[BidClub_]
David Senra · · 102 min

DHH: How to Build a Profitable Company Without Losing Control

David SenraDavid Heinemeier Hansson

YouTube
TL;DR
  • DHH's core thesis is that constraints—not resources—produce great products, and AI acceleration is now the biggest threat to that discipline. The first Basecamp was built in 380 hours on 10 hours a week; today "you can build a monstrosity" with 10 agents in the same time, so the builder's job shifts from shipping to "killing our darlings." His self-diagnosis is the tell: "I don't trust myself... if you have unlimited time, unlimited money, and unlimited people, you're going to build a blob."
  • Finished software is a real, underpriced business model: the Basecamp version launched in 2004 and discontinued in 2010 still throws off millions in nearly pure profit. Customers treat it like DHH treats his Brother HL-2340DW printer—"I'm not in the market for a better product. I'm in the market for the product I already bought." Highrise, frozen with no version two, remains a multimillion-dollar business under 37signals' "until the end of the internet" promise.
  • DHH publicly reversed on AI after Tobi Lütke "nerd sniped" him out of his autocomplete-era skepticism—and says Shopify's internal tooling is ahead of anything commercial. Tobi wrote an internal memo in '23 or early '24, "way before agents," calling the big switch; from the Shopify board DHH now sees tools like Scout (AI over customer feedback) and Rover (agents opening PRs) and begs, "Can you please commercialize this?" His meta-lesson: conviction comes from touching the tools, not reading about them—"like trying to learn how to drive a race car by reading a book."
  • The incumbent-threat model: never fear the behemoth, fear the team of two. "Microsoft is going to produce the kind of software that takes 50,000 people to make"—the resource curse explains multiple versions of Outlook, Jar Jar Binks-era Lucas, and VC-funded "crap software," while seven-person 37signals shipped a product a year by 2007. His open question: does that still hold "when a much smaller team can act as a much larger company? I'm not quite sure."
  • The 20-year "out-teach your competition" go-to-market is showing cracks because algorithmic feeds broke the reciprocity loop. "My followers don't see anything I post unless it goes medium viral," which is why he now favors podcasts and newsletters—non-algorithmic, direct-to-subscriber channels. He'll keep teaching regardless: "I choose to believe that. I don't actually know if it's true."
  • The Bezos anecdote is a case study in non-VC capital: in roughly 2005, Jason and DHH sent a "flippantly... almost offensively overvalued" term sheet expecting a no—and Jeff took it. The money mattered less than the confidence ("there's self-confidence and then there's Jeff telling you, 'No, you're right'"), and it let them refuse the roughly 40 VCs circling; Bezos still gets quarterly dividend checks and has been paid back "many, many, many times over."
  • The 2021 politics-at-work blowup led 20 of 60 employees to accept an offer of up to six months' salary—and DHH calls it "the best money we've ever spent on anything related to culture, maybe anything at all." Tobi connected him to Marc Andreessen, a prominent VC figure DHH had criticized at times, who supplied contacts, solidarity, and a syllabus tracing wokeness to Marcuse and the Frankfurt School's "long march through the institutions." Cost discipline runs through everything: he quotes Carnegie—profits are cyclical, but "any savings achieved in the cost of goods were permanent."
  • The endgame he's articulating is a hierarchy of independence: no investors, then no board, then—the final transcendence—no customers. Omarchy, his omakase Arch-plus-Hyprland Linux distro built over thousands of hours, is the prototype: he says people who want to give him ill-considered feedback have to pay him, while open-source contributors can form "a little club." 37signals is "quite likely my last business"; he says retirement would be "a retirement from capitalism," after which he'll keep shipping without customers' claims on his time.
Digest · the substance, structured for research

1. Brevity was the original product—and it doesn't come free anymore

  • DHH opens with self-skepticism about his own long-windedness: Getting Real (2006) chapters were half a page, "some of them are three paragraphs," and that came "straight from the gut." By Rework, brevity required violence—they submitted 50,000 words, cut it to 25,000, and the publisher "freaked out... we can't publish a business book that looks like a pamphlet," padding it with margins and illustrations. The cut, he insists, is what "made it all happen."
  • Senra's counter: writing should optimize for brevity, but conversation shouldn't—the best conversations run five hours, which is why he wanted DHH on the show after remembering unfiltered lines from a roughly 2008 Startup School talk 15 years later.

2. Constraints built Basecamp; AI just removed them

  • The founding constraint as told: Jason Fried hired DHH at $15 an hour ("I got paid in Apple gear... an iPod and a MacBook"), with 10 hours per week—"not per day, per week"—and the entire first Basecamp version shipped in 380 hours. Their original tagline was "Less software." "The first version was awesome because of that."
  • With AI acceleration, "if you have 380 hours together with your 10 agents, you can build a monstrosity... that bloat just comes naturally in a way it didn't before." On Basecamp 5—the first version built with AI acceleration—designers took features to completion and the founders had to pull them at the cusp of shipping: "if we keep expanding that balloon, it's going to pop" and destroy the one thing customer surveys say keeps people choosing Basecamp, that it is simpler than the competition.
  • The confession Senra stopped him on: "I don't trust myself. I don't trust us. I don't trust Jason... if I can do everything I want at very little cost," the selection process dies. "If you have unlimited time, unlimited money, and unlimited people, you're going to build a blob."

3. Fear the team of four, not the behemoth—the resource curse in software

  • Why Microsoft never scared him in 2004: "Microsoft is going to produce the kind of software that takes 50,000 people to make. Because that's the size of their organization." The real threat was "a team of two... a team of four" operating under the same constraints. The joke about multiple Outlook versions is the resource curse made visible: "It's not a blessing, it's a curse." His honest hedge on whether this still holds when small teams can act large: "I'm not quite sure."
  • The cultural evidence, as told: the first Star Wars still looks incredible on a big screen, while Lucas with 100 times the budget produced "whatever Jar Jar Binks was"; shoestring Terminator "beats Avatar by a thousand times" for DHH because constraint forces a tight story.
  • This grounded his early VC skepticism: people raised enormous money, hired hundreds, and produced crap, while seven-person 37signals ran Basecamp and launched a product a year by 2007. Without the narrow funnel forcing "out of the 100 things customers are asking for, I can do three—damn, they better count," headcount can become anti-product.

4. The printer thesis: software should be allowed to be finished

  • The Brother HL-2340DW is his model customer relationship: plugged in, worked, no firmware drama, and he wants it identical in 10 years. "I think about my relationship to the printer every single time we move things around in Basecamp"—a huge contingent of customers bought a solution once and never wanted anything to move again.
  • The commercial payoff of honoring that: instead of forced upgrades, 37signals kept its old versions alive. The 2004 version, off the market since 2010, "is still making millions of dollars... in profit because there's basically no expense to it"—and those customers do not bother the company much. Basecamp 5 feedback proved the point again: "Why did you [mess] with my printer? Yesterday the button was here on the right."
  • The envy underneath: a knife or an album ships finished, but with SaaS "if you don't upgrade in like 3 months, you're like, 'Is this dead?'... Can you appreciate just what you have?" Hence Highrise—their second-biggest hit, a CRM neither founder used—frozen but running as a multimillion-dollar business under the promise to keep it "until the end of the internet... or as long as we're in business, whatever comes first."

5. Built for solitude: the builder's schedule, the clean desk, productive procrastination

  • Asked to imagine a 16-hour waking day, DHH says at least half is alone; 37signals' 60 people meet twice a year for a week, and by the end he'd "quit and live as a hermit in the forest rather than work with them 365 days a year in an office." His career "only took off when I could close my door"—open offices flattened his productivity, and Remote (2013) predated the COVID cycle he watched reverse ("oh, I guess we still have that 10-year lease").
  • He concedes the typology: many leaders and entrepreneurs thrive on interruption; he lives in Paul Graham's builder mode, where "a 45-minute chunk" is worthless but "if I have 4 hours, okay, now we're talking." He could stomach exactly three runs of the 8-hour Building a Basecamp workshop before the scripted repetition made him want to "blow my brains out."
  • The viral clean-desk office is the same principle—mess consumes his mind—and his tools are "functions of procrastination": "I have a thing I need to do... but first I'm going to design a wrench from scratch so that I can put that damn table together." Ruby on Rails, by his account, is part of that productive procrastination.

6. Tobi Lütke nerd-sniped him out of AI skepticism

  • DHH's starting position: early AI coding was autocomplete—"this pestilent coworker who's like, 'Let me drive'... It was the open office on steroids." He locked in on that and missed the trajectory; Tobi didn't, writing an internal Shopify memo "in '23 or early '24, way before agents doing the work on their own," saying "I've seen it. This is the big switch... we need to be a very different company."
  • The racing metaphor they now share on track: "the difference between a great racer and a mediocre racer is very often where they look... you go where you look." Tobi's eyes were further up the road, and DHH admits genuine frustration "on my own behalf that I did not have the same conviction as Tobi did, as early as he did"—"I'm still not entirely sure, like, what did he see? Why didn't I see it?"
  • From the Shopify board he now sees the fruits: Scout, which digests customer-feedback channels so product managers can query anything ("Damn it! I want to buy this. Can you please commercialize this?"—"No, we just kind of built it for ourselves"), and Rover, the system for employing agents to do work and open PRs. "Everyone is working toward that. Shopify's already there"—remarkable for a 7,000-person, 20-year-old company sitting on the problems of "15% of world GDP on e-commerce."
  • The mechanism of the mind-change matters: not essays but shame plus contact—Tobi's repeated nerd-sniping led him to install things such as Pi and OpenClaw, as heard, until instinct formed. "You can read a write-up... but it's kind of like trying to learn how to drive a race car by reading a book."

7. The counter-snipe: leaving Apple for Linux

  • DHH repaid Tobi on Linux. After more than 20 years as "completely a Mac head," Apple's conduct made continued spending untenable; Windows got two weeks ("man, I can't do it"), Linux got five minutes before he thought "maybe I can do this," then two weeks before he burned the boats.
  • The unlock was r/unixporn—nerds spending hundreds of hours making Linux "look like it was made for a hacker movie." His inference: "if these nerds individually are able to make Linux look this cool, if I just take it back 20%... and bake it all into Linux, we can make something that's competitive with the Mac." Stock Linux desktops had looked to him "like a cheap copy of something Redmond would have made—and that was already crap."

8. A pseudonymous Polish kid beat a trillion-dollar company

  • Three-quarters of unixporn was using Hyprland, a tiling window manager built by Vaxry—a Polish "cracked kid," now roughly 22, who started it at 18 or 19, with a handle and an anime avatar. DHH's delight is the throwback to the warez and demo scenes of his youth (his own handle: Webster)—and the punchline: against "one of the top five most valuable companies in the world... 40 years of history, unlimited resources, unlimited people," the cracked kid from Poland can still beat them. "Absolutely amazing."
  • The design argument underneath: Apple and Windows remain stuck in the original Xerox mouse-and-windows pattern—great for learnability, "a terrible tool" for productivity. Keyboard-driven Hyprland demands investment, but "it's just like putting on a goddamn wingsuit, and you go 200 miles an hour, and there's cliffs all around... you have to internalize it."
  • The historical irony he savors: Ballmer called Linux "a cancer" in the early 2000s; today it is roughly 40 million lines of code running on billions of devices, everything embedded and everything server—"the one final thing it hasn't cracked is the desktop. And I just go, why shouldn't it?"

9. Omarchy: the omakase computer

  • The name fuses omakase, Arch, and Hyprland. The omakase philosophy: "There are people in this world who have spent more time than you getting really good at figuring out what quality is... sit down and hand over your sovereignty for this meal." Most people can't articulate what they want but recognize quality instantly. His favorite illustration is the American construction-kit burger that baffled him arriving from Denmark: "Am I supposed to put it together myself?... No, you don't know [anything]. Let a chef prepare the food for you."
  • The obsession ran on his stated affliction—"when I see something that's not quite right and I have the power to fix it, nothing else matters until it's perfect"—thousands of hours of pick-it-up, fix-five-things loops, no roadmap. Same pattern as Ruby: find an obscure thing with the right vision, build the tooling, invite everyone in.
  • His productivity indignation is quantified: a new Mac took 42 minutes to set up; Omarchy installs from a USB key in about 2 minutes. "Shitty tools, shitty setup processes—we're robbing the world of progress... apply that trillion hours towards productive outcomes and, I don't know, we'd have flying cars by now."

