Jason Fried: Your Only Competition Is Your Costs

I want to start with what you told me last night: You feel the best way to make a product—or the best way to make a product for you—is to be the actual customer. You make the products that you want to use.

Yeah, I don’t know how to do it any other way. This is how I’ve always done it.

Back when I was 15 or 16, I started making software with something called FileMaker Pro, which is way back when you could make databases for yourself. I made a database to keep track of my music collection because I was loaning out tapes and CDs to friends and never getting them back. I thought, “I need a way to keep track of this stuff because I keep losing these things.”

I made this product, which I eventually called AudioFile, for myself. It was just this database, and I made a nice interface because I liked art and making stuff. I eventually decided to put a little text file in the software archive that said, “If you like this, send me $20.” I put it up on AOL, so this was pre-internet.

I got an envelope—actually, an airmail envelope, one of those old-school envelopes with the red-and-blue check marks—from Germany. I opened it up, and somebody had printed out the piece of paper that I had included with the software and given me a crisp $20 U.S. bill.

That was the moment when it all clicked for me: Make stuff for yourself. There are probably other people out there like you who want what you want, so make it available for sale. You are the customer. You are the audience. It’s you, you, you—and then there will be other people just like you.

We’re not all that unique. There are plenty of people who like what we like, plenty of people who don’t, and plenty of products for them, too. But there are enough people who like what you like. That’s where I got started.

You have this interesting idea that if you’re just making what you want, it doesn’t matter. You just have to go and collect more people who like the things that you like, and ignore the people who don’t.

Yes, and this is all tied into keeping your costs low. If you have a lot of costs—a big company with high costs—you have to find a lot of people like you. But if you keep your costs low and your company small, you don’t have to.

At the time, it was just me when I was doing the software thing. I was making, I don’t know, $20,000 a year selling software as a solo person when I was 16 or 17 years old. I went into college for a little while as well. That’s an amazing little side business—or a huge side business when you’re that age—because I had no expenses.

It was easy. I only had to find a few thousand people to pay me $20 to eventually make that money. But if I had had a big business, a lot of people, and a lot of overhead, I would have had to find a lot of people like me, and that’s harder.

The whole game for me is to make things as simple and easy for me as possible. Keep your costs low, keep your company as small as you possibly can, and make great stuff. Then you don’t have to find as many people just like you. But the ones you find really love what you do, and that’s enough.

You can stop there conceptually and say, “I’m going to make stuff for me and people like me. I don’t need the whole world to like what I like. I need enough of a small world to like what I like, and we’re golden.”

You put it in a very interesting way. You said your real competition is your costs.

Yeah.

Is that the line that you have?

Yeah. It’s your only competition.

Explain that.

A business is very simple: You have to make more than you spend. That’s a business, basically. You can keep borrowing money, and then you can borrow more than you spend, but eventually you have to make more than you spend.

If you’re making more than you spend, then your competition is your costs. That’s what you’re really in business against: how much it costs you to stay in business.

It’s not all the other alternatives that are on the market. Of course they exist, and they’re real, but you can’t do anything about them. They’re going to do what they’re going to do, and you’re going to do what you’re going to do. You can’t control what they put out there, what they price it at, or all the things they do.

What I can control is how much it costs me to run my business and how much I sell my product for. As long as I make more than I spend, I get to stay in business.

Isn’t that what this is all about—staying in business? That’s what it’s all about, because I like this. We like this. I want to keep doing this. I can’t keep doing it if I don’t stay in business. I can’t keep doing it if I make less than it costs me to make the things that I make.

I’m always thinking about the only competition I really have on an annual basis: making sure that we make more as a company than it costs us to run the company. That’s my real competition.

This is something I talk about over and over again on my other podcast, Founders. It’s kind of weird how every single one of history’s greatest entrepreneurs was obsessed with watching costs, from Sam Walton to Steve Jobs when he first started Apple to Andrew Carnegie and Rockefeller.

This theme reappears over and over again. We were talking the other day about how fascinating it is that you can have a software company with insane margins and still lose money.

When I talk to young founders, I tell them, “Just go study the early days of Microsoft.”

Yeah.

Bill Gates—one of the most interesting stories is that the first 30 employees of Microsoft were Bill Gates, his secretary, and 28 programmers.

Yeah, amazing. No fat.

There was no fat at all.

No fat. All product.

That’s something you talk about a lot. Can you talk about the importance of keeping costs low, having small teams, and essentially having no fat anywhere?

We have 62 people at 37signals. We’ve gotten as high as 80 at some point, and now we’re around 63 or 62, which feels really good.

But we also built a lot of things when we were much smaller. We had 12 people way back in the day, or 4 people in the way, way, way early days when we started out. I’ve always been comfortable with small teams.

I think small teams work better and are better. There’s less room for miscommunication, because I don’t think companies really have communication problems. They have miscommunication problems. When you have too many people and too many layers, someone misses something and someone else has to repeat what happened. I want to avoid all of that and get rid of the things that get in the way of making good stuff.

I actually think too many people often get in the way, and you end up making worse stuff the more people who are involved. We just try to keep the team small.

Any team we have making something is usually 2 people: 1 programmer and 1 designer working on a feature. That’s pretty much it. Sometimes someone else will come in here and there, but for the most part, it’s 2 people.

It also keeps us honest. It prevents us from making things that we can’t make with 2 people. It keeps everything tight, simple, and clear. You keep parlaying that and adding it all up, and you end up with a very tight product with a small surface area.

You can see the whole thing, hold the whole thing, and know how it all works. Your customers can see the whole thing, hold the whole thing, and know how it works. That’s all people want.

People don’t want complicated stuff. They don’t want software full of things they don’t use. People will sometimes buy things like that because they’re sold things like that, but when it really comes down to it, that’s not what they actually want.

The people who buy our software are the people who use the product. A lot of enterprise companies sell software to a buyer who then makes other people use the product, and everyone hates those products. But the people who use our products buy our products. It’s the same person, so they’re looking for something that just works really well.

I’ve found there’s no better way to do that than to keep the company small and tight. That goes everywhere. We don’t have any middle management. We tried it a little bit, which is why we had 83 people at one point. We hired a few more people to build out a team, then pulled back from that and said, “That wasn’t helpful.”

What did you not like about that?

There are 2 people on the executive team: me and David, my business partner. That’s it.

We had a COO for a while. They were fine and they were good people, but frankly, there wasn’t enough work for them to do. They were just doing things that didn’t really need to be done.

When you do stuff that doesn’t really need to be done, you feel bad for them in a sense because they’re wasting their professional life doing things they don’t really want to do and that don’t need to get done. That doesn’t feel good.

We’ve had engineering managers, and we found again that there were too many levels between David, who is the CTO, and the people doing the work.

He had to talk to someone else, who talked to someone else, and it was like a game of telephone. Things were lost in translation along the way. We tried those things. We had some thoughts that maybe this would be a better thing for us to do, and it turned out not to be a better thing to do.

How long does it take you to realize?

A year.

Okay.

Basically. COO roles were longer. They were 3 years. We tried it twice. For the most part, we give everybody about a year to prove themselves at 37signals. We hire somebody, and they have about a year until we decide if we're going to hire them again. That's how I think of the second year: it's a rehire.

It's not like a performance review, where we look at numbers. It's one simple question. If I can, I always try to boil everything down to a question that answers all the other questions. The question we ask after the first year with any new employee is, “Knowing what I know now, would I hire them again?” That answers pretty much every question.

It answers every question about performance, attitude, culture fit, all that stuff. If I know what I know now, would I hire them again? It turned out with the management stuff, it wasn't even about the people. It was more like, “Now that we know what we know, would we create this position again?” The answer was no. So, we eliminated those positions and never rehired for them. That's how we got back to a smaller size.

Does that work with products too, or features of products?

It can. It's harder.

You've rolled back people.

Yes.

You've rolled back entire products.

Yes.

Do you ever roll back features?

We have done that in some ways. Typically, every 5 or 6 years, we reinvent Basecamp, which is our main product, our biggest product.

Do you write it from scratch?

We have in the past. From Basecamp 1 to Basecamp 2 was a total rewrite. From 2 to 3 was a total rewrite. From 3 to 4 was not, and from 4 to 5, which we're working on now, is not. But it's a chance to revisit a lot of fundamental assumptions about what the product does and how it works.

I'm trying to buck the trend. Human nature is about expansion, typically. Things tend to expand. But in the physical world, there are also limits that push back on those expansions. If this mug were burning hot, we would know that's a bad design. If there's no handle here and I had to hold it this way, maybe it's not a good mug. There are physics here.

If this thing were made of a really, really fragile material, or something that would melt if it got wet, you'd be like, “That's a bad design.” There are things telling you this is a bad design. In software, you don't get that. Software can be anything. It's infinitely malleable.

What ends up happening is, because there's nothing pushing back, it just expands forever and gets worse. Software slides downhill. It gets better for a while, then slides downhill. I'm conscious of that, and I'm always trying to make sure that every new version we make of something is a little bit simpler in the fundamental ways than the previous version. It might have more features, but the experience is hopefully simpler.

That's the big challenge, and frankly, the most fun part of building products over the long term is asking, “Can we buck the trend of having them slide downhill and instead maintain them or make them even better over time?”

Why is that fun?

It's hard, and that's fun. It's a bit of a puzzle. It's a bit of pushing back against the forces of nature, which again would be to expand. It's forcing us to come up with clever solutions to problems, more creative solutions to problems.

It forces me to understand what something really is, not what it could be or what I think other people think of it as, but what it's really trying to do. It's fun to have these insights.

My favorite thing in life, frankly, is to have an insight. I don't get to decide when I have them, right? No one does. You just have one. Maybe it's in the shower, maybe it's whatever. You just have an insight.

It's cool to work on a problem in software and then have an insight about how to make it simpler. For whatever reason, I bounce into those insights very frequently making software, more so than pretty much anything else I do. So, it's fun to make something new because I get to have more insights into how to make it simpler and better. For whatever reason, that's where they come from: the shower and the software.

A lot of the conversations that Jason and I have are about craft, about the importance of putting your soul into your work and making the best possible product that you can. Our conversations remind me a lot of the conversations I have with my friend, Karim, who is the cofounder and CTO of Ramp. Ramp is the presenting sponsor of this podcast, and Karim is one of the greatest technical minds working in finance today. Karim is obsessed with crafting a high-quality product and using the latest technology to constantly create better experiences for his customers. Ramp has one of the most talented technical teams in finance, and they use rapid, relentless iteration to make their product better every day. In the last year, Ramp has shipped over 300 new features. Ramp is completely committed to using AI to make a better experience for their customers and automate as much of your business's finances as possible. In fact, Karim just wrote this: "AI is all I think about these days. It is our duty to be first movers and push limits so we can make the greatest possible product experience for our customers." Many of the fastest-growing and most innovative companies in the world are running their business on Ramp. Make sure you go to ramp.com to learn how they can help your business save time and money. Let AI chase your receipts and close your books so you can use your time and energy building great things for your customers. Get started today by going to ramp.com.

We were talking a lot about this conversation I just had with Tobi Lütke. I know both you and I admire him.

Oh, yeah.

What I love about Tobi, and what you have in you as well, is that when you talk to him, the next response out of his mouth is not predictable.

Yeah.

Some of his views are not correlated with one another, which also makes it really interesting.

Yeah.

You've been running your company. You started your company when you were 25.

Yeah.

You've been running it for 27 years.

Yeah.

You guys have been profitable every single year.

Yeah.

You have millions of customers over the lifetime of the business. You've made hundreds of millions of dollars. And yet you told me that if you ever sell the company, you don't want to look at a computer again.

Yeah, I don't. First of all, I don't like being consistent. I'm not that interested in being consistent. Your point about saying something that conflicts with something else you said, to me, it's all about context. It's not about consistency. I don't find consistency interesting in any way, shape, or form.

To me, it's all about the context, which is why I don't like to plan. I don't have long-term plans. I like to make things up as I go. That's all tied into that.

I don't particularly like business. I like running my business. I figured out how to run my business, but the idea of me running another business, I don't want to do that. Maybe I could create another one that's mine, and I would like it, but I don't think I could, actually.

I think we're a product of timing, teams, the right people at the right time, the right ideas at the right time, and all that stuff. That's what made this thing and continues this thing. But to start over again, to run a business? No, thank you.

Frankly, the other thing is, I would never trade my business for anyone else's business. I don't want anyone else's business. I don't want to put myself in someone else's shoes. I know how to do my thing, and that's enough for me.

I don't need to stroke my ego and go, “I could do this again somewhere else. I could turn something...” I don't think I could do this ever again, but I don't need to, and that's okay.

This sense of being comfortable with what you've built and what you're working on now, of it being enough, is a very peaceful place to be for me. I think that's unfortunately not something that's talked enough about in my industry, which is tech. It's “Grow, grow, grow, get as big as you can, sell valuations, do it again, serial entrepreneurship.” It's boring to me. All that's boring.

Okay, there are a million things I want to unpack there—

Let's go. Let's do it.

Because you said a bunch of things.

Yeah.

The serial entrepreneurship I want to hit on, because you and I were talking about the conversation I had with John Mackey—

Yes.

Where he was referencing some of his friends who just love to start. You were like, “Oh, I actually have this metaphor that I want to start talking about,” and it is envelopes and letters.

Envelopes and letters.

Yeah, okay.

Yeah.

And then we'll go back to the fact that you don't like business—

Yeah.

And that you only like... And you're not... Really important, too—don't let me forget—is that you have no sense of envy, I know you well enough now—

I try not to. Well, yes.

Toward other people's businesses.

Yes.

I don't think that is an act.

No.

Yeah.

I would not trade my business for anyone's business, so I don't envy anyone's business. In fact, it would be a downgrade. Anyone's. You could pick anyone, right?

Oh, you've got to explain that.

If you got to decide, you're like, “Jason, would you trade this business?” No. Any business, I wouldn't take. I'd take mine over anyone else's business. So, I don't have—

What is the underlying thought there? It's just like...

I built the company I want to work at. I built the business I want to be in. No one else has that. I have that. That's my thing.

They have their thing, and I have my thing. I love what I've built. It's great. I'm very happy with it, and it's a good fit for me. I don't want to wear someone else's clothes. I don't want to do someone else's stuff. I don't want to live up to someone else's expectations.

We have ours. We do our thing our way, and that's it. If I had to do my thing someone else's way, it'd be a game of charades. There are a lot of people, I think, playing entrepreneur. I don't want to play entrepreneur.

What does “playing entrepreneur” mean to you?

It means a lot of things to me, but let's get into the envelope thing, because this is part of that.

Okay.

I remember being an envelope guy when I was getting started. To me, there are basically 2 sides of business: the envelope and the letter. The envelope is the outside, the shell, the business—the vehicle that holds the letter. The letter is the product or products.

