I'm a Numbers Driven CEO and I've Never Had to Deal With That

Jason Fried (@jasonfried) of Basecamp (formerly 37 Signals) shares his wisdom on cutting through the noise to find your own voice. There are some great nuggets in here about design, and how to be a contrarian thinker. This will be a great episode for entrepreneurs, whether they're experienced, or relatively new. Also, this is the FIRST EPISODE of Love Your Work! Please subscribe, and leave us a review to help us get featured in the iTunes "New and Noteworthy" section. Show notes: http://kadavy.net/podcast

Show notes: http://kadavy.net/blog/posts/jason-fried-basecamp/

Transcript:

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David Kadavy 00:11 This is Love Your Work. On this show we meet people who have carved out success by their own definition. I'm David Kadavy, best-selling author and entrepreneur. This is the first episode of the show, so if you're not familiar with me, I wrote a book called Design for Hackers, which is a bestseller. It debuted in the Top 20 on all of Amazon. Before that, I was the lead designer for a couple of startups in Silicon Valley, and I freelanced as well. I blog at kadavy.net. That's K-A-D as in David, A-V as in Victor, Y, and you can tell how many times I've repeated that in my life. You can follow me on Twitter at @kadavy, or you can join 60,000 others and take my free design course at designforhackers.com. One thing that's really important to me is helping people build a business and a lifestyle that suits them. It's something that I've managed to do, and I want more people to experience it, and that's kind of the idea behind the show. With this show, I want to introduce you to people who have created businesses and lifestyles that are all their own. They've achieved success by their own definition and built a life according to their own values. They're not necessarily going to be millionaires, but they will be happy people. As the name of the show would imply, they love their work, and also, I love their work. Now, to help us get the show off to a great start, can I ask you a favor?

David Kadavy 01:26 In this first few weeks of the show we have the opportunity to be featured in the iTunes store in their new and noteworthy section, and this show is a bit of an experiment. I'm launching with a few episodes and I'm going to see how it goes, but this first few weeks is absolutely critical. This is the one chance in the lifetime of this show to really bring in more listeners, and more listeners means I can put more of my energy into bringing you great guests with wisdom to share. But in order for that to happen we need reviews on iTunes. Lots of them. They also have to be positive reviews, but that's, of course, up to you and the actual quality the show. So can you please review this show on the iTunes store? If you loved it and want to hear more, please give it five stars.

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David Kadavy 02:14 I'm very grateful to bring you this first guest. He is one of my biggest heroes, and he's the perfect example of someone who has built a business and a life according to his own values. Jason Fried - yes, the Jason Fried - hardly needs an introduction. He is the CEO of Basecamp and a New York Times best selling author. Jason co-founded Basecamp way back in 1999. It was originally a web design shop, but they built a little project management app called Basecamp, and now that's the focus of the company. In the process of building Basecamp the company also created Ruby on Rails, which is an open-source web framework that powers thousands of sites. And the thing I admire most about Jason is his contrarion thinking. Whatever the prevailing wisdom is, Jason seems to speak up and explain why that wisdom is wrong. He intentionally has setup his company small. His employees can live and work wherever they want, and they get a three day week during the summer months. The company is almost totally bootstrap. I say "almost" because they did take a little bit of investment from the one and only Jeff Bezos of Amazon, primarily just to be able to give him a call once in a while.

David Kadavy 03:23 Jason has co-authored three books, one of which is the New York Times best selling Rework, in which he and his co-founder, David Heinemeier Hansson, share their rules for running a simple business. This interview is about one hour long, and there is so much more that I wanted to ask Jason. It could've been several hours easily. We talk about Basecamp in the beginning, which you may already be intimately familiar with, but stick it out and we soon start digging into the source of Jason's famously contrarion thinking. I'm really fascinated by where it comes from, because I'm someone who tends to be a bit contrarion myself, but these thoughts, they usually come after I have this deep internal conflict, and it seems like it just comes so naturally to Jason. So that's something that I try to unpack in the interview, and you're going to find some good tips for listening to that mischievous voice in your head. If you aren't already familiar with Jason, prepare yourself. He really spews brilliance. Everything that comes out of his mouth could be quoted, or could be a Tweet or could be the subject of a blog post. He's really easy to interview, which is great because he's one of the first people that I've interviewed. So I'm very excited to bring you this interview. Let's get started.

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David Kadavy 04:44 Okay. So I'm here with Jason Fried in the Basecamp offices, and I look around here, and there's this beautiful wood paneling and it's just a quiet office. I can't help but notice there's nobody here.

Jason Fried 04:58 No one's here. One person's here, but he's at lunch.

David Kadavy 05:00 Oh, okay. That person's at lunch.

Jason Fried 05:02 That person's at lunch.

David Kadavy 05:03 Well, we are talking here on the day before Thanksgiving, so I wonder if that has something to do with it.

Jason Fried 05:09 A little bit, but also most of the people even who work in Chicago work remotely, so we're a remote company. People across 30 some-odd different cities around the world, and, including the people who are here, we have 14 people in Chicago. Usually any given day there's five of them here, and it might be a different five each day but that's how we work here. Yeah.

David Kadavy 05:28 Wow, five people. Okay. And this is a huge office.

Jason Fried 05:31 It's a big office, yeah. So we have 50 people in the company and we all get together twice a year. We have an office that's built to handle the whole company, but a very small portion of the company is in the office on any given day. Half the office, too, is dedicated to public space. We have a theater. We've got a big kitchen area, a reception area. It is still a large office, though.

David Kadavy 05:54 Yeah. We're in Chicago so there's a little more space available. So you guys have had this office for how long now?

Jason Fried 06:04 Since August of 2010.

David Kadavy 06:07 Okay. It's quiet, there's lots of space, there's lots of private spaces as well. To what extent do you feel like this office kind of is an expression of your own personality?

Jason Fried 06:19 Well, I think it's an expression of the company's personality, which is probably derived at some point from mine since I was one of the founders. But mostly we're kind of an introverted group for the most part. Definitely there's some extroverted people here though as well, but we try to be respectful of one another's space, and privacy and time. So we kind of treat the office like a library, in that the rules here are kind of like library rules, which is that you walk into a library, everyone knows how to behave. You're respectful of one another. You're quiet. You don't interrupt people. People are studying, and thinking and working, and that's the same way the office here works. So for the most part, even if it's full of people, it's pretty quiet and pretty hush, and then people can go into these private rooms like you and I are sitting in right now and have a full volume conversation without interrupting people on the outside. Just like a library, they have little side rooms where you can sort of talk loudly and not interrupt people who are reading outside.

David Kadavy 07:14 Yeah, that was always something that bothered me whenever I worked at a company. I might have a bunch of different roles, but I might be ears deep in some code, and somebody would come up, and tap me on the shoulder, and interrupt me and just lose all of it.

Jason Fried 07:28 You lose it all. You lose the focus, the zone, and so we want to protect that because that's a really hard thing to get into in the first place. So if you're in that, we want to make sure that you stay in that as long as possible, versus inviting interruptions all day long, which is what a lot of modern offices are all about these days.

David Kadavy 07:45 Yeah, I can definitely relate to that. I've noticed that before. So you guys started out as a software sort of consultancy, right? Or a web design company.

Jason Fried 07:57 Web design. Yeah, we started as a web design company.

David Kadavy 08:01 And that was called 37signals.

Jason Fried 08:02 Yeah. In 1999 we launched the company in August, and we were doing website design for hire, but just redesign work for the most parts. So we weren't doing programming. We were just doing visual redesigns. So people already had the sites and we were like, "We can make that site a little bit better," and so they would hire us to do that.

David Kadavy 08:19 Yeah. And now you are concentrated entirely pretty much on this one product, Basecamp.

Jason Fried 08:25 Yeah, Basecamp. And Basecamp 3, the third version of that, just launched a couple weeks ago.

David Kadavy 08:30 Oh, cool.

Jason Fried 08:30 Every four years or so we completely reinvent the product from the ground up. Not a single line of code, not a single piece of design is shared. We make it all over again every four years, roughly. So we just did that for our third major time. Basecamp's been around for 12 years. It came out in February 2004. So about 12 years total now. So we're on the third major version.