10. Don't ship the Temu version—the best ideas sound stupid first

  • Before Omarchy he built a tweaked-Ubuntu predecessor, likely Omakub, that mimicked Mac/Windows familiarity—and identified the misconception: "if we just make it as close to Windows or Mac as possible, then they'll come. But no, they won't. Why would you want the Temu version?... Most people just want the best thing." Free-software idealism moves "0.001% of the population."
  • So Omarchy is deliberately alienating—no icons, a 15-key-binding cheat sheet, "here's your syllabus, sit down and study, boy"—and it took off. The generalization: "all the best ideas that actually turn out to have an impact sound stupid at first... that's where all the value has been locked up." His example: the McLaren 720S's sunken headlights, which he first thought "the ugliest car I've ever seen at this level" and now ranks among his favorites. When feedback says ugly and unworkable, "I'm more into it."

11. Out-teach the competition—a strategy now cracking on algorithmic feeds

  • Kathy Sierra's line—"the best way to market is to out-teach your competition"—"built all of 37signals," and Senra adds that it helped build his first podcast, which in turn helped build this one: "if you could buy that idea, it's worth tens of millions of dollars to me." Against Microsoft, 37signals could never outspend, "but we could out-teach them"—Gary V's jab, jab, jab, right hook, free insights and open source with an occasional "and now we have a new version of Basecamp." Senra's overlay is Munger: the ever-present human desire to reciprocate.
  • DHH's caution, hedged exactly: "I choose to believe that. I don't actually know if it's true... I'm starting to see some cracks." The human link isn't broken; the algorithms are—"my followers don't see anything I post unless it goes medium viral." Hence his affection for podcasts and newsletters, where subscriptions put content directly in a feed or inbox. He'll continue regardless—and Senra announces they are starting to use Basecamp for the show: "these are my guys. I'm just going to use their thing."

12. Beyond no-investors: the transcendence of having no customers

  • Senra's diagnosis of what actually drives DHH—not money but "a fierce desire, almost a need, for control and independence"—gets a flat "Yes," plus a ladder: no investors is one level of freedom; no customers is higher. The economics of ill-considered feedback: "You looked at this for 5 minutes. I spent 4,000 hours... If you want to tell me ill-considered feedback on anything I make, you got to pay me." A paying Basecamp customer earns a genuine thank-you; someone who takes the gift owes "a modicum of respect." Open-source PRs are the collaborative exchange: "Now we have a little club. Let's make this amazing together."
  • The disclosure with a timeline: customers get "some claim... in aggregate" on what he does—"a tolerable exchange"—but "37signals is quite likely my last business," and retirement "will actually be a retirement from capitalism," after which he'll keep making and sharing "without any claim other people have on my time."

13. Capitalism works—and the Lamborghini is a moral obligation

  • Against tech's money-shyness ("they pretend"), DHH argues successful builders have "some obligation... to show that it did work"—the visible carrot. And a second-order duty: "it is your moral obligation to buy a Ferrari if you do really well... send some of that money to the craftsmen of Italy. We would not have Ferraris to pine for if no one bought them." Kids' revving response included: "there's just an instinctual human attraction to beautiful things that make noise. Why would you be ashamed of that? Unless you feel guilty about how you made your money." He flags his own possible post-rationalization, then sets it aside.
  • The lifestyle-business jab gets its definitive answer: 37signals was built in Chicago when nothing was happening there, on 40-hour weeks, long-term thinking, and profits taken out rather than valuations chased. "Yeah, I have a business and a lifestyle. What the [expletive] do you have?" Senra's earlier framing: "the guy started out making $15 an hour and now he's driving a $15 million car... which lifestyle do you want?"
  • The cost gospel, via Senra's Carnegie quote ("profits and prices are cyclical... any savings achieved in the cost of goods were permanent"): revenue is outside your control, expenses aren't. DHH admits he "shouldn't have to worry about a $2,000-a-month recurring expense," but striking the line is a joy he never predicted—"if you tell my 18-year-old self, 'you're going to love going through expense reports,' I would have said that sounds like an accountant." Overhiring, in his frame, "robs the world" of people who could be productive elsewhere.

14. Bezos bought a ridiculous term sheet—and sold them confidence

  • Circa 2005, roughly 40 VCs circled post-Basecamp-launch; DHH, scarred by the dot-com bust and distrusting his own resistance to "a $20 million check... at a time my bank account said $8,000"—he'd landed in the US with roughly $50,000 and immediately blown it on a cash Audi S4—wanted none of them. Bezos was different—a builder, not "just a money person," and the polar opposite in method: "let's just raise all the money in the world and I don't care if we don't make anything for 20 years."
  • They sent a "flippantly... almost offensively overvalued" term sheet expecting rejection. "And then he took it." He's since been repaid "many, many, many times over," still owns Block, and gets a dividend check roughly every quarter.
  • The real asset was psychological. Annual dinners ran: "Here's the situation." "What do you think?" "I think we should do that." "That's a good idea. You should do that"—"it almost sounds like it doesn't have any value, and it actually had all the value in the world... there's self-confidence and then there's Jeff telling you, 'No, you're right.'" His stated regret: not being more grateful—without Jeff, "some VC would have given us a massive check... it would have destroyed the business and we would have been miserable."

15. The 2021 purge—and Marc Andreessen's surprising rescue

  • "Peak woke insanity era": an activist minority pushing the company as "a vehicle for their political aspirations," founders "boiled like a frog" from roughly 2018 until, by 2021, "this could eat the entire company." DHH even contemplated retiring—"which is preposterous. I still like what I do." The fix: a memo banning politics in work channels ("we're not going to settle the Palestine question inside the same space where we're discussing features in Basecamp"), then doubling down with an offer of up to six months' salary to leave—in a booming job market, "almost a mega bonus for getting out." Twenty of 60 took it; "the best money we've ever spent on anything related to culture, maybe anything at all"—it "didn't just cut out surgically that bit of cancer, it cut out a thick ring around it."
  • With a third gone and worry about keeping the lights on, Tobi connected him to Marc Andreessen, a prominent VC figure DHH had criticized at times, who supplied context—this was happening across portfolio companies—operational contacts they ultimately didn't need, and fortitude against "40,000 people on Twitter calling you all the worst things in the world": "we're not going to grovel. We're not going to apologize. We're not going to revert." Old grievances "were actually minuscule. We were fighting the White Walkers on the other side of the wall."
  • Andreessen also handed him a syllabus: wokeness wasn't "lightning from a blue sky" but the "long march through the institutions"—Herbert Marcuse, the Frankfurt School, 1960s designs on a decades-long timeline. Understanding the history reframed their stand as "chipping in to the great civilizational battle" rather than defending one small company.
David Heinemeier Hansson

I have a mild skepticism about my own ability to talk at length about most topics that I care about because I remember Getting Real from 2006—the brevity. We were so brief. All the chapters in Getting Real, most of them are half a page. Some of them are 3 paragraphs. I actually have a deep appreciation of our former ability to be that succinct.

It wasn't like we were trying to. It was just, “Here's the distillation of this idea down to these 3 paragraphs, and that's it.” What's funny about that is that when we wrote the later books, we didn't have that straight-from-the-gut brevity. In fact, when we wrote Rework, the initial manuscript that we submitted was, I think, 50,000 words. That was what the publisher got to see, right? They were very excited: “Great, this fits. This is just the size of the book.” Then Jason and I went through it and cut it in half. It was down to 25,000 words, and the publisher freaked out. They were like, “We can't publish a business book that looks like this. It looks like a pamphlet.” So we had to pad it with spacing, margins, and illustrations to get it to that size.

But it was really that process—cutting it from 50,000 words to 25,000 words and taking some essays from 2 pages down to 4 paragraphs—that made it all happen. I want to retain that ability to distill. Sometimes, just being mechanically able to talk for 20 minutes about a topic isn't always the best thing.

David Senra

I would say the brevity—obviously, we talked about this at dinner last night. I woke up with my abs sore because I was laughing so much. I've been reading your writing for 15 years, so, yeah, with your writing, brevity is the right thing to optimize for: getting across your point in as few, succinct ways as possible.

But it's not the same as the art of conversation. The best conversations that you've ever had in your life aren't, “Oh, yeah, I talked to this guy for 5 minutes. It was great.” It's, “I talked to this guy for 5 hours.” And so this is why it's so important, and why I wanted you on the show immediately. We were working together to figure this out for a few months. I remember watching you at Startup School and Y Combinator. You probably did it in, like, 2008, and there are lines from that because you were unfiltered. I think it was about an hour long of just, “This is what's in my mind right now, and here's how I think about things,” that I still think of 15 years later.

Let me ask you a question. You've built so many different products. I've lost count of how many of them have made millions—multi-millions in profits, tens of millions, maybe hundreds of millions in profits. Do you apply that ruthless edit, like Rick Rubin's idea of a ruthless edit? You start out with 10, cut it down, think you need 5, then cut all the way down to 3, and are very judicious about what you add back? How do you think about that when you're building products?

David Heinemeier Hansson

It's even more on our minds now than it used to be, and it was always on our minds. Our initial spiel, our tagline, was “Less software.” When we launched Basecamp back in 2004, it was often contrasted with Microsoft Project and other heavy, enterprise-y tools. Our pitch was always, “It's really good, but one of the reasons why it's really good is that it's just less.” There are fewer features, less to learn, less to teach—there's just less. We focus on making the few things it does do very well.

Now, in this new age, where using agents and AI has made it so much easier to implement things, it becomes that much harder to stick to those principles. We used to be granted these constraints simply by the fact that it took a long time to build things. Especially in the early days of Basecamp, for example, we built the entire first version—

I had 10 hours per week—not per day, per week—to build it. That is an enormous constraint on how you can do anything, because you can waste 10 hours really quickly just chasing things around or focusing on the nonessentials. We wanted to get that product out, and we got it out in 380 hours.

The reason I remember this is that, at the time, I was a contractor for 37signals. Jason had hired me at $15 an hour when I was in Copenhagen, Denmark, and he was in Chicago. By the way, I got paid in Apple gear. That was the other laugh. It was like, “Don't even send me the money. I will just come to Chicago, and you'll give me an iPod and a MacBook and whatever.” Anyway, that's how I got started, and therefore I know exactly how much time we put into the first version.

The first version was awesome because of those constraints. Now, if you have 380 hours together with your 10 agents, you can build a monstrosity that does a million things for a million people. That bloat just comes naturally in a way it didn't before. Therefore, our task as software builders becomes much more about distilling it, much more about killing our darlings—killing features that we think are good but are just too much.

I saw this especially with the new version of Basecamp, Basecamp 5. This is the first version we've been building with AI acceleration. Suddenly, we had designers who were able to take features all the way to completion, and we were at the cusp of shipping them when we started reviewing them and saying, “I'm not sure this actually fits. This is expanding the balloon here. If we keep expanding that balloon, it's going to pop in a way where we lose the central selling point of Basecamp, which is that it's just so easy to use.”

Sometimes you can have that as a high-minded, intellectual guidepost: “We want something to be simple to use.” Everyone says that, by the way. Anyone who builds software—or builds anything—is like, “Oh, yeah, our stuff is very easy to use.” It doesn't matter. If it comes from your mouth, it's not credible. But if it comes from the customer, it's very credible.

When we do customer surveys, simplicity is the number-one reason why people continue to pick Basecamp. It's simply simpler to use than the competition, and therefore it's a joy to get others onto the platform with them because it doesn't require training sessions or anything. That's gotten so much harder to do, even for us. I actually really like this notion of embracing constraints because I don't trust myself. I don't trust us. I don't trust Jason. I don't trust my own sensibilities that, if I can do everything I want at very little cost, I wouldn't do it.

David Senra

Wait, wait. Say more about not trusting yourself.

David Heinemeier Hansson

The constraints—“I don't have enough time, I don't have enough money, I don't have a big enough crew”—are what force that selection process. If you have unlimited time, unlimited money, and unlimited people, you're going to build a blob.

This is actually the reason why, when we got started, I was never worried about Microsoft. When we got started, everyone was like, “Microsoft is going to make Basecamp a feature of Project or Teams or whatever.”

David Senra

For context, in the early 2000s, when you started Basecamp, everybody was saying, “Why are you going to write the software program? Microsoft is just going to do it,” because they were the dominant player. It sounds crazy today, but, yeah.