I'm a product guy. I love product. That's all I care about. The business side just has to exist to hold the product, right? That's the vehicle in which the product travels. But I don't care about the envelope so much.

There are lots of people who do, though. I remember this early on, when I first started my business. I was thinking about the brand and the business, how big it could be, how to describe it, and what to call it. That's all envelope work. That's all on the outside.

There are a number of people who are envelope people, and that's fine. All of this is fine. What I'm getting at is that you've got to know who you are, what you want out of yourself, and what you want to do. If you're an envelope person, that's fine. If you're a product-letter person, that's fine, but you've got to know who you are.

I know I'm not an envelope person. I don't just want to build shells that get filled, sell them, and build another shell. I want to work on the letter, and the envelope is just the thinnest little thing that needs to be there to hold the letter.

I think playing entrepreneur is spinning up businesses all the time, making all sorts of stuff, giving it a name and a logo, trying to raise money, coming up with valuations, and talking about all this stuff when there's nothing of substance inside yet. Maybe there will be, but in a lot of cases, there's nothing. There are just losses.

Then it's a mad rush to get out at a certain valuation for other people who put money in. That's like turning a business into an asset, a financial instrument. It's just not interesting to me. I want to make things. I want to build products, and that's what I do.

Again, that's what we do. The idea of a business being a financial instrument is anathema to me. It's repellent, actually.

You just used the words “thin shell” to describe the envelope. Why do you want a thin shell?

I want it to be a thin shell.

What does that mean?

I would say this: The more massive an object is, the more energy it takes to change its direction, right? This is just getting back to basic physics. When I think of this stuff, sometimes these metaphors don't perfectly line up, but in my head, I think of a thick business as something that's hard to change. It's heavy and massive.

There's too much distance between it and the customers, and between it and the product. There's space, right? If you imagine something very thick, this is the thing that matters, and you've got to go through all this and compress it down to get to the thing that matters. I don't like that.

I think the thing that matters should be big, and the rest of it should be as thin as possible. That's what we've tried to build at 37signals. It's a very thin business with a thick set of products that are good, solid, and real. They generate real profits and are real businesses. The rest of it is just enough to hold it all together.

That's my vision for business. It's not the only vision. Plenty of people way more successful than me don't see it this way. I don't care. This is just how I see it, and how I'm sharing it.

It's mainly to show people that you don't have to go big. It doesn't have to be a big, thick, heavy, busy company. It can be very thin, focus on the product, and get to a place where you can find out if people like you. Get to this place where enough is enough, and then maintain.

Another way to think about this for me—I always go back to these weird metaphors—is the hockey-stick chart, right? That is unappealing to me. I prefer a metaphor where it's more like a rocket into orbit.

You've got to get off the ground, and you've got to break free of gravity. But then there's a point where you actually just want to sit in orbit and maintain. You want to be within a certain range and fluctuate a little bit up and a little bit down, but be in this comfortable place where you're just orbiting.

You're not pushing super hard anymore. You're maintaining a level of quality, maintaining a level of enjoyment, and just orbiting now. I think that's a really wonderful place for businesses to be.

I wouldn't encourage you to be trying to get to orbit in year 2. You've got to be on the ride up to break free of all the forces that are holding you back. But then you should also find a place where you can settle into an orbit, versus people who I think are just constantly trying to grow, grow, grow and get as big as they possibly can.

I always say, “Why?” What if you're massive and then you're twice as massive? So what? Why? What's that all about? They may have an answer for you. I don't know what the answer would be, other than just growing for growth's sake. But I'm a big fan of getting somewhere and then holding.

When I think of you, I think of one of your maxims that you repeat the most. I hear you say, “So what?” all the time.

Yeah. “So what?” With all those questions.

Yeah. Explain more about that.

You'd have to ask a question, and I would be like, “So what? I don't know.” Why grow? Maybe that's not a good example.

For example, we're definitely leaving money on the table. I'm sure of it. We don't optimize our pricing. I'm not constantly testing pricing. We're not constantly A/B testing. I'm certain there's some formula that we're not following that could lead to more growth, more revenue, more whatever, and my answer is, “So what?”

I'm very comfortable with where we are. We've got a great business: high margins, very predictable. We make new stuff all the time. We enjoy ourselves. We have a great time. I don't want to f*** that up.

I think people f*** it up all the time. You get to the right size, and for whatever reason, you can't be content there. You push a little bit too much, too hard, and you lose what was great about what you were doing.

This whole thing about money being on the table—maybe there is, and maybe there isn't. Maybe there's a way to optimize, and maybe there isn't. It doesn't interest me, so it's “so what?” to that. I don't really care.

Tell me if this observation that I have about you is correct.

Yeah.

You seem to have an inherent, natural revulsion against optimization.

Yeah, I don't like optimization.

Okay.

Here's the consistency thing: It's all about context. I don't like optimization around numbers. We can make $5 million on this, but it would be amazing if we could make $5.1 million if we did X, Y, Z. I don't care about the X, Y, Z to make $5.1 million.

But I am interested in optimizing a product to make it better. That, to me, is a worthwhile optimization. It's better for me because I use it, and it's better for our customers because they use it. That's fun.

Squeezing out an extra $100,000 off $5 million or something is not fun. It's boring. Beyond boring, actually. I don't even know what would be beyond that, but I'm not interested in it at all. I'd rather spend the money making the thing I make better.

That is the thing I'm here for—not to squeeze an extra $100,000 or an extra $1 million out of something. I don't care. It doesn't matter. There's a point where you're doing well enough that it shouldn't matter anymore.

Now, that might make me a bad CEO. Maybe someone else would come into my business and double the business overnight. That might be totally true, and I'm willing to accept that that's the case. My answer would be, “So what?” I don't care.

I don't even think you think of yourself as a CEO. And there goes the “so what” again.

You asked for it.

No, I don't think you can help yourself. I don't think you think of yourself as a CEO. I don't. I don't actually even like the term, frankly.

Okay.

Like, executive officer? What? Of what? I make products. I run the company with David. David and I run it together. I don't need the CEO.

How do you say it?

Chief Executive Officer. Of what, again? Of what? We make decisions. That's what we do. We make decisions. We make products. We hire great people that we like. We find people with zero drama. We put together a team. We set out to make things.

We take really good care of people and really good care of our customers. We make good products that we really like—great products, hopefully, right? I've got to leave a little bit of room there for some humility. We can always make better products, so I'm not going to call our products fantastic. They are good, great. There's always room for making them better.

But as far as being a CEO and whatever that's supposed to mean, I don't know what the hell that means. Yesterday, I answered 200 emails from my customers.

Some people would say that's irresponsible for a CEO to spend their time emailing customers.

I think it's the best thing you can do.

Yeah.

But I don't think of myself as a CEO.

I would say, whoever says that's not a good use of your time—

A lot of people say it, dude.

Yeah, but they need to listen to Founders because they're all like this.

Yes.

The best entrepreneurs—

Yes.

—and founders in history—

Yeah.

—and I think what you and I bond over is exactly that.

All I care about is products. I don't care about anything else.

Yes. I think the way you think of yourself is as a designer.

Yeah.

Is that correct?

Yes. Sure.

Okay. That's a little presumptuous. I think of it—

Yes, fine.

You're not a presumptuous person. I didn't mean it that way.

I know you didn't.

Yeah, but when I talk to you, it's like you've just designed everything in your life.

I like to make things.

Yeah.

I'll just say that.

You're a very thoughtful guy, and you see how much thought you've put into the design of everything in your life. It just happens that you've also put a lot of thought into designing products in the business, again, to fit exactly who you are as a person.

Yeah, as best I can. I have a family, and I have kids, and you don't always get things the way you want them to be, right?

Yeah. But you do your best, and you live within a system that you're proud of and happy with, and that's, I think, a big part of it.

The best founders—I see this over and over again—they're always... You said something about the thickness of the envelope and all the stuff that's between the person running the company and the customer.

Yeah.

You have to make that as small or almost nonexistent as possible. One of my favorite examples is this.

Yeah.

This example from over 100 years ago: Jim Casey, the founder of UPS.

Uh-huh.

What he realized is that he had all these executives. He paid attention to incentives and realized they would, over time, just tell him what he wanted to hear. Therefore, he was getting—

Of course.

—his ass kissed all the time and not getting useful information. So he was like, "Forget this. I don't want to talk to them."

Yeah.

He had a driver, and they would drive on the streets, and he just said, "Every time you see a brown truck—a brown UPS truck—you pull over," and he would just talk directly to the drivers.

Awesome.

He spent all his time—

Awesome.

—talking to the person—

Yeah. That's doing the work.

—that's actually doing the work for the customer.

They know the most. I don't think anybody is saying, "Jeff Bezos." I know he's a partner of yours. He owns a percentage of your company. He railed about this forever.

Right.

And he made every single executive spend a day or a week or a month—whatever it was—

On support or whatever.

—on customer support.

Yeah. We do the same thing. We haven't done that for a bit, but we used to do that, and we should do it again, actually. We used to have this thing called Everyone on Support, where people would do it for a day and rotate through the company. Mostly so I would do it, and so David would do it. And now I do it anyway, but it's very important.

When I lived in Chicago, there was a grocery store down the street called Olivia's. There still is. I got to know the owner, and I appreciated the fact that he got to know his customers personally, because they'd walk into the store and he would say hello, right? That's how I got to know him.

I don't, unfortunately, have that opportunity. We have hundreds of thousands of people who use our products, and it actually frustrates me that I don't know all of our customers. On the street, I could walk past 75 of our customers on a given day, and I wouldn't know that. He would know, because he would know who they are, and he knew their family—the whole thing.

So I've always tried, as best I can, to get as close to our customers as possible. I can't get as close to our customers; we have too many of them, in that sense. But whenever you sign up for Basecamp, the first thing you see is a letter from me with my email address, with my signature and my email address, and I want my customers to email me. I don't want to hide from anybody.

There's no AI. There's no assistant. There's no levels between at all. Just write me, and people do all the time. We have our email address in our books as well. I want to get as close as possible to the people who use the things that we make—not just to make them happy, because I want to make myself happy, too. We are the first customer of our products.

But I also want to understand what they're doing with them, the language they use, how they describe them, and who they are. I want to know these things, because somehow it permeates me. I get to feel what it's like to be them and understand what it's like for them to use the lever we've made for them to move something.

There's no other way for me to do that than to just share my email address, because I don't get to meet people in person like this guy who runs a grocery store. But I love businesses like that. I love the dry cleaner who's been there for 40 years. I love the local grocery store. I just love businesses. Those, to me, are so much more interesting than the billion-dollar whatever.

Why?

That's a great question. I feel like they're more real. I like real things, whatever that means. Define it however you'd like, but a billion-dollar business or a $10-billion business doesn't feel like a real thing to me. It feels like a concept.

Meanwhile, the dry cleaner down the street—I can drop off my shirt, get it cleaned, and pick it up from the person who owns the place. This is her living. This is what they do. There's something that I connect with, something that's real, that I feel like I can hold in my head and understand.

I keep coming back to this—not keep, but I've already come back to it once in this interview: this idea of surface area and a business as an object. I want to be able to see the whole thing and understand the whole thing. A massive entity with tens of thousands of people and billions of dollars and whatever—I don't understand it, and that's maybe my own shortcoming or whatever. I don't really care. Again, I don't need to understand that. It's not my thing.

But I just prefer smaller businesses. Our customers are small-business owners, and I don't care about enterprise customers. I don't want them. I like small and medium-sized businesses. They're more like me. I understand who they are. I understand what they do. I like that kind of stuff.

So, a business can't be beyond a single person's comprehension—you can understand it. A dry cleaner is very comprehensible. You gave this great story—I don't remember if it was in one of your books or not. There's a love of craftsmanship that I get from your writing. There's a pizza place where he will only sell—

Oh, yeah. Yeah.

Is it the fresh dough? And he has no—

It's a sandwich place.

Okay, sandwich. Can you tell this?

When they ran out of bread—I don't know if they're in business anymore.

They're in Chicago.

Okay.

Vinnie's, I think, was the name of the place on Chicago Avenue, if anyone wants to look it up. Sandwich place, subs, Italian joint, whatever.

You go in, and they're open as long as they have bread. They just sell out, and they're closed. That's it. They're done. They could sell more.

They're not making—

They could sell more.

That's anti-optimization. Yeah.

Yeah. They could, I'm sure, get more sacks of bread from the bakery. It actually comes in a sack, like the big baguettes or whatever. They just run out, they're done, and maybe usually it's 2:30 or something. There are no hours on the door. They close when they close, when they're done for the day.

But he does that because—

They could sell more, but then where do you stop? But this is the thing: Where does this end? We could stay open till 6:30. I mean, 7:00, probably. We could do 7:30. Someone's still at the door, so we could do 8:00.

You can see how this doesn't end and how a business like that could consume everything. Then you begin to not like it, because there's nothing else in your life but that. Then you're so attached to it. You can see how this could expand to that degree.

I just think this idea that you're done at 2:30 is healthy. I think the business lasts longer because of that. I think you probably don't get bored with a business like that. There's something about that versus this idea of a business that you have to maximize and fully fill all your time, all your energy, everything.

I can understand the appeal there for a while, but I also think there's something very simply beautiful about enough. Now, I don't own that business. They might wish they had a lot more revenue and sold a lot more sandwiches. So I also want to recognize the fact that I'm looking at this from the outside. I'm an objective observer.

But I'm just observing what I think is a beautiful thing: a business that's been around for a long time, is family-owned, does enough business for them to support themselves and their employees, and makes great food for their customers. Isn't that what this is about?

Are you proud of how long you've been able to stay in business?

I'm not proud of it. I didn't mean that in a negative way. It's like pride is not a—

Is it important?

I feel fortunate.

Is the time important to you? If I could tell you, "Okay, you can make the exact same amount of money that you made in 27 years, but you made it in 15, and you're done," you'd take the 27?

Right.

I would take the 27. The money is a side effect of all of this.

I know.

Patrick O'Shaughnessy, whom you interviewed, right? I love what he said about work. I think it's something like, “I work so I can work more,” or something like that.

“The reward for good work is more work.”

There you go.

It's to keep going.

Great way to phrase it. That's why 27 years is more interesting than 15. I like this stuff. The beauty of this, for me, is that somehow we've managed to build this system, this company, these products that sustain over a long period of time, that allow us to enjoy our craft and our work over a long period of time, and we are in control of that as much as we can be.

The market can change. Anything can happen at any time. But I can control my costs, I can control my quality, I can control my messaging as best I can, and we can make the best thing we can over time and keep making that thing. That's what I want to do. This is my whole point. I don't want to trade my position with anybody for anything.

I can love what other people do, too. I do. There are great products all over the place, and I'm like, “Wow, that's an amazing thing that someone made.” For example, one of my favorite products is the Concept2 Rower. Are you familiar with this?

