again, this is like conceptual and metaphorical and not like so literal, but I turned it around and saw it from the back and it was dead simple.
And what it basically told me was turn everything around.
This is like invert.
Everything's a lot simpler from behind.
Everything's real.
The back of things are real.
The front of things are fronts.
The back of things are real.
So what does that mean?
How do I apply that?
Like, I don't try to apply that.
This is like not trying.
It's just an insight and a revelation that like, get behind something to really know what it is.
Again, I don't like constantly refer to this, but it's something that now I have that I didn't have before.
I'm very glad I have it.
So that's like, Part of that, it's like, it's just seeing through a different lens.
And like, I'd rather have a few more lenses available to me if I can, that are like harmless.
This is not heroin, cocaine and that kind of stuff.
But again, I'm not here to sell any of these things and I'm not a doctor and all the disclaimers, right?
But I would say it was a very worthwhile experience for me.
Did you read Rick Rubin's book, The Creative Act?
Yes.
Do you think about things similarly to him?
Yeah, when I read that book, I was like, did I write this book?
Not like really.
He wrote the book.
But you know what I mean?
I just read it, just an episode on it.
And when I hear you speak, I'm like, he's just like, we live in a magic world.
All this stuff's not, you have an intelligence that is not coming from your brain.
The world is beyond your comprehension.
You have to be comfortable with, you know, ambiguity and not knowing.
And I just feel, I hear that from you constantly.
There's like Taoism in that, which is like not knowing, not trying, not doing.
Like there's just there's things.
The world just works somehow in some magical way that we don't fully know.
And this isn't about getting metaphysical, actually.
I actually want to kind of bring it back.
But like the, I do think that there's this is part of the date like make it up as you go philosophy of business, which is just going a bit more with the flow of where things go.
This is the squirrel.
There's something very honest and real about that that works to me.
And so it's similar to what he's talking about, which is things just happen.
You don't need to know exactly why all the time feel into them and understand them and pay attention to them and trust them and trust your intuition, your gut.
Like I'm a fully intuition and gut driven entrepreneur.
And I don't even love that word, entrepreneur.
I make products.
There has to be business around it.
I run the business, but I'm gut and intuition driven.
I don't look at numbers.
I don't care about the numbers as long as we're profitable.
And I know there's enough blubber in the business as we've talked a little bit about.
No one's going to get that.
You have to talk about the blubber.
I want to get back to intuition.
Okay.
And then we'll get back to Rick Rubin.
Yeah, sure.
You mentioned this point.
They're like, your business should have some blubber.
And it's very memorable.
What does that mean to you?
And I had not said that before until last night.
The word blubber just came to me, which is just like I don't want to run a very tight margin business where I can't make mistakes or I'm afraid of them.
So I believe in cushy margins.
So we can screw up and it won't matter that much.
I mean, it can matter, obviously.
Again, I'm not oblivious to the reality like businesses can go out of business.
They do all the time.
All of them do eventually, basically, at some point.
We take risks, we don't put ourselves at risk.
It's kind of how I like to think about this.
So I'm willing to take plenty of risks, but I'm not gonna do something that's gonna bet the farm, unless we like, had to.
And if I'm at the point where I have to, I feel like it's over already anyway, frankly.
I'm not interested in betting the farm.
It's just not even that fun.
I'd rather just have the farm and then not have the farm.
So big margin of safety is the way you think about it.
Big margin of safety.
A lot of cash, high profit margins.
You still pay attention to your costs.
Yeah.
We pay attention to costs.
When we talk about cutting costs.
David wrote this great article about getting off.
The cloud is going to save us something like 10 million, and whatever it is.
And it's like...
A lot of people are like, why are you putting in all this effort to save $10 million?
Because it's our money, man.
We don't have outside funding.
I don't want any outside funding.
Everyone's wanted to give us money over the years.
I don't want anyone's money.
It's our money.
We make money through our customers, through revenue.
So we take very good care of that money, and we're careful with it.
And we watch our costs.
Again, if you want to stay in business, you don't like competition or your costs, which hopefully you want to stay in business.
So these are the things that I'm paying attention to.
And so...
I wanna have margin, that's why we keep the company small.
We don't spend money on marketing.
We don't.
We've spent money some money on marketing over the years, but like it's been a rounding error over 27 years.
We don't waste money on stupid things.
We just, we don't blow it on things.
We just like save it, keep it and allow ourselves to make more mistakes elsewhere that we sort of enjoy trying and making.
And so I would not want to run a grocery store.
I don't want to run a 2% or 1% margin business.
And what's always blown me away is how many companies in Silicon Valley who are in the software business lose gobs and gobs of money.
It's like the most unbelievable thing for an industry like Silicon Valley to lose so much money on the highest margin product in history software with no costs.
Nothing.
There's nothing to software.
It's bits.
There's some data costs, but let's call it basically zero, all things considered.
And there's still companies that are blowing billions have never made a penny.
They're like big companies that you know of just blowing money.
It just blows my mind.
I just it seems so incredibly irresponsible to me.
But that's just me, coming from a small business entrepreneur mindset, I suppose.
But like, I just don't get that world.
So the blubber, if we're going to use the blubber, let's get back to the blubber.
The blubber helps you stay in business.
Yeah, it's fat reserves.
You should have those.
It's cool to have 6% body fat, but it's not a good thing to live that way for a long period of time.
You need to have some.
If you're stuck out in the wilderness for a while, you need to burn something right.
So we've lived through dot-com crash, 2008 stuff, COVID.
We have fat on the bone.
I think it's very important to have that and not just be at the bone.
The other thing is is that, because we're an LLC, at the end of the year, whatever money is left over goes to the members, the unit holders, which are me David, and then we have two other people on the cap table.
And then also 10 of our profits go to our employees every year and it's based on seniority, or actually that's wrong.
It's based on longevity, not seniority.
The two aren't the same thing, however long you've been here.
So every month, you basically accrue units up to 10 years worth of units.
At that point like, you've maxed out your units and we distribute profits based on that.
So it's not based on which role you're in.
It's not based on the salary or your title.