David Heinemeier Hansson

It does.

David Senra

Yeah.

David Heinemeier Hansson

But our response was always, “Microsoft is going to produce the kind of software that takes 50,000 people to make, because that's the size of their organization. They can only produce that kind of software. I'm not worried about that.”

I'm worried, and still am, about a team of 2, about a team of 4, because they will produce software that's competitive with ours because it comes out of the same constraints. Therefore, our threat doesn't come from the behemoth.

Now, is that true today, when a much smaller team can act as a much larger company? I'm not quite sure. But I do know that I don't trust that, if I were running Microsoft in 2004, I wouldn't also have made the sprawling mess that is Microsoft Office. The joke today is that I think they have 4 versions of Outlook. They have Outlook New, Outlook New (Old), and Outlook New (2026). How do you end up with such a mess? By having unlimited resources.

It's a little bit like that resource curse, right? If you just have wealth springing out of the ground, you kind of don't need to bother with anything else, do you? You don't need to develop your economy, you don't need to develop your society. You can just sit back, relax, and let the money flow. It's not a blessing; it's a curse.

I don't trust ourselves to be able to channel that by default. This is why I'm quite skeptical about all this new AI acceleration we're having. Even for us, I think it's quite likely that we could use it wrong—to build too much software, to get too far away from less software and learnable software. It still has to fit in the mind of a human.

David Senra

Okay, I think that's a great point. I do think the complexity comes from the resources and your lack of constraints with success. I study a lot of the music industry because there are crazy characters, and I love crazy characters.

I heard something Rick Rubin said about the first time he ever met Jimmy Iovine. I've had both of them on the show, and I've become friends with Jimmy. Jimmy is a decade older than Rick, so he did basically everything before Rick, a decade before Rick did. Rick tells the story of the first time he met Jimmy Iovine. Rick was probably 19 or something. He goes in and plays music for Jimmy, and Jimmy's response was so surprising. He said, “Man, I wish I could still make something that simple.”

Rick said, “I'm sure you can.”

You have. So, even if he didn't make more money, the problem is you're iterating more, and you're spending more time on it. I was just listening to a podcast I did 4 years ago on the partnership between Ben Franklin and George Washington because it was July 4. I'm listening to it, and I'm like, “Fuck. One, this is good. Two, it's good because it's simple. It's because of what I left out of it. I think I'd fuck it up today.”

David Heinemeier Hansson

Yes. And I think I had that analysis quite early because I saw it in things like movies. The first Star Wars movie is just incredible. When you think about the technology they had in the mid-1970s to produce a space odyssey as timeless as that, it still looks incredible. You put it on a big screen today, and no one is going, “Oh, the effects look stupid.” No, they're going to go, “The effects look incredible.”

Then you look at what George Lucas did when he had 100 times the budget. He had all the computers in the world and all the staff in the world to produce whatever Jar Jar Binks was in the 2000s, and it was awful. That's exactly where that distrust of my own ability to handle increased capacity comes from. You can look at so many of the greats and go, “What they produced when they had nothing was truly spectacular.”

Another one I love is James Cameron. The first Terminator movie is one of my favorite movies of all time. It was made on an absolute shoestring budget, and it still beats Avatar by a thousand times. There are also people who like Avatar, and I'm sure James Cameron does. That's great. I don't. I like Terminator, and I like it because it's low-budget in a way that doesn't feel low-budget. It's constrained, so you have to tell a tight story with a real focus on just that action flow, and it's incredible.

It was exactly the same thing I was saying earlier, where I read chapters we wrote for Getting Real back in 2006, and I think, “Damn it. I wish they came out that brief by default today.” I have to work a lot harder now to be that succinct. I still want to. As we talked about, there are all of the formats where it's great to be able to pontificate, but in writing, having that brevity—and in software, having that ability to distill and say, “No, no, no, no, no”—is an incredibly rare gift. It can be spoiled so quickly by an influx of money.

This was one of the reasons why I was always so skeptical about venture capital when it came to software. I saw, time and again, people raise an enormous amount of money, hire hundreds of people, and produce crap software. I thought, “If we're able to produce Basecamp—and, by the way, by, I think, 2007, we had 4 major projects or products—we were launching 1 a year while we were also running Basecamp, while we were 7 people at the company.” My brain couldn't even comprehend, “What do you do with 100 people? How do you even apply them toward software to make it good?”

And the answer was, in many cases, “Well, you don't. You apply them toward software, and crap comes out because there is no funnel. There's not this narrow part that forces you to go like, ‘Well, I can't have it all.’” So now I have to figure out: Out of the 100 things customers are asking for, I can do 3. Damn, they better count.

David Senra

Tied to what you were saying last night, there's some benefit to almost not changing any software, and you compared it to the fact that you keep—

David Heinemeier Hansson

Yes. You buy the same printer over and over again.

David Senra

Talk about your relationship with your printer.

David Heinemeier Hansson

Oh my gosh. The Brother HL-2340DW. I think that's the model number of my beloved printer, and the reason why it's so beloved is that it was the first printer I ever bought that I just plugged in and it worked. There was no firmware. There was nothing. There was just functionality.

I just need black-and-white prints often because, for whatever reason, something needs a wet signature. So I can't do DocuSign or whatever. I print something out, sign it, and scan it. That's the job. I am not interested in anything else this printer could conceivably do. I just want that to happen, and I want it to happen consistently, exactly the same way, 10 years from now.

This is a solved problem for me, and I love the printer. Even though I'm not a mega-fan of Brother, it's not because it is some amazing piece of technology that's built in this beautiful way. No, it does one function, and I think about that and my relationship to the printer every single time we move things around in Basecamp.

I know we have a huge contingent of Basecamp customers who treat Basecamp like the printer. Once upon a time, they had a problem. Things were falling through the cracks. They weren't organizing well. They'd start the project on email and turn it into a mess, and they looked around. Maybe they got a recommendation from a friend. They signed up for Basecamp and went, “Yep, that's it. That does the job.” Now they just use it.

They don't want things to move around all the time. They don't want all the new features that we're so excited about because it solves the one job that they have, and that's enough. Now, you have to weigh that when you're making products with the fact that you also have to sell to new people. If you're trying to sell a product that looks like it's 15 years old to new people, that's a little difficult. But we've done it in multiple ways over the—

David Senra

Have you solved the problem? We've tried all the—

David Heinemeier Hansson

Options, but the one option I still really like was that we rewrote the whole thing 3 times. So there was the first version, which came out in 2004—

David Senra

Which people are still paying you from the old version?

David Heinemeier Hansson

Yes, that's exactly the point. So we rewrote it 3 times, but we kept the old versions. Normally, what always happens in SaaS and in software is that a new version comes out and everyone just has to get it. They're forced to upgrade to it.

David Senra

Yes.

David Heinemeier Hansson

And you actually feel like, “I've lost control here. I bought a thing that did the job, and now you're making me learn things.” The new version of Basecamp 5 is certainly better. It's a vastly superior product. I'm just not in the market for a better product. I'm in the market for the product I already bought. I don't want something different. I want the shitty thing I already have because I know all the ways it is broken, if it is, and I've made peace with that.

So for Basecamp, we kept those old versions. The version we launched in 2004—we stopped selling it in 2010. Sixteen years ago. We still have customers on it. As an individual business, it's still making millions of dollars.

David Senra

In profit.

David Heinemeier Hansson

In profit because there's basically no expense to it, right? There's no additional development. There's a little bit of maintenance; you just have to keep it secure and bring it forward and so forth. But it's basically pure profit because those people who've been using a product that's been discontinued for 16 years don't bother us very much. They're not like, “Oh, this thing—how do I use that?” No, they know how it works. That's why they keep with it.

The magical thing for me is that in that cohort, from 2004 to 2010, there's a ton of people who love Basecamp. I get this all the time: “Oh, we use Basecamp. I love it.” And I'll tell them, “Oh, did you try the new features?” They're like, “Oh, no, no, no. We use the old version.” I'm like, “How old?” “Oh, yeah, yeah, the original. We started in, like, 2008.” I'm like, “Wait, what? You haven't seen any of our good ideas in the last 16 years, and you're still over the moon about what we sell?” I think that's incredible.

Now, it has trade-offs, right? There are software products that just get stuck with their initial cohort. Then they just age with that cohort, and I think that's fine, but it also cuts you off from new customers. So, I want to have both things, and we do to some extent. We have 3 major versions of Basecamp.

That initial version, then we did Basecamp 2, which lived from 2010 to 2015—or 2012 to 2015, I think. Only 3 years. And then we have the current version of chassis, as we like to call it, that we've evolved twice, but it's still the one where we bring people forward.

David Senra

What's that word you just said?

David Heinemeier Hansson

Chassis.

David Senra

Chassis. That's what we call it. You know how car makers—oh, chassis, okay.

David Heinemeier Hansson

Yeah, okay.

David Senra

Yeah, I guess I was pronouncing it wrong.

David Heinemeier Hansson

It's sassy. It's a sassy chassis.

It's the original code base, and therefore we're bringing customers along with it. It totally has these trade-offs. We just launched Basecamp 5. I think it's an incredible version of Basecamp, the best one we've ever made.

A substantial amount of the feedback was, “Why did you fuck with my printer? Yesterday the button was here on the right. I just want to push that, and now you moved it somewhere else.” And I go, “I totally get it. I totally get it.”

I actually wish we had more capacity in software to accept finished products. This is one of my great envies of people who make physical products. By the time you ship, I don't know, a knife, it's done. There are no firmware upgrades and no patches. You may sharpen it over time. You may fix it if it breaks, but otherwise, that is a finished scope.

Same thing with movies, same thing with music. You ship that album, and it's done. I think there's something really beautiful about that. People intuitively understand that that's how it is with physical products or cultural products.

With software, they don't get it. With software, if you don't upgrade, especially SaaS software, in 3 months, you're like, “Is this dead? Is this out of business?” No, fuck, it's just as good as it is. Can we leave it for a second? Can you appreciate just what you have? That would be great.

We have a fair amount of that software because we've been in business for over 25 years, and we've created a bunch of things. I've always thought, “You know what? Not everything that we've ever made is something we're going to want to continue to evolve forever.” Fine, but we should keep it around.

This is one of the promises we've made to the customers we have: We're going to keep it until the end of the internet. That's our moniker for this. Either that, or as long as we're in business—whatever comes first.

Therefore, we allow someone who bought Highrise, for example, to keep using it. We made a CRM tool, a customer relations tool, that made millions of dollars—our second-biggest hit after Basecamp—that we ran for many years. Then, at some point, we were just done with it.

Neither Jason nor I ended up using it because we don't actually interact with that many people that we need to keep track of things. It had this core user base who were super happy with it, and we're still running it for them. It's still a multimillion-dollar business, and I'm super happy, but it's frozen. It's done. It's finished software.

David Senra

It's funny that you made a CRM because I think you've said before that you don't like people.

David Heinemeier Hansson

That is one of the reasons why we haven't made version 2—

David Senra

Of that?

David Heinemeier Hansson

I like people, actually, in the abstract. It's funny: I've heard someone say that I don't like people in groups; I like them individually. I'm sort of the opposite. I like people in the abstract. Individually, I have more of a problem with them. So, I don't interact with that many people on a daily basis.

David Senra

How much of your time do you spend alone?

David Heinemeier Hansson

The vast majority. In fact, it's funny because at 37signals, we work remotely. We have about 60 people. Twice a year, we all meet up and spend a week together, and it's really great. You get to see people, and I cherish that because you need that human connection.

You need to sit right in front of someone to reestablish trust batteries and charge things up, and realize it's not just all avatars and text. It's actually real people. But at the end of that week, I'm always like, as much as I love these people, as much as I love this company, I would fucking quit and live as a hermit in the forest rather than work with them 365 days a year in an office.

I'm just not built that way. I am not built to be in an office and work with someone all the time. In fact, when I look back upon my career, it only took off when I could close my door and not see anyone for long stretches of uninterrupted time.

When I got started working in technology, I worked in open offices. Do you know what? My productivity and my creativity were a bit of a flatline. I just got exhausted with having folks around.

David Senra

So, let's say hypothetically you're up 16 hours a day. How many of those 16 hours are you alone?

David Heinemeier Hansson

Oh, man, at least half of it. The other half is spent with family. The amount of hours per week that I spend with strangers in longer interactions is small.

David Senra

Is that increasing with age, or were you always like this?