Yes.

I don't know anything about the company, but I can reverse-engineer it. I bet it's a badass, killer company, too, because that's how I look at things, by the way. I look at the products, not the companies. I look at the products and go, “Oh, that's a great product. I bet that's a great company.” Or, “This product is—nah, I don't like this product. I bet the company's kind of…”

I do this for people. If you can make a great product, you're probably an interesting person to talk to.

Yeah, I could see that reverse-engineering thing as well. Again, look to the inside to figure out what forms on the outside.

Concept2 is probably one of my favorite products of all time, the Concept2 Rower. Their bikes are good, too, and they make a SkiErg, too. But the rower is my favorite machine, and I love it because it is so well-built. First of all, it's under $1,000, and I think it's been under $1,000 forever. It's been around forever. There have been different variations of it, but they're always improving on a theme. It's roughly the same thing every iteration, but slightly better.

It comes in a big box and is very easy to assemble. It's a big machine, but it's very easy to assemble. The display is a black-and-white LCD, not even LED, with 5 rubberized buttons, and then I think there are 2 other ones. It runs on C or D batteries. No electricity, no plugging in, no recharging. “Oh, shit, it's done. Get some new batteries.” It just works.

There are no touchscreens. The buttons you press, the thing is reliable. It always works. It's incredibly durable. It does exactly what it's supposed to do with nothing else. I look at that, and I go, “That is a perfect product.” It's one of the few perfect products I've ever seen. A paper clip and a Concept2 Rower—it's hard to improve on both of those things.

I have deep admiration for that kind of thing. I still wouldn't want to trade my company for theirs, because I don't know anything about what they do. I know what I do. But I can still respect and admire all sorts of things and all sorts of companies, and I still wouldn't want to be them.

I like what we do, and I like that I can do it for a long period of time. Hopefully, I'll do it for as long as I feel like I want to do it, and then, at some point, we'll decide that we're not going to do it anymore. I don't know when that'll be.

I'm always a year-to-year guy. I'm a day-to-day guy when it comes to planning. Like I talked about a little bit earlier, I don't believe in long-term planning. I believe in being around for the long term, but I think the best way to do that is day by day, not quarter by quarter or year by year. Just figure out today, and figure out tomorrow, and figure out tomorrow.

I've always been mystified by people who think they can figure out the next 3 years today, but they're afraid of figuring out tomorrow, tomorrow. “I need to plan the next 3 years, so I can do that. I can plan 900 or 1,000 days in advance, but tomorrow, I can't figure things out if I don't have a plan.” You can figure things out tomorrow if you can figure things out for the next 1,000 days.

Explain how you plan day by day.

There's no plan. We have a direction.

So, the way I think about this—and this is, again, another weird metaphor, perhaps—I think of our business, and maybe me, as a squirrel.

You watch a squirrel run across a field. What does it do? It knows roughly where it wants to go, and it runs, and it scurries, and it stops and looks around. Then it scurries some more, stops and looks around, and scurries some more.

It doesn't need to get exactly where it wants to go. It knows roughly where it wants to go, and it clearly doesn't know exactly how it's going to get there, but it knows where it's headed, and then it course-corrects. That's how I do it.

At our company, we typically think about 6 weeks in advance, and that's about it. There are occasional projects—maybe a few over the 27 years that we've been doing this—that we needed to think further ahead about. We just recently left the cloud, left AWS, and we're running our own stuff in data centers now. That was a much bigger project.

But 99% of the projects at our company take 6 weeks or less, and most of them take much less than that. Six weeks is the most we're willing to think ahead. That 6-week period is like where the squirrel is headed, so it's not super clearly defined. It's generally defined, and then we figure it out as we go. We figure it out on a day-to-day basis. The teams figure it out as they go.

I kind of set—or David or someone sets—the target generally. Not financial targets, but generally, we're headed in this direction with this idea. Figure out how to get there on your own. We'll check in when we need to. If you want some help, ask; we're happy to come in. I'll review stuff as we go, but it's a bunch of course-correction to get us there.

I find that this is the most honest, real way to get somewhere good, because in general, you know more about things the closer they are to you. I don't know what's going to happen 5 Mondays from now, but today's Thursday, so let's just take Friday. I probably have a better idea of what might happen tomorrow than I do 5 Fridays from now. I'll worry about those when I get there.

Let me worry about tomorrow. Let me nail tomorrow. Let me get tomorrow right. Let's do the right stuff tomorrow. Let's make the right decisions tomorrow, and then we'll make some more on Monday, and make some more on Tuesday, and make some more on Wednesday. Just make small decisions all the time, and don't put yourself in a place where you're making huge decisions you're afraid of. You can sort of get wherever you want to go for 27-plus years.

There's a question that I keep getting asked by different people, so it must be a popular question, and I'm always perplexed by it. They ask, “You seem to have something good going right now. What does success look like 5 years from now?”

You hate the question I'm going to ask you.

Yeah.

I'm going to ask what your answer is, and I'm going to tell you what my answer to that question is.

“I don't know” is the answer. I don't care.

So what? I don't even know 5 years from now. What's the difference? It's an interesting question because it's a directional question, but I don't care. I don't have an answer. My answer is boring: “Just more of this.”

Yeah, sure. Well, exactly.

And that's essentially what it is. So, here's the thing about those questions: people answer them today for who they think they're going to be then. You don't know who you're going to be then, so it's kind of a silly thing to answer or even to ponder. Yeah, I'm with you.

This is the answer, basically.

I've read all your books. I've listened to almost all your episodes. We've shared a bunch of meals together.

Yeah.

And I never even knew that you did the day thing, too, because I try to make a good 24 hours, and then I say, “I like this day, so I'll do it again tomorrow.”

Yeah.

I had this line that I just said by accident. I was like, “All a great life is is just a string of great days.”

Thank you. Of course.

So, all I need to focus on is: let me make a great day. I told you last night, the way I think about it—which is very similar to what you're doing, or what I'm doing—is I'm just laying bricks.

That's it.

Today, I'm making a podcast, and tomorrow I'll make another one, and a few days later I'll make another one. Then I'll let the score take care of itself because I just like doing this, and I do it the way I want to do it.

Yes.

I want to make a great product.

Yes.

My answer to that question is just, “This.”

This.

Five years from now, I just want to be making more podcasts. I know I'm going to be reading books forever.

Yes.

That's the only unbroken habit I've ever had in my entire life, for over 30-something years. I can't stop reading, so I'm going to be reading books.

Yeah.

That's what my other podcast is about.

Yeah.

I like talking to smart, interesting people who do great shit. I don't think I'm ever going to stop doing that, so that's what this is.

All of the founders and extreme winners that I have studied have this one trait in common, they have excessively high energy levels. If you're going to be the best at what you do, you need to maximize your energy and output, and that's why I've partnered with Function. I signed up for Function long before they were a sponsor of this podcast, and when you sign up, they ask you what your health goals are, and my response in all capital letters was MAXIMUM ENERGY. Function provides access to comprehensive blood tests and other lab testing to help you improve your health so you can perform at your highest level. Function has made it easy for me to monitor and improve my internal health markers so that I feel at my absolute strongest. As a member of Function, you get access to test over 100 plus biomarkers, from hormones to toxins to markers for heart health, inflammation, and stress. Function gives you a straightforward analysis of all your results, along with advice from expert doctors on how to improve things like your testosterone, your stress hormones, how to reduce toxins in your body, and much more. The platform is absolutely beautiful and provides an easy-to-understand picture of your overall health. Once you try Function, you will immediately understand why it's the fastest-growing health platform in the country. You can now join Function for just $365 a year. That's a dollar a day. Learn more and join by visiting functionhealth.com/senra, and use code SENRA25 for a $25 credit towards your membership. That is functionhealth.com/senra.

Yeah, great answer. If one day you decide you don't want to do this anymore, then you just change.

That's where you and I start to separate a little bit.

And I’ll jump off a cliff. I’d be very disappointed.

Maybe that would be the thing you start doing: jumping off cliffs. I don’t know. Well, with parachutes, hopefully.

I’d be very disappointed in myself.

You might find another interest in your life. Something Jeff Bezos told me, which I’ve always kept close at heart because I’ve examined the things I’ve come to enjoy doing: He says, “You don’t find your passions; they find you.” And I’ve always believed that. I didn’t know that, but I’ve always believed it. I didn’t really know that I believed it.

When he said it, I’m like, “Yeah, I have always felt that way,” because I’m into things now that I wasn’t into 10 years ago, that I didn’t know about 10 years ago. I’m hopeful for you that there are other things, too, even though you can do this, too. But who knows?

I think there’s another beauty in just being empty and open to the world and how it presents itself to you. You might find that you love this, and you love something else. There might come a time when you don’t like this anymore, and that’s okay. It’s okay. I can tell you don’t believe me.

No, it’s not that I don’t believe you.

Maybe we do this until 80, right?

Hopefully.

And I hope you do, too, because you’re damn good at it, right? But who knows? And it’s okay. It’s okay.

This is why the whole idea of a 5-year plan is kind of a ridiculous thing. How about just getting tomorrow right? Get tomorrow right. If tomorrow wasn’t right, this is the thing: I think this gets back to, in some ways, tying it back to the thinness. You want to find tiny units, small units. A day is a good small unit, right? A simple decision is a good small unit.

The good thing about that is, if you screw up, it’s not a big deal. If tomorrow sucks because of whatever happened, okay, it’s behind you in 24 hours. It’s over. That’s versus big, huge decisions where you take 8 months to think about it, pull in all these people, set up all these contingencies, and make the big decision. Then it goes sour, it goes south, whatever. Maybe it works out, but maybe it doesn’t.

It’s so hard to make those calls. It’s so hard to deal with the ramifications of those things if they don’t work out. Make things small, tiny little units that you can throw away. It doesn’t matter. What you basically want, then, is enough good things, enough good units in a year, right? Not 1 great year or 1 great plan, but enough good little things, because you know you’re going to miss a few things. Who cares? Throw them away. It doesn’t matter.

Small units, bricks—build that way. I think that you become more antifragile in that way. When they’re just little things, they can’t throw you off too much if you get something wrong and it’s small.

Now, someone could say, “Well, you’re going to miss big opportunities,” and yes, maybe so. So what? If I can stay alive doing the thing I’m doing and running the business I want to run, I don’t need the other big opportunities. Stop worrying about all the other things you can maybe do, and just focus on the thing that you’re doing. Make that work over and over and over and over, as long as you want to do it.

Brad Jacobs has started eight separate billion-dollar companies. He said, "I've come to know a lot of extremely successful people in my life, and they all have one thing in common: they think differently than most people. All of them, to a person, have rearranged their brains to prevail at achieving big goals in turbulent environments where conventional thinking often fails." What Brad noticed is that great business leaders are pattern spotters, but you can't spot patterns if you can't see all of your data. Most businesses only use 20% of their data. Why? Because 80% of customer intelligence is invisible. It's hidden in emails, transcripts, and conversations. That's where HubSpot comes in. With HubSpot, all of your data comes together so you can see the patterns that matter. This is important because when you know more, you grow more, and that is a pattern that never fails. Visit hubspot.com today. That is hubspot.com.

Do you feel you have a narrow aperture with the world?

No, I don’t.

Okay.

Well, actually, what do you mean by that, first of all? Because I’m guessing.

Like what you just said. Why are you worried about all these other opportunities out there in the world? You just seem to be focused on, “I’m building the business the way I want. It’s a perfect business for myself.” You’re kind of oblivious—I don’t mean this in a disrespectful way by any means. You don’t really care what other people in your industry are doing. You have a narrow focus on—

Yeah, I don’t know if it’s narrow or wide. It just is. I’m doing what I’m doing, and it doesn’t matter what they’re doing.

How often are you paying attention to how other people are making their products?

Very rarely. I don’t actually want to pay attention to it.

Why?

I think what ends up happening is—and in my world, you see it everywhere—everyone follows everybody else. When you’re paying so much attention to what everyone else is doing, that’s the way you think it has to be done or can be done. You’re not open to alternatives because you don’t see them anywhere.

People then build out of fear: “Gosh, they’re doing this. They’re launching this. I have to meet them. There has to be parity between my product and theirs.” Then you end up following everybody. I don’t like that.

If I’m going to take inspiration from anything product-wise, it’s the Concept2 rower. It’s not another piece of software. I’m not inspired by other software. I like buildings, furniture, Concept2, and watches. I like other things outside of my world that I can admire and understand, and get fired up about.

I don’t know if those things come back. I don’t think they need to come back. Everyone’s always like, “How does that come back and help you build your business?” I don’t know. I don’t care. Why does it have to? Why does everything have to come back to business?

Why does everything have to influence your decisions? These are all things that just happen. They exist in your world, they happen to you, and they form you, and you’re not even aware of most of it.

I think if you admire a variety of different things and pay attention to different things, and enjoy a walk in the woods. A few days ago, it was 4:45. Here in California, the light is just beautiful at the end of the day. I was sitting outside, looking at the way the sun was raking over the hills. I’d rather look at that than this piece of software. I’m learning more from that.

I’m getting more from that than I am from a competitor’s product. I don’t want to look at that. I want to look at the sun, I want to look at the ocean, I want to go for a walk, I want to look at nature, and I want to look at great furniture. I want to be in great architecture. That fills me up in a way.

I’m getting enough of the software world by being in it. I don’t want to soak in it. I want to soak outside of it, and then my only soaking in the software world is my own stuff. That’s enough. It’s enough for me to focus on.

Tell me about your idea of Galápagos Island product design.

There’s something really cool about islands that have evolved on their own. I don’t know—I’ve never been to the Galápagos. My wife has. She asked me if I wanted to go. I didn’t want to go because it’s too far. But I should have gone, probably. Actually, I didn’t want to go, frankly, because part of that was that it was too far.

I also felt like, “Can we let it be?” She loved it, and I’m so glad she went. The pictures are incredible, and it seems like an amazing experience. But there’s something very cool about things that have just evolved on their own, that are not influenced by other things.

I try to think of us as the Galápagos. I don’t think of us this way, really, but conceptually, I don’t use the phrase “the Galápagos Island of the software industry.” I don’t use that. But I do think of us as an insular group focused on solving a problem our own way, without paying too much attention to what everyone else is doing.

I’m aware of it because I live in it, but I’m not seeking out ideas from other companies in our field. I think that’s actually a slippery slope. It is, because we see so much copying in our industry. Someone has a successful product, and then all future products for the next 3 years look just like theirs. That says to me that there’s danger here. Don’t fall into that trap.

Our stuff looks different from everybody else’s stuff. Our stuff works differently from everybody else’s stuff. Nothing works like Basecamp, HEY, or Fizzy. It’s all different. Some people hate the way our stuff looks and works. Fine. I don’t care.

We have enough people who love what we do, and it’s an expanding pie of people who are into what we do. We love what we do, and again, that’s enough for us.