If you've been here for 10 years and you're a principal software engineer making hundreds of thousands of dollars a year, your bonus, your profit-sharing bonus, is the same as someone on customer support who's maybe making 90 grand or 100 grand who's been here for 10 years.
So all that money goes to real people.
It's real money.
It's real cash.
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.
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 2024, because we haven't closed the total books on 2020, there were six-figure bonuses.
And this is like year after year after year after year, it's real cash.
That's the beauty of a simple business, the simple cap table, an LLC, and sharing real profits.
Because there's plenty of people in our industry, plenty of our competitors, which I'm not going to name, that hire a lot of people and promise them a lot of stock.
And you look at the chart and it's down and to the right.
And I feel bad for those people because they were promised something they'll never, ever get.
So, getting back to real, I want to pay people with real money they can actually put as a down payment for a home, pay for the college education for their kids.
Go on vacation, sock it away, whatever they want to do.
This is real cash on an annual basis.
And this is all part of a good business with sound fundamentals that has high margins and high profits and is an LLC.
So we can distribute every year.
We have to, in fact, you can't leave any money in an LLC.
You can, but you got to pay taxes.
Anyway.
You know what I mean?
Just so like there's some pedantic person watching.
Wrong show for this.
I want to go back to Rick Rubin and you, knowing yourself through this psychedelic experience partially in your 40s.
Before you had that experience, what was your inner monologue like?
Let's say when you're running your business, you're 10 years into it.
You're 35 years old at the time.
Were you, did you have a negative inner monologue?
No, I think I was just more aggressive I don't know how I'm coming off.
I'm not, I tried to be pretty.
You're definitely not.
No, you're like a soulful dude.
Well, I don't know.
Like, I don't know.
Sometimes I have a scowl and people think I was probably a lot more.
No, it's not a scowl.
The kids call it RBF.
Oh yeah.
Resting bitch face.
You should see our photographer, Mike.
He sends me pictures of me.
I'm like, I'm like, I'm happy.
You're like, I'm happy.
Exactly.
There's so many times where I'm like literally, we're having this conversation and this is how I know I'm going to do this for a long time.
I'm like, this is so much fun.
Can I do it again tomorrow?
Yeah, exactly.
While we're talking.
Exactly.
So, but like my face just like.
I know.
Yeah, anyway.
I think I was more maybe aggressive or I don't even, I kind of don't remember myself actually.
Like I'll just pull it back to something else.
Then I'll come back to this thing in my mid thirties perhaps.
But we don't do like postmortems.
I don't look back on things.
I don't like to look back on things actually.
Jimmy Iovine sat in that exact same chair and he said, I have no rear view mirror.
Yeah.
No trophy room.
So you're like, what were you like at 35?
Like, I don't, probably more aggressive, but I don't really know.
And I'll tell you why I don't like to look backwards.
First of all.
Backwards is a story you're telling yourself about what you remember about something.
And it's probably not true.
And it's probably perverted in a million different ways.
And there's a million different things that have happened to you that caused you to be the way you were.
And all the things, like, I don't know what any of them are.
And 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 have no effing idea why it did what it did.
You're going to find some reasons that you're going to believe.
But had you done that again, it may have turned out differently.
Who knows?
One little thing could have been different.
The world could have been different.
The way you said something could have been different.
Who knows, right?
If you want to find certainty, you're going to find it because you'll convince yourself of it.
I just don't have any interest in looking back.
I'd rather learn by doing something again, making more things.
So if you draw a line, people are like, well, you should learn from your mistakes.
I'm not sure what you can learn from them, frankly.
I think you learn from moving forward and doing something.
You learn by doing.
You can't redo what you did.
You learn by doing.
So if you don't like something that you did and you kind of have it in your head, just don't do that again.
Like that's the learning.
It takes one second to know that and move on and learn by doing new things.
So I don't like to look back.
Now, that's not like absolving myself of things I'm not proud of.
That I do, but I don't.
It's like that's who I was when I did the things, and that's that.
So like, I'm moving forward.
So I want to pull up, pull up something.
The reason I asked the question about the, the negative inner monologue.
It's very common with.
You know a lot of people.
Yeah.
And um Rick, we've been talking about a lot about Rick Rubin and I love his answer to this, which it sounds like if I was going to ask you this question now, you would answer it in a similar way.
So he was asked the question do you have an engine of constant dissatisfaction, self-criticism that I could have done better?
And his answer was almost near.
Can I guess?
Go ahead.
I don't know what it is.
Okay.
You couldn't have done any different than what you did.
Is that his answer?
Very close.
Yeah.
And I believe that to be true.
This is what I wanted to know how you look at this.
So I was going to ask you to answer that question next.
So he goes, no, I'm pleased with the work that we did.
Excited to keep working.
It's fun.
You've said this multiple times today.
I don't know what else I'd do with myself.
I like making things.
It's fun.
That sounds like you again.
Yeah.
I feel like it's my reason to be on the planet, so I just keep doing it.
If it could have been better, I would have kept working on it.
If it could be better, it's not done.
I've done everything I can to make it the best it can be.
I can't do more than that, so there's nothing to be critical of.
It's almost like a diary entry.
It's a very fast thing.
Everything we make is a reflection and a moment in time.
Could be a day or could be a year.
100%.
That's exactly how I see things, which is I did what I did.
I did the best I could or the worst I could, whatever it is.
It was what I did.
And there it goes.
Now what?
Like that doesn't mean be an asshole to people.
And like just you can be an asshole.
Like that people, other people remember what you did too.
So like they'll remember what you did.
So you wanna just be a good, honest person anyway, but like some people might hear this, that's why I'm saying this.
Some people might hear this and go, well, that's an excuse to just do whatever the hell you want.
There's no ramifications to any of these things.
There are ramifications to these things, but they are written in history and that is that.
I've always just tried to do the best I can.
This is why I have to tie this back to numbers.
Like 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.
Like a target shouldn't make me do better work.
I should do better work because of the pride I take in the work that I do.
And the seriousness in which I take the work that I do and the enjoyment in the work that I do.
I'm going to do the best I can.
