I like 37 Signals. I like Joel Spolsky. I like Paul Graham. I occasionally even read Techcrunch. However, I believe all of these people (and many others) tend to occasionally overstate and undersupport their positions. I can’t blame them for it. After all, shoddy generalization provokes snarky rebuttal, which leads to counter-rebuttal, which leads to increased exposure. It’s a great play for the writers; unfortunately, while the writers are busy racking up traffic, readers are unwittingly pissing away the hours spectating a geekier version of Jerry Springer.
I would pay good money to obtain access to a stream of intrinsically interesting content without any of this overstated, undersupported crap.
Edit: My (overstated? undersupported?) assertion that this article is overstated, undersupported crap is now the top comment. The irony is disturbing. I hope someone builds a product that eliminates these frustrations for me (and others) in the future.
I agree. If you're getting sick of reading our overstated and undersupported crap, I suggest getting a puppy. During the first few months of his life you'll be too busy to surf the internet.
I barely have time for one or two HN stories a day, now, and I haven't been to Reddit since picking Taco up at the airport.
I guess I'm just frustrated that the current structure of web has created all sorts of malincentives around the exchange of knowledge. Trollish content attracts more attention, so well-meaning creators of worthwhile content are incentivized to wrap legitimate ideas in trollish presentation in order to reach a larger audience.
I wish this weren't the case. I hope it changes in the future.
That's the same problem that TV and radio "news" has had for a long time. I don't think the problem has to do with the structure of the web. I think the problem has to do with human beings. And given that this keeps repeating itself, I wouldn't call it a "problem," more just "reality." I agree it sucks though, but presumably the low cost of spreading information on the web will allow niche information sources to flourish. HN itself is an example of getting closer to that.
Be careful. Once the dog grows up and calms down it will spend large portions of time sleeping. The solution then is to get another puppy, and next thing you know you're addicted and running a kennel, which isn't necessarily a bad thing.
For example, my Australian Kelpie is now about eight years old. She spends most of her day sleeping. She has to be let in or out once every few hours so she can look for kitties, and I take her for a 20 minute walk in the evenings before bed. She spends the rest of the day napping while I program, read, or play games.
The general formula is: this worked for me, therefore this will work for everybody. I value their experiences and opinions, but sometimes they overlook all the confounding factors that made their situation unique. Of course, if they didn't do that, nobody would read their stuff, people like to hear strong opinions with fiery delivery.
I agree this article was mostly hastily written over-generalized crud. But there is no need to throw Joel and Paul under that same train. Usually, they do a better job of supporting their positions, and their articles are much better written.
What exactly are they overstating and undersupporting? The video that sparked a lot of this dialogue has a lot of the reasoning and thought behind what he claimed in his post.
Andrew is definitely guilty of frequent link-bait headlines, but that doesn't mean the videos are low quality. There are a lot of real gems in that stuff, and it is mainly because Andrew pushes past the unsupported assertions that the grandparent is complaining about and pries for details.
I do watch many of the videos yes. They are well done. He asks good questions and he's not like a typical journalist, because he asks questions he shouldn't. Sometimes he puts the interviewee on the spot and I like how he helps them feel comfortable sharing things they otherwise wouldn't. That part of it is great, because it helps entrepreneurs understand that the reality of business isn't pretty PR releases.
Packaging is important. It can be just as important to focus on the failures, but we don't see that a lot. People don't want to talk about their failures. It's hard to find the failures though, they aren't as famous. We can really learn a lot from failures though.
I believe it may be precisely because we don't see many failures that we keep failing. It's very difficult to understand why a company succeeded. We aren't told about the neighbor who had $1 M to invest or the happenstance that led to a great sale.
It's easier to identify reasons we fail and help us avoid them. Oddly, most failures we read about are due to the environment created by vc. Expectations, short runways, business/techie conflict, yet we continue to be led to believe that vc is a good thing for entrepreneurs. If you run the numbers, the first decision you should make as first time entrepreneur is to avoid VC.
Bootstrap the first one and get VC for the second one. Or, as some suggested to me in the past, get VC for an easy idea you don't really care about. Sell the investors that idea, keep the good one for yourself, then use the money to fuel what you're really passionate about.
For Anu, as a serial entrepreneur, there must have been some failures. Ask lots of questions about those and how they might have been avoided. What lessons were learned? How is trial and error used to make better startups in the future? What things are important to remember and forget? What are some of the less intuitive things to think about? What are some motivations.
