Lessons Learned at 37Signals

 Jason Fried is the founder of 37Signals

According to Jason Fried, speaking at the Web 2.0 conference, these are the basic ideas they’ve learned by working together over the last couple of years. Ranging from collaboration to design, hiring, and lots more. An insightful look.

Lessons Learned at 37Signals

1. Momentum – Has its hands in just about everything and is incredibly important. Esp for morale. Most typical projects are really exciting at the beginning and then people tend to lose interest and fade out. Long projects eat at you and you’re not even looking to do good stuff you just want to finish things and they don’t turn out well. Create a situation where projects are short and there’s excitement and it’s a short 2 week project and it leaves people in excited mode. Break big projects into as many small projects. 2 week rule.

2. Planning is Vastly Overrated – 37Signals doesn’t do road maps, specs, projections. They have rough ideas internally but these aren’t shared externally. Even internally they’re not set in stone or written down. Think about what’s being done now and maybe what’s next. You set expectations too soon and things changed. Don’t want to be boxed into decisions you made 18 years ago. They don’t do design docs and functional specs ‘artifacts’ that don’t push back enough. A spec doc contains 1000 yes’es. Leads to an illusion of agreement. Everyone can read the same paragraph and think you agree. Don’t do projections like financial projections.

3. Get rid of abstractions – Focus on what’s real right now. Not something that represents real. The actual real thing. That’s what’s most important. Don’t worry about the things you might do.

4. Decisions are temporary – Companies are often paralyzed by big decisions that they believe are permanent. They think that what they decide today has to be that way forever. At 37Signals they’re going to do 4-day work weeks and pay for the hobbies they are interested in. They posted it on the blog and they got feedback “you guys are fucking crazy”. 37Signals has 12 people right now. Half are in Chicago, half in other cities. “If we have to change we change. Not the way it has to be always. For now this works.” Optimize for now. Don’t worry too much about what might happen. Focus on today.

Lessons Learned at 37Signals

5. Red Flag Words – They chat a lot and do a lot of collaboration by typing. The more they collaborate the more they use certain words. The words don’t sound that dangerous to begin with: “need”, “can’t”, “everyone”, “easy”, “nobody”. “We need this feature.” A lot of needs but very few necessities. When you run into situations where everyone has needs that’s where animosity arises. “Can’t” is on the opposite end of the spectrum. “Can’t deliver this proposal unless we do X,” the truth is you probably can. Maybe you do but you probably don’t. “Easy” is a word you use to describe other people’s jobs. It’s pretty loaded and presumptuous. Watch out for these red flags. “Everyone” and “nobody” are words used as words to move towards decisions.

6. Interruption is the enemy of productivity – when Jason and DHH were across the pond from each other they were super productive and they did work. When DHH moved to Chicago they got a lot less done. Proximity invites collaboration. Interruptions: tap on the shoulder with a question, required meetings, shouting someone’s name, “Hey Check this out”, phones & blackberry’s. Great quote: “Average work day has been traded in for work moments.” Most people get work done in the mornings or late at night. Not that there’s more work today – just that there’s less time in the daytime. Fragmented day is not a productive day. Strategy: on Thursdays nobody talks to each other. Passive collaboration instead of active collaboration. If someone is busy they can put it aside and come to it when they’re ready. Interruption points screw your days up.

7. Focus on what doesn’t change – The technology and software business seems to obsess with what is in flux and changing. Always new stuff. New languages and frameworks. Focus on what doesn’t change and think about the things that matter today and will matter 10 years from now. “Speed is a really important thing for our products. 10 years from now people will still want speed. We could make a Facebook app or we could just make things faster – so we make things faster.” Reinvest in the things that don’t change. Competitors will chase the next big thing.

8. Worrying about things that don’t matter yet – happens to people in business all the time because people are paying attention to things that don’t matter yet. When you’re a designer and working on initial ideas. Jason finds that it’s better to sketch with a sharpie rather than a pen. With a sharpie you can’t get lost in the detail. You don’t want to worry about the details too early. Don’t spend days on a sketch, spend minutes. Polish may be important later but don’t worry about it now. The longer it takes to develop something the less likely you’ll launch it.

9. Underdoing – there is a cold war going on in the software world where everyone is trying to one-up everyone. If they’re spending X you have to spend XX. It’s like an arms race. Very expensive and very difficult to win the cold war. Usually only one winner and the other collapses. They under-do. They create the simpler product. Target nonconsumption. There is a group of people called nonconsumers who want to be consumers but are, for some reason, not able to be because of expense or complication. Problem is most companies move too far upmarket. Lot of people building office software, don’t build something that takes on excel head-to-head, but takes on something much more down market. Solve the simple problems because the big guys who have all the money won’t even notice you – you’re in a market they’ve already moved in.