David Heinemeier Hansson

I was always like this. I was always an introvert. I always appreciated my own company. I always appreciated the lack of interruption, the lack of noise, and the lack of stimuli, really.

David Senra

I feel the same way. Everyone who watches my podcast is like, “You're not an introvert.” I'm like, “No, no. Things have changed now because this new show has been fucking crazy.”

Before, I ran a solo history podcast with no employees. I would spend half of my waking hours alone in a room with books. You see books everywhere—books are everywhere.

There's a great line by Kanye that sounds like something you just said. He goes, “So much personality. What do you want from me? I can be by myself and enjoy the company.” I just enjoy this better than most of my interactions with people.

David Heinemeier Hansson

Especially if you don't control the environment, like an open office.

David Senra

Yes. I have a really deep-seated hatred of the open office. I worked in quite a few, and I ended up with a burning desire to see it all just go up in smoke and a commitment, in fact, to make sure I was successful enough that I never had to return.

But remote work is everywhere now. They don't understand. You guys published a book called Remote in 2013, if I'm correct.

David Heinemeier Hansson

Yes, that's right. Yeah, well before anyone did it. What's funny is, I've seen the full cycle, right? During COVID, everyone goes, “Actually, remote works amazingly, and we get just as much done.” Then, as soon as that was over, we're like, “Oh, I guess we still have that 10-year lease. We better get people back into the office now.”

That's a bit of a cynical view. I totally get that there are individuals who thrive when they're around others. I think the common form of leaders and entrepreneurs is actually people who do like to be around others a lot, who do like to be interrupted. That's the mode they exist in. That's not my mode.

Paul Graham has this maker-versus-manager mode, or schedule. If you're a builder and you get interrupted just a handful of times in a single day, that day is a waste because you will never get into the flow. You will never get into this long stretch of uninterrupted time, and therefore you will not feel in not just the mood but the moment to solve the deep problems you've got to deal with.

To me, that was really the breakthrough for my career, certainly in programming. I can't use a 45-minute chunk of time and have it turn into something. That's not going to turn out to be something. If I have 4 hours, okay, now we're talking. I can actually attack a problem and feel like I can get all the way into it.

Part of that is that I hate repeating myself. This is one of the reasons why, in the early days of 37signals, we did these workshops called Building a Basecamp. They were 8 hours. We just went through everything that we learned building software products and shared it.

We built those up, and I could stomach 3. By the third time I was saying exactly the same thing according to a script, I was like, “I'm going to blow my brains out.” That does not have any stimuli for me. I can't do it. Therefore, I needed not to repeat myself. I needed to get into that novelty and the ability to have these long stretches of uninterrupted time to do that.

That's where I find it, right? In that open space. The funny thing, too, is that it's not just people I can't have around while I work. I can't even have a mess. This is why I posted some pictures of my office here in Malibu on Instagram.

David Senra

It still goes viral every few months.

David Heinemeier Hansson

It does. It actually just got picked up by some content mill that keeps putting it out because it creates so much engagement. One of the key points of feedback I would get on that is, “That's not a real office because there's not a mess. It doesn't look like the desk is used.”

I'm like, “Dude, you don't understand. If I have shit all over my desk, I'm not creating work because my mind will just go to the shit.” It's a bit like that Marie Kondo process where you go through simplifying your home and throwing out all the stuff. It actually creates free mental space. It does for me.

Therefore, I need this pure cocoon. It's actually a form of procrastination. I need to run out of obvious things to procrastinate on before I'll start the real work.

It's also one of the reasons I got so into building software tools: Ruby on Rails and everything else. Many of these tools are functions of procrastination. I have a thing I need to do, and for whatever reason, I can't get started on it, but I can do all this other stuff around it. “We need this wrench. I should just build the wrench.” Yeah, let's wait with the table for a bit. I really need the table, but first I'm going to design a wrench from scratch so that I can put that damn table together.

That can be a very productive form of procrastination, but it is also just a reality of how I'm able to produce work. I've just come to terms with that—at peace with that. Very early on in my career, I realized I cannot work for 8 hours a day sitting next to other humans.

David Senra

This reminds me of what I want to get to. You're close friends with Tobi Lütke. We've had amazing people on the show so far. I've enjoyed every single conversation, but that conversation with Tobi is the one that I don't think more than a week goes by without me thinking about it.

It's probably my answer when people ask, “What should I start with?” I'm like, “Just go there.” I was on the phone with a founder who was asking for advice, and I was like, “Man, I need more context of what's going on.” I said, “But basically, just go watch this Tobi Lütke episode, then call me and we can talk.” He texts me, and he's like, “Within 3 minutes, Tobi's already dropping gems.”

The reason Tobi's interesting to me, and I want to get to your relationship with him and then his influence on your adoption of AI, is because, one, he's like your favorite founder's favorite founder. There are a lot of other founders that I admire. My friend Karim, who's the founder of Ramp, which is my biggest partner—Karim is very similar to you, and very similar to a lot of great entrepreneurs. He's divinely discontent. He makes something, everybody says it's great, and he's like, “It could be better.” He's just never satisfied.

Therefore, he doesn't like a lot of other founders and doesn't like a lot of other products. But he speaks very highly of Tobi and likes the way he thinks. Then what you realize about Tobi is that everybody says, “I'm an independent thinker,” but Tobi actually thinks through every single thing for himself. Therefore, he has all these ideas and beliefs that are not correlated with one another. When I ask him a question, I have no idea—

David Heinemeier Hansson

That's the hallmark of a great debating partner.

David Senra

You don't know what they're going to say.

David Heinemeier Hansson

Exactly. And that's why the conversation was incredible. I was like, “This is phenomenal.” If I didn't have to catch a flight, we would have been talking before and after. I was like, “Man, I have to have this conversation again.”

David Senra

You said earlier what I also admire about you—and I've been following you for a long time—is that you'll have an idea or opinion, and you're very vocal about it. But then, if you get new information, you'll immediately be as vocal about changing your mind.

David Heinemeier Hansson

Correct.

David Senra

You mentioned that Tobi really influenced your thinking about using AI. Can you go into that?

David Heinemeier Hansson

Yes. I was as excited, I think, in the abstract as anyone by the advent of AI. We got to see ChatGPT and all of that early, three-plus-years-ago enthusiasm for the general proposition of AI. Incredible. We can make computers do that. Wow, I love it.

But I had a far greater skepticism about how soon and how much it was actually going to have a material impact on how I write code, for example. That was informed by what was present at the time. At the early stages of this AI revolution, we were getting autocomplete. You were sitting in Visual Studio Code or whatever, trying to write something, and the AI would be like this pestilent coworker who was like, “Let me drive. Let me write it for you.”

I'm like, “Can I just think for a second?” Everything we just talked about—that isolation—I want to be able to sit and think and not get constantly interrupted. It was that on steroids. It was the open office on steroids. It was everyone walking by like, “Hey, can I write on your keyboard?” No, you can't. Get your grubby fingers off. I want to type this myself.

I didn't like that at all, and I therefore locked in on thinking this is what AI is going to be. Tobi clearly saw much further ahead. His eyes were much further up. It's funny: now I'm racing with Tobi, and one of the things we talk about all the time is where your eyes are. The difference between a great racer and a mediocre racer is very often where they look. If you're looking at the turn-in, where you're supposed to turn, and not at the apex, you're not going to hit it.

It's like the old adage: you go where you look. This is why you don't look at the tree, because you'll steer right into it. Training your eyes to look ahead—further ahead than you think—is actually quite difficult in racing, and I think it's quite difficult in business and life in general.

He had an eye that was just looking further ahead than I was. He was going, “Yeah, but it's not going to be like this forever.” Intuitively, he had this understanding of the evolution, and I'm still not entirely sure what he saw. Why didn't I see it?

I'm actually a little frustrated on my own behalf that I did not have the same conviction as Tobi did, as early as he did, toward seeing, “Yeah, you don't like it right now, but just imagine 2 more years of this.” He wrote a memo to the company internally, I think in ’23 or early ’24, way before agents were doing the work on their own, saying, “I've seen it. This is the big switch. This is what we've been waiting for. This is why I'm here as a CEO: to identify those kinds of discontinuities in the trend line, and we need to be a very different company to be able to position ourselves for that and take advantage of that.”

Now I get a front-row seat to the fruits of that. Being on the board of Shopify, I see just how far ahead they are in this. Half the time, when we're getting a presentation to the Shopify board of the internal systems that Tobi has, it's like, “This is better than anything commercial. How do you have these incredible tools?”

They have a tool, for example, called Scout that analyzes the customer feedback they get so that their product managers are very well informed about what people are asking for. They're just sucking it out of all these channels, and you can ask it anything: “What do people think about this feature or this feature?” Then you get an answer.

I go, “Damn it! I want to buy this. Can you please commercialize this?” And they're like, “No, we just kind of built it for ourselves.” Or Rover, the current system they have for employing agents to do work and open PRs and everything. Everyone is working toward that. Shopify's already there.

The reason they're already there is that Tobi saw it so much earlier than the rest of us. Now, there were other people who saw it, but most of them already worked in AI. Tobi was running this enormous company at the time, and it's actually quite difficult—I think, at least; it looked difficult to me—to be as focused as he is on that main business.

Shopify has a million things going on, and then also having your gaze that high up, looking that far forward toward the next apex, what's coming, and then acting on it. It was his incessant, “Look at this. Look at this. Look at this,” that got me from, “Yeah, I like AI, but it's abstract,” to, “Okay, fine, I'll install Pi. I'll install this. I'll install that. I'll give it a try.”

Then I realized, “Oh, actually, yes, this is going to change everything.” That nudge—having someone just constantly nerd-snipe you, as in, “Hey, I know a little bit more—or not even a little bit, a lot bit more—about this specific thing.” I'm like, “That can't stand. I cannot be the person in this relationship who's not up to date on this shit.”

So much of the ability to move your opinion comes not from these abstract ideas, but from touching things, from actually setting up OpenClaw or whatever and getting some experience with it, and then having this instinctual feeling of where things are going to go that you're not going to get from just reading someone else do it.

You can read a write-up of anyone else using something else, but it's like trying to learn how to drive a race car by reading a book about it. You could pick up some pointers, but until you get behind the wheel, it's not going to internalize. It's not going to be something you can actually perform. So I credit Tobi heavily with that, just being a guiding star.

What's so incredible, too, is he's not running a startup. Well, he is. He would probably say that he is in some sense, abstractly—day-one kind of thinking—but it's a company of 7,000 people. Most companies, even technology companies, that get to that stage, have that level of history—Shopify's been around for 20 years—and are that large, with 15% of world GDP on e-commerce occupied with the problems they have at hand, are focused on those problems.

To be further ahead than I felt I should have been while running a much smaller company was a great way to almost shame me into getting up to speed. So, thanks, Tobi.

David Senra

Have you had a chance to nerd-snipe him back since then?

David Heinemeier Hansson

Yes, on Linux. I switched to Linux about 2½ years ago, and first I had this soft on-ramp, as most people do when they switch to Linux. I used Ubuntu, which is the most popular Linux distribution. It's fine. It's actually great in many ways because Linux has all these different distributions. They have Ubuntu and Fedora and Red Hat and whatever, but it's all the Linux kernel. The magic of Linux is the Linux kernel and then the ecosystem of all these tools around it. Whether you package them in this one way or package them in another way is not the make-or-break of it.

Just getting into Linux was a huge thing for me. I'd been on the Mac for well over 20 years. I was completely a Mac head, thinking, “A Mac is a computer. I don't want to use another computer.” Windows certainly wasn't for me. Linux was for people who liked pocket protectors—the kind of nerd I could relate to and kind of respect—but it wasn't a me thing.

Then, finally, Apple pissed me off enough that I thought, “I cannot, in good conscience, continue to spend money on their products if I have such deep disagreements with how they run the company.” Fine. I was going to try something else. As I said, I gave Windows 2 weeks, and I realized, “Man, I can't do it. I'm going to come crawling back to the Mac if there's not something else.” Thankfully, there was Linux.

I discovered Linux and spent about 5 minutes realizing, “Okay, maybe I can do this.” After 2 weeks, I was like, “Okay, fine, I can. I'm committing to it. I'm going to burn the boats.” Off with the Mac computers, committing to Linux, and then, of course, I just got completely sucked in. Oh my God, I could do everything on this thing.

David Senra

But didn't you say you discovered a subreddit like that?