Even your landing pages look different. They’re essentially a letter from you describing what the product is and why it exists.

Yeah. I always try to build things that I would want to see. I build the company I want to work at. I hire the people I want to work with. I try to write. I do all of our writing.

I don’t do the design. I work with our designer to do a lot of that, but he’s the visual person there. I do all the writing, and I want every word to land with meaning.

This is, again, about thin versus thick. I don’t like thick stuff. With thin, how can I just get to the right point but not be sterile? It’s a problem sometimes with getting to the point: You can be sterile.

There should be a little bit of bounce, a little bit of rhythm in the writing. It should feel nice. You should be carried through it. There should be some momentum in there, and I just love doing it.

That's my favorite thing to do at the company: write. But we just do stuff that we like. I like that style. If you look at my product demos, I always do the product demo for the launch. They're long, and they're unedited, and I screw up a bunch. I don't care.

If I were sitting with you, what I would want to get to with this kind of stuff is this: if I'm showing you our product, and you're behind me or sitting next to me, and we're looking at this thing together, if I screw up 2 minutes in, I'm not going to say, "Let's start over." I'm just going to keep going. That's how I want these to feel.

I want to connect with people in a real way. This is a real person showing off a real product. This is a real person writing a real thing. My name's on it, my signature's on it, my email is on it. We are who we are. We represent ourselves as we are. We are not a corporate entity hiding behind a structure. We're not a CEO or a CTO hiding from our customers.

We don't have a board. We don't have any of these things. It's just us running the show, and the show is open for anyone to see. We open-source most of our work. We're very open about sharing everything we know as best we possibly can. I just feel like there's no reason not to. I just want to be direct and clear with people.

Hopefully, they like that, and some people don't. Some people are like, "Oh, you guys are too small. I can't trust you." I'm not out to convince anybody of anything. That's the other thing: I don't want to convince anyone. I don't like marketing language. I don't like tricks.

Here we are. Here's what we do. Here's what our product does. That's the best we can do, and that's the best I want to do. I think it's the honest way to be. Take it or leave it. Some people don't like it. That's totally fine. I get it.

I love the idea of doubling down on authenticity and leaving the mistakes in. I remember reading one of your essays a long time ago. I can't remember the culture, but they would do—

Navajo rugs.

Okay.

I'll tell you the story.

Yeah.

I was in Wisconsin, in this little town called Mineral Point, Wisconsin, about 50 miles west of Madison, and I was wandering through a gallery. It was this weird building, and it looked like a junkyard inside. You peered in and thought, "What is going on in here?" I saw some old man in the back and thought, "There's going to be something cool here."

I knocked on his door and walked in. There were some rugs hanging, but there was also junk everywhere. Anyway, he comes out, and you're like, "Okay, this guy's a character." I love characters. I love old people. There's something going on there, right? I'm thinking, "Who is this guy?"

He's a Navajo rug collector. He's dead now, so you can't go there today, is what I'm saying, but he collected Navajo rugs. I find them very beautiful. They're very simply patterned, the colors are very vibrant, and they're very interesting. I don't know what it was—they spoke to me.

I don't want to analyze why, either, because I find that's a great way to ruin any experience: trying to figure out why. It either does or it doesn't. It does. I love these things for whatever reason.

So, I go in and talk to the guy, and I notice that the rugs have a lot of errors on them. There were geometric shapes—stripes, squares, triangles, all sorts of different shapes—and a lot of them weren't quite right. They're trying to make a perfect triangle, but it's not quite right. Or there's a stitch that's off—very clearly off. I'm thinking, "They could have just taken that out and redone it."

Again, I don't know if this is true, but this is what he told me. He said that the Navajo don't see those as mistakes. They're just a moment in time. He relayed it this way: "If you're walking on a path, if you're climbing a mountain or something, and you're going on a path, and you trip or stumble or whatever, you don't start back." You can't take that stumble back. It just happened.

The Navajo leave these in their rugs because they just happened, and this is a record of what happened. I love that. I just thought it was so lovely. I've tried to do that with the things that I do.

I don't want to leave typos and stuff. That's not quite the same thing. But if I make a mistake on a video or something, whatever. That's what you would do in the real world, so I'm comfortable with that.

I've always found that to be a very beautiful thing. These are not mistakes. Mistakes are a concept we put on ourselves when we do something that wasn't what we intended. Why does that have so much weight? Maybe what we intended was wrong, too. I don't know.

Are these rugs worse because there's a stitch off? No, they're not worse. They're better. That's what I'm striving for with this stuff: not to take things so damn seriously, and not to build a company that's afraid of itself, afraid to do anything wrong, and afraid to have an opinion.

All these companies—not all; that's a very broad statement—companies are afraid. The PR people have to talk to lawyers before they publish anything. Everyone's afraid of everything: of saying something wrong, doing something wrong, being wrong in some way. That is not endearing.

I think people want to do business with people. They have to do business with companies because companies provide a lot of products, but I think they really want to do business with people.

Maybe this is why I like the dry cleaner. Maybe this is why I like the grocery store. Maybe this is why I like running my business my way. I feel like people are dealing with people. We don't have a big corporate structure. We're just 62 people currently doing the things that we're doing. We're all accessible, all reachable. No one's hiding from anybody.

This is what we do. There's, again, a thinness, a directness to that which has an aesthetic value to me that I can't quite explain. It's like the quality without a name.

I think it might have been Christopher Alexander or something, who was an architect, who talked about this. I might be totally off on this, but conceptually, the idea was that you can go see buildings in native villages, and there's no architect who made any of this stuff. They didn't have any architects. They had people making places for them to live, work, and worship.

There's a certain quality to that which is not textbook high quality, but it's beyond high quality because it's a perfect fit for what they wanted for themselves. That's the kind of stuff I like to build.

It's kind of how you're designing your company.

Yeah. It's a perfect fit for us, for what we want and what we need. Again, getting back to the original thing, how many other people are there out there like us? Enough. That's the business model.

This is exactly how I started doing the podcast. I think I'm drawn to that, too. I think in people, not companies, right?

Yeah.

And this is why I was drawn to podcasts to begin with. Some of these podcasters I was a fan of before I had a podcast, I've heard them speak for hundreds of hours. You can't hide who you are at that point.

Right.

You're going to hear the good, you're going to hear the mistakes, and you used the word endearing. That's exactly how I feel—

Mm-hmm.

—about some of the people that I admire.

Mm.

There's something about them that is endearing.

Mm.

In fact, a friend of mine just texted me this morning. My friend Lulu was listening to one of my old podcasts on Napoleon's maxims on Founders—Episode 337, if I remember correctly.

Yeah.

She thought it was hilarious that I didn't edit out the fact that I was mispronouncing all these French names. I'm just like, I don't know. I'm reading from the book. I'm like, "I don't know what this is."

Yeah.

"I don't speak French."

Yeah.

"So I'm just going to do this phonetically."

Yeah, just do it your way.

But it was endearing to her—

Of course.

—that I didn't act like I speak French or anything. I was like, "I read books—"

Yeah.

—and I'm just guessing at how this is pronounced."

You're not putting on airs. I admire anyone who is truly themselves, and that's what that was for you. You're like, "I could have probably faked the accent."

You watch TV news, and the guy uses a Hispanic accent for some Spanish word, and you're like, "That's weird."

I know.

You're trying too hard. If you don't speak Spanish, you don't need to fake the accent to try to speak Spanish. But you see it all the time. I don't know how to pronounce French words, either. I'm not even going to try. I'll just say what I say and read it phonetically, and you could even say, "I don't know how to say this."

I do say it. Exactly.

Yeah. "I don't know what this is. You're going to laugh at me, but this is what it is." Then you move on, and no one gives a damn because you're you, and that's not the point of the story.

The point of the story is not perfect French pronunciation, with 7 words out of 5,000. It's: What is the story? Who's telling it? Why are you telling it? That's what matters.

Figuring out the stuff that actually matters is what's important about that process. Running a business and making decisions about a product is the same: What matters? What doesn't matter? That's fun.

Going back to you writing these letters for the landing page, do you do it like Bezos, where he writes it before the product is created? Or do you do it after the fact?

In the middle, usually. With HEY, I wrote one for HEY, which is our email service, and before we launched—before the product was even anywhere near done—I wrote the letter.

I need to interrupt you.

Yeah.

I was a fan of your writing. The first time we met, I showed you the Amazon. I said, “Listen, I have receipts here. I’ve been reading—”

Yeah, yes.

your stuff for 13, 15 years.

Yeah.

I bought HEY just because I wanted to give you money. I’d buy your books, but I didn’t have a team, and Basecamp’s project management—

Right.

and I’m working by myself.

Yeah.

So I couldn’t ever give you money, and then you built up so much goodwill by teaching me so much through your writing that I thought, “Oh, I use email. I’m going to buy that product.”

I appreciate that.

So I am a proud subscriber of HEY. I’ve got to pay you back somehow.

Thank you.

It happens so much.

And it’s a cool way to purchase something.

This goes back to how we identify with people, not companies.

Yes, and it’s a cool way to purchase something.

Yeah.

Sometimes, the use is the support, not the actual use of the product. But anyway, during the development of HEY, we launched this pre-launch page months before HEY was done. I wrote this letter about why email is a beautiful thing.

For the longest time, people have hated email because they despise it. Email has gone off the rails, and we can bring it back on. Do you remember when you used to get an email from someone you loved, or your grandparent, or an old friend? It’s a wonderful thing to get an email from someone who you care about.

The problem is that most emails now are spam, sales and garbage, meetings and shit. We can get into that, but the point, to your question, was I wrote that in the middle. I didn’t know what the product was going to be yet. We were going one day at a time. I didn’t know what it was going to be.

Was that the why behind the product? How would you describe it?

It was the love behind the product.

Love?

Yes.

Say more about that.

It’s not silly.

I know, but it’s a different version of love.

No, I love podcasts, so I know exactly what you’re talking about.

Yeah. Yeah.

No, I love them.

Yes.

And when I make one—

Yes.

and listen to it before anybody else does—

Yes.

and I’m like, “I’m happy with this”—

Yes.

that is love.

Yes, that.

You’re not silly. It’s not silly to me.

Yeah, I know, I know. So there’s a certain warmth and tone that comes through when you make something you’re really proud of in that way. We got proud about running the business for 27 years. I’m really proud of the products we make.

The business, again, is like the envelope. I’m not proud of the envelope. I’m proud of the things that sustain the business, which are the products. I love getting them as right as I possibly can.

There is a warmth that comes to you when you’re really proud to share something that you’re done with, that you’ve finished, that you want to put out there in the world. It could be a letter, it could be a line, it could be the right word in the right place, it could be an entire product, and it can also be a company, in a sense. But there is love reserved for that, for sure.

So this is a love for the decentralized... I remember reading this. You were talking about how the actual creation of email is a miracle; we’ve just fucked that up.

Yeah. It’s amazing that anybody in the world can get in touch with anybody else. There are no platforms. Everything else is a platform. You want to write someone on WhatsApp? They have to have WhatsApp. Signal? They have to have Signal. Whatever, right?

Email is a beautiful thing. It’s as beautiful as the web. The web is beautiful because anyone in the world with a web browser made by any company can use HTTP and connect to some other website. The same thing is true with basic email. These are the wonders of the world.

How did they become so despised? I blame Apple, I blame Google, I blame Yahoo, I blame Microsoft for making shitty email products that they just don’t care about. Now, they’ve started to care more about them. But they didn’t care about them for a long time, and everybody knows that nobody cared, and so we care.

I live in email sometimes. We don’t use email inside our company; we use Basecamp. But for the outside world, we use email. I want to use tools I love. I want to use tools that matter to me.

If I’m going to spend most of my day in Basecamp, I want to make Basecamp. If I’m going to spend the other part of my day in HEY, in email, I want to make an email tool that I’m proud of, that I want to use, that I have a certain love for, and that’s what that is.

That letter was a love letter. In fact, it ended, if I remember correctly, like this: “This is a love letter. HEY is our love letter to email.” I meant it.

Yeah, it’s a great thing. It’s an amazing thing. You just used the word “tool” a few times.

Yeah.

Do you identify with Tobi Lütke? He’s like, “I’m just a...”

Toolmaker.

Yeah. “I’m a toolmaker.”

That’s all I make, too. I make tools.

That’s how you think about it?

Yeah. When people ask, “What do you do?” I say, “I’m in the software business,” so they understand what I do, but I don’t like that term. I also don’t like, “I’m in the tech industry.” I’m not a tech person. I don’t like that.

I make tools. They just happen to be made of software. That’s all I know how to do. I don’t know how to make things out of wood, but I know how to make things out of software, code, design and conceptual ideas.

So, yeah, I make tools. We make tools. We make levers. It’s just a lever that lets you do more with it than you could without it. That’s all it is.

You can move more things. You can organize more people. You can come up with better ideas. You can see those ideas through. You can make progress with the products that we make. That’s what a tool is for: to make progress.

I’m fascinated by how much of your time is spent outside the business, and how much of the inspiration you derive in life seems to be from physical things. You just named a bunch. You have a love of architecture; we just talked about watches, cars and the Concept2 rower.

When you said, “You could change your mind, David. Maybe you’re not podcasting in the future,” what I know for sure is, if I ever do anything else, it’s going to be physical.

The same phenomenon is that I barely look at numbers. I know you barely look at numbers, but it’s just numbers on a screen. Those numbers happen to be big, but you don’t understand that. You just don’t feel it.

I remember Mark Leonard of Constellation Software did this podcast. He talked about how one of the most fulfilling jobs he ever had was not starting and compounding whatever it was, from 50 million to 80 billion, or whatever he’s done with pure software. He was building stone walls.

Mm.

Even to this day, he said he’d go—I think he was a kid or a young man, maybe he was in his 20s or 30s back then—but you can go to where the stone wall that he worked on 30 years ago is, and he’s pointing at it, saying, “I did that.”

That’s badass.

“I made that.”

Yeah.

Why do you draw so much inspiration from physical things?

I’ll take some guesses, because I don’t know. It’s like I don’t know why I like certain flavors. I just do, right? You can’t really explain these things, but if I had to guess, it comes back to the fact that there’s something real about them.

I like being able to hold things and touch things. I like texture. Something you’ll see in a lot of our software products is texture, which is not real; it’s simulated. A lot of software these days is very flat. I like gradients, colors, lines and some texture.

I find it very fulfilling and real to rub your finger over something and feel it. I like patina. I like age on things. Software doesn’t age. I mean, it does age. It can look old or whatever, but software looks the same over time.

A great building, a great brick—to get back to bricks—bricks are beautiful because they look even better as they get older. They collect age on them. They get stronger. They build into other things.

There’s something about the physical world to me that is just... We’re from it, okay? We are it. We are part of it. There’s something so fundamental about it that I try never to get too far away from it.