That's what I do.
That's all I can do.
That's all I should be doing.
And I don't need something to try to tell me that I could do better had I aimed for some target.
The target is the work I'm doing now.
That's the best I can do.
So fully on board.
He said it more eloquently than I did, but That's how I've always felt about this stuff, which is why I don't like measurement.
I just like the product.
The product is the measurement, not the number of things that people have done and used it and whatever.
It is what it is.
The money is ultimately like the byproduct of making something good.
It's not the reason to do it.
People are in search of certainty all the time, and I think it's nowhere to be found.
Um and so but, but it makes people very uncomfortable not to know like, why this happened or and, by the way, I shouldn't say it's not to be found.
Like if you're making widgets on a on a on a line and like all this and the widget's supposed to have a circle in the middle and all of a sudden the circles off.
Like you can trace that back to where the machine went offline.
And like you can figure out some of these things.
Of course, if like the mechanical and you can, you can track it all down but like, most businesses are not mechanical in that way.
They are a series of decisions ideas timing, market conditions, competitor conditions, perhaps your mood on a given day, the way it rolled out, what other news was happening in the day, the thing.
To try to pinpoint the answer and then to go okay now, next time we know not to do or to do, and to feel like you now know something that you actually don't know, but to be so certain that you do because you figured it out, I think it's really dangerous.
Is that why I've heard you say a few times that you don't think you could start.
You could do base camp again today.
Yeah, no way.
No way.
No way can I do it again.
The amount of friends that I have that sold a company and just thought like, I'm like, I'm good at company building.
And then their second shot is not going well or ended in failure and really made them question who they are.
I think that's actually an important thing to say.
It's like, maybe, you know, you don't know why it actually succeeded.
I think that's true.
You don't know why it didn't work and you don't know why it worked.
I really think that's true.
But people don't understand how devastating that is where you sold a successful company.
First of all, it's almost nearly impossible to build a successful company.
There's a tiny percentage of humans that have ever existed have been able to accomplish this goal.
This is why I started one of the shows, because I want to celebrate the people that have done this and say hey, if you want a role model, maybe we should.
You know people that build companies and products that make other people's lives better.
Those are maybe good people to like listen, to hear speak.
They probably know some shit if they've been doing it for multiple decades.
Turns out.
You know they have a lot of wisdom or they've required a lot of knowledge in that, but it's so devastating to have had that.
And then, in the case, I always think of Trader Joe, you know because again, talk about different me and you bond over the fact that, like we want to make products that are different.
I'm not interested in making a Me Too product.
Doesn't even exist.
Yeah.
He had a completely differentiated product.
He loved it.
He wrote this autobiography.
It was very fascinating because he writes it.
You know, I would say 90 of the pages are building Trader Joe's.
He clearly loves it.
It was very difficult.
Yeah.
Just put his whole heart and soul to it.
Then he gets scared.
He winds up selling it, I think in the 1970s, if I remember correctly.
It could have been the 80s.
Sold it because he was fearful.
Yeah.
Then lives another few decades.
I think three, at least three, maybe four decades.
Yeah.
Like a long time.
Yeah.
And the last, you know, last like 10% is like, yeah, I, you know, did some investing.
I did some real estate.
I did consulting.
But then the last paragraph is like, he's like, I must admit something to my own self.
I wasn't true.
I regret selling.
Thanks for listening.
Joe Colombo.
I don't know how to pronounce his last name.
I don't know how to pronounce anything.
I'll call him Joe Colombo.
Do it in a French accent, please.
Do it in a French accent.
But then he goes, you know, thanks for listening, Joe Colombo.
Book gets published.
He dies the same week.
Oh, wow.
That's quite a story.
And I always think about that when you're like you know this guy's life, you could tell he's full of regret.
Yeah.
Full of regret.
Yeah.
I know people like that.
Yeah.
And it tends to happen like in your 30s, once you've like built this big thing and sold the first thing.
And you're like, I'm loaded now.
You have decades ahead of you.
Decades left.
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.
And so they're like jumping.
And like it's like if you try to jump a hundred times, like you can't get to those first jumps because you're tired, and that's just what ends up happening.
And so then they might build something great, but they can't see the greatness in it because it's not as great as the thing before.
And that's even more tragic is that they can't see something that's still an incredible achievement, but it's not the same.
And other people will see it as less than, and it's just a terrible outcome.
I'm afraid of it not so much now anymore, but David and I talk about this all the time which is, we do negative visualization and like practice, like what if this?
Just like AI, like what if this just changes the whole damn landscape?
And like SaaS is just dead in three years.
Our answer is, well, we had a great run, like 27 years, amazing.
And by that time, maybe 30 years.
What a run, like we should be happy and proud of that experience.
Not like, oh, damn, that sucks that we're out of this now.
More like we should be enjoying this, and I hope we sure did, because that's a rare and fortunate experience to even have that experience.
But I wouldn't go and start another business after that.
I would just do something else.
I don't know what it would be.
But 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, 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 have the thirst and the hunger to build a brand new software company from scratch again.
I just don't.
I would have the curiosity, But I know that wouldn't carry me enough.
I had, like, probably early on, I was, again, more aggressive, younger, pumped.
You know, it was early days of, like, we were pioneers.
Like, there's that kind of, like, energy that you have that you just don't have again.
And it's fine.
It's fine to have again.
One of the great, I saw, I think it was Bob Dylan was being interviewed on 60 Minutes.
And I think it was like Morley Safer or something was asking him like about songwriting.
And he was saying something.
I don't know if you've seen this quote, but it's great.
He was talking about like he was like reciting one of his great songs.
I forget the name of the song or whatever.
And he's like still has an incredible memory to remember these incredible lyrics.
And he's like, I used to be able to write music like that or write.
I'm paraphrasing.
I used to be able to do that.
There was a certain magic to that.
I don't know how I did that.
I know I couldn't do it again, but I can do other things now.
And when I saw that, I'm like that is a mature.
I mean he's in his 80s now.
I hope he's mature.
But that is a mature human being to go.
I could do that before.
I don't really know how I did it.
Somehow I did it.