Ask Fred about Zynga and why he was quiet about it so long. Why does he think what they were doing is acceptable? Ask him why he doesn't push Zynga to give the ill gotten gains back.
Ask the VCs how to techies can manage expectations and package their startups in a way that can help them better understand them. What motivates them to invest in a particular startup. Do they actually read emails? What's the best way to contact them? What is an introverted techie to do? Can a techie focus on the tech stuff and still succeed in a VC backed startup? How?
For Ed of course, what kinds of prejudices did he face in a world dominated by twenty somethings? How did he balance risk inherent in older life with risk in a startup? What is different at that age than a 20 something entrepreneur? Do people respect his opinions more or was he considered washed up? Why did he wait so long? How has the environment changed over the past couple of decades?
For what it's worth, I think Mixergy is useful just as it is. Why does everyone want people to "cough up their secrets"? There is value in discovering some of this stuff for yourself. The founders Andrew talks to certainly didn't have Mixergy there when their companies were founded, simply spitting out "secrets". Yet, in an hour of listening to Andrew talking to these guys, I learn quite a bit, not just about tactics (which many founders are hesitant to reveal), but about the way that successful people think and formulate ideas.
Hearing other people's stories and ideas is great, but at the end of the day, it's just fluff. Only by trying to start a successful company will you actually figure out what works for you and what doesn't. Obviously, no one wants to hear that. They'd rather hear convenient doctrine, packaged up nicely in a book or podcast, that makes founding a successful company as easy as baking cookies. Here's the newsflash for those people: That recipe doesn't actually exist.
Andrew: you're not a hopester. But what you need to do: really push harder to get your guests to cough up their secrets. You do try. But too many of them end up getting away with answering key questions with vague answers. "Oh, well, we just kept trying and somehow managed to build an customer base." Stuff like that. HOW did that happen? Accident? Happenstance? The guy from Aptimize got away with skimming right past the most important question he could answer: how the hell did he manage to build a business with little or no marketing? His answer was "oh, some SEO and stuff" -- not good enough, not if I'm trying to learn from his experience. The wu-themes guy -- same thing. He "built a community" and then starts charging $100 per theme. Little or no detail about how exactly he built a community -- what specific steps he took -- and what exactly he said and did to get people to cough up $100 for a wordpress theme.
That's been my frustration. It's good to hear these people explain their success, but if you managed to squeeze a bit more detail out of them, I would even consider becoming a Mixergy subscriber.
Good point. I'll push even further. I need to find a good interviewer who'll help me figure out how to get guests to remember the steps that led to big epiphanies.
I don't think anyone has a generic formula for success yet (other wise we would be busy working on it and everyone would be a success story). And in my experience other's people success formula is not going to help me much even if I copy it bit by bit, unless it tune it to my personality/environment/limitations/resources etc.
So I just read these articles (or watch interviews) in the hope of just getting new insights and not looking for a sure way to make millions.
It may not be perfect, but isn't this what HN is supposed to be? Most of the time, I read the comments before the article and use them to filter the fluffy ones.
Steve Jobs was a serial entrepreneur—starting Apple, then Pixar, then NeXT, then returning to transform Apple. Maybe he didn't want to be at the time, but in his Stanford commencement speech he said (with the benefit of retrospect) that getting fired from Apple was one of the most important events in his life. Here's what he said:
"I didn't see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life."
Now, Steve didn't flip Apple, he didn't sell out. But the point is that he did start over from scratch. 37signals are right that building a business for the principal purpose of flipping it is probably a perverse goal. But being a serial entrepreneur is not a bad thing, and Jobs is precisely an example of why it's not a bad thing.
I'm curious what you mean with the Warren Buffet comment. Running a tech startup and running Berkshire are completely different, so I'm not sure what sort of comparison you are making.
Yes, I agree. 37s have become a slight parody of themselves. They used to point and laugh about how web business was done in an 'enterprisey' way by their example company Enormicon (I think it was called).
Now we have a set of cliches for a small funky online company should act.
It is all about subverting the dominant X paradigm where X is anything that you don't like or don't use or don't understand.
- Only use Apple computers to subvert the dominant Windows OS paradigm
- Only use Rails to subvert the dominant PHP/Java paradigm
- Only use Textmate for editing to subvert the dominant Vim/Emacs/Notepad/Eclipse paradigm
- Use swear words in your presentations to subvert the dominant politeness-to-people-who-pay-into-conferences paradigm
I could go on. I am generalising here too! But sooner or later 37s may wake up and realise that they are the new mainstream amongst the web dev crowd.