David Kadavy 08:50 That's funny. I guess I hadn't noticed that you reinvent the whole product every four years.

Jason Fried 08:55 There's similar themes. So it's a lot like-- think about cars. We'll take the Porsche 911. Porsche 911 was released in 1963. It's about 52 years old now, but there's been seven generations of the Porsche 911. So every seven years, roughly, they do a new chassis, they do new engines, they do new technology around it. But it's still a Porsche 911. It looks roughly the same. The engines in the back. The driving dynamics are similar. You can identify a 911 that was made today and a 911 that was made 50 years ago. You can tell there's continuity, but roughly every seven years it's an entirely new car. And the same thing is true for like a Honda Accord or a Civic. These lines have been around for decades, but every four, five, six, seven, eight - in cars it's more like five to eight years because it's very expensive to make a new car - they make a new car. It's still an Accord, which means it's a four-door primarily. They have a coupe version too, but it's like a family car. And the Civic's a little bit smaller. They have these themes and these spirits around the things, but they're all new. And so that's what we do with Basecamp, is that Basecamp today, in 2015, can trace back to base camp classic, which is the first version of Basecamp in February 2004. The themes were similar but the product is reconsidered in a big way every four years, and in between that we just sort of improve the existing version. But then there's a point where you can't pack new ideas onto an old chassis, so we kind of redo the thing from scratch.

David Kadavy 10:26 Yeah, that car analogy is interesting. I'm not totally up on the designs of cars, but I imagine that, say a Honda Accord, there's certain values that are portrayed - values about what a car is and what is important in a car being portrayed in that. And then there's all this changing technology, and then there's certain trends maybe that are influenced by other--

Jason Fried 10:47 Exactly.

David Kadavy 10:48 --what the drivers are used to.

Jason Fried 10:52 Yes.

David Kadavy 10:53 That those sort of things change, and so that sort of calls for a total redo.

Jason Fried 10:59 Totally. And you think about, like-- I think just cars are really good metaphors for this because you think about the Corvette, which has been around, I think, since the 50s, and there's like a spirit to that car. It's a two-door sports car, it's kind of a long-nose. There's a spirit to it. And even though they don't all look the same over the years, there's a language and an idea behind the Corvette which stays in the DNA of the car, but the car is redesigned and reengineered completely from the ground up every seven years or something. That's just how that industry-- most industries work that same way.

David Kadavy 11:33 Yeah. I mean, they're still positioned, in a way, against other types of cars. The Corvette, it's a different thing from a Camaro, right? It's a different type of person that will drive it and it's different sort of values that person has. Right?

Jason Fried 11:48 Yes. So each car has it's spirit-- it's much like-- look, you are not the same person - I'm not even talking, like, personality - you don't share a single cell in common with yourself from ten years ago.

David Kadavy 12:00 Yeah.

Jason Fried 12:01 So you're actually-- but you're still David. You're still the same guy. You've changed. Your tastes have changed and your points of view have changed, but you're still you, even though you've been completely reengineered from the ground up in many ways all the time. So there's iterative tweaks, and then at a certain point you're all new. You're actually all new compared to what you were ten years ago.

David Kadavy 12:23 Yeah. So let's talk about that.

Jason Fried 12:24 That's a little bit of a weird analogy, let's stick to the car one. But that's kind of what we're trying to do here, instead of the alternative, which is typically how software works, which is that it's constantly iterated on. Which is good, but that's when the code base gets really difficult to work on at a certain point, because it gets old and the technologies that you build on are kind of old. It becomes hard to work on, you begin to slow down, and you can't handle brand new ideas because you try and fit them into the current patterns and it's like, "But this won't quite fit anymore." So you kind of shoehorn it in, then you make compromises, and that's how things start to get bad over a certain point of time.

David Kadavy 13:01 Yeah. So let's talk about that DNA, then. Basecamp, for those who aren't familiar, is a project management web app, basically.

Jason Fried 13:14 Yes.

David Kadavy 13:14 I mean, there's probably--

Jason Fried 13:16 There's iOS and android apps, yeah. All that stuff [inaudible].

David Kadavy 13:19 When you started, it's like your main competitor was maybe Microsoft Project.

Jason Fried 13:26 Main competitor has always been the same: email.

David Kadavy 13:28 Email, okay.

Jason Fried 13:28 Email and habits.

David Kadavy 13:31 But when people would think of project management, would they think of email back when you guys were first starting?

Jason Fried 13:39 If you ask people even today what their primary method of working on projects with people is, it's still email. So email is still the biggest. Our industry thinks there's certain products of the time that are the big product, but the biggest of them all is email. And that's not a product, it's like a thing.

David Kadavy 13:58 It's a protocol.

Jason Fried 13:58 Yeah, right. But that is the thing you're always battling against, is email, phone, in-person habits. That's the thing you're battling mostly against. The biggest thing that you're trying to do is sort of-- there's this idea of non-consumption, which is this concept that there are people out there who work with others, and they need a better way to do that, but they don't know how to do it. They don't use any products to do it yet. I mean, they use products, but they use products that are not built for this purpose, but they just use other things. And they don't even realize that there's something out there that would help them. They're non-consumers. They want to consume. They want something better, but they don't even know something exists. So our industry sometimes thinks that whatever the hot product of the moment is, that everybody uses that. But actually, all things told, a very small slice of people use that, and most people don't use anything. So that's always the biggest competition in our opinion, is the people who don't use anything.

David Kadavy 15:03 I feel like there's a parallel we draw in there between email and what we were talking about with office interruptions. The email is this sort of portal where anybody can interrupt you, and you're providing a space through which everything is about this project that you're working on right now - all the communication that's happening and all that within Basecamp. What is that DNA of Basecamp?

Jason Fried 15:32 Here's the thing. So the DNA of Basecamp, there's a couple things going on here. No matter what it is that you're working on, if you have a team there's a few things you need to do. I don't care if you are building a building, or you're working on a small school project, or you are putting together a publication or you're building a website, when you work with people you've got people problems. So you need a way to divvy up and organize the work that needs to get done amongst the group. Our take on that is to-dos, but let's forget our implementation for the moment and just get back to the fundamentals. So you've got a group of people. You want to do some work together or whatever it is. You've got chunks of work, pieces of work that need to be outlined and divvied up in some way and assigned out. You need a way to hash things out quickly. So sometimes you just need to hash stuff out and go informally back and forth really fast. Sometimes you need to slow down and present something, and think about something, and pitch something, and write a thoughtful post or something and give people a chance to write back in time. So there's moments when you need to make announcements, there's moments you need to hash stuff out quickly. You need to keep track of when things are due and what the major milestones are - what's coming up next, when is thing launching or when are we doing this thing together? So there's some dates around it. There's artifacts. There's files, and there's documents, and there's sketches, and there's PDFs and there's stuff that-- typically you need to keep track of that stuff.

Jason Fried 17:00 You want to organize that stuff. You need a place where everyone knows where it is, and where to go to get it and that sort of thing, right? And then finally, you need a way to check in on people. Like, "How's it going?" And, "How are we doing?" And, "Are we doing the right thing?" And, "How do you feel about how we're doing it?" And, "Are you stuck on anything?" Those kind of things. So to me, it doesn't matter the kind of work. When you work with people, those are things, right? Hashing stuff out, divvying up work, dates, artifacts, making announcements, being able to get a hold of people when you need to no matter what their speeds are, that sort of thing, right? So that, to me, is the DNA of what Basecamp's about. It's about understanding how groups actually work together to make progress on something. There's difference too, because there's moments when you're just social and you're just kind of, like, social. You're not trying to make progress there. But when you want to make progress on something, Basecamp comes in and helps you make progress on things with other people.

David Kadavy 17:51 Yeah, and I like that you're--

Jason Fried 17:52 It's a collection. Let me-- it's really a collection. That's the the thing that's always set Basecamp apart, is that it's a collection of unique tools that work together to help a group make progress on something together. There's many ways to approach things. There's a way to piece together a bunch of separate tools, and duct tape them together and try to point at each thing, or there's a way to buy something that kind of tries to do all those things really well in a simple way, and that's kind of our side. We want to give you one thing that you can use to do all these things together with a group, versus you having to go out and shop for a bunch of different solutions, and try to tie them all together and get people on board on five or six different products.