I would much rather lie on the ground than fly in the air. I just want to be closer to things that are real. Now, flying in the air is real, too, of course, but I’d rather walk somewhere. I’d rather drive. I’d like to be closer to the ground.

I’ve begun to collect rocks that I think are cool-looking.

Oh, now you can move to Malibu.

Yeah.

Are these rocks crystals?

They’re not crystals. I was going to save that in case you asked me. They’re not crystals. I’ll just find something at the beach, or I’ll find something interesting with a cool pattern in it, and I just like it.

I love nature. I love all the textures, patterns and colors. For example, when you’re coming up as a designer, in the early days when I was designing identities, like logos and stuff, you’d go through these logo books or corporate identity books.

I think there was an organization called—I want to call it Brand, but maybe I’m wrong. Print, actually. It was this magazine that had all these pictures of business cards and stuff, and every designer I know would look through other business cards for inspiration—for color patterns, palettes and layouts—and I’d think, “Go outside.”

The best designs ever are right there. That leaf is the best it’s ever been. Obviously, it has survived and evolved. This is a great thing. If you want to find great colors, look at a bird. Don’t look at a book. Look at a leaf, right? Look at the ocean.

Go to a tide pool and just look at the colors in that tide pool. Look at the way the light reflects. That's the real stuff, and I have goosebumps.

For me, whenever I talk about this, it's just fundamentally real to me. I love it, and I love the screen, too. I love making software, too, but probably because I'm in that a lot, I really like not being in that, too.

I don't think you love the screen. You said if you sell your business—

Right now, I do.

All right, we never answered that.

Okay, let's get into this.

You said if you sold your business—

Yeah.

You're never going to use a computer again.

Well, I said I would never start another business again. What I would like to do is shut my laptop. I don't need a screen to survive my days. I'd like to close my laptop for a year and just not use it.

I'll use my phone because I get in touch with people, right? But I don't want to “compute.” I don't need to compute. Let me just close it and walk away. The computers are probably the most amazing tool humans ever made.

Yeah.

I don't despise or hate them, but I could take some time away from them. I think time away from nature would bug me a whole lot more. If I couldn't go outside for a year, it would bug me way more.

Oh, you'd go insane.

Yes.

Yeah.

I'd jump off the cliff.

I think people have gone insane.

They have, for sure. Exactly. I want to be out. I want to be out there. I think it's just a wonderful thing.

The screen is wonderful. Software is wonderful. Computers are incredible things, and right now is an amazing time for computers—one of the most amazing times since the web back in the late '90s, or the mid-'90s, really. It's cool to live through both of these moments.

But I'd still rather play with some bricks and work on a stone wall, even though I don't know how. That wouldn't pay my bills either, so I have to be practical. I've built a great software company, and I like this stuff a lot. I don't know how to build stone walls, but I wouldn't mind playing with them.

The bills are taken care of.

The bills are, but I still—

I don't think you have to worry about that anymore.

I don't, and I don't do it for that reason.

I know you don't.

My point is, had I built stone walls for 27 years, I'm not sure where I would be, you know?

No, the bills would be piling up.

My hands would be very sore, for sure.

The bills would be piling up.

Yeah.

One of the people I most hope to get on the show and talk to is Christopher Nolan.

Yeah. Have you ever looked into his personal philosophy at all?

No, I just like his movies.

Okay.

There's something that you, me, and him, I think, have in common. He desires to live in an analog world. I'm almost positive that's a direct quote. It might be me summarizing something I read in his biography.

If you think about the juxtaposition between you making software but wanting to be on a hike outside—you want to look at the ocean, right? He makes some of the most technologically advanced films that have ever been created, and yet he doesn't have a cellphone. You can't get in touch with him.

Love that.

You have to email his assistant, and his assistant has to track him down.

That's amazing. Yeah.

He will purposely put himself into a difficult position. He'll drop into a new city. He doesn't have a smartphone, so he has no GPS.

Right.

He's got to go up to somebody and say, “How do I get to the deli?” or whatever.

Yeah.

If he wants you to be in his movie and says, “Email me the script,” he's not emailing you the script.

Right.

He is printing it out physically—

Yes.

—and flying to you.

Yeah.

So I'm Christopher Nolan, and I want you, Jason, in my movie. I'm showing up at your door.

Yeah.

“Here's the script,” and you're like, “Great, I'll read it.”

Yeah.

And I'm sitting there until you're done reading it.

Waiting.

And then when you're done—

Take it back.

I'm taking it back.

Amazing. Amazing. That's cool.

I feel that exact same way. Your entire product is delivered digitally.

Yeah.

Mine is, too.

Right.

But I like to read physical books. I like to be in person. I will not do a remote podcast.

Right.

Now I've gotten to the point where I won't even go on other people's podcasts remotely. I'm like, “No, let's go meet and hang out.”

It's cool.

I want to talk on the phone if I can't be with you in person. I don't want to text you. I want to live in an analog world. I just feel better being outside, reading physical books, and not looking at a goddamn screen.

I'm with you. What's important about that isn't actually what you said. This is going to sound like whatever, but what you said doesn't matter, actually. It's that you know who you are. That's what matters—that you know that you like that, that you've figured out that you like that.

It's good to figure out what you like eventually. A lot of people don't know what they like. They like what other people like. They like what they're supposed to like. They live up to other people's expectations. They kind of run someone else's business, in a sense—not like an executive running their business, but people grow businesses they think they have to grow because that's what you do.

They make decisions they think other people would make. They don't even have a sense of who they are and what they're all about yet. I hope all of them find it, because it's a wonderful thing when you know what you're into. You can also know that it might change, but you know that right now you're into that.

The other thing is, you don't need to pick sides. You can love digital, and you can love physical. They're all the same thing. We live on this speck of dust in space. It's all the same thing, right?

It doesn't really matter. What you like and why you like it—it just matters that you do, and that you know that you do. You don't even know why you do, but you do, and you respect and treat yourself to those things that you find beautiful.

So, you told a story earlier. When you were making products, you were in high school, and you were designing them just for you.

Yeah.

You're the first user. That is an indication that you're comfortable trusting your own judgment. You just said it's really important to know who you are. At what age do you really think you finally figured out who you are?

I think probably more recently, frankly. I think I knew what I liked to do, but I'm not sure I still know fully who I am. That's the big question, right? Who are we and the whole thing?

I don't totally feel like I should be certain about that. No one should be certain about that. But I feel like I've come more into my own since getting married and having kids.

Looking back on maybe how I was, how I acted, and how I was in the world, I'm glad I am who I am now. I wouldn't want to be that person again.

Why? Didn't you say you used to have anger?

I think I was definitely more of a punk, you know? Like a young—

Say more.

I think I probably resented things for some reason. I had a chip on my shoulder. Maybe that was good. You've got to prove yourself when you're new to something, and you're young, and you're breaking in, and people don't think you're any good at what you do.

The only time I'm ever competitive is when someone slights me. Otherwise, I'm not competitive. If someone's like, “You can't do that,” or, “You guys aren't good enough,” then—

I remember this. Early on in my career, when I was a web designer, before I made software, I just designed websites. I submitted a website design to an awards thing, and I'm trying to remember what it was. It might have been called the High Five Award or something. I can't quite remember what it was, and I can't remember the guy's name right now.

Dave Siegel, actually, was his name. I do remember now. Back in the day, getting an award from Dave Siegel, I think, was a big deal in the design community. So I submitted a design, and he wrote me back saying, “You suck. Literally, you suck. Find another day job.”

And I loved that. I loved that. I love when someone says you can't do something, that you're not good at something, you know.

Maybe this comes from being 5'7", and I'm pretty good at basketball. You walk onto the court, and people don't think you're very good. I love that kind of stuff, right? So that just fired me up.

As far as finding confidence, I think I probably had a lot of that early on, when people were like, "You're just one guy. How could you do this?" Or, "How could you do that?" Or, "You don't know what you're doing. You don't have a degree in this." That kind of thing fired me up for a while, but there's a point where you want—this is, again, to the point of wanting to launch—and then you want to find a place to settle, where you just come into your own at a certain point.

I think I probably did that in my forties. I'm 51 now, so I think in my forties I probably came into my own, actually settled into my own. I had some psychedelic experiences, which helped as well.

Did you?

Yeah.

John Mackey—I don't know if it was in the episode; I can't remember.

Yeah.

But this guy keeps trying to get me to do psychedelics. I think we talked about it at the end.

Yeah.

I was like, "I'm not doing psychedelics." What did you do?

Why not?

I—

Let's turn this interview around.

Let's go. It's a conversation. You can do whatever you want.

Yeah.

I think you and I both bond over this. There are some positive things—obviously, the tech industry, the Bay Area, and San Francisco have created great companies and great products—but there's also a lot of wacko shit.

Sure.

There's just too much drug use, in my opinion. I don't do drugs.

Yeah.

I like the way my mind is, and I don't want it to change.

Yep.

I'm very resistant to doing drugs because I've also had these experiences. My cousin died of a heroin overdose. My dad did drugs his whole life. He went to jail for selling drugs.

Yeah.

I've never seen somebody high on cocaine make a great decision.

Yeah, yeah.

We carry all the stuff that we experienced earlier, and I'm like, "Well, what's the opposite of that?"

Yeah.

The opposite of that is not doing drugs. So I'll just not do drugs.

Yeah.

I'm not here to convince you to do drugs.

No, no, go for it. For me, the experience was very—

As I mentioned earlier, my favorite thing in life is to have an insight, and psychedelics for me were an avalanche of insights. It was fascinating to know that my mind could see things and understand things in ways I didn't know were possible.

I could see—this will not make any sense, but maybe people who've done this will understand—you think of an idea, and I never thought an idea was like a 3D object that I could turn around and see from the other side. Not like a different perspective on an idea, but literally, I could turn it around and see what was behind it. Things like that fascinated me.

Having insights about the nature of existence and all this other stuff was fascinating, too, but just having—I remember, I've done this a few times, and the experiences are always like, "Wow!" While I'm doing it, I'm thinking, "Wow, I never thought about it that way," or, "I've never seen it that way."

For me, it's candy. This sounds like maybe candy and drugs, and I don't want to mix them, but there's a sweetness to having an insight that you've never had before about something you thought you knew, which psychedelics have shown me. But I don't do "drugs."

But it's an insight of—

I've done this 3 times.

How does it help you know yourself better?

Well, that's not why I did it.

Okay.

I don't think I know myself better, but I feel more expansive now that there's more than I thought I knew. Here's how I thought about it afterward.

You have to picture an old car radio from maybe the 1950s. An old pickup truck had a car radio with a needle, and you could move the dial, and the needle would move, right? You'd get the little glass window with all the channels, and you're in one of the channels. That's where you are all the time. You're in this channel. 95.7 is you.

Psychedelics let me turn the knob a little bit and tune into something else that's always been there, but I couldn't hear that frequency. It's amazing. If you look at a radio and turn the knob, you're picking up things that are there but that you can't hear until you turn the knob. That's what it was like for me.

And how does it make me better at whatever I do, or help me know myself better? I think all experiences help you know yourself better. It's just a mirror and a reflection, a detail and a crumb, that creates the pile of you.

I don't really know. It's not like that was a huge breakthrough for me, but it was fascinating enough to do it a few more times and learn a few more things that were just fascinating.

One thing I'll share—it's a little bit of an aside, but again, it comes back to this object thing. Maybe this is me seeing how my mind works that way, because we talked about objects before. I remember having this experience where I was puzzling through this 3D puzzle and being stumped by it, but enjoying the problem-solving.

Then I finally—again, this is conceptual and metaphorical, not so literal—I turned it around and saw it from the back, and it was dead simple. What it basically told me was, "Turn everything around. This is inverted. Everything's a lot simpler from behind."

Everything's real. The back of things is real. The front of things is a front. The back of things is real. So what does that mean? How do I apply that? I don't try to apply that.

This is not about trying. It's just an insight and a revelation: get behind something to really know what it is. Again, I don't constantly refer to this, but it's something that I have now that I didn't have before, and I'm very glad I have it.

So that's part of it. It's just seeing through a different lens, and I'd rather have a few more lenses available to me, if I can, that are harmless. This is not heroin, cocaine, or that kind of stuff. Again, I'm not here to sell any of these things, and I'm not a doctor—all the disclaimers, right?

I know. Yeah.

But I would say it was a very worthwhile experience for me.

Did you read Rick Rubin's book, The Creative Act?

Yes.

Do you think about things similarly to him?

Yeah. When I read that book, I was like, "Did I write this book?" Not really. He wrote the book.

Yeah. Okay.

But you know what I mean? Like the—

I just read it. I just did an episode on it.

Yeah, yeah.

And when I hear you speak, he's just like, "We live in a magic world." All that stuff's not— You have an intelligence that is not coming from your brain.

Yes.

The world is beyond your comprehension. You have to be comfortable with ambiguity and not knowing, and I just—

Yes.

feel I hear that from you constantly.

There's Taoism in that, which is not knowing, not trying, not doing. The world just works somehow, in some magical way that we don't fully know. This isn't about getting metaphysical, actually. I want to bring it back, but I do think that there's something here.

This is part of the make-it-up-as-you-go philosophy of business, which is just going a bit more with the flow of where things go.

Mm-hmm.

There's something very honest and real about that that works for me, and it's similar to what he's talking about. Things just happen. You don't need to know exactly why all the time, but feel into them, understand them, pay attention to them, and trust them. Trust your intuition, your gut.

I'm a fully intuition- and gut-driven entrepreneur, and I don't even love that word, "entrepreneur." I make products. There has to be a business around them. I run the business, but I'm gut- and intuition-driven.

I don't look at numbers. I don't care about the numbers as long as we're profitable, and I know there's enough blubber in the business, as we've talked a little bit about.

No one's going to get that.

That's fair.

You have to talk about the blubber. And then I want to get back to intuition.

Yeah. Okay.

And then we'll get back to Rick Rubin.

Yeah, sure.

You mentioned this point that your business should have some blubber. It's very memorable. What does that mean to you?

I had not said that before until last night. The word "blubber" just came to me. I don't want to run a very tight-margin business where I can't make mistakes or I'm afraid of them. I believe in cushy margins.

Blubber.

So we can screw up, and it won't matter that much. I mean, it can matter, obviously. I'm not oblivious to the reality that businesses can go out of business. They do all the time. All of them eventually do, basically, at some point.

We take risks. We don't put ourselves at risk. That's how I like to think about this. I'm willing to take plenty of risks, but I'm not going to do something that's going to bet the farm unless we have to.

And if I'm at the point where I have to, I feel like it's over already anyway, frankly. I'm not interested in betting the farm. It's just not even that fun. I'd rather just have the farm than not have the farm.

So a big margin of safety is the way you think about it.

A big margin of safety.

A lot of cash, high profit margins. You still pay attention to your costs.