David Heinemeier Hansson

Yes.

David Senra

That really was the turning point in this, correct?

David Heinemeier Hansson

Yes. One of the reasons I loved Apple as a company and its stewardship of the industry was the design. It was the taste. They made beautiful products, mostly. They certainly still make beautiful hardware, and for a very long time they were also the leading bar for software quality: sweating the details and making sure everything was aesthetically pleasing. To me, that's an incredible part of why I like computers in the first place.

I like all the little subtleties. I like just the right font and just the right border curvature. I like things to look nice and behave nicely. Apple was the undisputed leader in that for the longest time, especially compared with Windows, which was the epitome of having no taste and no sensibilities about how things should look, and having no cohesive vision for what a computer should be. It was all these disjointed parts.

Then I found Linux and thought, “Man, this is like an even tamer version of Windows.” It looked like a cheap copy of something Redmond would have made, and that was already crap. Why would I want that?

On Reddit, there's this amazing subreddit called r/unixporn. It's basically a showcase for these nerds who spend, in many cases, hundreds of hours personalizing their Linux distribution and setup to the point that it doesn't look like anything else you've ever seen. It looks like it was made for a movie—a hacker movie where you see all the Matrix characters scrolling down the screen and it just looks cool.

Sometimes it just looks cool and doesn't actually work that great. But when I discovered that, I thought, “If these nerds are individually able to make Linux look this cool, if I just take it back 20%—not as over the top as what they're trying to do—and bake it all into Linux, we can make something that's competitive with the Mac.”

David Senra

Hold on, you said something interesting. Let me interrupt you real quick: they were, like, kids. You told me this story about some 22-year-old Polish kid who smoked Apple.

David Heinemeier Hansson

Yes. This is one of the other things I love about this ecosystem: everyone goes by a handle. It's like the early days when I got into computers. The reason I actually got into computers was for video games, and I didn't have enough money to buy the video games, so I got into pirated video games, which meant I got into the warez scene. It's with a Z at the end. Everyone had a handle because it was kind of illegal—you were trading copyrighted goods.

My handle, by the way, was Webster. I don't know why that was or whatever. It was Webster. Everyone else in that scene had a handle, and I hadn't really thought about handles in a long time. The demo scene at the time had the same thing, but then I discovered r/unixporn and this subculture of people who worked on this, and they all had handles.

There's one Polish kid who goes by the handle Vaxry, who built the tool that 3/4 of everyone on this r/unixporn subreddit was using to build their rice. That's what it's called: the rice. They rice out the Linux distribution. It's called Hyprland.

It's just this one kid—I call him a kid. He's, I don't know, 22. But when he first made the first version, I think he was 19 or 18. One kid out of Poland comes up with this window manager, which in its essence is not a new concept. There have been tiling window managers on Linux for a long time, where you basically don't move windows around with your mouse. They tile, so you open a new window and it repositions, and all the windows are already available.

But they all look, again, like they were made by people who did the tame version of Windows. They're just not aesthetically pleasing. Maybe they're highly functional, maybe they're fast, maybe they're productive for certain people, but I need the aesthetics to live. I need it to be beautiful.

David Senra

And Apple never did this the way you did.

David Heinemeier Hansson

Apple never did this. Apple has been stuck, as has Windows largely, in the original Xerox pattern: here are windows, you have a mouse, you drag a window around, and a lot of the interaction with the operating system is through the mouse.

The mouse is an incredible tool for learnability. Anyone who has a rough conception of how to move this thing around can use almost any app because everything is explained. But if you're interested in productivity, it's a terrible tool.

This is why all the cracked programmers are all about their keyboards, right? They're all about hotkeys and shortcuts. They require a lot of investment to learn, but if you learn them, you can fly. It's just like putting on a goddamn wingsuit: you go 200 miles an hour, there are cliffs all around, and it's not explained how everything works. You have to learn it. You have to internalize it.

I've been using a computer for, I don't know, 40 years. I've always used the keyboard, yes, but I've not been driving my computer through the keyboard. I would've thought, “That little mouse.” Here is an operating system—Linux plus Hyprland—where I can drive it all through the keyboard, and it can be superfast and easy to use because everything's just a keyboard command, and it can look amazing.

The core engine to make that work, that tiling window manager, Hyprland, is made by this cracked kid from Poland who goes by a handle and has an anime avatar. I love it. It's such a throwback to what computers used to be, when they were more about fun and artistic expression.

The funny thing about the original warez scene, the pirated software scene, was that it overlapped with the demo scene. The demo scene was all about how to use these wildly underpowered-by-today's-standards computers to make incredible computer graphics. They put out these demos, and the 2 scenes would meet.

The demo scene would produce the intros to the cracked games, so you'd see this really cool video before the game loaded up that basically said, “This game was cracked by Evilhead24.” And I'd think, “Wow, it looks so cool.”

This is a resurgence of that: computers can be fun in that way, they can be a bit whimsical, and they can be made by pseudonymous individuals. The combination of it can be better than one of the top 5 most valuable companies in the world—a trillion-dollar organization that has 40 years of history caring about this, with unlimited resources and unlimited people—and still the cracked kid from Poland can beat them. Absolutely amazing.

Once all those pieces started falling together, I was not just sold; I flipped. As you said, I used to have a perception of Linux that it was a server tool. I've used it on all the servers we've ever run; they've all run Linux. But running it on the desktop sounded like something for people who liked to update the firmware on their printer. Not me, man. I don't want to update the firmware on my printer. I just want the things to work.

I realized, you know what? That's not all Linux could be. Linux just has all the LEGO pieces. Someone could put those pieces together for you.

And you could get the Millennium Falcon or the Taj Mahal or something incredible that looks great and is ready to play with. I went, “Well, okay. If no one else is going to do that, I will. I’ll take r/unixporn, I’ll take Vaxry’s cracked Hyprland, and I’ll slap it on top of Arch Linux, and we’re going to make Omarchy.”

And that’s what I’ve spent a shocking number of hours on over the last year.

David Senra

Thousands.

David Heinemeier Hansson

Thousands. Yes, that’s probably fair at this point. It became an obsession, and it became an obsession in the same way we were talking about earlier: not because I had a grand road map—“Oh, I need to do this and that.” I just picked up the thing and went, “Here are 75 things that are wrong. This thing is slightly misaligned. This is not right. The colors are not correct. It’s not all integrated. The themes aren’t coherent,” and so on.

Then I fixed 5 of them, put it back down, and was like, “Oh, that’s better. It’s more pleasurable to use.” I picked it up again and fixed another 5 things. Picked it up. Picked it up. Picked it up. Until I finally had something that felt like, “This is good.”

And not only is it good, it’s goddamn better than whatever else is available commercially—certainly better than what Apple has to offer. And again, better means it’s better for me. But what I’ve always realized is that every single piece of product that I built started there: I’ve got to make something that’s better for me.

Then, if I can get beyond the point where I would rather use this than that, I know I’m not alone. I know I’m not that special. I know there are going to be tens of thousands, maybe hundreds of thousands, potentially even millions of other programmers—or just computer users who like computers—who are going to be like me, who are going to appreciate the same aesthetics and appreciate having an operating system they actually own and can migrate. Especially now, with agents, they can make it bespoke to their own needs. They just don’t want to put in 2,000 hours up front to get access to that kingdom.

So, if I give it all to them in a prepackaged, omakase, ready-to-use chef’s-choice edition, then they can get invited to it. And I did exactly the same thing with Ruby back in the day. There are great parallels between these things.

When I first picked up Ruby in the early 2000s, it was an obscure programming language out of Japan that only a handful of people in the West were using. It didn’t have a killer app. It just looked really good, and people were using it for small things here and there.

Then I went, “This is incredible. This guy has the right vision for what a programming language should be. If I take it and apply it to the thing I want to build—web applications—I want to build Basecamp—and then I build the tooling around it, I can get other people to realize the magic of what’s here.”

It’s exactly the same thing with Omarchy. Linux is incredible. It is one of the 7 wonders of the software world. It is the largest open-source codebase in the world. It’s like 40 million lines of code. Literally millions of man-hours have been poured into that collective process in a way that wasn’t always obvious was going to work.

We talked about Microsoft a bit. The famous quote from Steve Ballmer back in the early 2000s was that Linux was a cancer, that it was going to eat everything. It was going to be very disruptive and very negative for the software industry, and it turned out exactly the opposite.

Today, Linux runs on billions of devices. Basically, anything embedded is Linux. Anything server is Linux. The one final thing it hasn’t cracked is the desktop. I just go, “Why? Why shouldn’t it? We can just make it so good that at least technically minded people will realize that this is just a better option, and they’ll pick it. Of course they’ll pick it, because if I show them something that’s better, of course they’ll realize.”

I mean, that’s a pretty naive instinct, but that’s my driving principle. If I make something better, people are going to realize it’s better, and they’re going to use it.

David Senra

Okay, but this is actually really important, because last night I kept going back to it. Basically, I have these conversations selfishly. I just like that there’s shit in this person’s head that’s valuable to me. I can pick out—you might give me 50 ideas, I might grab 2 and use them in my life, and my life is better as a result of that. So I’m intensely interested in that.

Last night, I kept asking a question and wasn’t getting the right answer. I was just trying to figure out what actually drives you, right?

You mentioned earlier—I thought this was absolutely ridiculous—where people forever would describe you and Jason and the business you built as a lifestyle business. It’s like, I don’t know: the guy started out making $15 an hour, and now he’s driving a $15 million car. What kind of lifestyle is that to you? You live in a 1-bedroom apartment and have to kiss this VC’s ass so that you can make payroll next month. Which lifestyle do you want? I don’t know what you’re talking about here.

I thought that critique was pretty weak if you actually analyze what’s going on. But what I realized is that it’s not money. Obviously, you grew up without money. I grew up without money. Once you get money, you realize, yeah, it’s valuable, but the return on it diminishes really, really rapidly, right?

So you’re definitely not driven by money. I was like, “Okay, well, this guy is just introverted and loves making things.” You’re definitely driven by making things. Yes. But then you have this other element that, in my opinion—tell me if I’m wrong—you have this fierce desire, or almost a need, for control and independence and freedom, right?

David Heinemeier Hansson

Yes.

David Senra

And so we started talking about Omarchy. Am I saying it correctly? Last night, you realized to the point where we were like, yeah, if anything happened with Basecamp, you wouldn’t start another business because you wouldn’t want customers.

Me and Rob—my partner, Rob; he was over here this morning—we were laughing about what you said last night. I want to get to that, where you’re just like, “Yeah, yeah.” It’s like you have fuck-you money and financial independence, but then there’s another thing that you transcend. You don’t even have any customers, and your whole thing is just the love of making something for yourself.

And then putting it out to the world, making something great. The reason I bring this up is: explain why you named it Omarchy.

David Heinemeier Hansson

So, Omarchy is 3 words put together. It’s omakase, which is “chef’s choice” in Japanese, and it’s usually applied to restaurants. You go to a sushi restaurant, and they just start serving you great food because they know better. They’ve been making this goddamn sushi for a very long time, and the chef who gets to be the one who picks it has probably been making it for decades.

What do you know? You don’t know shit. You don’t know what’s good. You don’t know what the order should be. You should just sit down and hand over your sovereignty for this meal to this person who’s more competent than you, then open your trap and eat it. It’ll be delicious.

This is actually the best way to experience all sorts of things: there are people in this world who have spent more time than you getting really good at figuring out what quality is, and they hand you that quality so you can just enjoy it.

What I found is that a lot of people have a very difficult time articulating what they want, but they can appreciate quality instantly. They can just know, “Oh, this is good. Yummy, this is some great sushi,” right? They don’t know what to ask for or how to season it or whatever.

Funny anecdote: one of the things that always tripped me up when I came to the US originally—and this will crack Jason up—is the notion of the construction-kit burger. My mind was blown when I came to the US from Denmark, and I would order a burger and just be handed the parts: here’s the bun, here’s some lettuce, here are some pickles, here’s the meat.

I’m like, “What is this, a construction kit? Am I supposed to put it together myself? You can’t even assemble my food for me?” And I’m like, “There’s something deeply American about this. No, I know best.” No, you don’t know shit. You are ignorant as shit. Let a chef prepare the food for you, goddammit. Why would you want to get your hands dirty like this?