David Kadavy 18:35 It sounds like you've been able to really think about the abstract needs that are there and separate that experience from the technology itself. It's not Ajax, to use a very 2002 term [chuckles].

Jason Fried 18:50 Very early, yeah.

David Kadavy 18:51 It's not Ajax. It's not about all these individual technologies or something. It is managing these sort of abstract things that are floating in the ether and making them into something that you can get a handle on.

Jason Fried 19:04 And getting your head around it and getting organized around it is a really important part of working together with people. The thing is that everyone can have their own individual messes, but if you bring someone else into your mess they're going to be like, "Woah, I don't know where things are." So you need to have an organized place, a space, a shared place where you can do this kind of work. But yeah, it's not about technologies. It's not even necessarily about individual feature sets, because when I say, "Hash things out quickly," what I actually mean is-- in our implementation is more of like chat. Campfires are now in Basecamp 3. But in five years chat might not be they way to hash things out quickly. There may be another way to hash things out quickly. So, it's not about staying true to a tool set. It's about staying true to the problems you're trying to solve. This is what gives us the opportunity to resolve those in new ways [crosstalk]

Use it to [crosstalk] technology at hand.

Exactly.

Just like the cars that change over time with technology.

Jason Fried 20:00 Totally. Yeah. Bluetooth wasn't a thing in cars eight years ago. Now it is. Navigation wasn't a common thing, and now it's in almost every car. So technology moves, ideas move and things you can do change. And that's why I think forcing yourself to reinvent yourself and be willing to look at those technologies and those new options on a regular basis is very viable.

David Kadavy 20:23 Now, when I think about you reinventing the product every four years, I can't help but think about how most people would react to doing something like that or the idea of doing something like that. They would be so scared that everybody would be so pissed when you change everything that they'd be afraid to make a change like that. How do you get over that?

Jason Fried 20:49 Yeah, it's a great question, and the way to get around that is to, again, get back to people. People do not like to be forced into change. People don't mind change. People hate forced change. So we never force anyone to switch versions of Basecamp. People who've been using Base-- we have customers who've been using Basecamp for 12 years. Same version. They signed up for Basecamp when it was just called Basecamp. Now it's called Basecamp Classic, which is the original version. We've never forced anyone on Basecamp Classic to move to Basecamp Two and no one on Basecamp Two has to move to Basecamp 3. We've made a commitment to our customers to always maintain every major version of Basecamp forever. So if you're happy with Classic, our definition of new may not matter to you. New doesn't matter to you. Consistency might matter to you--

Jason Fried 21:39 But the new customers, it would be to your detriment to have the original interface with the technology of 2002 or whenever it was--

David Kadavy 21:48 2004, yeah exactly.

Jason Fried 21:49 --2004, and somebody shows up and that's what you've got, that would be a problem.

David Kadavy 21:53 Totally. So new customers today who go to Basecamp.com will be signed up for Basecamp 3. That's the only thing they can sign up for. The newest, latest, greatest version of Basecamp we've ever made before. Customers who've been with us from 2004, some of them might still be on Classic if they've chosen to. Some of them might be on Basecamp 2 if they've chosen to be. Up to them completely, entirely. That's how we solve that problem. We don't force change on anybody ever.

Jason Fried 22:17 You don't run into situations where that backwards compatibility is just impossible to support?

David Kadavy 22:21 We don't support backwards compatibility.

Jason Fried 22:23 Maybe I'm using the wrong terminology there, but--

David Kadavy 22:26 If you start on 3 you can't move to Classic, because there's not a future parity. For example in Basecamp 3, you can assign - this is a small example - but you can assign to-dos to many people. In Classic you can only assign to-dos to one person. So if you're in Basecamp 3 and you assign a to-do to six people, and you try to go back to Classic somehow, you'd lose data because we wouldn't know where to-- you can't move backwards in time.

Jason Fried 22:50 So you've been doing this for a long time. Basecamp has been around for 12 years in itself. The company has been around--

David Kadavy 22:57 16 years.

Jason Fried 22:57 --for 16 years. This reinventing every four years, is that something that helps you keep it fresh and keep it being something that you want to be doing everyday?

David Kadavy 23:08 Yeah, it's for everybody. It's partially for us. It's fun to make something new and it's fun to improve that thing for a while, but at a certain point you want to make something new again. The way we did it in the past was we kept making new products. So we made Basecamp, then we made Backpack, then we made Campfire, then we made Highrise and then we made the job boards. We've made a variety of things over the years. What ends up happening, though, is that making something is actually the easy part. The hard part is that once it's out in the wild you've got to maintain it. You've got customers using it. They have demands, and you've got to provide customer service, and support and all these things. So we love the act of making new things, but we've decided that we want to focus on making one new thing over and over. That's how we keep it fresh for us, also keep it fresh for the market and keep it fresh for customers, but also not ever upset existing customers by forcing them on to something new that they're not ready for or they don't want to be in. Something I learned early on - and it's sort of a ridiculous revelation because you just expect that you would know this, but it's one of the things you just don't think about. Software companies especially almost never think about this. People are always in the middle of something, right?

David Kadavy 24:19 So if I release a brand new version, and they're in the middle of a project and they're trying to work on a client project with somebody, and we release a new version, we push some them on to the new one, they're in the middle of something else. They're not ready to move to this. They don't want their software to change in the middle of their project. So once we realized that, we realized, like, "Okay, that's a deep insight and very important. Our product is not their lives. Their lives is their livelihood. The work that they do for their client is what's important to them, and they don't want their software tool that's aiding them all of the sudden changing on them in the middle, because that's really disruptive and anxiety producing and stuff." So that's why we don't force anyone to change. You've got to get to those human insights. The thing I've noticed most is that the things that drive people away are fear and anxiety. It's not about, "You don't have this feature. You don't have that feature." It's the fear and anxiety attached to forcing me to shift, or forcing me to change, or forcing me to switch or forcing me to do something I'm not ready for - that's where people really recoil.

Jason Fried 25:24 Not having control.

David Kadavy 25:23 Yeah. People don't want to be in a situation where someone's changing up underneath them that they rely on. That's a really uncomfortable feeling. It's like an earthquake. You live somewhere. You rely on the ground to be solid. You trust that the ground will be solid. Then one day the ground starts to shake, and that is terrifying because you can't go hide from that.

Jason Fried 25:45 Have you experienced a couple earthquakes before?

David Kadavy 25:48 I have, and it's terrifying.

Jason Fried 25:48 Yeah, I have too. It's terrible.

David Kadavy 25:49 Terrifying.

Jason Fried 25:50 And they weren't even big ones.

David Kadavy 25:52 No. Right.

Jason Fried 25:52 It's the worst.

David Kadavy 25:53 I'm a Midwesterner, so a small one is a big one for me. But the thing is, if it's really crappy weather-wise outside you can kind of go inside and hide, but you cannot hide when the earth beneath you moves, and that's a terrible feeling, and that's what software's like to people. When there's this thing they've been relying on that's been consistently working a certain way and all of a sudden it changes on them, that's an earthquake. We don't want to create earthquakes for customers.

David Kadavy 26:14 Yeah, especially this things that they're relying upon to help them--

Jason Fried 26:19 Do their job.

David Kadavy 26:20 Do their job, do their work, to manage their projects. If I'm using a bad word there, I don't know.

Jason Fried 26:25 Totally fine. Actually, what's interesting is we've gone away from the word "project," which maybe we can talk about in a little bit. But yeah, fundamentally, absolutely. People use Basecamp to run projects, and they use it for other things too. Imagine if you're doing work for a client. You're a designer. You do work for a client. You've trained the client on this thing. You've told them this is how it's going to work. This is a client relationship, which is often delicate. They're paying you a lot of money. You might be friends with them, but it's still a delicate relationship at some level. And all of a sudden, this thing you told them was going to work one way, all of a sudden works a different way on Tuesday then it did on Monday. That is a bad situations, so we don't ever want to put our customers in those situations.

David Kadavy 27:04 Right. You've definitely gotten really comfortable over all these years with your particular way of doing things, but I want to step back a little bit further and get an idea of where it all comes from. I'd say that you're probably known for being a contrarian thinker. Would you agree with that?