Yeah. We pay attention to costs.

Yeah, yeah.

When we talk about cutting costs, David Heinemeier Hansson wrote this great article about how getting off the cloud is going to save us something like $10 million, or whatever it is.

A lot of people are like, "Why are you putting in all this effort to save $10 million?" It's because it's our money, man. We don't have outside funding, and I don't want any outside funding.

Everyone has wanted to give us money over the years. I don't want anyone's money. It's our money. We make money through our customers, through revenue.

So we take very good care of that money, and we're careful with it, and we watch our costs. So again, if you want to stay in business, your only competition is your costs, assuming you want to stay in business. These are the things that I'm paying attention to, and I want to have margin.

That's why we keep the company small. We don't spend money on marketing. We've spent some money on marketing over the years, but it's been a rounding error for 27 years. We don't waste money on stupid things. We just don't blow it on things. We save it, keep it, and allow ourselves to make more mistakes elsewhere that we enjoy trying and making.

I would not want to run a grocery store. I don't want to run a 2% or 1% margin business. What's always blown me away is how many companies in Silicon Valley that are in the software business lose gobs and gobs of money. It's the most unbelievable thing for an industry like Silicon Valley to lose so much money on the highest-margin product in history: software.

There are no costs, nothing. There's nothing to software. It's bits. There are some data costs, but they're basically zero, all things considered. And there are still companies blowing billions that have never made a penny. They're big companies that you know of, just blowing money. It blows my mind. It seems so incredibly irresponsible to me, but that's just me coming from a small-business entrepreneur mindset, I suppose. I just don't get that world.

So the blubber, if we're going to use—

The blubber. Let's get back to the blubber.

The blubber helps you stay in business.

Yeah, it's fat reserves. You should have those. It's cool to have 6% body fat, but it's not a good thing to live that way for a long period of time. If you're stuck out in the wilderness for a while, you need to burn something, right?

You're dead.

So we've lived through the dot-com crash, the 2008 stuff, and COVID. We have fat on the bone. I think it's very important to have that and not just be at the bone.

The other thing is that because we're an LLC, at the end of the year, whatever money is left over goes to the members, the unit holders, which are me, David, and 2 other people on the cap table. Also, 10% of our profits go to our employees every year.

It's based on longevity, not seniority. The 2 aren't the same thing. It's based on how long you've been here. You basically accrue units every month, up to 10 years' worth of units. At that point, you've maxed out your units, and we distribute profits based on that.

It's not based on which role you're in. It's not based on your salary or your title. If you've been here for 10 years and you're a principal software engineer making hundreds of thousands of dollars a year, your profit-sharing bonus is the same as someone in customer support who's maybe making $90,000 or $100,000 and who's been here for 10 years.

All that money goes to real people. It's real money, real cash. No options, no RSUs, no stock—any of that bullshit. I find almost all of that to be pretty much bullshit unless you're a really well-established public company.

Our bonuses are based on profits. We've been profitable for 27 years, and they're distributed every year, and they're meaningful. I looked this up before the show: about 20 out of the 62 people last year—or 2024, because we haven't closed the final books on 2025 yet—received 6-figure bonuses. This is year after year after year after year. It's real cash.

That's the beauty of a simple business, a simple cap table, an LLC, and sharing real profits. There are plenty of people in our industry, plenty of our competitors, which I'm not going to name, that hire a lot of people and promise them a lot of stock. You look at the chart, and it's down and to the right. I feel bad for those people because they were promised something they'll never, ever get.

Getting back to real, I want to pay people with real money they can actually put toward a down payment on a home, pay for their kids' college education, go on vacation, sock it away, or whatever they want to do. This is real cash on an annual basis, and this is all part of a good business with sound fundamentals that has high margins and high profits and is an LLC, so we can distribute it every year.

We have to. In fact, you can't leave any money in an LLC. You can, but you've got to pay taxes. Anyway—

I know.

You know what I mean. I just wanted to say that for the pedantic person watching.

The wrong show for this. I want to go back to Rick Rubin and you knowing yourself through this psychedelic experience, partially in your 40s. Before you had that experience, what was your inner monologue like? Let's say when you're running your business, you're 10 years into it, and you're 35 years old at the time. Did you have a negative inner monologue?

No, I think I was just more aggressive. I don't know how I'm coming off. I try to be pretty steady.

You're definitely not. You're like a soulful dude.

Okay, good. Well, I don't know. Sometimes I have a scowl, and people think I was probably a lot more aggressive—

No, it's not a scowl. The kids call it—

Probably resting face—

RBF: resting bitch face.

Oh, yeah.

You should see our photographer, Mike.

Yeah.

He sends me pictures of me, and I'm like, “I'm happy!”

You're like, “I'm happy!” Exactly.

There are so many times when I'm literally having this conversation, and this is how I know I'm going to do this for a long time. I'm thinking, “This is so much fun. Can I do it again tomorrow?”

Yeah. Exactly.

I think I was more aggressive, or I don't even know. I kind of don't remember myself, actually. I'll pull it back to something else, and then I'll come back to this thing in my mid-30s, perhaps. But we don't do postmortems. I don't look back on things. I don't like to look back on things, actually.

Jimmy Iovine sat in that exact same chair, and he said, “I have no rearview mirror.”

Yeah, that's how I feel.

No trophy room. Just like—

So you're asking, “What were you like at 35?” I don't know. Probably more aggressive, but I don't really know. I'll tell you why: I don't like to look backward.

First of all, backward is a story you're telling yourself about what you remember about something, and it's probably not true. It's probably perverted in a million different ways. There are a million different things that have happened to you that cause you to be the way you were, and I don't know what any of them are.

The reason I don't like postmortems in business—and I know a lot of businesses do this—is that they launch something, spend all this time and energy looking back on it, and try to figure out why it did what it did. My general sense is that you'll have no fucking idea why it did what it did. You'll find some reasons that you're going to believe, but had you done that again, it may have turned out differently.

Who knows? One little thing could have been different, the world could have been different, or the way you said something could have been different. If you want to find certainty, you're going to find it because you'll convince yourself of it. I just don't have any interest in looking back. I'd rather learn by doing something again and making more things.

People say, “Well, you should learn from your mistakes.” I'm not sure what you can learn from them, frankly. I think you learn from moving forward and doing something. You learn by doing. You can't redo what you did; you learn by doing.

If you don't like something that you did and you have it in your head, just don't do that again. That's the learning. It takes 1 second to know that, move on, and learn by doing new things.

I don't like to look back. That's not absolving myself of things I'm not proud of. That's who I was when I did those things, and that's that. I'm moving forward.

I want to pull up something. The reason I asked about the negative inner monologue is that it's very common with a lot of people. We've been talking a lot about Rick Rubin, and I love his answer to this, which sounds like, if I were going to ask you this question now, you would answer it in a similar way.

He was asked the question, “Do you have an engine of constant dissatisfaction and self-criticism—that you could have done better?” Can I guess?

Go ahead.

I don't know what it is.

You couldn't have done any differently than what you did. Is that his answer?

Very close.

And I believe that to be true. Go ahead.

So this is what I wanted to know: how do you look at this? I was going to ask you to answer that question next.

Rick Rubin said, “No, I'm pleased with the work that we did, excited to keep working. It's fun.” You've said this multiple times today.

Yes.

“I don't know what else I'd do with myself. I like making things. It's fun.” That sounds like you again.

Yeah.

“I feel like it's my reason to be on the planet, so I just keep doing it. If it could have been better, I would've kept working on it. If it could be better, it's not done. I've done everything I can to make it the best it can be. I can't do more than that, so there's nothing to be critical of. It's almost like a diary entry.”

Yes.

“Everything we make is a reflection of a moment in time. It could be a day or it could be a year.”

100%. That's exactly how I see things. I did what I did. I did the best I could—or the worst I could, whatever it is. It was what I did, and there it goes. Now what? That doesn't mean be an asshole to people.

You can be an asshole. Other people remember what you did, too, so you want to be a good, honest person anyway. But some people might hear this—that’s why I’m saying this—and go, “Well, that’s an excuse to just do whatever the hell you want. There are no ramifications to any of these things.” There are ramifications to these things, but they are written in history, and that is that.

I’ve always just tried to do the best I can. This is why I’m going to tie this back to numbers. We don’t have revenue targets, except that I want to be profitable. I don’t have sales targets, revenue targets, or user targets. I don’t have any of these things.

We just do the best work we can. A target shouldn’t make me do better work. I should do better work because of the pride I take in the work that I do, the seriousness with which I take the work that I do, and the enjoyment in the work that I do. I’m going to do the best I can. That’s what I do. That’s all I can do, and that’s all I should be doing.

I don’t need something to tell me that I could do better if I had aimed for some target. The target is the work I’m doing now. That’s the best I can do. So, I’m fully on board. He said it more eloquently than I did, but that’s how I’ve always felt about this stuff, which is why I don’t like measurement.

I just like the product. The product is the measurement, not the number of things that people have done with it, used it, or whatever. It is what it is. The number—the money—is ultimately the byproduct of making something good. It’s not the reason to do it.

People are in search of certainty all the time, and I think it’s nowhere to be found. But it makes people very uncomfortable not to know why something happened. And, by the way, I shouldn’t say it’s not to be found. If you’re making widgets on a line and the widget’s supposed to have a circle in the middle, and all of a sudden the circle’s off, you can trace that back to where the machine went offline. You can figure out some of these things.

Of course, if they’re mechanical, you can track it all down. But most businesses are not mechanical in that way. They are a series of decisions, ideas, timing, market conditions, competitor conditions, perhaps your mood on a given day, the way it rolled out, and what other news was happening that day.

Trying to pinpoint the answer and then say, “Okay, next time we know what not to do or what to do,” and feeling like you now know something that you actually don’t know—but being so certain that you do because you’ve “figured it out”—I think is really dangerous.

Is that why I’ve heard you say a few times that you don’t think you could do Basecamp again today?

Yeah, no way could I do it again today.

The number of friends I have who sold a company and thought, “I’m good at company building.”

Yeah.

And then their second shot isn’t going well or ends in failure, and it really made them question who they are. I think that’s actually an important thing to say. It’s like, maybe you don’t know why it actually succeeded.

Yeah, I think that’s true. You don’t know why it didn’t work, and you don’t know why it worked. I really think that’s true.

But people don’t understand how devastating that is, where you sold a successful company. First of all, it’s nearly impossible to build a successful company. Just a tiny percentage of humans who have ever existed have been able to accomplish this goal.

Right. Yes.

This is why I started one of the shows, because I want to celebrate the people who have done this and say, “Hey, if you want a role model, maybe people who build companies and products that make other people’s lives better are good people to listen to and hear speak. They probably know some shit if they’ve been doing it for multiple decades.”

Yeah.

It turns out, they have a lot of wisdom, or they’ve acquired a lot of knowledge in that.

Right.

But it’s so devastating to have had that.

Yeah.

And then, in the case—I always think of Trader Joe’s, because again, talk about being different.

Yeah.

You and I bond over the fact that we want to make products that are different. I’m not interested in making a me-too product. It doesn’t need to exist.

Yeah.

He had a completely differentiated product. He loved it. He wrote this autobiography. It was very fascinating because, I would say, 90% of the pages are about building Trader Joe’s. He clearly loves it. It’s very difficult.

Yeah.

He just put his whole heart and soul into it.

Yeah.

Then he gets scared, and he winds up selling it, I think in the 1970s, if I remember correctly. It may have been the ’80s. He sold it because he was fearful.

Yeah.

Then he lived another few decades. I think at least 3, maybe 4 decades.

Mm.

A long time. The last 10% is like, “Yeah, I did some investing, I did some real estate, I did some consulting.” But then the last paragraph is like, “I must admit something to myself. I wasn’t true. I regret selling.”

Mm.

“Thanks for listening, Joe Coulombe.” I don’t know how to pronounce his last name. I don’t know how to pronounce anything.

Yeah.

I’ll call him Joe Coulombe.

Do it in a French accent, please.

But then he goes, you know, “Thanks for listening, Joe Coulombe.” The book gets published, and he dies the same week.

Oh!

Yeah.

Wow, that’s quite a story.

And I always think about that when you’re like—

Yeah.

This guy’s life, you could tell, is full of regret.

Yeah.

Full of regret.

Yeah. I know people like that.

Yeah. And it tends to happen in your 30s, once you’ve built this big thing and sold the first thing, and you’re like, “I’m loaded now and I’m going to—”

You have decades ahead of you.

Decades left.

And it’s not arrogance, it’s just belief, like, “Oh, I can do that again.” And some people can. Most people cannot. Or if they can, they don’t reach the same height. And so, they’re jumping, and it’s like if you try to jump 100 times, you can’t get to those first jumps because you’re tired, and that’s just what ends up happening.

Then they might build something great, but they can’t see the greatness in it because it’s not as great as the thing before. That’s even more tragic: They can’t see something that’s still an incredible achievement, but it’s not the same. Other people will see it as less than, and it’s just a terrible outcome.

I’m afraid of it, not so much anymore. But David and I talk about this all the time, which is, we do negative visualization and practice. So, with AI, what if this just changes the whole damn landscape and soft SaaS is just dead in three years? Our answer is, “Well, we had a great run.” Like, 27 years—amazing—and by that time, maybe 30 years. What a run.

We should be happy and proud of that experience. Not like, “Oh, damn, that sucks that we’re out of this now.” More like, “We should be enjoying this, and I hope we sure did, because that’s a rare and fortunate experience to even have.”

But I wouldn’t go and start another business after that. I would just do something else. I don’t know what it would be, but I wouldn’t want to try to do this again because I don’t think I could. I don’t think I could, and I think it’s totally fair to admit, “I don’t think I’m good enough again to do what I did before.”

I don’t have the stamina. I don’t have the drive. I don’t have the thirst and the hunger to build a brand-new software company from scratch again. I just don’t. I would have the curiosity, but I know that wouldn’t carry me enough.

Probably early on, I was more aggressive, younger, pumped. It was the early days, and we were pioneers. There’s that kind of energy that you have that you just don’t have again, and it’s fine. It’s fine.

I think one of the great examples—I think it was Bob Dylan being interviewed on 16 Minutes, and I think it was Morley Safer or something was asking him about songwriting. I don’t know if you’ve seen this quote, but it’s great. He was reciting one of his great songs. I forget the name of the song, and he still has an incredible memory for these incredible lyrics.

He said something like, “I used to be able to write music like that.” I’m paraphrasing. “I used to be able to do that. There was a certain magic to that. I don’t know how I did that. I know I couldn’t do it again, but I can do other things now.”

When I saw that, I thought, “That is a mature—” I mean, he’s in his 80s now. I hope he’s mature. But that is a mature human being: to go, “I could do that before. I don’t really know how I did it. Somehow I did it. I can’t do it anymore, but I can do other things.”