I can't do it anymore, but I can do other things.
And I think that's important because, like if you identify as an entrepreneur and you sell your business, like if your identity is tied up into entrepreneurship, like you have to go start another business because you have to, there's continuity there that you have to be that person again.
And then if you can't again can't achieve the heights like you, just you feel like you're a disappointment.
I've seen this in friends who've sold businesses.
And it's just like it's so sad to me to see that in them, when they can't just see that what they did was incredible.
In that moment, like it's, these are moments that you have.
These are periods of time that you have.
These are experiences you have.
And that's what happened in that time.
Actually, can I go back to psychedelics for a second?
I'm gonna tell you a little story.
I don't know if it's good or not, but it's meaningful to me.
The last time I did, these are mushrooms, by the way.
So last time I did mushrooms I remember going into it telling the guide I did it with.
I did it the first time and had this incredible experience to this one song.
She was playing different songs.
Had this one song that had this like experience, where I just felt like I learned everything like in an instant.
Next time I did it, I'm like, can you play that song again at some point?
I want to see if I have that experience again.
And so she was like, maybe we'll see, you know, whatever.
And so at some point I was aware enough that she played the song and I had no experience.
It was blank and empty.
And after the song ended, I broke out in laughter.
And I go, of course, you cannot have the same experience again.
You cannot have the same experience twice.
You don't deserve the same experience twice.
It's not even possible to relive something.
Again, that thing happened then, and this is now.
They're detached.
They're separate.
They can never be the same.
And it was a wonderful thing.
I've now used that with my kids.
I'm like, my kids are growing up.
They're 11 and 7.
I'm never gonna have the experience of my 11 year old again as an 11 year old once he's 12, he's 12.
Like I can't have that again.
So you have to really savor those things now and recognize that they are what they are now and you will never get them again.
And don't be sad about that.
It just is.
And that's the kind of stuff that, like those experiences that I had on those And those times, really like those are the things I carry with me and hopefully do affect the way I move through the world now today.
That's beautiful.
When you were talking about selling a company and then maybe your next company in this entrepreneur's life is not as financially successful, as big as well-respected.
I've never heard a great definition of like what— like what success means.
And the best answer I ever heard to like, what is success to you actually came from Steve Jobs.
And it was beautifully simple.
It was like, did I make something I'm proud of?
It's good.
Yeah.
And that's the way I think about it.
It was like, Nick, for your podcast, you need X amount of listeners.
It's like, no, did I make something I'm proud of?
That's great.
I think that's great.
The other way, the way I think about it is would I want to do this again next day?
Just this, whatever this was like, would i want to do it again?
If the answer is yes, then it was successful.
Like i wouldn't want to.
If, if i hurt myself, i wouldn't want to do that again.
If i was, wasn't proud of what i said, i wouldn't want.
Like it's a very.
It's the same thing.
Like knowing what i know now, would i hire this person again?
It's the same question, like would i want to do this, whatever i just did, again?
If so, it's successful, and i think that that's enough of a definition for me.
It's not about.
It's not about any of those things.
It's like, would I want to do it again?
Would I want to spend my time doing that again, playing replay?
And I know it wouldn't be the same outcome, but the experience of it would be different, but it would still be the same trajectory.
I'd like to do that thing again.
You were speaking earlier about, like humans' propensity to take something simple and make it complex.
Even though we crave simplicity, we abhor complexity.
We kind of trend in the trajectory of making things just more complex.
I don't know why, when you were speaking, this came to my mind, but one of my favorite podcast episodes ever was back in 2023.
Rick Rubin interviewed Jimmy Iovine.
And they talked about one of the first, Rick Rubin tells a story the first time he met Jimmy Iovine.
Jimmy's already a legend.
He's 10 years older than Rick.
So he's like, was well known.
And Rick plays.
They're with some other music executive and Rick plays him this song he just produced.
And he said, Jimmy said something that changed like his life or the way he thought about things.
He goes, oh, I wish I could still make something that simple.
And Rick's like, what do you mean?
I'm sure you can.
Like, you're better at this than I am.
You have a lot more experience than I do.
You've been doing this a lot longer.
Of course you can make something simple.
And the point was that you don't know what you don't know.
And so he made this beautiful, simple thing.
And then you tend to like think you need to add more things to it and make it more complex.
Where Jimmy just-.
Again, like that's just the way he is when you're with him.
He'll say one sentence, he just gets right to like the heart of the issue.
Yeah, it sounds like an incredible thing to have, like a skill to have basically.
Yeah, I think that is the trend.
It is to just to add more things, I mean, naturally.
And part of it is because you feel like well, you people get bored of things and so they have to kind of expand the things or, like there's expectations to add, do more.
And people put a lot of pressure on themselves as business owners.
Or they take money from the outside world and they have to grow a certain amount because they have to return the investment and all of a sudden they've they've unmoored themselves, they've lost a connection with why they started this in the first place.
They're no longer running their own business, they're running someone else's business.
They're now they just create a job for themselves, working for someone else.
That's what can happen when you've taken the simple thing that you had and added a layer to it that just blows it up in a different direction.
In some cases, it makes it worse.
I mean, for some people, it makes it better.
But I think for a lot of people it makes it worse, because now you're on a track which you can't get off.
There's only one outcome that works.
This is optionality.
Let me get into this.
My feeling in general is that business is like okay, the most important thing to me in business is independence, which is profitability is also actually the same thing.
As long as I make more money than I spend, I can stay in business.
That's independence.
Independence is also no one can tell us what to do.
We actually feel obligated to do things nobody would allow us to do.
That's like a thing David and I talk about all the time.
Like we should do this.
No one would let us do this.
Let's do it.
You know, that's like the exciting stuff for us is stuff we're not supposed to be doing.
That to me is like just... a big part of it.
And I think what ends up happening is this is so funny because there's no dry cleaner, who's raising VC money, right?
There's no pizza shop who's raising VC money.
So most businesses in the world are not like this.
But in my industry, a lot of people have an idea and go raise money.
And 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's it.
That's one option.