Jason Fried 27:26 Yeah, probably. It's funny because I don't think my ideas are contrarian at all, of course, but against our-- let's call it against our industry, yes.

David Kadavy 27:35 Yeah. I think that a lot of people have thoughts from time to time where there's a prevailing wisdom and they think, "Well, that doesn't seem right." But then they think a lot of people-- they bottle it up inside or they don't act upon it. They don't give themselves the permission and the confidence to go ahead and say, "I don't think it should be that way. It should be this other way," and to go ahead with it. I think that that's somethin, even if you go back and look at the 37signals - which is the former name of the company - 37signals.com/manifesto, there's all these things about, "We're small on purpose," and all these things that are against the prevailing wisdom. "We purposely are not full service," things like that.

Jason Fried 28:23 By the way, even that site itself-- actually, that site is the most contrarian thing we've ever done. We're a web design company. There wasn't a piece of work on that site. It was black and white. It was all text. 37 ideas is what that was. If you think about back then - that was in '99 - web design firms, even today--

David Kadavy 28:45 1999 for those who can't remember--

Jason Fried 28:47 Right, 1999, the previous century.

David Kadavy 28:50 It was a different century [chuckles].

Jason Fried 28:53 But even today, it's all the same. Basically, agency sites are portfolio sites for the most part, which is like, "Here's our shining work and here's the work we've been doing. Here's pictures of it," and I get that. We didn't have a single picture of any work that we'd done on that site, and the whole idea was that everyone's work pretty much looks the same. If it's good, it's roughly the same, right? But what sets companies apart and people apart, I think, are the ideas that they have, and most companies don't think they way we thought we thought. And so we want to put our ideas out there to make us appear different and to attract the kind of customers that we want to work with, who were people who'd appreciate this kind of thinking, versus just someone who'd appreciate a pretty picture of a website that we made. That doesn't help us self-select our clients. So that was the idea behind that.

David Kadavy 29:38 I think this is something that's so important for people to master, to be able to have a thought that's different from the prevailing wisdom and to give themselves permission to go forth with it. Take us back to 1999 when you decided to make this all text. Was that something-- did you know that it was something different from the prevailing way to do it? How did you arrive at that and give yourself permission to do that?

Jason Fried 30:04 Great question. We knew it was different. We knew no one had never done anything like that before. It's funny, they were almost like tweets or short blog posts. They were just these really short thoughts. We weren't trying to be different. We just realized that we were, and then we're like-- Originally, one of my partners in the business was a guy named Carlos Segura, who's a graphic designer in Chicago. He has a line that says, "Communication that doesn't take a chance doesn't stand a chance." That's his motto, and that drove us early on, which is like, "Let's take a shot. What do we have to lose here? What we actually had to lose is not being ourselves, and that is a bigger loss than being yourself and not getting traction." If we were trying to act like everyone else then we weren't really being ourselves, and that's the loss. "So let's take a shoot at putting ourselves out there, doing this differently, and let's see who we attract this way. Everyone's fishing with this lure. Let's put a different lure out and see what we attract, and maybe we attract some big fish that no one else knows how to attract, because everyone things the only way to attract this kind of fish is this way."

Jason Fried 31:20 And it turned out that we landed a couple big projects, and we've been profitable as a company ever since then because of that. I mean, looking back, it's a bold move, but at the time we just didn't think it was bold. We're like, "We have nothing. We have nothing yet. We have no company yet, so we have nothing to lose. So let's take a shot." It's a lot easier now, in my opinion, to be hesitant and being afraid to take a risk when you have something to lose. Like, "We have something to lose. We've got a great business. We've got a lot of customers. We've got a reputation. We could lose that now," and then you get a little bit tight. So we've tightened up as a company over the years. I think most companies do. But when you're fresh and brand new, that's the time to take a real shot. Why not, you know?

David Kadavy 32:10 It's funny to think about that thought process that you had, because I think-- how old were you then?

Jason Fried 32:17 25.

David Kadavy 32:19 Maybe around 25 was when I started to wise up to, "Okay, these thoughts that I have in my head that are different from the way other people are doing things, I should do something to pursue those," but I think before that I allowed other people's ideas of what success was, or what it meant to what I should be doing, I think I allowed those ideas to-- I know I did. I know I allowed those ideas to dictate my own actions and put me in situations that didn't make me happy. So did you ever experience that sort of thing where you were maybe making decisions based what somebody else had decided?

Jason Fried 33:02 Oh, absolutely. Yeah. Before 37signals, I was just a freelancer doing website design on my own, and I always referred to "me" as "we." When I was doing proposals I'm like, "We will provide a--" because I always felt like I had to act bigger. I had to act like I was a company. I wasn't a company. I was me. I was just me, and I just thought I had to be something else. I remember at the time-- you've been around for a while, too. You might remember there was something called USWeb, which was like wrapping up all these small web design firms trying to make this big web agency made of-- I don't know if you maybe remember this. I barely remember it.

David Kadavy 33:46 I don't remember that. What year would that have been?

Jason Fried 33:48 That was like mid-90s, late 90s sort of thing. It was like--

David Kadavy 33:54 Mid-90s I was making web pages on my AOL space and not really--

Jason Fried 33:58 Yeah, but so was I. Anyway, it's just a thing that didn't go anywhere, but I'm like, "Man, my firm might be acquired by a conglomerate." Like, this weird, stupid shit I was thinking about at the time.

David Kadavy 34:14 I remember wanting to work for Razorfish and seeing, "Oh, wow. MTV is a client, and they're doing all these good things." Actually, my thing was Communication Arts magazine.

Jason Fried 34:25 Sure, CA. Absolutely.

David Kadavy 34:25 As a designer, I would pour through the pages, and I'd write down every firm that was there, and I would go to the city and I would call and try to get an interview.

Jason Fried 34:34 I'd do the same thing. Same thing.

David Kadavy 34:37 Really? That's interesting.

Jason Fried 34:37 Yeah. I'd go through these designing [annuals?] and go, "Man, I wish I could do that kind of work." That's actually how I met Carlos for the first time.

David Kadavy 34:41 That's exactly the way I was.

Jason Fried 34:44 Yeah. I think most people are that way. I think it's good. I think it's a good start, and then you come into your own at a certain point. I think your mid-20s are actually a really healthy moment for that. Before that I was wide-eyed, and excited, and wanted to act bigger than I was and wanted to be more professional. This is the thing. I want to be more professional. That's the thing you have when you're fresh out of school - you want to be a professional. "I need to write really long proposals and I need to talk in a certain way. I need to act a certain way. I need to appear bigger." And that's just insecurity, and it's natural. Like, you don't know. What do you know? You're 21, you're 20. You don't know anything yet, right? So you're trying to act. You're an actor, and at a certain point you become yourself. And I think that's when it's formative, is when you begin to realize-- and I realized this at some point. I realized it by accident. I was doing these long proposals because I thought that's what you had to do. Like, 20-page proposals. I remember writing 20-page proposals about--

David Kadavy 35:47 Oh, yeah. I've done a couple of those.

Jason Fried 35:47 Right?

David Kadavy 35:48 Yeah.

Jason Fried 35:49 And you spend-- I don't know. Weeks and all-nighters, and you write these proposals--

David Kadavy 35:53 You don't get the job.

Jason Fried 35:53 You don't get the job, right? And then I realized-- first of all, I hate writing 20-page proposals. I think they're a waste of time. Because here's what happened to me. My parents were doing a kitchen renovation at home, and they were getting these proposals from contractors. I saw them look at them, and all they did was they turned to the last page. Like, "How much is it going to cost and how long is it going to take?" That's all you care about when you get a proposal, because to get a proposal from somebody, you've already vetted them at a certain level. Like, "I'm curious about what they would do for me. I know who they are, so what would they do?" You just want to know, how much is it going to cost and how long is it going to take? So I realized this. I'm like, "I'm doing these 20-page proposals. I'm busting my ass on them. I don't like doing them. It's what you're supposed to do, right? Or is it?" So I started doing shorter, and shorter and short proposals and started winning jobs. At the end of my freelance career I was doing single-page proposals, and I wasn't losing any business over them. I realized, "Holy shit, I don't need to do what everyone else is doing. I thought this is how you had to do it, but you don't have to do it that way." That's where I gave myself permission to go, "Well, what else don't I have to do that everybody else is doing?"