So I had that reaction right from the get-go: I love delegating my limited sovereignty when I don’t know something, or I don’t know more than the other person about a given thing, right? I want the best people in the world to prepare the services, products, and food that I then get to enjoy.

Because it’s like leveling up—cheating, almost, right? I thought, “You know what? I really like that principle, and I will also apply it in reverse, on my own accord. If I know something about programming, about using Ruby, or about using Linux, I can pour all of that competency into a package that you just have to sit and enjoy.”

So that’s what an omakase is. Then the other part is Arch. We talked about that. That’s the Linux distribution run by a gang of volunteers for the past 20-plus years. It doesn’t have an organization. It doesn’t have a lot of fundraising. It doesn’t have a commercial structure around it. It’s just a bunch of nerds who share the burden of distributing Linux. Amazing.

And then the last bit is Hyprland. So that spells Omarchy, and it turns into this sort of constellation where I take—there are a trillion tools in Linux land, a million ways you can configure your system, and you can have all these themes and apply them. I will pick them for you.

I will not give you a construction-kit burger. I will give you an omakase sushi meal, and you may do substitutions.

You may realize, “Oh, I don’t like that pizza.” Fine. But you’re going to start from a base that works. You’re going to install this system, by the way, in 4 minutes.

This is one of the things I got obsessed with really early on. I would get a new Mac computer, set it up, and I think the last one took 42 minutes because it needed a software update and some other things. I’m like, “This is unreasonable. These computers are about 1 trillion times faster than what put us on the fucking moon, and you’re telling me it takes 42 minutes for a new computer to be ready to use? This is preposterous.”

So, I got obsessed with how quickly we could install a system that was fully ready to go and use, and we got it down to about 2 minutes. You insert that USB key with Omarchy on it, fill out your username and password, and 2 minutes later, you’re ready to rock. All of it is there, right?

So many of these things we just take for granted. Getting a new computer is just hours of work setting it up and getting it ready for real work. No, it’s not. Someone could just do that for you, and collectively we could save trillions of man-hours every year.

This is part of why I love sharing these things. I get this indignation about world productivity. When we’re subjecting humans everywhere—millions of them, maybe even billions of them—to shitty tools and shitty setup processes, we’re robbing the world of progress.

You could have taken those 1 trillion hours that people have spent, 42 minutes at a time, setting up a new computer and applied them toward productive outcomes. I don’t know—we’d have flying cars by now. I just feel like, “You know what? If I can assist in that process somewhat and take some of that drudgery out of the world’s gears, I’ve done my little part. I’ve added a little bit of oil so that everything glides a little more seamlessly.”

Especially if we do it in a way that’s aesthetically pleasing, I’ve actually contributed to delight and lightness in the world. We should all be surrounded by beautiful things, including beautiful computers that just work out of the box and are ready to use.

So, that became sort of that dual mission. First, I wanted the very best computer for me. Suddenly, I had found all these building blocks where everything I was ever annoyed about with how the computer worked, I realized I could change. All the code was there. Everything could be rewritten and reconfigured so I could get exactly what I wanted, and that just became an obsession.

I have this affliction where, when I see something that’s not quite right and I have the power to fix it, nothing else matters until it’s perfect. I will polish that thing until every single quarter-millimeter is perfectly round. I cannot do anything else.

It’s not always great, I will say, as a person who has other obligations in life than running Linux. There were moments of that journey where I essentially just went on a hermit trip and said, “I will learn everything there is about this just so that I can make the perfect computer.”

It becomes a bit of an obsession. Thankfully, it doesn’t last because, at some point, the ball is literally a perfect sphere and it’s beautiful. It has just the right texture, light, and color. Then I go, “Okay, now I’ve made this beautiful thing.”

I enjoyed it more than anything else. This is the best computer I’ve ever used in my life. If it’s so good for me, it should be good for other people. I should share it. So, I did with Omarchy.

What’s funny is that I actually made a version before Omarchy called Omakub, where I took that Ubuntu thing we talked about—the thing everyone who starts on Linux uses—and tweaked it a little bit to make it look more like Windows or a Mac. It felt familiar.

The misconception that I had, and I think a lot of people in the Linux world have had, is that if we just make it as close to Windows or Mac as possible, then they’ll come. But no, they won’t. Why would you want the Temu version of a Mac or Windows? I don’t need a cheaper version.

Then you have to appeal to these high-minded ideas: “Well, it’s free software as in speech, not as in beer.” Yeah, okay. There’s 0.001% of the population who gives a shit about that. Most people just want the best thing, and your job is to give them that if you want to win them over.

So, I said, “No, let’s make something radically different. This computer will not work like anything you’ve used before.” In fact, you won’t even be able to operate it right out of the box because it’s all keyboard-driven. You’ll have your little mouse and be like, “There’s nothing on the screen. Where are the icons to click on?”

I’ll go, “No, here, let me show you a cheat sheet. You’ve got to learn these 15 key bindings before you can do anything on this computer. Here’s your syllabus. Sit down and study, boy.” By the time you’ve learned the first lesson, you’re ready to use this computer.

We’ve already fucked the timeline, right? I’ve already said that every other computer in the world is focused on making this as approachable and learnable as possible. I go, “No, fuck that. That option is covered. It’s great, but let’s get something else. Let’s build something else.”

Then it took off. I found that’s very often true about products. You enter some domain and think, “Who’s the best? Can I just copy them and then do a slight tweak?” That’s not going to work. That’s not going to succeed at anything, right?

All the best ideas that actually turn out to have an impact sound stupid at first. They’re not intuitive, because that’s where all the value has been locked up. It’s been locked up in this misconception about what people actually want, because most people don’t know what they want.

You actually have to give it to them in a form that’s beautiful and approachable and quirky and a little bit weird, and maybe a little bit off-putting at first. I find that in all sorts of different domains.

Some of my favorite car designs, when they first premiered—the McLaren 720S, for example—had these sunken-in headlights. When I first saw it, I thought, “This is the ugliest car I’ve ever seen at this level.” Now, it’s one of my favorite car designs of all time.

I think you’ve got to be able to work in that space where you have a high tolerance for people telling you, “What you’re building is ugly. What you’re building is never going to work in the real world.” When I get that feedback, I’m even more into it.

You can’t just get that feedback. There are always going to be a few people who like what you’re doing. But Kathy Sierra, who is one of my all-time greatest writers on what animates users and good products and—

David Senra

Let me interrupt you, because this is the power of ideas. This is why I’m addicted to podcasting. I didn’t know who the hell Kathy Sierra was until I learned about her through you and Jason’s writing. Then I go consume her, and you’re like, “The best way to market is to out-teach your competition.”

David Heinemeier Hansson

Bam. It’s all I do. Bam. That’s literally what I do. Bam. This is still—

David Senra

—the idea that helped build—

David Heinemeier Hansson

Yes.

David Senra

—the first podcast, which then helped in turn build this podcast. It was super valuable to—

David Heinemeier Hansson

It built all of 37signals.

David Senra

If you could buy that idea in my life, literally, it’s worth tens of millions of dollars to me.

David Heinemeier Hansson

Yes. And it’s all down to Kathy Sierra and her writings on the internet in the mid-2000s.

So, I would spend a little time on “out-teach” just to linger on that, because I think it applies to all of this. As you said, it applies to podcasting. It applied to Basecamp. We talked about how it applies to everything, because when we launched Basecamp, we didn’t have any money. We had a tiny team, and Microsoft had all the money and all the whatever. They could swallow us up.

What we then had to fight back with was not more banner ads, right? We weren’t going to outspend them on a marketing campaign. That was never going to happen. But we could out-teach them. We could have better insights, and we could share them. People could resonate with that and then reciprocate by buying our products—at least some percentage of them, even if it’s a small percentage.

That has been our operating strategy for literally 2 decades, and it’s exactly the same thing.

David Senra

I’ve got to interrupt you again. It’s also better for the world.

David Heinemeier Hansson

Yes.

David Senra

Because you guys are putting so much out there, you’re capturing a tiny percent of the value that you created. You put out so much more value. Even a tiny percent of a huge number gives you a $15 million car, which you won’t have to keep hitting on, right? But the world is big. The internet is very big.

David Heinemeier Hansson

Yes.

David Senra

I told Jason this, who I’ve now become friends with and just love spending time with. We just had lunch together, and I went to look at the construction project he’s doing right now.

I was like, “Dude, I was by myself. I didn’t have any employees for 10 years. You make project-management software. My project’s in my fucking head. All I can do is buy your books,” which I did. “But I’m so glad that as soon as you did HEY, I was like, ‘Oh, now I can give you money.’”

David Heinemeier Hansson

Right.

David Senra

You’re hitting on something that’s really important: why what Kathy says is valuable. This is something that Charlie Munger would talk about, and he’s my hero. If I could only learn from one person, it’d be Charlie Munger.

He said, “There’s a deep desire in human nature that is ever-present and never changing, and it’s the desire to reciprocate.”

David Heinemeier Hansson

Yes.

David Senra

I feel you have done something for me by writing those books, by going on those podcasts, by talking at Smart Passive Income. As soon as you give me an opening to reciprocate, I will do so. I'm really tight with the Spotify team, right? Daniel, Gustav, all the top people there, Alex, everybody else.

David Heinemeier Hansson

Roman.

David Senra

And, you know, I fly to Europe. I've been there 4 times in 14 months just to talk podcasting because I'm obsessed with this. And the crazy thing in these conversations is they're just like, “You know, a weird thing that we see in podcasting is they have private feeds, and you can do, you know, ‘My content's free. If you want to buy another podcast, it's X amount of dollars per month.’” Most people never even listen to the content. They're just looking for an excuse because your podcast gave them so much value.

David Heinemeier Hansson

Yes.

David Senra

That will always work. It worked today. It worked 100 years ago, and it will work 100 years from now.

David Heinemeier Hansson

I choose to believe that. I don't actually know if it's true, but I think it is how we built a business up until this point. I will say that I'm starting to see some cracks in that reciprocal exchange.

David Senra

Tell me about that.

David Heinemeier Hansson

It's not because the human part of the link is broken; it's because the algorithms have changed things. So, for Jason and me, for the longest time, what we did was exactly that: we're just going to out-teach. We're going to put so many observations, lessons, experiences, software, open source, whatever, into the world, and we're just going to hope that a small percentage of that trickles back.

It used to work, especially on Twitter, where you'd build up a following, and if someone followed you, they'd see all the stuff you're sharing. This is Gary V's “jab, jab, jab, right hook.” You do all the jabbing. You do all the “Here's free stuff, here's free insights, here's free observations, here's free software.” Then occasionally you'd go, “And now we have a new version of Basecamp. Check it out.” Right?

What's broken now on the social platforms is that my followers don't see anything I post unless it goes medium-viral. Because everyone is now in the algorithmic feed, the “I follow someone” is just this little drop in the signal, and it kind of breaks that reciprocal exchange, at least on those social platforms.

This is one of the reasons why I love podcasting. There, you have subscribers who actually get things straight into their feed. It's not algorithmic. And I love newsletters. I have newsletters as well, and a bunch of my long-form writing goes into that, because then I'm assured that at least it shows up in their inbox.

But both of those outlets are minority outlets compared to the behemoth that is social media, and I've seen some of it break down a little bit. I don't know what that means. I'm going to continue regardless of whether it works as well as it did in the past or whether it does in the future. I'm still going to bet on the fact that someone who does get exposed to the ideas we have or the free software that we give away is going to feel some connection to what we have, and then, if there is an opportunity, maybe not even for themselves, but they spot it in others.

Like you said, “Hey, I'm one person. I don't need Basecamp.” But you hear of someone who's complaining about setting up projects on complicated ClickUp or their email not working, and you go, “Just check out Basecamp.” We're starting to use it for the podcast because—

David Senra

Oh, you are?

David Heinemeier Hansson

Because we're vastly increasing the amount of episodes we're doing and the amount of people I have to talk to, stuffing this up my funnel for interesting people to talk to. Rob and I—we had dinner last night—go back and forth over text message. The other day I was like, “Bro, what happened? I think we're losing the thing here.” He's like, “We should use Basecamp.”

David Senra

You're the classic example. This is the point, though. You guys have provided so much value to our lives. We're not like, “Oh, maybe use Basecamp or maybe go look around.” I don't even give a fuck. These are my guys. I'm just going to use their thing.

I want to go back to a fundamental understanding of you, though, because I love this—the transcendence of how you deeply desire independence, freedom, and control. That's why you're anti-investors, and you don't have a board of directors. It's you and Jason making all the decisions, right?