I mean, some people become very rich doing that, like if that's what they want to do, but most people blow right through what would have been a good business and is now not good enough for someone else.
And once it's not good enough for someone else.
That's got to be a shitty place to be as an entrepreneur, thinking that you just gave up this thing.
That was actually a good business but it's not good enough anymore and you can't get more money.
You built a business to raise more money.
You built a business that needs more money.
Now you gotta lay people off.
Now it just falls apart and it's like over because you have no options except one.
I'm a big fan of optionality.
We can go ipo i don't want to.
We could raise money i don't want to.
We could raise more money i don't want to.
We could sell the pe i don't want to like.
We could quit i don't want to like.
These are all options that we have and keep going for as long as we want, as long as the business survives, like we can do that right.
That is gold to me is optionality.
And I'd like to see more people think that way, because I think it'll benefit them and not cut themselves off when even they think there's like this mirage, that like oh, I got a bunch of money and like I can do anything now.
No, you can't.
You can do one thing, build a big business.
That's not a lot of things.
I feel you have, you're attracted to like timeless things.
You have two tweets.
One of them just went viral.
And it's related to like this, you know, basically craving simplicity, abhorring complexity.
One was about, was it the design of a Rolex over time?
And they just start, was that the brand of watch?
It was some kind of watch.
Which brand was it?
Yeah.
It might have been a Rolex.
It might have been, I mean, there's a few.
Could have been like an Omega Speedmaster.
They've just maintained the same design.
Porsche 911, similar.
But you were showing pictures from like, I think, let's just say it's a Rolex.
Look at this Rolex design in 1960.
Oh, yeah.
Basically perfect.
Has everything I need, nothing I don't.
Look at the updated version, whatever, 2010.
Look at all the other stuff they added.
Right.
Why are you drawn to the first?
Well, I'm drawn to the first.
By the way, I don't think the new one is bad.
It's just that what attracts me is the purity of the first one, because that is the purest form of the idea.
And I love ideas and insights.
Someone had an insight to design a watch that looked like that.
And then from there, everyone based their designs off of that initial thing.
But there was a time when that was the first thing that looked like that. gets me going.
For example, you take a Rolex Daytona today, and you look back at the first one in 1963.
To me the one in 1963, not just because it's older.
It's better, in my opinion aesthetically, because it's the purest form of the concept, of the idea.
Everything else from there has been layered on, because they need to sell more and they need to come up with a new version, a new model.
And this is what happens.
They couldn't still sell that first version.
That's not the way the world works.
You have to keep making new stuff, right?
Purity, that's the word that comes to mind.
Purity.
Purity and the pure idea, the pure form of the thing.
Could you use the word essence or no?
I mean, essence...
It's part of it, I think.
Maybe you could.
What's the French word for essence?
I want to hear you say it.
Essence.
I don't know what the hell it is.
But it's more about the...
To me, it's purity.
It's like that's.
The beauty is that this is the initial idea, this is the original concept and this is the first execution of that idea in three dimensions in a product.
Actually the gym I used to go to had some old Concept.
Getting back to the Concept 2, old Concept 2 rowers.
And I actually really liked looking at the early ones and then looking at the changes over the years.
And in that case, the changes were more functional.
Like they used better materials that lasted longer and stuff.
But the idea, the fact that this idea of this product that's so good today was so pure back then and still kind of the same thing, like just gave me –.
I'm more attached to the brand because of that.
Like they didn't just add stuff to add stuff.
They added stuff that literally did improve things, not just to sell new models, but you could see the material changes.
Meanwhile like a lot of things like watches and stuff.
It's just like new dial colors and new stuff, just to kind of sell more.
That's a great point.
You're adding it, adding to it, but you're not making it better.
So that's the second viral tweet where you kind of laid out this huge essay about smart electronics.
Oh, God.
My parents were visiting for a couple months, so we rented them a house down the street so they had some more room.
They liked the room.
So we rent them a house and it's a brand new construction house.
So we're like, oh, it's nice.
There'll be no issues, you know, no leaks and no issues.
So we get in the house and like most new construction, it's got digital shit everywhere, right?
Like the thermostats aren't like thermostats that you can just like turn anymore.
They're like touchscreens.
And some of those are like Nest is good.
This doesn't have Nest.
Like Nest is a great product.
It's funny because it's a great product based on the original Honeywell design that Dreyfus designed.
I forget his first name the round dial.
And that's just updated that because it's such a good design.
These are like rectangular and big and have the weather forecast on them.
But actually, the thermostats don't.
That's the alarm panel that has, it's like a huge iPad screen.
Anyway, screens and screens, and everything's a touchscreen.
Everything's a big black glass thing with too much stuff on it because you got to fill up the screen.
You can't just have a tiny screen.
You got to have a big screen.
And if you have a big screen, you got to put stuff on it.
So you put stuff on it.
A dishwasher couldn't be used the first time without an app to register it.
So like my mom wants to do the dishes, like they don't work.
She had to call the house manager guy.
He had to come down.
He's like, why doesn't this work?
I plugged it in and oh, there's an app.
I got to get an app.
What?
You're adding and not making it better.
To do the dishes.
Exactly.
That is, your insight is exactly right.
Adding it, not doing, not making it better.
The alarm panel is slow and laggy.
The thermostats are like.
They say a number on them and you're like is that the current temperature or the temperature I want it to be?
Like I changed the temperature, but then there's a schedule which I can't quickly simply modify, because it's like in this little menu structure with this little laggy UI.
And you're like, Does anyone use this?
Like the people who built this certainly don't have this in their house.
There's no way.
There's no way they have this in their house, right?
This is not a product built by people who are using the product they're building.
This is a product built to specifications.
Someone imagined this.
There's this, whatever.
I don't know.
I don't actually know how that happens.
I'm baffled by how it happens.
The TVs.
You know now, like you know and I don't this is not like I'm not like a Luddite old timer thing, but like You don't turn the TV on anymore.
You boot the TV up and it takes like 12 seconds to get a menu before you can before like again like there were some things that were better before.
You turn the TV on and the channel that you were on would be on.
Like that was good.
Like you actually, it's amazing.
Like you can't do that today.