David Kadavy 37:01 Okay. This is exactly what I'm looking for. This is the time when you slowly started making the proposals shorter and shorter, and you realized that this thing that other people had told you was so, or somehow you had come to the conclusion was true, was in fact not true.

Jason Fried 37:18 It was in fact not true. I don't even know if people told me, or I just thought you-- I don't even know.

David Kadavy 37:23 It was more than not true. It was false.

Jason Fried 37:24 It was false at a variety of levels. It was false that I had to do that to get jobs. It was false that I had to stay up late and bust my ass to get work. It was also false that it would make me happy. I was miserable making these long proposals, so I realized if I can eliminate the misery, and I don't have to stay up late, and I can be concise, and get to the point and present my work clearly in a page or two, man, that's a bunch of wins, plus it's a win for the customer on the other side. And I told them that. I'm like, "Look, I know how proposals are. You're just going to look at the--" I said this in my proposal. I'm like, "I know how proposals are. You thumb through a bunch of stuff, and at the end of the day you just look at the price and how long it's going to take, because you've already seen my work because that why you've asked me to submit a proposal. So I don't need to go through all my work again. Here's how much it's going to cost. Here's how long it's going to take." That was my pitch, basically. Like, "Look, let's cut through the bullshit, because that's going to represent how I'm going to work with you. I'm not going to bullshit you. I'm going to be direct and clear, and we're going to work concisely together." It was like an embodiment of how we're going to work also. That resonated with people. Then I started to realize, "Man, I don't have to be like everybody else. This opens up opportunities." Now, I didn't see all the other opportunities. It was just like a moment where I could poke the way you're supposed to do it and get away with it, and then like, "Oh, maybe I can do this more." So I started doing more things like that.

David Kadavy 38:57 There's sort of a sense of mischief to it. It kind of makes things more fun that way.

Jason Fried 38:59 Absolutely.

David Kadavy 39:00 I know I'm that way where if I get stuck in a rut, I just kind of say, "I'm going to just write this silly, mischievous blog post or email," and suddenly it feels fresh and people respond more.

Jason Fried 39:12 Absolutely. This is something I'm actually thinking about here right now. Next year there's some stuff I want to do that doesn't seem like it would be a reasonable thing to do. Like, it would be difficult to justify in the same way that I think a single page proposal would be difficult to justify until you realize it works, and then you don't have to justify anymore because it becomes true. And so there's a couple things - I'm being very vague here because I don't want to talk about it quite yet because I haven't formed any ideas thoroughly - but there's a couple things I want to do that seem counterintuitive to our own company or our own way of working that I want to ruffle a bit.

David Kadavy 39:58 Yeah. So it sounds like you're trying to shake things up a little bit in the office. You don't want to get too complacent in doing things a certain way. Is that going to bring some freshness, or what's driving that?

Jason Fried 40:10 Yeah. Well, that's part of the whole-- reinventing Basecamp is part of that. Like, being on this schedule where we have to reinvent Basecamp on a frequent basis. It's not that frequent, but like four years.

David Kadavy 40:19 Four years is [inaudible].

Jason Fried 40:20 But yeah, in this industry-- actually, it seems like a long time in some ways, but--

David Kadavy 40:25 Yeah.

Jason Fried 40:26 My opinions change over the years, and I have new ideas, and a thought comes to mind, and I've been doing some-- one of the things that's been interesting is I've been doing a lot of in-person demos of Basecamp 3. I've never really done a lot of in-person demos of Basecamp before, and it's been really interesting because I'm seeing some really cool insights that come from followup questions. We've always thought about demoing Basecamp with videos, or tutorials or whatever, right? But what I've realized is that that kind of demo doesn't lead to followup questions, and followup questions are really valuable, because that is where someone requests or looks for clarity. Like, "Wait. What do you mean by that?" Or like, "Wait, how do you do that?" Or, "Wait, how do you think about that?"

David Kadavy 41:21 It's kind of like where they ask the question that they were initially too afraid to ask or something like--

Jason Fried 41:26 That's a good way to put it.

David Kadavy 41:27 --but they thought was a dumb question before, but somehow--

Jason Fried 41:30 Totally. [crosstalk] That's a great way of putting it. Yeah, a great way of putting it. Those moments, I'm realizing, are extremely valuable, very valuable. In fact, it's almost all the value. Yet, when you do a lot of self-service stuff you don't get to that value because you don't talk to the person, right?

David Kadavy 41:49 See their facial expressions or--

Jason Fried 41:51 Yeah, or just the things that-- it's like a comedian. A comedian writes material, and if they want to do a one-hour show on HBO, they spend a year in the clubs perfecting that material They don't know how audience are-- they think all the stuff they're writing down is funny, but they've got to try that stuff out. You've got to try it out in front of an audience and see what reactions-- and sometimes the audience give a reaction on something that you didn't think was going to be that funny, or they react to the timing or something. You've got to try that stuff out. So what's been interesting is I gave a couple of demos of Basecamp 3. One of the interesting features of Basecamp 3 is-- it's such a basic thing. You can create folders, and you drag things into folders to organize them your own way, and I got a standing ovation from this one group [chuckles]. I was really surprised by that. It was not something that I thought was going to be like this eureka moment for people, right? But I had to be there to see that, to feel it, to know that there's something there now. Then I can follow up on that and get-- wow. I'm like, "Whoa. Why was that such a big deal for you." "Oh, because--" and then you get the because.

Jason Fried 43:06 Every word after because is gold, you know? You don't get that when you just kind of like put material out there that people can do on their own. So I want to do a lot more in-person stuff next year. This is stuff that does not scale. We have well over 100,000 paying customers. We have a very big business. Tons and tons of customers, millions of people use Basecamp. I can't possibly demo it for all of them, right? But I don't have to. What if I can demo Basecamp to 200 companies a year? What if I could do that? How much better would the product be? How much better off would they be and how much better off would we be? I think it's undeniable that there'd be a deep value there, and I want to think about doing that kind of stuff. Anyway, that's very different from how we've ever done things before. So that's just one of the things I'm thinking about, but I just feel it's really important to shake up your own thoughts from time to time.

David Kadavy 44:02 Yeah, and I love this idea of these insights of these things that you are taking for granted in a way for whatever reason - maybe it was an obvious solution to make the folders draggable like that - and then it just blows away these other people. I think that that's something that-- I find that myself just in trying, or I have found that in trying to find my own entrepreneurial voice or deciding what to do in my own career, is that every once in a while somebody will make an observation. They say, "Oh, you're really good at explaining things," or something like that. And you're like, "Well, wait. I didn't know that." Was there anything like that for you personally that helped you find your own path in the early days of 37signals or something? Things that you didn't necessarily know that you were good at but you later discovered through observations like that.

Jason Fried 44:58 Yeah. I'm not sure if it's a specific thing other than like a way of looking at things. So we would do work for clients all the time, oftentimes bigger clients. Like, back in the early days we'd do work for Hewlett-Packard or something. We did a website for them. And I'd be sitting in a meeting with them, and there'd be a lot of people on the table, and they'd be talking stuff through, and they'd be like-- they'd be talking stuff through, putting the ideas through their own process, which often involved a lot of people, followup meetings and a whole timetable to get something to try something. I'd be like, "Why don't we just try it right now? Why don't we just make the change right now and just look at it together?" That, to me, was like, "Of course. If we want to see how it looks, let's just do it, and then let's look at it." For them, that was just like a revelation. Like, "What? But doesn't it have to be this, and that and approved?" I'm like, "It could be, but it doesn't have to be. Right now, let me pull out my laptop, and I'll make the change, and I'll hit reload and let's look at the page." That came from me being a freelancer. I was working on my own. I had no one else to talk to. No one else to rely on. I had to do it all myself. I did all the HTML and design. There was no process.