And I think that’s important, because if you identify as an entrepreneur and sell your business, and your identity is tied up in entrepreneurship, you have to go start another because there’s continuity there. You have to be that person again. Then, if you can’t achieve the same heights, you just feel like you’re a disappointment.

I’ve seen this in friends who’ve sold businesses, and it’s just so sad to me to see that in them, when they can’t see that what they did was incredible in that moment. These are moments that you have. These are periods of time that you have. These are experiences you have, and that’s what happened in that time.

Actually, can I go back to psychedelics for a second?

Yeah.

I’m going to tell you a little story. I don’t know if it’s good or not, but it’s meaningful to me. The last time I did mushrooms, I remember going into it and telling the guide I did them with that I’d had this incredible experience with one song the first time. She was playing different songs, and when she played this one song, I had an experience where I just felt like I learned everything in an instant.

The next time I did it, I said, “Can you play that song again at some point? I want to see if I have that experience again.” She said, “Yeah, maybe. We’ll see.” At some point, I was aware enough that she played the song, and I had no experience. It was blank and empty.

After the song ended, I broke out in laughter and said, “Of course, you cannot have the same experience again. You cannot have the same experience twice. You don’t deserve the same experience twice. It’s not even possible to relive something again. That thing happened then, and this is now. They’re detached, they’re separate, they can never be the same.” It was a wonderful thing.

So I’ve now used that with my kids. My kids are growing up. They’re 11 and 7. I’m never going to have the experience with my 11-year-old again as an 11-year-old. Once he’s 12, he’s 12. I can’t have that again. So you have to really savor those things now and recognize that they are what they are now, and you will never get them again. Don’t be sad about that. It just is.

That’s the kind of stuff—the experiences that I had in those times—that I carry with me and hopefully do affect the way I move through the world today.

That’s beautiful.

Mm.

When you were talking about selling a company, and then maybe your next company in this entrepreneur’s life is not as financially successful or big—

Right.

—or as well-respected, I’ve never heard a great definition of what success means. The best answer I ever heard to “What is success to you?” actually came from Steve Jobs, and it was beautifully simple. It was, “Did I make something I’m proud of?”

It’s good.

Yeah.

It’s good.

That’s the way I think about it. For your podcast, you need a certain number of listeners. It’s like, no: Did I make something I’m proud of?

Yeah.

That’s great. I think that’s great.

The way I think about it is, would I want to do this again?

The next day?

Just this—whatever this was. Would I want to do it again? If the answer is yes, then it was successful. If I hurt myself, I wouldn’t want to do that again. If I wasn’t proud of what I said, I wouldn’t want to do it again.

It’s the same thing as knowing what I know now, would I hire this person again? It’s the same question. Would I want to do whatever I just did again? If so, it’s successful. I think that’s enough of a definition for me. It’s not about money or any of those things. It’s, “Would I want to do it again? Would I want to spend my time doing that again, playing it back?”

I know it wouldn’t be the same outcome, but the experience of it would be different. It would still be the same trajectory. I’d like to do that thing again.

You were speaking earlier about humans’ propensity to take something simple and make it complex. Even though we crave simplicity and abhor complexity, we trend in the trajectory of making things more complex.

Yeah.

I don’t know why, when you were speaking, this came to my mind, but one of my favorite podcast episodes ever was back in 2023, when Rick Rubin interviewed Jimmy Iovine. They talked about one of the first times Rick met Jimmy Iovine.

Jimmy was already a legend. He was 10 years older than Rick, so he was well-known. Rick was there with another music executive, and Rick played Jimmy a song he had just produced. Jimmy said something that changed Rick’s life, or the way he thought about things. He said, “Oh, I wish I could still make something that simple.”

Mm-hmm.

Rick said, “What do you mean? I’m sure you can. You’re better at this than I am. You have a lot more experience than I do. You’ve been doing this a lot longer.”

Yeah.

Of course, you can make something simple. The point was that you don’t know what you don’t know.

Mm-hmm.

He had made this beautiful, simple thing, and then you tend to think you need to add more things to it and make it more complex.

Yeah.

Jimmy just gets right to the heart of the issue. That’s the way he is when you’re with him. He’ll say one sentence, and he gets right to the heart of the issue.

Yeah, it sounds like an incredible skill to have. I think that is the trend: to add more things, naturally. Part of it is because you feel like people get bored of things, so you have to expand them. Or there are expectations to do more, and people put a lot of pressure on themselves as business owners. They take money from the outside world, and they have to grow a certain amount because they have to return the investment.

All of a sudden, they’ve unmoored themselves. They’ve lost connection with why they started this in the first place. They’re no longer running their own business. They’re running someone else’s business. They just created a job for themselves, working for someone else.

That’s what can happen when you take the simple thing you had and add a layer to it that blows it up in a different direction. In some cases—

It makes it worse.

For some people, it makes it better, right? But I think for a lot of people, it makes it worse, because now you’re on a track you can’t get off. There’s only 1 outcome that works.

This is optionality. Let me get into this. My feeling, in general, is that businesses—the most important thing to me in business is independence. Profitability is also the same thing, actually. As long as I make more money than I spend, I can stay in business. That’s independence.

Independence also means no one can tell us what to do. We actually feel obligated to do things nobody would allow us to do. That’s a thing David and I talk about all the time: “We should do this. No one would let us do this. Let’s do it!” That’s the exciting stuff for us, the stuff we’re not supposed to be doing.

That, to me, is a big part of it. What ends up happening is—and this is so funny—there’s no dry cleaner who’s raising venture capital money, right? There’s no pizza shop that’s raising venture capital money. Most businesses in the world are not like this. But in my industry, a lot of people have an idea and go raise money.

The moment they go raise money, they’ve cut off almost every option. They think they’ve expanded their experience and their opportunities, but they’ve cut off almost every possible off-ramp outcome, because now they have to be a big business or they fail. That’s it. That’s 1 option.

Some people become very rich doing that, if that’s what they want to do. But most people blow right through what would have been a good business, and it’s now not good enough for someone else. Once it’s not good enough for someone else, that’s got to be a shitty place to be as an entrepreneur, thinking that you just gave up this thing that was actually a good business but isn’t good enough anymore.

You can’t get more money. You built a business to raise more money. You built a business that needs more money. Now you’ve got to lay people off. Now it just falls apart, and it’s over, because you have no options except 1.

I’m a big fan of optionality. We could go public. I don’t want to. We could raise money. I don’t want to. We could raise more money. I don’t want to. We could sell to private equity. I don’t want to. We could quit. I don’t want to.

These are all options that we have. We can keep going for as long as we want, as long as the business survives. We can do that, right? That is gold to me: optionality. I’d like to see more people think that way, because I think it’ll benefit them. Don’t cut yourself off when you think there’s this mirage that says, “Oh, I got a bunch of money, and I can do anything now.”

No, you can do 1 thing: build a big business. That’s not a lot of things.

I feel you’re attracted to timeless things. You have 2 tweets. One of them just went viral, and it’s related to this—craving simplicity and abhorring complexity.

Hmm.

One was about the design of a Rolex over time. Was it the design of a Rolex? Or was it the brand of—

Mm-hmm. Yeah.

Which brand was it?

It might have been Rolex. There are a few. It could have been an Omega Speedmaster. They’ve just maintained the same design. The Porsche 911 is similar.

But you were showing pictures from, I think—let’s just say it was Rolex.

Yeah. Yeah.

Look at this Rolex design in 1960.

Oh, yeah.

Basically perfect.

Yeah.

It has everything I need, nothing I don’t.

Yeah.

Look at the updated version, whatever, 2010.

Yeah.

Look at all the other stuff they added.

Right.

Why are you drawn to the first?

I’m drawn to the first because of the purity of it. I don’t think the new one is bad. What attracts me is the purity of the first one, because that is the purest form of the idea.

I love ideas and insights. Someone had an insight to design a watch that looked like that, and then from there, everyone based their designs off that initial thing. But there was a time when that was the first thing that looked like that. That gets me going.

For example, you take a Rolex Daytona today and look back at the first one in 1963. To me, the one in 1963—not just because it’s older—is better aesthetically, in my opinion, because it’s the purest form of the concept, of the idea.

Everything else from there has been layered on because they need to sell more, they need to come up with a new version, a new model, and this is what happens. They couldn’t still sell that first version. That’s not the way the world works. You have to keep making new stuff, right?

Purity is the word that comes to mind: purity and—

Interesting.

—the pure idea, the pure form of the thing. Could you use the word “essence,” or no?

I mean, essence is part of it. I think maybe you could.

What’s the French word for essence? I want to hear you say it: “Essence.”

I don’t know what the hell it is.

But it’s more about, to me, purity. That’s the beauty: this is the initial idea, the original concept, and the first execution of that idea in 3 dimensions, in a product.

Actually, the gym I used to go to had some old Concept2 rowers. Getting back to the Concept2, I really liked looking at the early ones and then looking at the changes over the years. In that case, the changes were more functional: they used better materials that lasted longer and stuff. But the idea—the fact that this product, which is so good today, was so pure back then and is still kind of the same thing—made me more attached to the brand. They didn’t just add stuff to add stuff. They added stuff that literally improved things, not just to sell new models. You could see the material changes.

Meanwhile, a lot of things, like watches, are just new dial colors and new stuff to sell more.

That’s a great point.

Yeah.

You’re adding to it, but you’re not making it better.

Right. There we go.

So that’s the second viral tweet, where you laid out this huge essay about smart electronics.

Oh, God! My parents were visiting for a couple of months, so we rented them a house down the street so they had more room. They liked their room. It was a brand-new construction house, so we thought, “Oh, it’s nice. There’ll be no issues—no leaks and no issues.”

We got in the house, and, like most new construction, it had digital shit everywhere. The thermostats weren’t thermostats that you could just turn anymore; they were touchscreens. Some of those are good, like Nest.

Yeah.

This didn’t have Nest. Nest is a great product. It’s funny because it’s a great product based on the original Honeywell design, that Dreyfuss design—I forget his first name—the round dial. Nest just updated that because it’s such a good design.

Yeah.

These are rectangular and big. They have the weather forecast on them—or whatever. Actually, the thermostats don’t; that’s the alarm panel. It’s like a huge iPad screen.

Anyway, there were screens everywhere, and everything was a touchscreen. Everything was a big black-glass thing with too much stuff on it, because you’ve got to fill up the screen. You can’t just have a tiny screen; you’ve got to have a big screen, and if you have a big screen, you put stuff on it.

The dishwasher couldn’t be used the first time without an app to register it. My mom wanted to do the dishes, but it didn’t work. She had to call the house manager guy. He had to come down, and he was like, “Why doesn’t this work?” He plugged it in and said, “Oh, there’s an app. I’ve got to get an app.”

Like, what?

You’re adding and not making it better.

To do the dishes?

Yeah, exactly. Your insight is exactly right: adding it, not making it better.

The alarm panel was slow and laggy. The thermostats showed a number on them, and you were like, “Is that the current temperature or the temperature I want it to be?” I changed the temperature, but then there was a schedule that I couldn’t quickly and simply modify, because it was in this little menu structure with this little laggy UI. You’re like, “Does anyone use this?” The people who built this certainly don’t have this in their house. There’s no way. This is not a product built by people who are using the product they’re building. This is a product built to specifications. Someone imagined this. I don’t actually know how that happens. I’m baffled by how it happens.

The TVs, you know, now—I’m not a Luddite old-timer. But you don’t turn a TV on anymore; you boot the TV up, and it takes 12 seconds to get a menu before you can do anything. Again, there were some things that were better before.

Yeah.

You turned the TV on, and the channel that you were on would be on. That was good! It’s amazing—you can’t do that today. That’s actually not even a possible thing. You turn it on, and you’re back to some menu with all the options again. It’s like, “How do we go backward?”

I call this the great regression. Thermostats have gotten worse. Nest may be an exception—I’ll grant them that. Good product. A really good product. Big alarm panels, a lot of panels, a lot of third-party products with big glass screens: bad. Touchscreens are often bad.

In fact, car manufacturers—with the exception of Tesla, because Tesla’s is outstanding—but everyone else who put a bunch of screens in their cars is starting to move back to dials and buttons again, because people are like, “This sucks.” Software is hard, and a big piece of glass has no tactile feedback. I can’t do it without looking at it. There’s no muscle memory, because I’m not sure I’m just confirming what I’m doing. These are bad things.

So the technology can get worse, and then it can slide back, and hopefully it can get better again, and new lessons can be learned. But it was a revelation to me to go into a new home with state-of-the-art stuff and see how backward it was. I’m in technology. Again, I’m not a Luddite. I’m not afraid of this stuff; I get it. But to see how bad it’s gotten—

The light switches, literally—when we rented the place, my agent, who found it, did the negotiations, and so on, said, “Hey, they want to do a walkthrough with you.” I said, “Cool, I’ll be there tomorrow.” I thought the walkthrough was going to be just like, “Here’s the house,” but it was like, “No, here’s how you use the lights.” You’re like, “I have to—what? What?”

The best interface ever was the switch.

It’s on, off.

It works.

On, off. Beautiful!

It’s almost like the way I see it is that it hasn’t been discovered yet. I mean, it had been, but then it had been forgotten. This is like an old technology from the Romans or something. How did they build concrete so well? We still don’t know today how the Romans built concrete so well that it lasted so long. There’s a lost art there.

I feel like the light switch is a lost art. It’s just gone. It will be rediscovered one day, and people will be like, “Oh, my God, this is so much better than this damn technical shit,” you know?

There’s a room and a place for all sorts of advancements, but there also are regressions. It’s unfortunate that the industry I’m in is the one that tends to sell many of these to people.

It makes me think of—again, I’m going to tie this back to Rick Rubin, since we’ve been talking about him a lot.

Yeah.

He has this concept of a ruthless edit.

Rick just has candles in his house, I’m guessing. He just doesn’t—

I don’t know. These guys are close with him. Ask him.

Okay.

But he has this idea of a ruthless edit, and he’s like, “Okay, you made 30 songs for your album?”

Yeah, yeah.

He’s like, “Pick the 5 that you absolutely can’t live without.” So now we have a 5-song album. It’s a perfect album.

Maybe he needs some more.

So he’s like, “But then we decide, out of the 25 left, before we add numbers 6 and 7, did it make it better?”

Yes.

Going back to, “You’re adding to it, but you’re not making it better.”

Yeah.

I think the throughline here is that you see this timeless design of the 1963 Daytona.

Yeah.

There’s nothing else that’s going to make it better, so just leave it. It is perfect.

Yeah.

I know you’re a big fan of Porsche.

Yeah. It seems like the silhouette is very similar.

Yeah. In fact, here in Malibu, do you remember going up PCH? There was that burned-out car toward the Palisades, on the right-hand side.

I do, yes.

You could just tell it was a 911. Why is it still here?