They have slayed the monster of PHP/Java.
Perhaps its is time to stop playing the hip outsider?
What's wrong with that paradigm? If you believe that your technology or philosophy is better than the status quo, why wouldn't you argue for that? Why wouldn't you want to convince others to do the same? The progress of the world demands on the spreading of good ideas.
Also, there are still many, many, many more PHP and Java developers and shops out there than there are Rails. That shift is far from done.
Once the good ideas have become mainstream, the work on those are done, but by then I'm sure even better ideas are available and the process starts anew.
Don't get me wrong, I have worked with Rails - I admire what 37s have done and a good rate of churn in new ideas in any profession can be healthy and welcome thing.
I just wonder if 37s have gone from being the underdogs? What do you rebel against when you are the status quo - at least among the opinion formers and alpha geeks?
It is like when a renegade leftfield music act become mainstream. Look at Rage Against the Machine (with their leftist anti-capitalist music) becoming millionaires after signing up to one of the biggest capitalist music corporations on the planet.
What he argues is that the 37signals paradigm is that of attacking a status quo for personal or aesthetic reasons, and not, at least not necessarily, because the attacker has a better idea.
I applaud 37s. I wish their voice was even louder! They are constantly drowned out by the VC rush that I've seen destroy really great companies with really great products that aren't around anymore because an investor wasn't satisfied with the growth rate.
If the companies, many who were my clients with VC, had gone a little slower and taken a little more time they would have been long time established players. Instead, another company years later -- also backed by VC -- comes in and takes the market that, years prior, wasn't big enough to support investor expectations.
During the dotcom boom, I saw multiple layoffs at multiple companies. I saw people crying. I saw founders of companies let go. I heard people say, "Just let me stay. I love working here. You don't have to pay me!" Sorry, that isn't an option in a VC backed company.
Yet, I don't know one bootstrapped startup who would say no to a loyal team mate who wants to work and build something without needing a salary.
The point isn't that they're the only ones doing it right. In fact, he lists off other entrepreneurs that did the same thing. I think their point is made well, and they're just citing other examples of people doing it or that have done it historically.
What they're saying is build a business, not just a thing to flip. Focusing on the business will, even if you end up selling it to someone else, make it a better venture in the end, and more satisfying to you as a person.
Egads. There is nothing wrong with selling. Imagine this scenario: You sell your first company, perhaps you've bootstrapped it and perhaps you sell it for 8 digits. Then you can create a second company (yes, people, it IS possible to create TWO companies unless your fist company was a fluke and you're unable to come up with a second company idea). Starting a second company with serious money in the bank gives one a level of freedom you cannot possibly imagine today. The 37Signals gurus always express their ideas relative to having only a single company in one's lifetime (because that's what they know). I've started and sold two companies to date and I couldn't be happier with the outcome (that's an understatement). I am having more fun than I ever had in my life and had I not sold, I would have never met my fiance -- she's the true passion in my life and startups don't hold a candle to her!
And my next company will be something wayyy out there -- probably so far out that I can't get funding because it's too risky. The only reason I can do that is because I sold my first two companies very early on and I have just enough financial wiggle room to where I can, for now, take some risks. I see companies like 37Signals making safe, predictable product bets and leaning on their brand and existing customer base for income, and that's fine. But the world needs risk takers, too. And taking risk requires capital and if that means selling a couple of companies before they turn into empires, then count me in! If I were to do it all over, I wouldn't change a thing.
First off, almost everything is for sale at the right price. If someone offered 37signals one trillion dollars would the sell? Of course.
Also, there are other reasons to sell than "some sucker is willing to pay x". Maybe you are burnt out, want to spend more time with your family, try something new, take some risk off the table.
There is a nugget of truth in much of what 37signals says, but it is always stated in such absolute terms that it becomes off-putting.
You're not engaging with the article, you're engaging with a straw man. Nobody is going to offer $1Tn, $1Bn, or even $100MM for 37signals in 2010. When they get to the point where someone might, the notion of them turning down $100MM won't seem so funny anymore.
Similarly, DHH isn't writing "don't sell your business if you burn out". If you burn out and you can't fix it, do right by your team. DHH is critiquing the notion that you should build to flip, and the notion that there's great honor in doing that repeatedly. It's undeniable that there is a mythology around "serial entrepeneurs" who repeatedly flip companies.