Jason Fried 46:18 So for me, just growing up that way in the industry, helped me realize that you don't need a lot people to get things done. You don't need a lot of process to try stuff. But a lot of the clients I worked with early on, they couldn't believe-- they're like, "You're a genius." I'm like, "I'm not a genius at all. That is like the worst label to give me. I'm actually being a simpleton." I'm just being like, "Let's just change it and hit reload." So it wasn't like a thing. It was just a way of cutting through. So what I saw there was that process creates layers, and layers and layers, upon which you then begin to rely. And you don't realize that there was a time, when you didn't have to have all those layers, but you've become used to them and you think then that's the only way. So I think what I was good at early on was coming in and cutting through that stuff, and being like, "We don't need to do all that. Let's just do it this way." And they'd be like, "What? What? You're not allowed to do it that way."

David Kadavy 47:15 Again, it goes to this contrarian thinking thing. I'm trying to figure out like how much of it is your DNA and then how much of it was-- was there ever a time--? Huh. I guess what I'm trying to figure out is-- I think that, yeah, I can show a lot of people, "Here we're talking with Jason Fried. He sees things differently from the way other people do," but somebody can't just flip a switch and start thinking in their own way or gain that confidence. Was there ever a time when you didn't have the confidence to do that, and how'd that happen?

Jason Fried 47:53 Oh yeah. I mean, I've always had a world view, I think, which is things are simpler than they appear actually. Which is funny, because they're also way more complicated than they appear. What I mean by that is that things can be simpler. Like, whatever the thing you're trying to solve, there's a simpler version of that. I've just always had that in me, that I'm like, "There's no way this is the only way we can do this. We can do this simpler. We can be clearer about this--"

David Kadavy 48:18 What do you think was the earliest example you can think of--

Jason Fried 48:22 Of that?

David Kadavy 48:22 --where you did that?

Jason Fried 48:29 I remember back before the web was around-- the way I got started in any of this stuff was I made this program called AudioFile, which was a music organizing tool. It was like iTunes kind of way, way back, but there was no digital music. So it was just like a way to organize your CDs and your tapes. Because I had bunch, and I was loaning them out to friends and never getting them back.

David Kadavy 48:51 Tapes, for people who don't know, was this thing that had two reels on it and there was this tape-like thing that had music on it.

Jason Fried 48:57 It was actually tape. It was tape that moved [chuckles].

David Kadavy 49:00 It wasn't sticky.

Jason Fried 49:01 Right. It was magnetic and weird. Anyway, so I would loan stuff out to friends and never get it back. I didn't know who borrowed it and I didn't know-- so I'm like, "I need to organize this stuff. I need to get my stuff together." So I started looking on AOL, actually, because the internet wasn't around. This was like the early 90s. But AOL was around. There was software boards and stuff where you could download shareware and stuff. I downloaded a bunch of these music apps, because there was lot of other people who had this problem, and I just found them incredibly complicated, and just really weird, and strange, and ugly and all the things that-- it's still subjective, but my aesthetic was not being satisfied by their aesthetic. I'm like, "I don't know how to do this, but I need something, and I'm going to make one myself." So I just got FileMaker and learned how to do it, and made a much, much, much, much simpler version, because I just made something that I knew I needed. And it wasn't about imagining what everyone else needed, it was just like, "What do I need?" And I was able to cut right to that, and it became very successful product. I made $20,000 off this little shareware thing.

David Kadavy 50:08 Just getting checks in the mail and--?

Jason Fried 50:10 Yeah, and this was the revelation that I could do this for a living. So I put in the [product?]-- just like it was shareware, which is like, "You could use it for free, but if you like it, send me 20 bucks, and here's my home address." So people started sending me $20 bills, and I'm like, "Holy shit, I can do this."

David Kadavy 50:29 Were there moments of doubt along the way?

Jason Fried 50:31 Never, because I didn't care.

David Kadavy 50:33 You didn't care. It just happened.

Jason Fried 50:33 It was for me. The product was for me. If no one used it, didn't care. And that's how I've always tried to make it, which is like-- we still make Basecamp for ourselves. We need Basecamps to run our own business. I care a lot more now because we have tons of customers and we've got a payroll - 50 people - and the whole thing. But fundamentally it's still we want to make something for ourselves, because we know there's a lot of people out there just like us who need what we need. That's how we look at it. But with AudioFile, the first thing ever, I was in high school or whenever it was, and there was never a moment of doubt because it didn't matter if anyone used it. It was a miracle that anyone did. But I needed it for my own thing, and so it wasn't even about confidence. It was like, "I need it anyway." That's how I kind of learned graphic design, and learned a little bit of software development, and learned usability, and learned about customer feedback and all that stuff I learned through those channels because I'd made my own little software thing.

David Kadavy 51:32 So there are no existential crises over like, "Should I do this or that?"

Jason Fried 51:40 I think the biggest one we had recently in the company was deciding to go all in on Basecamp, and then what to do with the other products and stuff. That was like an existential thing, but it was like a moment, and there was risk involved and all that stuff. Those moments still come up. I mean, deciding what to do with a product. Do we release it this way or release it that way, and how do we price it? We have those discussions and decisions all the time, but I try not to worry about it too much. I worry about it probably more than I should still, but it's like, "Let's make a call, and move forward and see how it does."

David Kadavy 52:17 All right. I've got a few questions that are a little more canned questions as we wrap up. What's the biggest compromise that you've had to make in your career to have the success that you have?

Jason Fried 52:30 Well, the biggest compromise. That's a really great question. I've never been asked that question. I love when I've never been asked a question before. Those are great questions. So I made a compromise-- I'll talk about inside the business, and this is interesting because it turned out to be a great thing. So David, who's my business partner-- I'd had two partners originally in 37signals and then they both left, and so it was just me. And taking on another partner was a compromise in some ways, because it's, to me, like, "I'm running the show now, and now I'm going to bring someone else in and someone else's opinions are going to matter at that level." So it was like--

David Kadavy 53:19 And David, by the way, could be called a contrarian thinker as well, right?

Jason Fried 53:24 Absolutely.

David Kadavy 53:25 So lots of opportunities for you to disagree.

Jason Fried 53:27 Yeah, and we do disagree. We still disagree deeply on certain things. We agree on most things, and then there are some things that are on the edges that we disagree on deeply, which is really healthy, and that's my point. Sometimes it feels like I have to give-- it would be easier if I could just do whatever I wanted, right? But the company wouldn't be better, and that's what I've come to realize, and I realized it pretty early. I'm just talking about the moment of thinking on taking on another partner, again, was this moment where I have to make compromises, and it turns out that compromises are actually really damn good things to make sometimes. But at the time I just remember thinking, "I've got it all now." And this actually includes ownership in the company. I owned a 100% of the company, and David came on as a partner and now he owns a piece. He owned more and more over time. Looking back on it, it's one of the best decisions I've ever made, but I just remember, going back, thinking about--

David Kadavy 54:28 It was a point of tension, right?

Jason Fried 54:29 Yeah, absolutely. Internally.

David Kadavy 54:30 It could have gone either way.

Jason Fried 54:32 It could have gone either way. Also, I talked to my dad about it, and my dad's always been someone who's like, "Never have a partner in business. Never take on a partner because a lot of them dissolve and it gets really messy and horrible," and I've been really fortunate to always be able to work with great people. But this is not a compromise I've considered recently. I'm thrilled with how things have turned out. But I just remember at the moment really feeling like I'm taking--

David Kadavy 54:57 And the two of you had worked together before that point. It wasn't just blindly going into this partnership.

Jason Fried 55:02 No. Yeah, we'd worked together, and I actually encourage people to do that. I hired David--

David Kadavy 55:06 Like dating before getting married.

Jason Fried 55:07 Yeah, absolutely. And I hired David as a-- David was still in school when I first met him, and I hired him. He only had ten hours a week to give me as on a contract basis to build Basecamp. Actually, before that we were working on some client work together as a contractor, because we didn't have any programmers on staff and he was the first programmer I had ever worked with. This client hired us to build an intranet for them and we're like, "We can do the design," and they're like, "Well, we want you to do the back end too," and I didn't know how to do that. I found David, and he did it with us. Anyway, we had experience working together on multiple levels, but it's still-- like, the moment you decide to bring someone into your business, as the remaining founder, it's a difficult moment. Even though [crosstalk].

David Kadavy 55:58 I [?] it myself. I own 100% of my business, and it would be kind of agony to make a decision like that.