Like that's actually not even a possible thing.
Like you turn it on and you're back to some like menu with all the options again.
It's like, how do we go backwards?
So I call this the great regression.
Thermostats have gotten worse.
Nest maybe is an exception.
I'll grant them that.
Good product, really good product.
Big alarm panels, a lot of panels, a lot of third-party products with big glass screens, bad touch screens often bad, in fact, car manufacturers um, with the exception of tesla, because tesla is outstanding, but everyone else who put a bunch of screens in their cars, they're starting to move back to dials again and buttons again, because people are like this sucks, Software is hard and a big piece of glass.
There's no tactile feedback.
I can't do it and I have to look at it.
There's no muscle memory because I'm not sure I'm confirming what I'm doing.
Like these are bad things.
So the technology can get worse and then it can slide back and hopefully can get better again and new lessons can be learned.
But it was a revelation to me to go into a new home with the state-of-the-art stuff and see how backwards it was.
And I'm in technology.
I'm not like, again, I'm not a Luddite.
I'm not afraid of this stuff.
I get it.
But to see how bad it's gotten, like the light switches, like literally, when we rented the place, my agent who found it and whatever and did the negotiations and stuff, he's like hey, they want to like do a walkthrough with you.
And I go, cool, I'll be there tomorrow.
And I thought the walkthrough was going to be just like, here's the house.
But it was like, no, here's how you use the lights.
You're like, what?
What?
Like, the best interface ever was, like, the Switch.
Like, it works.
On, off.
On, off.
Beautiful.
It's almost like, the way I see it, it's like, that has not been discovered yet.
Because it had been, but then it had been forgotten.
This is like an old technology from the Romans or something.
Like, how do they build concrete so well?
Like, we still don't know today how the Romans built concrete so well that lasted so long.
Like, there's a lost... art there.
I feel like the light switch is a lost art.
It's just like gone.
And it will be rediscovered one day.
And people, oh my God, this is so much better than this like damn technical shit, you know?
There's a room and a place for all sorts of advancements, but there also are regressions.
And it's unfortunate that the industry I'm in is the one that tends to sell many of these to people.
It makes me think of again.
I'm going to tie this back to Rick Rubin, since we've been talking about him a lot.
He has this concept of a— Rick just has candles in his house, I'm guessing.
He just doesn't—I don't know.
These guys are close with him.
We'll have to ask him.
But he has this idea of ruthless edit.
And so he's like, okay, you made 30 songs for your album.
He's like, pick the five that you absolutely can't live without.
Okay, so now we have a five-song album.
It's a perfect album.
Maybe it needs some more.
But then we decide out of the 25 left, before we had number six and seven, did it make it better?
Going back to you're adding to it, but you're not making it better.
I think the through line here is you see this like timeless design of the 1963 Daytona.
And you're like, there's nothing to add to it.
There's nothing else that's going to make it better, so just leave it.
It is perfect.
I know you're a big fan of Porsche.
It seems like the silhouette, it's very similar.
In fact, here in Malibu, Do you remember going up to PCH?
There was that burnt out... I do, yes, yes.
They left... You could tell... On the right-hand side.
Exactly.
It was a... You could just tell... Like, why is it still here?
But you knew it was a 9-11.
You knew it was a 9-11?
It was a 997, in fact.
It sat there for like a year, by the way.
Yeah, yeah.
But...
Immediately.
The other car is next to a burnout.
I have no idea what it is.
Yeah, which model is that?
But that was just, it was like, I know exactly what that is.
I think about that all the time.
I think product, you should think about this.
Jerry Seinfeld has this really interesting concept where he says dosage matters.
And he's like, you could go see a standup comedian and 45 minutes in, you're like, this guy's great.
Hour and 15, you go.
Eh.
Yeah.
It's like he should have stopped at 45.
Yeah.
It's so hard.
I guess the reason I'm bringing this up, it's so hard for us to stop.
It is hard.
To stop adding complexity.
Yeah.
To just sit there.
When I asked you about, like Timeless Design.
Go back to Rick Rubin, what I love about him and that exchange between him and Jimmy Iovine.
That happened, you know, probably 40 years ago.
Rick would say, he's like, somebody playing the piano, Just the piano.
And a piano and a beautiful vocal sounded great 50 years ago.
Sounds great today.
It'll sound great 50 years from now.
So when you try to revive Johnny Cash's career, there's this great song called Hurt.
Yeah, the Nine Inch Nails song.
Exactly.
That Trent Reznor of Nine Inch Nails as a 21-year-old man wrote it.
And he's talking about regret.
And Rick's point was like a 21-year-old talking about regret is one thing.
A 75-year-old man when he can't go back and fix it, it's a way deeper cut.
Yeah.
But his whole point is like a great vocalist with a guitar sounded great 50 years ago.
It sounds great today.
Let's just go back to the essence of what we're actually building.
And I think, you know, not many people building products.
You just gave the perfect example.
There's no essence there.
They're not even using their own products.
No.
This actually ties into some other advice that Jeff gave us way back right when we first met him, which was that he told us to focus on the things in our business that don't change, because there's gonna be plenty of things that do change, but make sure you focus on the things that don't change.
And the examples he gave us were said something like 10 years from now.
People are not gonna wake up and go.
I wish Amazon's customer service was worse.
They're not gonna wake up 10 years from now and go.
I wish it took longer to get a product from Amazon.
They're not going to say 10 years from now, I wish Amazon's prices were higher.
So these are the core essence elements that he clearly invested in.
Things are coming faster than ever.
Another one's like people aren't going to wake up 10 years from now and go.
I wish I couldn't get this on Amazon.
More selection, faster delivery, great customer service, fair prices, even competing against other people and offering the lower price even if Amazon doesn't sell it.
Like these are the things in his business that he knew would never change.
And he can still explore a whole bunch of other things because they do a lot of other things.
But don't lose sight of those basics is something that he really instilled in us and something we've tried to focus on.
So that this idea of what is the, this is the essence, like what is the essence, or the purity, or the core, fundamental basics that really matter.
And don't lose sight of those, because it's very easy to lose sight of those, because they can become boring.