But you knew it was a 911.

You knew it was a 911.

It’s a 997, in fact.

It sat there for a year, by the way.

Yeah, yeah. But immediately, the other cars next to it burned out. I have no idea what they were.

Yeah, which model is that? Exactly. But that was just like—

Yeah.

—I know exactly what that is.

I know.

And I think about that all the time. I think products should think about this.

Jerry Seinfeld has this really interesting concept where he says, “Dosage matters.”

Mm.

You could go see a stand-up comedian, and 45 minutes in, you’re like, “This guy’s great.” At 1 hour and 15 minutes, you go, “Eh.”

It’s like he should have stopped at 45.

Yeah.

It’s so hard for us to stop—to stop adding complexity, to just sit there.

Yeah.

When I asked you about timeless design, go back to Rick Rubin. What I love about him and that exchange between him and Jimmy Iovine, which happened probably 40 years ago, is that Rick would say, “Somebody playing the piano—a piano and a beautiful vocal—sounded great 50 years ago—”

Right.

“—sounds great today.”

That’s right.

“It’ll sound great 50 years from now.”

Period.

When he tried to revive Johnny Cash’s career, there’s this great song called “Hurt,” which I listen to all the time.

Yeah, sure.

“‘Hurt’ by Nine Inch Nails.” Exactly—that’s Trent Reznor of Nine Inch Nails. As a 21-year-old man, he wrote it, and he’s talking about regret. Rick’s point was that a 21-year-old talking about regret is one thing. A 75-year-old man, when he can’t go back and fix it—

Right.

—it’s a way deeper cut.

Yeah.

But his whole point is, “A great vocalist with a guitar sounded great 50 years ago.”

Always.

It sounds great today. Let’s just go back to the essence of what we’re actually—

Yeah.

—building, and I think not many people building products—you just gave the perfect example. There’s no essence there.

They're not even using their own products.

No. No. This actually ties into some other advice that Jeff Bezos gave us way back, right when we first met him. He told us to focus on the things in our business that don't change. He goes, “There's going to be plenty of things that do change, but make sure you focus on the things that don't change.”

The examples he gave us were something like, “10 years from now, people are not going to wake up and go, ‘I wish Amazon's customer service was worse.’ They're not going to wake up 10 years from now and go, ‘I wish it took longer to get a product from Amazon.’ They're not going to say 10 years from now, ‘I wish Amazon's prices were higher.’” These are the core essence elements that he clearly invested in.

Things are coming faster than ever. Another one is, “People aren't going to wake up 10 years from now and go, ‘I wish I couldn't get this on Amazon.’” More selection, faster delivery, great customer service, fair prices—even competing against other people and offering a lower price, even if Amazon doesn't sell it. These are the things in his business that he knew would never change, and he can still explore a whole bunch of other things because they do a lot of other things.

But don't lose sight of those basics. That's something that he really instilled in us, and something we've tried to focus on. So, this is the essence: What is the essence, the purity, or the core fundamental basics that really matter? Don't lose sight of those, because it's very easy to lose sight of them. They can become boring. “I've done that for a while. Let's do something else.” You can kind of lose sight of that.

This is why I think people that have run companies for as long as you have are so rare, and it's why, if you look at the first few guests, I bet you, if you took the average length of time a person has been working in their business, it's probably 30 years. You said you like old people.

Yeah. People always say I'm obsessed with old people, which is funny. But I'm not obsessed with old people. I'm obsessed with people that do—

Longevity.

—things for a long period of time.

This is where you and I will actually have a disagreement. You're like, “I don't work hard.”

Yeah, yeah, I do. Do you remember talking about this last night?

Yeah. And I was like, “Jason, Jason,” and we added it up. I literally pulled out my phone last night and did the math.

You did. You did the math.

You're like, “But I only work 40 hours a week.” I go, “Yeah, 40 hours a week over 27 years.” Whatever that number is, I think it's 54,000 hours or whatever the number is.

Right.

And my question back to you is, “How many people have worked on the same thing for 54,000 hours?”

I don't know.

A tiny, tiny amount.

Yeah. I just like that you spread it across time. Probably.

Yeah, I suppose. Again, it's one day at a time, so it wasn't intended.

You were laying bricks.

I was just laying bricks.

I just keep doing it. It adds up, and the path gets bigger and adds up. That's what happens. But I've always admired things that have stuck around for a long time.

We used to have a podcast back in the day called “The Distance,” which was a podcast we did for a few years about businesses that had been around for 25 years or more. Maybe that's not even that long, all things considered, but it's quite long for most.

I listened to it.

It was awesome, and most of these were family-owned small businesses. They just nailed some things and got them right, and I love businesses like that that have been around for a long time.

I'm not talking about us here, but there's something about a business being around that long: It's not a fluke. You can have something that's hot for a while, and it can go out. That's kind of a fluke, or a trend, or a fad, or something. But to be around for a long time signals that there's something repeatedly right about this thing—right enough to stay in business for a long time.

A lot of these businesses are tight. You could have a dry cleaner whose margins are thin, and maybe it's just enough for them to get by. But they'd rather still be doing that than something else, so they're in it for a long time. It's not that it's a great business, but it's a sustainable business. And that, to me, is a great business. If they can keep doing that—

Right. There you go.

It's the same insight you had earlier with the leaf. You're like, “Why don't you look at this leaf? It has evolved forever.”

Do you know who Mark Spitznagel is?

No.

I read his book called “The Dao of Capital,” probably 7 years ago. He runs this hedge fund. I don't even know if he's still doing it anymore. But he has an entire chapter in that book on conifer trees.

Uh-huh.

He's like, “They're the tree that is present and can survive in the most extreme environments on Earth. They've been evolving for an extremely long period of time.” He was drawing all these parallels between a great business that could survive, using the insights he derived from studying these trees, which I think is very fascinating.

Yeah. I love it. I've often thought of our business as an oak tree. I love oak trees. Oak trees are trees that I love.

Bezos uses the analogy of Amazon as an acorn that grew into an oak tree.

Hmm. I don't think about it as the acorn so much. That's cool, though, especially “A,” “Acorn,” “Amazon.”

There you go. I wonder if he thought about Acorn as a company?

No, it was never that. You remember this. You're old enough.

Yeah.

The directories were in alphabetical order.

Oh, yeah, that's why—

Remember?

That's right. Remember, there weren't that many websites, so you could actually list them all.

That's right, that's why he named it.

That's right. I remember reading that.

And he almost did, like, “Abracadabra.”

Hard work or something like that?

No, it's like “Abracadabra” or something like that. Then people thought it was “cadaver,” and they're like—

Ah.

—“That's not a good association.”

Funny. They don't sell cadavers there, do they?

No.

No, they don't. They don't. It's amazing. The Everything Store doesn't sell cadavers.

Yeah.

Okay. So, I've always thought about our business as an oak tree. Oak trees are very stable. They can withstand a lot of storms. They don't grow very fast. They're actually quite slow-growing, though some are faster than others.

In the Midwest, where I came from, a bur oak is a very slow-growing tree, but it lasts a long time and can weather a lot of storms. I've always found that to be a very appealing kind of tree to be, versus a cottonwood, which grows really fast and makes a lot of noise. You can hear cottonwoods when it's windy. They make a big mess. Everyone notices them because there's cotton all over the place, and they die in about 75 years or something like that. They come down hard. It's just not as interesting to me.

I don't need to be flashy. I don't need to leave signs all over the place that I've been here. I'm just going to be nice and quiet, build a great business, keep a solid foundation, add a little bit every year so it feels more stable, and weather storms.

Over the years, in the tech world, there's a lot of, “It's a killer. It's a Slack killer. It's a Basecamp killer. It's a whatever killer.” When you've been around for a long time, you see that played over and over and over. There are a lot of things that are supposed to kill something else, but very few of them can withstand and outlive the storms that come. You can be hot for a while, but the hardest thing is just to stay around, to stick around. So people are like, “How do you compete?” Well, we just stay around longer than everybody else.

Yeah. The line I have on this that's repeated over and over again in these biographies is, “You just stay in the game long enough to get lucky.” There's going to be something that happens in year 5, 10, 15, or 20—usually an innovation invented by somebody outside your company that you can take advantage of.

Right. The example of this is Coca-Cola with refrigeration. They didn't invent refrigeration, but it drastically expanded their market.

Tobi's interview with COVID, in a sense. COVID saved Shopify in a lot of ways, right?

He needed that difficult time period—

Yeah.

—to then grow and realize all the things he was doing wrong—

Yeah.

—and he realized—

And people were shopping online more, and all that stuff, too.

Well, he had that huge spike in stock price, which he talked about, and then it going down.

Yeah.

But it's when he realized, “Oh, I'm cosplaying.”

Right, yes.

“I'm a public company CEO, and this is what I do.”

Yes.

He's like, “No! There's still…” I love what he said in the conversation, where he's like, “There's not one right way to do something. There's probably 100.”

I believe that.

“At least 100.”

Yeah. I think the way you did it, if you had to do it again, you'd do it the same way. But there are 100 different ways to do that same thing.

I want to go back to what you just said, though: Something can be hot; it can be a fad. The maxim I have for this is, “Time is the best filter.” It's the only filter I trust for businesses, for ideas, and for books. I usually read a lot of old books, but it works for people, too, because a huge influence on my thinking is Charlie Munger and his whole thing.

It’s like you need to build a seamless web of deserved trust with high-quality people.

Yeah.

And the only way you know if somebody’s high quality is time.

Yep.

In his and Warren’s case, they knew the same people for decade after decade after decade.

Right.

I’m rereading the book “The Snowball” right now. It’s the 700-page biography of Warren Buffett. The amount of friends that he accumulates in his 20s, 30s, and 40s who are still around when they’re in their 70s and 80s is absolutely remarkable.

For a business, time carries most of the weight. That’s another maxim I got from Munger, because when you read “Poor Charlie’s Almanack,” his thing is that you should master the big ideas. There’s only a handful of big ideas in all these different disciplines—biology, physics, economics.

Right.

He’s like, “And if you just master the big ideas,” he says, “those few big ideas carry most of the freight.”

Mm.

Reading that, I was thinking about how he prioritized durability in a business.

Yes.

And I was like, “Oh, so time carries most of the weight. You just have to survive,” which goes back to your blubber and having a margin of safety.

Blubber and small units.

Yeah.

That’s a big part of it, too. This is a bit of an aside, but it’s tied to it, and I think it’s important to talk about: pricing.

With Basecamp, for example, nobody can pay us more than $299 a month. It doesn’t matter how many users you have. You could be a big enterprise, and $299 a month is the most you can possibly pay us. Our prices go much lower, but that’s the most we allow you to pay us.

Now, many of our competitors will say, “Hey, you want to pay us $50,000 a month? You’ve got 2,000 seats? We’ll take it.” I don’t want their money, because what I want is a static group of customers.

If you think about static like an old TV—the dots are all equal-sized—you should be able to pick out 10 random customers and lose them. I don’t want to lose customers, but if you could pick out 10 random customers and lose them, I think you have a good business. If you could pick out 100 random customers and lose them and be okay, you have a good business.

What you don’t want is a bunch of outlier companies that you cannot afford to lose. You don’t want customers that you cannot afford to lose. By equalizing our pricing and not letting anyone pay us more than anybody else, we create a bunch of small units, which are individual customers. If you take one out, it’s not like Jenga, where the whole thing is going to fall. It doesn’t matter, in a sense, because everyone’s essentially equal, no matter how big you are.

Then we can develop software for the customer base as a whole, and not for a handful of customers that pay us a lot more than everybody else. That’s the enterprise game: getting as many seats as you can and landing these whales. I just don’t find that interesting. I also don’t find it durable.

Durability is about a lot of small things. If someone wants to chip away at some of those, it doesn’t matter because there’s a lot more left. That’s what we were aiming for with durability.

So, one thing that we haven’t touched on, which I think is really important—we’ve danced around it a few times, and you’ve mentioned it a few times—is that you are all intuition.

Yeah.

I want to hear your thoughts on intuition, and I want to hear how you refined your intuition.

Intuition for me is just making decisions that you’re comfortable with. You do want to look around and pay attention to as many things as you can, in a sense. But ultimately, you have to be willing to make a human decision about something, and stick by it and stand behind it.

I think these decisions come from somewhere that you can’t quite define. It’s not like there’s one thing that tips it over. Intuition, to me, is a collection of a lot of things that you can’t quite split apart, which lead you to make a decision.

That’s how I’m driven. I go by gut; I go by intuition, whether it’s a pricing decision, a product decision, a feature, a new product, a name, or whatever it is. We don’t test things. We don’t do focus groups. We occasionally A/B test for fun, but not because it matters.

I’m not looking at numbers. I’ve never seen a spreadsheet that’s ever made me do anything. I don’t want to make a product decision because a spreadsheet told me to. That’s just a thing, and there are a lot of other things that can tell me to do other things.

I don’t want to value something because it’s a spreadsheet with numbers on it. That’s just a thing, and I’m very careful not to put too much weight into something that purports to be more valuable than some other feeling I have just because it has numbers on it.

Of course, I don’t want to do stupid things. I’m not going to throw $50 million at a Super Bowl ad. I’m not going to do that. Your intuition has limits, too.

Everything we do is based on what we want to do and what we feel. I want to feel into these decisions and go, “I feel good about this. No matter what happens, let’s do it anyway.”

Yeah, that’s what it is for me. How have you refined it over time?

You just do things. You make decisions. To me, it’s all about area under the curve in terms of making decisions. The more decisions you make, the more time you have, the more you refine your intuition.

But you don’t actively refine it. You don’t practice intuition. You just make decisions. The more you make, the more you make, the more it sharpens everything up.

It takes the edge off, I think, eventually. As you make more and more and more decisions, and you’re tumbling these things around, essentially, you end up with a nice, smooth orb, and it feels really good to have that in your hand. It feels right. That’s kind of where you want to get to.

You want to have this place where, when you make a decision, you’re like, “This feels like the right decision. I’m not afraid of this decision. I’m excited about this decision. It could go wrong, and I’d be okay with that, too. I just know that this is the decision I want to make right now, and I’m lucky to be in this position where I can make it. No one can tell me I can’t.”

That’s another part of intuition, because you can have intuition that keeps hitting a ceiling, and someone else says, “No,” and then you don’t get to use it. Intuition has to be used, I think, to really be enjoyed. That requires going back to independence and back to optionality as well.

Jason, one of the coolest things about my job is that I can have somebody like you, whose work I’ve read and who has shaped my thinking over a decade and a half. We’ve become friends, we get to hang out, and then you also get to come on the show and share all the things I love about you with everybody else.

I really appreciate the time today, man. Just fucking awesome.

It’s been a blast. Thank you so much for having me on.

Yeah, sure.

Thanks for doing it.

It’s really fun, yeah.

Yeah, you bet, man.