But then you introduced this other level of transcendence last night. It's like, “Oh, no investors is one level of freedom. How about no customers?” It's even higher. So, your point is, “I'm going to put 2,000, 4,000 hours of my time into this. I'm going to craft it. I'm going to make sure everything is perfect, and then I'm going to give it to you.”

Yes. But then you said something last night where you were just like, “Well, what if they have feedback for you?” What were your thoughts on that?

David Heinemeier Hansson

I love feedback if it's well-grounded in solid observations that can give me new insights. But a lot of feedback you get on the internet does not fall into that category. It's just like, “You looked at this for 5 minutes. I spent 4,000 hours, and you have some knee-jerk reaction and you want to tell me how to do it? You want to tell me what I should do and what I shouldn't do? Well, you can go fuck yourself.”

I actually get that indignation stemming from the fact that I've been working on it. But there's just this sense of, like, this is not a reciprocal exchange. I gave you something of tremendous value. Now, you can choose to ignore it or say it's not right for you. That's completely fair. Like, “Okay, thanks for the gift, but no thanks.”

But if you take my gift of 4,000 hours and you go, “Well, I'll give you 5 minutes, and then I'll just dump shit on you.” What? You didn't pay me anything. That's a privilege you have to pay for. If you want to tell me ill-considered feedback on anything I make, you have to pay me. And you can do that with Basecamp, and you can tell me—

David Senra

And then you're a customer.

David Heinemeier Hansson

And then you're a customer. And then I know we have a different relationship now. I will actually say thank you, even though I think maybe the knee-jerk reaction on my part is that this is not the most well-considered piece of advice. I will take it in because we've had an exchange and there's a reciprocal nature there.

But I actually appreciate transcending above that, and I don't have that obligation with you. I am sharing something with you, and I don't owe you anything. I mean, you technically don't owe me anything either if you don't accept the gift, but if you take the gift, you actually do owe me something.

You owe me just a modicum of respect to look at this for more than 5 minutes before you just dump your shitty ideas onto me. Or even worse, it's not so much about the ideas; it's when people try to tell me what to do. And this goes straight back—

David Senra

This is what I hit on last night.

David Heinemeier Hansson

That's the nerve, right? The nerve is, I have worked very hard, not just in my life but in business, to have damn near close to total independence, so no one can tell me what to do. No one can tell me no. No one can tell me what to work on. No one can tell me what to do.

Jason and I have structured our entire business around that concept of pure independence. We don't have any investors who get to tell us what to do. We don't have a board to tell us what to do. We do have customers, and they get some claim, some of the time, to tell us, at least in aggregate, what to do, because if no one wants to buy the things that we're putting out there, the business is not going to continue.

So, they get some good influence there. I find that tolerable. That's a tolerable exchange. I put a product into the world, you pay me some money, and I will listen to you. Fair.

But I appreciate the transcendence to the next level. I don't even have a commercial relationship with you anymore. We can still have a great relationship. One of the reasons I enjoy open-source software so much is because I get to collaborate with like-minded people about making things better, right?

So, if I give you the gift of 4,000 hours on Emacs, and you then tweak a few things and send in a pull request back on GitHub and say, “Here's something,” I go, “Awesome.”

Now we’re in business. Now we have a little club. Let’s make this amazing together. And that feels so pure—not because I’m against capitalism at all. I’m a huge fan of capitalism.

But I’ve also realized that at some point, when I retire, it will actually be a retirement from capitalism. It’ll be a retirement from customers and economic exchange. 37signals is quite likely my last business. I’ve made the money I needed to make to live the life I wanted to live three times over. I could live for the rest of my time.

At some point, either the business ends because circumstances change, or Jason and I just get tired of it. Then I will transcend to the next stage of not having any customers at all, and continue to make things and share things, but without any claim other people have on my time or my attention, or where I want to go with it.

David Senra

All right. This leads us to another thing I want to talk to you about: capitalism actually works.

David Heinemeier Hansson

Yes.

David Senra

What I like about you is that people in the tech industry act like they don’t like money.

David Heinemeier Hansson

They pretend.

David Senra

Exactly. They all do.

David Heinemeier Hansson

Yeah, exactly.

David Senra

My point is that how you make money actually matters.

David Heinemeier Hansson

Yes.

David Senra

To me, the best definition of business I’ve ever heard actually came from Richard Branson. He says, “A business is just an idea that makes somebody else’s life better.” There are infinite ways to make somebody else’s life better, so there are always going to be infinite opportunities in the future.

David Heinemeier Hansson

Yes.

David Senra

If you make a product that other people love, and it makes somebody else’s life better enough that they decide to give you their hard-earned money in exchange for it, that is the system working.

What I like about you is that, again, I think you have this counter-narrative where you prize independence. You want to do things for decades. You want to build products for yourselves first and then find the other like-minded people. But you’re not shy about saying, “Here’s my Pagani, and here’s this floating desk in Malibu that goes viral all the time.”

We talked about this a little bit last night, and you said it straight out. You go, “Yeah, that’s an example that capitalism works. It’s not just, ‘Look at the shit that I have.’ That’s not what you’re doing.”

David Heinemeier Hansson

I actually think there’s some obligation for people who’ve been able to make things work to show that they did work, that it is a carrot you put out for others. I think it’s completely legitimate to be motivated, in part, by wanting to have nice things—to have a dream car that you aspire to. I certainly had that as a kid. I thought, “Look at all these cool cars.” I didn’t have any concept that I’d ever have an opportunity to reach that point and afford one, but it was part of what drove me.

I think that’s a good thing about capitalism. We want to better our lot, and some of that is material. There’s no shame in that whatsoever.

Not only that, I think there’s a second order of capitalism. If you sell a product or service and make a lot of money on it, you have an obligation to put that money back into the system. Send some of that money to the craftsmen of Italy to create you a beautiful Ferrari. There’s someone who has to stitch that seat so it’s just right. There are engineers putting that car together so that it exists in the world.

We would not have Ferraris to pine for if no one bought them. Who can buy them? The people who’ve been successful in other parts of business. Therefore, it is your moral obligation to buy a Ferrari if you do really well—or a Lamborghini, or a Pagani, or whatever floats your boat. You should be sending this forward. This is how we get to have nice things.

Not everything can just be boiled down to needs. Man needs more than just bread to live. We need beautiful Ferraris, even if we don’t own them.

This is one of the things I love so much about cars: They’re actually a shared, collective enjoyment. The number of times I’ve driven in a nice car next to kids—especially kids, because they haven’t yet internalized this filter that they’re supposed to be cynical about wealth and nice things. They go, “Whoa!” Then you rev the damn thing and they go, “Yeah!” There’s just an instinctual human attraction to beautiful things that make noise. It’s just joy. Why would you be ashamed of that? Why would you be reserved about that?

Unless you feel guilty about how you made your money. There are some people in the world who probably should feel a little guilty about how they made their money, and maybe they shouldn’t buy the Ferraris. But anyone else who’s made legitimately good services or products and had success with them should be able to celebrate that.

Is there a line where you turn into a bore or a braggart, and it’s nothing but, “I bought this, I bought that”? Yes, there is. But you can straddle that line. We don’t have to be either-or. You can be passionate about the things you do or create and validate why you made your money in a reasonable way, because you made something good that other people wanted to pay for. Then here are the fruits of that labor.

This is capitalism, and it’s beautiful. It is absolutely beautiful. It’s worth celebrating, worth exalting, and worth making an example of.

In my personal case, all of this could also just be post-rationalization, because I like nice things and I don’t want to feel guilty about it. But let’s put that aside for a second and focus on the fact that we built 37signals in a kind of weird way for a software company.

Most of our peers raised a bunch of money from VCs and did all sorts of other things. We built a software company out of Chicago at a time when there was absolutely nothing going on in Chicago inside of tech. We built it on 40 hours a week. We built it on having a life next to work. We built it on going for the long term. We built it on taking profits out of the business rather than just chasing higher valuations.

Therefore, that is a counter-narrative to how you can also build a business. I want to validate that it is a reasonable thing to pick, even if you also want a nice Ferrari. These things are not in opposition.

You mentioned the lifestyle-business thing, right? I always love that. People are like, “Oh yeah, you’re just running a lifestyle business.” Yeah, I have a business and a lifestyle. What the fuck do you have? You just have a business? Why would you not want a lifestyle?

My lifestyle happens to include a fucking yellow Lamborghini, so it’s not like I’m giving anything up in terms of the material fruits of capitalism. These are actually compatible notions.

If someone is looking at which way they should go and starting a new business, they might ask, “Should I raise a bunch of money?” Fine, that’s one path. If you need to invest a bunch of capital in factories or GPUs or whatever, you should probably raise a bunch of money. I don’t have anything fundamentally against that. I have something against the notion that this is the only way to go.

I also have a little bit against it when it comes to software. I always felt it was just a waste. Why are you raising all this money just to have a bunch of programmers sit around? Just build it yourself. You don’t need as much as you think.

That was our motto: Tiny team building great software, having good success, not taking any money, and then producing profits. I know this is a bit of a foreign term in much of Silicon Valley. That’s the money you get to keep when you take your revenues and subtract your expenses.

When you get to keep that profit, you become interested in increasing it, and that increases your efficiency. I think this is part of my aesthetic appreciation of capitalism, and it’s why I care about costs so much. That appreciation is what makes the entire system more efficient.

If I’m hiring 3 times as many people as I actually need, I’m robbing the world of those people who could have gone to do other productive things, rather than spin their wheels at my little business when I could have gotten away with a third. The more money I spend on expenses, the less I get to keep for your yellow Lamborghinis. It’s really quite simple.

David Senra

And you have to think of the Italian craftsman.

David Heinemeier Hansson

Exactly.

David Senra

This is something that history’s greatest entrepreneurs repeat over and over again. In fact, we were talking last night, and I’m going to pull up the group chat that we’re in with Jason, because I dropped it in there while we were talking last night.

You kept harping on the fact that you get off on clipping expenses and finding savings, and I think it’s the same kind of refinement of—

David Heinemeier Hansson

You’re talking about product design.

David Senra

I showed you this quote, and you said, “Oh shit, I didn’t hear this. That’s great.” I’m going to read it. It used to be in every single ad. Andrew Carnegie would repeat his mantra time and again:

“Profits and prices are cyclical, subject to any number of transient forces in the marketplace. Costs, however, can be strictly controlled, and any savings achieved in the cost of goods were permanent.”

David Heinemeier Hansson

Yes.

He said that 150, almost 200 years ago. It's remarkable how that goes directly to my kind of thinking. I know how hard it is to increase revenue. If you already have a going business and you want it to grow massively, it's very difficult. It's very difficult to convince customers to part with their money.

I try very hard to do so. We, as a business, try very hard to do that. Everyone tries to do that, right? And it's outside of your control to a large degree. What I can control is my inputs. I can put out the best damn software product I know how to. I can talk about it. I can out-share the competition or out-teach the competition and therefore create this reciprocal relationship with potential customers.

But ultimately, I don't get to choose whether they put in their credit card or not. They do. I do get to choose how much money we spend on servers. I do get to choose whether we squander that revenue on needless cloud services rather than just owning our own hardware, right? These are things within my control, and I love things that are within my control because I have this direct input on them and I can immediately see the result of taking an action.

If I cut off a recurring expense—I mean, it's funny because at this point I really shouldn't have to worry about a $2,000-a-month recurring expense on something—but oh my God, the satisfaction I get from striking that line, replacing it either with something that's free or just slightly lower-cost, is a key part of the mechanics of the business that I just really like. I also have this aesthetic appreciation of an efficient business. It's like an efficient engine or an efficient computer that's not wasting cycles on things that don't propel it forward.

Expenses are exactly that: taking out these inefficiencies. Very often, what I find is that when you take out expenses that shouldn't be there, it's not just about the extra money you get to keep. The whole thing gels better. When you have a smaller team with better people and higher competence, it's just more fun to work with a tight crew.

I don't know many entrepreneurs who don't look back upon the early days with longing eyes, right? Just this lost love: “Remember when we were just 10 around a table?” Now, you get other benefits, and I'm sure Tobi commands an army of 7,000 and can do very different things now and impact the world in very different ways. But in terms of just that tight loop of working on something with a small team, it's incredible, right?