Like I've done that for a while, let's do something else.
And you can kind of lose sight of that.
This is why I think people that have run companies for as long as you have are so rare.
And it's why, if you look at the first few guests, I bet you, if you took the average length of time the person has been working in their business, it's probably like 30 years.
It's just like, I'm upset.
You said you like old people.
People always say I'm obsessed with old people, which is funny.
But I'm just not obsessed with old people.
I'm obsessed with people that do things for a long period of time.
This is where me and you will actually have a disagreement where you're like, I don't work hard.
Do you remember talking about this last night?
I was like, Jason.
Jason.
And I was like, we added up.
So yeah, this is where, like I would argue that you work harder than most people that have ever lived.
You just have spread it across 27 years.
So I literally pulled up my phone last night.
You did.
And I was like, did the math.
Yeah.
I was like, you're like, but I only work 40 hours a week.
I go yeah, 40 hours a week over 27 years.
Whatever that number is, how many?
I think it's 54000 hours or whatever the number is.
And my my question back to you is like how many people have worked on the same thing for 54000 hours?
Yeah.
I don't know.
Tiny, tiny amount.
Probably.
I like that you spread it across time.
Yeah, I mean, yeah, I suppose.
I mean, like, again, it's like one day at a time.
So it wasn't intended.
You were laying bricks.
I was just laying bricks.
I just keep doing it.
I mean, and then it just adds up and the past gets bigger and adds up and that's what happens.
But yeah, I've always admired things that have stuck around for a long time.
We used to have a podcast back in the day called The Distance, which was a podcast that we did for a few years of businesses that had been around for 25 years or more.
And maybe that's not even that long, all things considered, but it's quite long for most.
That's incredible.
And it was awesome.
And most of these are family-owned small businesses that just nailed some things and got them right.
And I love businesses like that that have been around for a long time.
There's something about.
I'm not talking about us here, but there's something about if it's been around that long, it's not a fluke.
You can like have something that's hot for a while and it can go out.
That's kind of a fluke or like a trend or a fad or something.
But to be around for a long time signals that there's something is repeatedly right about this thing, right enough to stay in business for a long time.
A lot of these businesses are tight.
Like you, could have a dry cleaner that their margin's thin and maybe it just is enough for them to get by, but they'd rather still be doing that than something else.
And so they're in it for a long time.
It's not that it's like a great business, but it's a sustainable business.
And that to me is a great business.
If they can keep doing that, there you go.
It's the same insight you had earlier with the leaf.
You're like, why don't you look at this leaf that has evolved forever?
Do you know who Mark Spitznagel is?
No.
I read his book called The Dow of Capital.
And this was probably like seven years ago.
He runs this hedge fund.
I don't even know if he's still doing it anymore.
But he has an entire chapter in that book on conifer trees.
And he draws, he's like, they're like the tree that is present and can survive in the most extreme environments on earth.
They've been evolving for whatever extreme time period.
And he was drawing all these parallels between like a great business that could survive, using like the insights he derived from studying these trees, which I think is very fascinating.
I love it.
I've often thought of our business as an oak tree.
I love oak trees.
Oak trees are like trees that I love.
Bezos uses the analogy of Amazon as an acorn that grew into an oak tree.
I don't think about it as the acorn so much.
That's cool though, especially A, acorn, Amazon, there you go, whatever.
I wonder if you thought about Acorn as a company.
No, it was... Remember, you remember this, you're old enough.
Like, the directories were in alphabetical order.
Oh, yeah, that's right.
Remember, there was that many websites so you could actually list them all.
I remember that.
I remember reading that.
And he almost did, like, abacadabra.
It's like abacadabra or something like that.
And then people thought it was cadaver.
And they're like...
Like that's not a good association.
They don't sell cadavers there, do they?
No.
No, they don't.
It's amazing.
The everything store doesn't sell cadavers.
Okay.
So, like I've always thought about our business as an oak tree, which is, like you know, oak trees are very stable.
They can withstand a lot of storms.
They don't grow very fast.
They're actually quite slow growing.
Some are faster than others but, like in the Midwest where I came from, like a bur oak is a very slow growing tree but it lasts a long time, can weather a lot of storms.
And I've always found that to be a very appealing kind of tree to be, versus like a cottonwood, which grows really fast, makes a lot of noise.
Like you can hear cottonwoods when it's windy, they make a lot of big mess.
Everyone notices them because there's cotton all over the place.
And they die in about 75 years or something like that.
And they come down hard.
Like that's just not as interesting to me.
Like I don't need to be flashy.
I don't need to leave signs all over the place that I've been here.
It's gonna be nice and quiet, build a great business, keep a solid foundation, add a little bit every year so it just feels more stable and weather storms.
And there's been a lot over the years.
Like you know, in the tech world there's a lot of.
If something comes out, it's like it's a killer.
It's a Slack killer, it's a Basecamp killer, it's a whatever killer.
When you've been around for a long time, you see that played over and over and over.
There's a lot of things that are killing, supposed to kill something else, but very few of them can withstand and outlive the storms that come.
So you can be hot for a while, but the hardest thing is just to stay around, to stick around.
So people are like, how do you compete?
Well, we just stay around longer than everybody else.
Yeah, the line I have on this that reappears over and over again in these biographies, is you just stay in the game long enough to get lucky.
There's going to be something that happens year 5, 10, 15, 20.
Usually an innovation invented by somebody outside your company you can take advantage of.
Right.
The example of this, like Coca-Cola with refrigeration.
They didn't invent refrigeration, but it drastically expanded their market.
Yeah.
I had Toby's interview with COVID, in a sense.
Like, COVID saved Shopify in a lot of ways, right?
He needed that difficult time period to then grow and to realize all the things he was doing wrong.
And people were shopping online more and all that stuff, too.
Well, he had that huge spike in stock price, which you talked about, and then it going down.
But it's when he realized, oh, like, I'm cosplaying.
I'm a public company CEO, and this is what I have to do.
He's like, no.
I love what he said in the conversation where he's like, There's not one right way to do something.
There's probably a hundred.