Jason Fried 56:07 Totally. And I think there's still times-- I'll speak for David. I'm guessing David feels the same way, that there's times David would just like to do things his own way and there's times I'd like to do things my own way. But the fact that we can't do that and we discuss these things with each other, we end up with something better. But there's also, of course, frustrating moments for everybody in every relationship. I mean, it's a relationship, right? And that's cool, but it is important, I think, when you-- I think a lot of entrepreneurs these days look for founders. They're like, "I need a co-founder. I need a co-founder. I need a co-founder." So they just go out and try and find one. You've got to date someone first, basically, for a while. I really think that's important. Because people are complicated, money is complicated, and people and money together is extremely complicated. There are few things in the world that are more complicated than that, and that's the kind of complication you're getting yourself into when you take on a partner in a business.

David Kadavy 56:59 Yeah, it's almost like this commodity approach to something that's so personal, or a person. Co-founders. Like, "Oh, I'm just going to grab some milk at the store."

Jason Fried 57:11 Yeah, it's not that way.

David Kadavy 57:13 "I'm going to go grab a co-founder."

Jason Fried 57:14 It's not that way. Especially if you're in a business 50/50 or something, like a lot of people do. They start out co-founder for 50/50. Actually, 50/50 is the worst number in business. There needs to be tiebreakers. But anyway, that's another topic. But anyway, as far as compromises - to get back to that - I think at the moment it was a major compromise that I had to get over, but I'm so glad that I did. But it was a big moment.

David Kadavy 57:41 Yeah. Well, that's a great one. I'm so flattered to have asked you a question that you hadn't been asked before [chuckles].

Jason Fried 57:45 I love that.

David Kadavy 57:47 I'm sure you've been asked a lot of questions. What was the last book that you read that changed the way that you saw something?

Jason Fried 57:52 A great questions too. I typically do not like business books. I find them boring and too long, but I read something recently which I don't even consider to be a business book. A book called--

David Kadavy 58:03 It doesn't have to be a business book, by the way. It could be about-- Adrian, who I talked to, said he read a book about ants.

Jason Fried 58:11 Totally. And I know that book, and he told me about it and it's on my list. But just being honest about it, the last thing I read that really changed my mind on something happened to be a business book.

David Kadavy 58:23 Got you.

Jason Fried 58:23 Although, actually there's-- can I give you two answers?

David Kadavy 58:26 Yeah, absolutely.

Jason Fried 58:27 Okay. So one of them was a business book called Turn the Ship Around, which is a wonderful book by this guy named David Marquet, who was a captain on a nuclear sub, and he was brought in to turn the worst sub in the Navy around. Like, turn it from the worst sub in the Navy to the best, and the way they measured this was sailor satisfaction, people who wanted to sail on that ship again. There's a variety of things. I don't remember all of the details, but it was like-- let's say there was 100 of them. It was number 100. The worst.

David Kadavy 58:56 Yeah, wow.

Jason Fried 58:57 And they brought him in to make it great, and he did it by doing something extremely contrarian. In the military it's all about orders. You give orders. Business is often structured a lot like military. The orders come from the CEO and we all follow the orders, right? And he realized, "Look, there's 800 people on this ship. I'm one of those 800. If I'm the one getting orders, then there's only one brain on the ship. It's mine. What a terrible waste to have 800 brains but only one of them has to work, and everyone else just does what I say. That is a waste." So he decided not to give any orders, which is something the military-- you don't do. It's the opposite of what you do. The only order--

David Kadavy 59:47 This sounds like a great book.

Jason Fried 59:47 It's a wonderful book and it's a great story, and he tells it. It's not a business book at all, by the way. It's not at all. But it's sort of like--

David Kadavy 59:54 Lots of parallels.

Jason Fried 59:54 Tons of parallels. But it's not a business book. He talks about how the only order he reserved for himself was the order to fire a weapon that could kill somebody. So if they had to fire a torpedo, that was still on him. Everything else-- what he did was, he said-- and it took him a while to make this work, which is what's really cool about the book is he is very honest about the failings of it initially. After he enacted the system, everything in his bones told him to step in and fix these problems, but he's like, "No, I got to let this settle out the way I want it to." Anyway, was that people were not-- so the way that it typically worked is people would come to him, and they'd say, "Captain, what should I do?" Or whatever it is, and he'd be like, "Turn this ship 30 degrees starboard," or whatever. I don't know. They'd be like, "Aye, aye captain," and they'd go do it. He'd give the order. But what he wanted people to do instead was to come to him and say, "I intended to turn the ship 30 degrees," and then he could okay that. But the point is that his okay would just-- they're already saying what they're going to do. They have to, in their mind, already know what they're going to do. They can't come to him to ask him what to do. They have to come to him and tell him what they intend to do.

David Kadavy 61:12 They have to go through that whole mental process of taking it through which is--

Jason Fried 61:15 "Because if he says yes, I've got to do this now."

David Kadavy 61:17 Yeah.

Jason Fried 61:16 "And I came to him with the idea." So he got people to come with intent--

David Kadavy 61:20 Accountability there.

Jason Fried 61:21 Totally, and think it through and come with intent.

David Kadavy 61:25 And ownership [crosstalk]--

Jason Fried 61:25 And that changed everything. Totally. And they started thinking. It took a while because it was weird at first, and this is part of the thing, is whenever you enact something new at a company, it's very easy to fall back on, "This isn't going to work. This is too weird." But he talked about the process of getting over that and giving it space and distance to see if it would work, and it turned out that it worked and became the best ship in the navy.

David Kadavy 61:47 That's a great recommendation.

Jason Fried 61:49 It's a wonderful book.

David Kadavy 61:50 I will read that book.

Jason Fried 61:50 He's a wonderful writer and a very honest storyteller. So there's that book, and the other book is a book which has the cheesiest cover ever and also a very cheesy title. It's called the Mayo Clinic Guide to Stress-Free Living, and it's like the cheesiest-- the book cover is someone doing a cartwheel in a field.

David Kadavy 62:09 Stress-Free Living.

Jason Fried 62:11 It's horrible. But it's this guy--

David Kadavy 62:13 Made by the Church of Scientology?

Jason Fried 62:14 It looks like it would be, but it's actually the Mayo Clinic, which is like the world's best hospital. This guy who wrote it is a doctor there who sort of unlocked a couple of really interesting truths about the brain and how to reduce stress in your life, and it's fascinating. It changed my life in terms of-- I haven't mastered the techniques, but they've influenced me greatly. The number one thing I'll tell you about it is that basically there's a sense-- what he's realized - and different religions and theologies have come to similar conclusions, but he's trying to make this very practical - is that there's two modes of the mind. There's the default mode and the focused mode. The focused mode is when you're working. He talks about when you're really into something, it's all you're thinking about, and you're cruising and you're nailing it, right? But when you're not focused and you're wandering, your mind tends to wander towards worry. It tends to wander towards-- you start having these thoughts in your head about the things you should be doing, the things you're not doing, and, "What's going to happen if I do this?" And, "Oh my God, global warming. We're all going to die." You just start-- because evolutionarily, you're programmed to do that, because if you just--

David Kadavy 63:31 It's amygdala taking over.

Jason Fried 63:32 Yeah. It's like, "There's a tiger who's going to kill me, and I've got to be wary." But he's like, "In the modern world, most people don't have those things anymore." We're pretty safe. Not everywhere, but most places. So you've got to get your mind off the default mode, which is the wandering mode, and back into focus. So he helps you figure out ways. Some people do meditation. He's like, "Meditation's a wonderful thing if you have all this time to commit to it, and learn and really master it--"

David Kadavy 63:59 Is that something you've tried?

Jason Fried 64:00 I have, and I've never been able to do it very well. So this really spoke to me, because he's like, "I think meditation is a wonderful technique, but it's not a practical technique for most people." In fact, a lot of meditation's about just letting your thoughts come and go, and that's when you have a lot of the bad thoughts. It's very hard to really, really master that technique. So anyway, I'm not going to get into deeply, but the book's wonderful. It's really, really approachable, and there's just some really good fundamental things that have sort of changed my way of dealing with those moments when I race towards bad thoughts, how to deal with those in a practical way. Anyway, those two books I highly recommend.