A lot of that comes from asking, how do we make that small team, that small company, as efficient as possible? Then we can reach further, and we have more resources to do things and so forth. So, I just love expense reports. I didn't know this about myself, by the way. Some of these amazing things you discover as you just do it, right?

If you tell my 18-year-old self, “You're going to love going through expense reports. You're going to love finding little lines that you can put a marker around and then cross out until they disappear,” I would have said, “That sounds like an accountant. That's not me.” But it turns out it is, and I love it.

David Senra

All right. So, you mentioned the yellow Lambo a couple of times. You bought the yellow Lambo after Bezos bought into a chunk—

David Heinemeier Hansson

Yes.

David Senra

—very early on, when you basically, by your own admission, didn't have much of a business. Yes, he gave you a bunch of money, whatever, millions of dollars. You're like, “Hey, I got a couple million. I got to give at least $200,000 to these Italian craftsmen,” right?

David Heinemeier Hansson

Yes.

David Senra

So, you buy the yellow Lambo. But more interesting than the yellow Lambo to me is what you said Bezos did for you and Jason: He gave you the confidence to go for it. Can you explain that?

David Heinemeier Hansson

So, in the early days, 37signals had launched Basecamp, it was taking off quite well, and we got a lot of interest and outreach from VCs. We counted 40-some at the time, and this was 2005-ish. I still have a very vivid memory of the dot-com boom and bust. I had seen what happened to some of these VC-funded companies and the internal mechanics of that, and I didn't like any of it.

I also had all these ideas about efficient businesses and what it takes to run one. So, we didn't actually want VCs. But going back to this point about trusting yourself, I didn't fully trust myself not to get tempted by a $20 million check, a $50 million check, whatever the number was, at a time when my bank account said, “I don't know, $8,000.”

Funny thing, my bank account did say actually slightly higher than that when I came to the US. I think I had about $50,000 that we'd worked up as we started Basecamp. The first thing I did as soon as I landed was go with Jason to an Audi dealership and buy an Audi S4, my first car, cash. That was basically all the money I had in my bank account. I just blew it all on the car, and I thought, “We're going to make it back.”

But this notion that we had something that was taking off, while this was all fleeting—I had great humility because I'd seen many other businesses go, “Oh, it's popping off,” and then it's leveling off and then it crashes, right? You can sell promise. That is one thing the VCs will buy any day of the week, right? A promise.

There's a trajectory. There's traction. This is going places. It may be small now, but if we keep plotting the lines, it's going to go to the moon. I'm going to get in early. You can make some money off that. We didn't want those people on board.

Jeff showed up around the same time, and we thought it was the same pitch. But it turned out it wasn't, right? He was not interested in the regular VC deals. That wasn't why he was doing it. I'm not actually 100% sure why he was doing it. I think he just enjoyed getting involved with companies and people that he had an interest in.

Anyway, he reached out, and we basically flippantly told him no. Then, politely, his team reached out again: “No, actually, Jeff would really like to meet you.” And you're like, “Okay, fine.” I mean, anyone who's actually built something—

This is one of my beefs at times with some quarters of the VC community: You're just a money person, which it's actually weird why I consider that to be derogatory, but I do. If the only thing you do is money, I'm skeptical of you. If you've built things and you've made money, let's talk. But if it's just about the money and the allocation, I don't know. I'd rather talk to some builders.

Jeff is certainly a builder. He absolutely built something in a very, very different way than we had built our things, right? He went, “Let's just raise all the money in the world, and I don't care if we don't make anything for 20 years.” We're the polar opposites, in a lot of ways, of how we built our businesses. But that was also interesting.

Don't surround yourself with a bunch of people who think just like you, who will say all the same things that you think and will think all the same thoughts that you think. Jeff had very different thoughts, and that was very appealing.

So, long story short, we ended up giving him a ridiculous term sheet. It was just flippantly, I mean, almost offensively, overvalued. There was not a lot here. There was some promise, but we took that promise and drew the line to the moon and said, “We want to be paid as though we were up here.” This was such a stupid number for the time. He's not going to take it.

And then he took it. It turned out to be an amazing investment for him. I actually wish I had some of the gumption that Jeff has to see that far into it. We've given him his money back many, many, many times over, and he still owns Block. Every quarter or so, we send him another check: “Here's your dividend.” And we keep on doing that.

But that gave us the confidence to say no to everything else. It gave us the reassurance that if this wasn't going to pan out, we at least didn't have to go look for a job the next Monday. That was an incredible gift.

Jeff then followed up with that gift not just with the money, but with the advice. Usually, we'd meet with Jeff once a year in the early years and we'd have dinner. Jason and I would share our trials and tribulations, and we'd ask Jeff, “Here's the situation.” Jeff would go, “What do you think?” And we'd go like, “Well, I think we should do that.” “That's a good idea. You should do that.”

It sounds so simple. It almost sounds like it doesn't have any value, and it actually had all the value in the world. He could have replied with, “You should do this thing,” and given us a detailed plan. But just that confidence—here's Jeff Bezos, king of the goddamn world in that sphere, telling us he believes in us. He thinks that our thoughts are valuable and good.

The funny thing is, neither Jason nor I generally has a deficit in self-confidence. But there's self-confidence, and then there's Jeff telling you, “No, you're right.” Oh my God, rocket boost. Let's strap in. Let's go.

In some ways, I think he turbocharged just that brashness, that indignation that, “Hey, here's a different way of building things, and we're not shy about sharing that we build in a very different way.” A lot of that came from Jeff, and we owe him tremendous gratitude.

Actually, when I look back upon the things I regret, I regret not being a little bit more grateful for that. In the long run, it was a really pivotal moment—not just for the business. It could have gone a very different way. We could not have gotten Jeff's offer, and 6 months later some VC would have given us a massive check that sounded super impressive. It would have destroyed the business, and then we would have sold our independence and been fucking miserable pricks.

David Senra

And that didn't happen, and it's thanks to Jeff, so that's beautiful. I have one more thing I want to talk to you about, which I thought was very interesting. Again, I think this speaks to your idea that you're pretty fluid in your thinking—you have strong opinions, sometimes weakly held. Even though you've been known as a VC critic, what you shared with me last night was that during the most difficult time of your business, Marc Andreessen was the single most helpful person to you.

David Heinemeier Hansson

Yes.

David Senra

Can you talk about what was a difficult time and then what Marc did for you?

David Heinemeier Hansson

So, in 2021, we had a huge blowup at the company. This was the peak woke-insanity era. This was when everyone was posting proclamations about political ideas on corporate pages that had nothing to do with each other. There was an activist group inside almost every tech company in the world, pushing these companies to do all these things—almost extorting them into doing them—and we kind of got boiled like a frog at 37signals.

Jason and I had probably seen good intentions in places where there weren't any and allowed things to roll. It happened quite quickly. It wasn't like something that had been building for 20 years. It was around 2018, I'd say, that you started to see the first inklings of an activist core minority that suddenly had all these ideas about what the company should and shouldn't do, what was kosher and not, what was offensive and not, and was pushing on things. We thought, "We can manage."

By 2021, it became clear that if we didn't do something, this could eat the entire company—the soul of the company, the feel of the company—and we could end up with a business we didn't want to be in. This was our business. I've had moments during that time when I felt like, "You know what? Maybe it's time to retire," which is fucking preposterous. I still like what I do. I like the vast majority of the people I work with, the business, and the technology. Why would I want to retire from that? It's because there's this miserable contingent that's poisoning everything.

So, we just went, "Okay, let's put a hard stop to it." The stop was Jason and I deciding, "We're just going to end it tomorrow. No more discussing politics inside our work channels. We're not going to settle the Palestine question inside the same space where we're discussing features in Basecamp. That is not an appropriate venue for having these things. In fact, it's incredibly divisive to introduce that kind of political energy into a professional environment."

We did that, and we made some other changes, but it was really that thing about politics that ticked people off. There was this core contingent inside companies who were very ideologically wedded to the idea that our business was a vehicle for their political aspirations on all these topics. Then there was the larger context of the internet, and especially Twitter at the time, which was very engaged in all of these topics. So, it just blew up.

We put out a memo saying, "All right, it's over." We also knew it was going to be contentious. After it proved to be contentious, we doubled down on it and said, "Do you know what? If you can't see yourself at a company where we're not going to discuss fucking Palestine during work hours with your random coworkers, we'll pay you up to 6 months' salary to go somewhere else."

At the time, the job market in tech was booming. Everyone was getting offers left, right, and center. So, this was an incredibly attractive offer: Here's 6 months' salary, and you can get a new job on Monday. It was almost like a mega bonus for getting the fuck out of there. It was the best money we've ever spent on anything related to culture, maybe anything at all.

Of all the things that I've bought, the peace of mind we bought with those payouts was priceless. It didn't just surgically cut out that bit of cancer; it cut out a thick ring around it. What we ended up with was a culture that was completely cured of all that insanity in one swoop.

Now, the patient had a little bit of a rough going for a while. That was the rough going where Andreessen came in. We're a small company—60 people—and at the time, 20 took the offer. 20 left. That's almost a third of the company that decided to leave in that moment. We got to a point where we were thinking, "Not that many more have to leave before I start to get worried about whether we can keep the lights on."

It was actually Tobi who put me in contact with Marc Andreessen, because Marc had been exposed to this phenomenon at other portfolio companies. Even getting that initial exposure—"Hey, there are other people struggling with this, by the way. Even though you're getting skewered right now on Twitter and being haunted by the mob, this is happening all over. You're not unique in this way"—was helpful.

And by the way, here's a bunch of contacts. Do you need someone to come in and help with programming, operations, or whatever? I was floored by the generosity. I don't think Marc and I have always seen eye to eye on these things, especially in terms of venture capital. He's been one of the main faces of venture capital for decades, and I've been critical at times.

David Senra

Exactly.

David Heinemeier Hansson

There was just a realization that all those grievances we might have thought were so big once upon a time were actually minuscule. We were fighting the White Walkers on the other side of the wall, and all our internal squabbles were going to be for nothing if those fuckers got inside the wall and destroyed everything. All of it.

That felt like a real threat at the time. It could have happened. They could very well have just ripped the whole thing apart. Marc clearly saw that this was a collective, almost existential threat to the entire industry. If these activists were able to take over these institutions in the same way that they have taken over academia, we would be fucked—not just for a little while, but potentially for decades.

That couldn't stand. So, clearly, when Jason and I stood up and said, "We're not doing it," there were a bunch of people who said, "Great that they're going first, so they take a bit of the heat, but let's also help them." Marc was incredibly helpful, not just in terms of the contacts and introductions—all of which we ended up not needing—but in a very powerful way.

When you have literally 40,000 people on Twitter calling you all the worst things in the world, even the strongest individual might think for a second, "Holy fucking shit, the mob is coming for me, and there's no one else there." There were other people there. Tobi was there. Marc was there. It was incredibly helpful to give us the fortitude to say, "No, do you know what? We're going to stick with it. We're not going to grovel. We're not going to apologize. We're not going to revert."

David Senra

[Snorts]

David Heinemeier Hansson

What Marc also did was give me a syllabus for understanding the history of wokeness, going all the way back to the 1960s and beyond, showing that this didn't just come like lightning from a blue sky. It had an institutional grounding that was set in motion, particularly in the 1960s: the long march through the institutions, Herbert Marcuse, a lot of the Frankfurt School, and all of these groups that had designs on how to reshape society and create the revolution they so dearly wanted.

But they had a timeline and a roadmap that were demarcated in decades. It wasn't just, "We're going to put something together, and then in 2 years something's going to happen." No, they were sitting in the fucking 1960s fantasizing about how to overthrow everything in the 2000s. It's actually incredible, in a Dr. Evil sense of it, but when you're on the receiving end of it, it seemed a little less incredible.

It was difficult not knowing: Where is this coming from? Why is this happening all of a sudden? Well, it wasn't happening all of a sudden. There was this long history of it, and when you understood that history, it made a lot more sense. It also gave more purpose to the rejection of it.

We weren't just rejecting it in our little corner of the world. We were chipping in to the great civilizational battle over where this country was going to go, whether the White Walkers beyond the wall were going to win. We were saying, "No, they're not going to fucking win. Get them out of that fucking wall. Take your goddamn spear and fire it with maximum velocity."

David Senra

David, this is awesome. Anytime you're in town, text me and we'll run this back as much as you want.

David Heinemeier Hansson

Thanks, man.