I believe that.
At least a hundred.
Yeah.
I think the way you did it.
If you had to do it again, you'd do it the same way, but there are a hundred different ways to do that same thing.
I want to go back to what you just said though.
Like, you know, something could be hot.
It could be a fad.
The maximum I have for this is time is the best filter.
It's the only filter I trust for businesses, for ideas, for books.
I usually read a lot of old books, but it works for people too.
Because a huge influence on my thinking is Charlie Munger and his whole thing.
It's like you need to build a seamless web of deserved trust with high quality people.
Yeah.
And the only way you know somebody's high quality is time.
And him and Warren's case, they knew the same people for decade after decade after decade.
I'm rereading the book Snowball.
It's like the 700-page biography of Warren Buffett right now.
And the amount of friends that he accumulates in his 20s 30s, 40s that are still around when they're in their 70s and 80s is absolutely remarkable.
The time is the... for a business, time carries most of the weight is another maxim.
I got that from Munger because when you read Porcello de Zomenac, his thing is that you should master.
There's only a handful of big ideas in all these different disciplines.
So, you know, biology, physics, economics.
And he's like and if you just master the big ideas, he says those few handful of big ideas carry most of the freight.
And reading that and thinking about his, the prior, he prioritized durability in a business.
Yes.
And I was like, oh, so time carries most of the weight.
You just have to stay, you have to survive, which goes back to your blubber having, you know, a margin of safety.
Blubber and small units.
Yeah.
That's a big part of it too.
This is a bit of an aside, but it's tied to it.
I think it's important to talk about is pricing.
So with Basecamp, for example, nobody can pay us more than $2.99 a month.
Okay.
It doesn't matter how many users you have.
So you could be a big enterprise, and 299 a month is the most you can.
Possibly our prices go way, way low, but that's the most we allow you to pay us.
Now many of our competitors will like hey, you wanna pay us 50 grand a month, you got 2000 seats.
We'll take it.
I don't want their money because what I want is a static group of customers, like if you think about static, like an old TV, like the dots, they're all equal sized.
You should be able to pick out 10 random customers and lose.
I don't want to lose customers, but if you could pick out 10 random customers and lose them, I think you have a good business.
Think about 100 random customers and lose them and be okay, you have a good business.
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 units which are individual customers.
And if you take one out, it's not like Django where the whole thing is going to fall.
Like it doesn't matter in a sense because everyone's essentially equal, no matter how big you are.
And then we can develop software for the customer base as a whole and not for a handful of customers that pay us a lot more than everybody else.
And that's the enterprise game is getting as many seats as you can and landing these whales.
And I just don't find that interesting.
I also don't find it durable.
Durability is about a lot of small things.
And if someone wants to chip away at some of those, it doesn't matter, because there's a lot more left.
That's kind of what we were aiming for with durability.
So one thing that we haven't touched on, which I think is really important and we've danced around it a few times, you've mentioned it a few times is that you are all intuition.
I want to hear your thoughts on intuition, and I want to hear how you refined your intuition.
I mean, intuition for me is just making... decisions that you're comfortable with.
Actually, you do want to look around.
You want to pay attention to things, as many things as you can, in a sense.
But ultimately you have to be willing to make a human decision about something and stick by it and stick behind it.
I think these decisions come from somewhere where you can't quite define where they're from.
It's not like there's one thing that tips it over.
Intuition to me is like a collection of a lot of things that you can't quite split apart that lead you to make a decision.
And...
That's how I'm driven.
I go by gut, I go by intuition.
Whether it's a pricing or a product decision or a feature or a new product or a name or whatever it is, we don't test things.
We don't do focus groups.
I don't, we occasionally AB test for fun, but not like, cause it matters.
And that's it.
Like I'm not looking at numbers.
I've never seen a spreadsheet that's ever made me do anything.
Like I don't wanna make a product decision because a spreadsheet told me to.
That's just like a thing.
And there's a lot of other things that can tell me to do other things.
I don't want to value this because it's like a spreadsheet with like numbers on it.
Like that's just a thing.
And so I'm very careful not to put too much weight into something that purports to be more valuable than some other feeling I have, just because it has numbers on it.
Now, of course, I don't want to do stupid things.
I'm not going to like throw $50 million at a Super Bowl ad.
Like I'm not going to do that.
So like your intuition has limits too.
But everything we do is based on just kind of what we want to do, what we feel.
I want to feel into these decisions and go, I feel good about this.
No matter what happens, let's do it anyway.
Yeah, that's what it is for me.
How have you refined it over time?
You just do things, you make decisions.
I mean to me like it's all about time under the curve in terms of making decisions, or area under the curve.
Sorry, I think, is the actual, correct way to phrase that.
So the more decisions you make, the more time you have, the more intuition you're refining, but you don't like actively refine it.
It's not like you're... You don't practice intuition.
You just make decisions.
And the more you make, the more you make, the more it sharpens everything up.
It's like it takes the edge off.
I think eventually, as you make more and more and more and you're tumbling these things around, essentially you end up with like a nice smooth orb and it feels really good to have that in your hand.
And it's just, it feels right.
And that's kind of where you want to get to.
So you want to have this place where, when you make a decision, you're like this feels like the right decision.
I'm not afraid of this decision.
I'm excited about this decision.
It could go wrong and I'd be okay with that too.
I just know that this is the decision I want to make right now.
And I'm lucky to be in this position where I can make it.
No one can tell me I can't.
That's another part of intuition.
Because you can have intuition that keeps hitting a ceiling and someone else says no.
And then you don't get to use it.
So intuition has to be used, I think, to really be enjoyed.
And that requires, again, back to independence, back to optionality as well.
Jason, one of the coolest things about my job is that I could have somebody like you that I've read and has shaped my thinking over a decade and a half.
We become friends.
We get to hang out.
And then you also get to you know, come on the show and then share all the things I love about you for everybody else.
I really appreciate the time today, man.
This is fucking awesome.
It's been a blast.
Thank you so much for having me on.
Yeah, sure.
Thanks for doing it.
Most of the guests you hear on this show first found me through Founders.