You know what would be incredibly boring? A DHH post that anticipated and acknowledged every special case and every objection. "What if someone offered you $1Tn" is an especially b o r i n g objection. One of the reasons people read DHH's articles and don't read ours is that we write things like "Of course, if someone offers you $100MM, you should blah blah b l a h b l a h", and he doesn't.
It is also OK for him to be wrong. Being wrong --- at least, when you're not writing about password hashing --- does not put a point on your blogging license. The bar is, "is it interesting and does it come from an honest place".
I reread the post and will admit my comment doesn't directly engage the spirit of the post. His core thought is to build something for the long haul and put your love into it which is a good strategy (but not the only strategy). My comment was a bit tangential and stems from years of reading 37signals and getting a bit sick of the preachy, holier than thou attitude.
> Almost everything is for sale at the right price. If someone offered 37signals one trillion dollars would the sell? Of course.
The fact is, nobody is offering 37Signals a trillion dollars with no strings attached. Actual offers would involve non-competes, possibly demands the founders stay on for a year or more, the right to fire employees, the right to raise prices or otherwise make things unpleasant for customers the founders like, and so on.
We can't say "Everyone's soul is for sale at the right price," get a yes, and then come back to reality and pull out a two hundred page term sheet and demand that they consider it since "We've established that they're for sale."
This is roughly akin to asking me if I would work for Microsoft if given a million dollar signing bonus. Does that mean I'm open to working for Micosoft? Or can I stick to my assertion that I'm not interested in working for Micosoft now or in the foreseeable future?
Selling your company only makes sense if you think they can do a better job than you can. Or when you think they’re overvaluing the prospects of your company. That’s either the talk of the meek or a con man (“let’s get these suckers to overpay for this company of questionable value…”).
Of course the trillion dollar number is ridiculous (just trying to make a point) but you can insert whatever number you want. DHH directly says you should only sell if you think the buyer can do better or if they overvalue your company.
As far as selling because you think the buyer can do better goes, does anyone actually do that? How many people are strong enough to build a company to the point where someone wants to buy it and then suddenly turn meek when the offer is on the table?
Selling your company doesn't make you a con man either. Even if someone overpays. If someone overpays, should you offer to give back the difference?
Like I said in my original comment, there is a lot of truth in what 37signals has to say, including this post, but sometimes they stretch it too far.
Here's a question: Why work for Microsoft? A friend went to work there recently, and he made a very good point: In Micosoft's "First Great Age," they had a mission everyone could understand: A computer on every desktop and in every household. This is not one of those craptastic missions CEO's write on their corporate retreats full off synergies and leverages, it's clear, direct, and best of all it's objective, it's measurable.
What's the mission now that there is a computer on every desktop and in every household? Is it as clear? Is it as direct? Will it last for a decade or more? Is it meaningful to every employee?
All I need is someone to answer that question for me and I'll be ready to change my mind.
Is it possible for them to just write a blog post on their own blog that nobody forces you to read without prefacing it with a detailed justification? Or have they spent all their "axod tolerance" tokens?
This attitude is the reason I don't blog anymore. You don't just disagree with them. You're put out that they're writing at all. I understand where you're coming from and I sympathize but that attitude is oppressive and stifling and I wish people would dial it down. I'm one of the culprits too (hoist me up by anything I've written about pg). I hope people call me on it too.
What? Our main business is to sell collaboration and productivity software to millions of users. Sharing our opinions on running a business is what we've been doing for the last decade.
[seems like the parent poster chicken out and deleted his comment]
You have a good point. However I think your analogy doesnt take into consideration that you can't really grow your house beyond that of whats dictated by the size of your land and planning permission, whereas a company's size is completely elastic. It can start the size of an outhouse and grow to a factory (or, unfortunately, sometimes the other way around!)
Its the fact that so many people find it so hard to believe that they don't want to sell.
If you look at the HN thread of the TWiST video, many were claiming they're just gassing the potential buyers up by saying they're not for sale.
I don't get why its really that hard to believe. Loving what you do is the thing I strive for, and they seem to have found it. Why mess with it?
People can say you can flip it and start anew, but 37signals has (according to DHH) enough to not worry financially and if they have a great new startup idea, why would they start a new company to do it? They have a company that they own and have the freedom to implement and launch products that they think are great.
Well, "hammered" meaning he asked probably 5 or 6 variations of "Would you ever sell?", "What if someone offered you 10x revenue, would you sell?", "What would it take to get you to sell?", etc, even after dhh gave the same answer every time.
37Signals pushes people to ask WHY. A lot of entrepreneurs are only in it for the end game -- money, fame, et al -- they demand that you do something you care about. Too many people view startups as a means to an end so it's a welcome message.