David Kadavy 64:39 This is my first time asking this one. Do you make your bed?

Jason Fried 64:44 No. I sometimes throw my bed. Like, I kind of just flop the sheets so it looks made up. But no, never been into that.

David Kadavy 64:57 Just, one of these things I'd heard over and over again is, like, "You should make your bed," and I started doing it.

Jason Fried 65:06 It's like a thing you just--

David Kadavy 65:08 It's one of these things I never did when I was a kid because it was like, "It's such a waste of time, mom. I'm not going to make my bed."

Jason Fried 65:12 The reason why I don't do it is because I don't like made beds. When I go to a hotel the first thing I do is I tear the bed up. I don't like them--

David Kadavy 65:20 I kick sheets from under. I hate having my feet trapped.

Jason Fried 65:22 Me too. I don't like things tucked in and tight that way. I like it to be semi-presentable on a certain level, but I don't go through the details. I certainly don't tuck things in.

David Kadavy 65:34 Yeah. You maybe flatten it out a little bit or something.

Jason Fried 65:36 A little bit. Sometimes, but not all the time.

David Kadavy 65:38 So it's not all just a bunch of--

Jason Fried 65:39 A flop. Yeah, floppy.

David Kadavy 65:41 Yeah, just flop it. When have you left money on the table?

Jason Fried 65:49 All the time.

David Kadavy 65:50 And what did you get in return? I guess the question I'm really asking is, what sort of values have you guided-- because money is a certain value, and then there are other values. What are the values that have guided your decision making?

Jason Fried 66:06 I've never ever been someone who's been interested in squeezing the last dime or penny out of anything. I don't find that to be interesting at all. I don't find extreme optimization to be interesting, like, "How can we move the numbers by .5%? Because there's money out there that we're not--" That doesn't do it for me, and also I feel like there's a moment where - this is very non-scientific - you're doing well enough. It's about enough. And we continue to make efforts to grow the business revenues, and we always have every year. Our revenues are higher than the previous year. Our profits are greater than the previous year. I'm a fan of that level of growth, but I'm not a fan of trying to bust our ass to make 10% growth if naturally we can just do 8. If we can just do 8, I just don't need 10, you know what I'm saying? I just don't need that, so--

David Kadavy 66:57 That last 2% is what ruins your life [chuckles].

Jason Fried 67:02 Exactly, and so I've just realized that, "Hey--" I'm just making numbers here. "If we can do 5% growth, I'm actually pretty happy with that." We do more than that, but what if we did just do 5% every year forever? That's pretty damn good still. That's wonderful. Fine. What if we could do 20% with a simple change? I'd love that, but I'm not gonna bust my ass to try and go from 5 to 6. That just doesn't interest me. So those kind of things don't interest me. What interests me is having-- I do believe in creating cushion. So I do like to have room. I don't like to feel like we're so tight that payroll would be a problem. That is something I've never had to deal with, and I don't want to deal with that. So I always want to create very healthy margins and lots of room to try to experiment and not struggle through those things. I've always worked that way, but I've never looked at the numbers and felt like I need to move the numbers in a meaningful way by squeezing. So I'm not a numbers-driven CEO in terms of like, "There's got to be a way to pick up more," but I'd also think that there is plenty more to pick up, and I'm interested in picking it up as an exercise, but not because I feel like we must. That's kind of how that happens.

David Kadavy 68:32 What do you feel like you get in exchange?

Jason Fried 68:33 By the way, I'm also big fan of just profit. So getting back to that, numbers for me have never been about top line growth or revenue. It's about profit, because profit to me is food, air and water for a company and it allows the company to continue indefinitely, and that's sort of what I want. Revenues do not do that, profits do. So I'm very big in the profit generation and not just trying to grow. Companies are like, "I want to get to $700,000,000 in revenues so we're worth $44,000,000,000." If they're only making $3,000,000 off all of the effort that goes into making [?], that doesn't interest me. Anyway, that was just an aside there, but I forget what else you were saying.

David Kadavy 69:15 What do you feel like you get in exchange for leaving that money on the table?

Jason Fried 69:19 A lot less stress. A lot less worry. Those things. And also just, I think, time back, and also a focus on more important things, like taking care of people. We do a lot of really interesting things for employees here that, if I was financially driven, I couldn't justify these expenses. We do some very expensive things for employees. Above and beyond salary, above and beyond benefits, but just other things. I don't need to go into them specifically, but they don't make sense from a financial standpoint, but they make sense to me as someone who wants to create great experiences for employees who spend their days working for me and I get to work with them. So those are the things you get when you don't worry about those other things.

David Kadavy 70:16 Do you have a final message for our listeners? Any parting words that you'd like to give them?

Jason Fried 70:22 Well, tell me about the listeners. Who are the listeners? Tell me about the audience.

David Kadavy 70:26 The audience. Well gosh, I don't know. You've really stumped me with that question, Jason [chuckles]. You know, I'm bringing in people like you, and the reason why you're going to be the first guest on this podcast is because you're somebody who has played by your rules and you have very clearly worked to achieve your own definition of success, which the evidence abound in this interview, I think. I'd like for people to see, through you, parallels in their own life. Not for them to do the same thing that you're doing, but for them to give themselves permission to listen to whatever contrarian voice might be in their head or whatever new way they might have of seeing something, and to give themselves permission to go forth with it.

Jason Fried 71:22 If that's the sort of the goal of the show, I think the most important thing - and it took me a while to realize this in my own life - is just to be completely true to your self and recognize that you've got to get to know who you are and then you've got to just live that life. I don't mean give up. That's not what I mean by, "Just live that life," but what I do mean is that if you believe in doing things your way and it doesn't compute with the rest of the world, do things your way, because you know yourself and that's how you want to live. If you want to take a certain chance and everyone else thinks you're crazy but you believe in it, then do it. You really have to get to know yourself and answer to yourself, versus letting other people define your own limits and your borders. It's a little self-helpy, which I don't like about it, but it's really true. You've got to get to know yourself. Something I hear from people when I speak, they're like, "Oh, I want to be like you guys." I'm like, "No, you don't. You want to be like you." You want to be like you, because acting is hard. Acting makes you have to hold a bunch of things in your head about a different state of the world that is not natural to you. Once you stop acting, then everything becomes a lot easier. You may succeed and you may not, but at least you're being honest and true to yourself. That is the most important thing.

David Kadavy 72:49 I can totally relate to that because I know, sitting across from you, you're somebody who I followed online for so long, and I was always watching what you were doing, and reading what you wrote and things. Eventually I had to find my own way of doing things. I know I'm not Jason Fried. I'm not going do things the same way that Jason Fried does things.

Jason Fried 73:08 Yeah, and you shouldn't. You shouldn't. You should do things the way you do things. I think there's a lot of copying in our industry. I think there's a lot of people who try to be someone else. This is probably not even just in our-- I think this just in the world, right? I think the earlier you realize that acting and playing a part is really hard but being yourself is really easy, then you should take the easier road. There's nothing wrong with that, and it's actually the more honest road, and I think that you'll ultimately be happier at the end of the day. So that's my advice to people.

David Kadavy 73:43 That's great parting wisdom for everybody. Thanks so much for meeting with me. It's been a huge honor, and I think it's going to be a huge help to a lot of the listeners out there. Thanks so much.

Jason Fried 73:54 Thank you. Let me say this, too. I think your show has a lot of legs, because you're a really good interviewer, and you have really good, deep questions and original questions. So I'm really excited to hear all your future interviews.

David Kadavy 74:05 Hearing that from you is fantastic. Thanks so much, Jason.

Jason Fried 74:08 You bet. Thanks.

[music]

David Kadavy 74:17 So there we have it. Before I go I've got to ask, do you like books? If you do, I'd love to send you my book recommendations. About 90% of them will be nonfiction on subjects spanning from biographies to neuroscience. Just go to kadavy.net/reading/, and make sure you put one more trailing slash on the end of that URL. Sign up, and you'll get my first set of recommendations right away. You'll be supporting this show if you buy any of those books through the links in the email. This has been Love Your Work, and I'm David Kadavy. The theme music for this show is See In You, performed by the Album Leaf, courtesy of Sub Pop Records. Love Your Work is a production of Kadavy Inc.