It just so happens these same people ultimately have the most success because it gives them the endurance to stick with it.
I personally always liked that Chris Rock monologue for the exhortation to build capital rather than frivolously consuming status symbols. Probably true in tech, too. (I don't know what our rims are, exactly, but I'm sure we've got a couple options...)
Not to nitpick, but the other reason acquisitions sometimes make sense is that a bigger "parent" might open doors that it would take a smaller company a long time to get to, particularly in terms of scaling. In a sense, getting bought by a big parent can (in some cases!) be equivalent to taking VC - funding, yes, but also advice and connections (traded for a measure of control!)
Now, the benefits are often illusory (see: pretty much anything Conde Nast has acquired). But sometimes it's actually true - particularly when there are economies of scale or actual (I hate this word) synergies.
This is pretty much the Google promise, isn't it? "Get bought by Google, get access to infrastructure you could never afford on your own!" This makes sense for some businesses, not so much for others (FWIW, 37s is probably in the latter category).
Facebook was the former (they could've benefited a lot from Google's infrastructure and knowledge). Google could've also benefited from Microsoft's experience and infrastructure.
Who's the sucker now?
The biggest disadvantage is that big companies that are willing to buy aren't risk takers ... they'll either dilute your idea, or kill your project. Google is my kind of company, but they've killed at least a couple of startups they've bought already.
Of course, I wouldn't place 37signals in the same league. But he does have a point ... if your company can handle the growth without external resources, than why sell?
1. In order for there to be a market, there have to be both buyers and sellers, so being a seller creates value and is a good thing.
2. He is saying that if you are a buyer then you are doing it "for the vision", but if you are a seller then you are doing it just for "a quick flip". I doubt that very much.
There doesn't have to be a market in startups. What is a startup trying to sell, their product or their shares? The lines can blur a bit, but ultimately it's the buyer that's going to take the product forward in the market and generate the value.
An interesting perspective, I guess. He seems to be saying that he's in it for the fame and the glory, which I guess is fine if that's his preference. Practicality suggests taking a good payout when it appears, but of course every circumstance is different and requires individual consideration.
For the record, many of the listed business leaders have sold businesses, and considered selling their flagship businesses but felt the offers were too low. I remember reading this specifically about Google, but don't want to find a source (searching "google acquisition" isn't really helpful these days). Jobs sold NeXT; I think he would have sold NeXT even if Apple was not the buyer. etc.
Buffet et al are driven by practicality. Dynastic ambitions are an obstruction on the way to Buffet's status.
Oh, make no mistake. I'm in it for the money too. But I think there's more money to be made owning my own company for the next twenty years than there is selling it for 10-15 times today profits (the realistic, going price for profitable software companies).
I think DHH on Jason's Twist show left an opening that could make him do an about-turn at any time.
First, he says he would never sell the company, not for 150 million dollars, because he's not in it for the money. So, ok, he won't sell the company.
However, he also said, you should always be working on your best idea. If you're not working on your best idea, then you're doing it wrong.
He says that 37 signals and its products are his best ideas.
Ok, following me? If one day, he came up with some idea out of the blue, out of inspiration, out of some life-changing event, out of...wherever.... and that turned out to be a better idea than 37 signals....ummmm then what?
Then he should sell his company to go work on that "best idea". No?
I'm not talking about an idea that can fall under the 37signals brand. I'm talking about an idea completely out of left field. For example, what if he suddenly was enlightened with how he could solve world hunger? Or a completely new form of alternative energy that could be easily and quickly distributed?
You wouldn't exactly have a 37 signals homepage that showcases Basecamp, Highrise, Backpack, Campfire, and now introducing World Feed, the solution to World Hunger!
Selling your company only makes sense if you think they can do a better job than you can.
There's nothing wrong with that. The person who's consistently able to spot talent may not be good at nurturing said talent. That's why some people are headhunters and others are coaches. It has nothing to do with meekness.
Each of Steve Jobs, Bill Gates, Warren Buffet have created 3+ billion dollar businesses each. Steve and Warren have sold multiple companies when the prices rose above 1 billion. Larry treats sailing and real estate like a startup designed to flip as well.
I would pay good money to obtain access to a stream of intrinsically interesting content without any of this overstated, undersupported crap.
Edit: My (overstated? undersupported?) assertion that this article is overstated, undersupported crap is now the top comment. The irony is disturbing. I hope someone builds a product that eliminates these frustrations for me (and others) in the future.