10. Find the right size – There are only two things whose soul purpose is to grow forever: business & tumors. Grow, grow, grow for no reason other than to grow. Best off figuring out what the right size is for your company. If you’re making a few mil or a few 100k a year, you’re doing pretty damn good. You want to grow slow and make big skips you may skip right over the right size. Figure it out as you go. “Maverick” Ricardo Semler has a great example: Oxford University is one of the world’s best universities. Why aren’t there tons of them? Because the Oxford that exists is the right size.

Lessons Learned at 37Signals

11. Follow the Chefs – Lagasse, Batali, Flay, Child, Oliver. What they do is they out teach, out share, and out contribute their competitors. They’re out there saying “hey look, I’m a chef, I’m going to give you all my secrets, here they are.” Not afraid to put their ideas out there and let people learn from them. Not afraid that people will take their ideas and build a restaurant right beside of them. Think about “what’s your cookbook?” For 37Signals it was all about “Getting Real”. In the business world people ask “why would you want to give this away, won’t your competitors use it?” Give the idea away and get the message out. Company is lucky if it has customers, very lucky if it has fans, incredibly lucky if it has an audience that comes back to hear what you have to say every day.

12. Always be Questioning: “Why are we doing this?” “What problem are we solving?” “Is there actually something wrong?” “Are we adding value?” Is this actually useful or is it just cool? Everything you add to your product dilutes everything else. “Will this change behavior?” Be thinking about is this additional piece of information going to change behavior?  “Is there an easier way?” The easy way is probably more than good enough.

13. Give up on hard problems – there is nothing wrong with being lazy. There is an abundance of easy problems that need to be solved. The really hard problems are probably better left to your competitors. Solve a bunch of simple things. Most people’s problems are simple and you can probably solve 10 in a month over 1 in 10 months.

14. Work less – this industry is plagued with people who work too many hours. At 37signals they find if you work people less, their work is usually better. 32 vs 40 hours has shown that the work is just as good and people are generally happier. People are more motivated and more refreshed when they come back on Mondays. Most of the week is “wasted on shit that doesn’t really matter.”

These are the basic ideas they’ve learned by working together over the last couple of years.

Question & Answer Session

Q: How do you align with strategy? If you don’t plan how do you align with big picture ideas? Would this work at a public company?

A: To the second part, I don’t know and I don’t really care. What we’ve seen is a lot of rich companies with a lot of big plans that have gone under. Basecamp’s big idea: project management is communication. Everything we add to basecamp needs to improve communication. Everything we work on we bump back up to that idea “does thi simprove communication?” Strategy of keeping things simple.

Q: How do you deal with too many meetings and processes in house when it exists?

A: It’s not going to happen over night. People pay attention to results. Pick a small project and show them that you can get it done in 2 weeks when it would normally take 2 months. People would be like “how the fuck did you do this?” You tell them. “There’s actually a study out about swearing [FUCK YOU from audience] and how it improves productivity in the company.” Slow change over time. Don’t go into the next meeting and say “we need to do this another way.”

 Lessons Learned at 37Signals

Q: How do you make small projects out of big products?

A: You don’t do products that take 6 or 7 months. Just release half of it in 3 months. Release the best half first. Might find out that’s all you really needed to do. Second half may have been the wrong feedback anyway. Cut your scope way back. First version of something should be barely releaseable. Say you have an existing product and it impacts many points in your product. Comments in basecamp took about a month of work. We pulled out a bunch in order to be able to get it out the door (like comments on Files). Down the road if they want to add those things back we can. Iterate. Iterate. Iterate.

Q: How do you do this if you’re in the client services business?

A: We aren’t in client services anymore. Thank the lord. We used to do these long proposals but people would go only to the price page or the front page. We realized this. We started cutting these proposals down and cutting in half. We were still getting a lot of business and we were giving out 2 page proposals.

Q: What’s so bad about client work?

A: Anyone care to answer that? Client work is depressing. Client work is not that satisfying at the end of the day. You’re lucky if you have 3 great clients. Great clients that allow you to do great work. Not obvious why. If we were our own client we could do the things we think are right. Recommend that everyone here tries to think of a project you can do on the side where you are your own client. In a year and a half it was making more money than the client services.

Q: How would you recommend how to be a great client?

A: It’s really hard to be a great client. It’s easy to rail on clients. Have to figure out why you’re hiring someone and give the person more trust. I hired an expert to redo my kitchen and found myself trying to do the project myself and getting on his turf. “Answers are temporary.” Respect the firm a little more to give them room and listen to the firm. If you hire a plumber and they say they need to do X, Y, Z you say do it. If you hire a designer you throw up your hands and say “Ehh I think it should be like this.”

Q: When do you hire?

A: We hire when it hurts. We hire for the stuff we’re doing ourselves right now and it really hurts. Fried is sitll doing accounting and it’s about time to hire an accountant. Usually to replace jobs we’re already doing.

Q: How do you bring new people into the culture?

A: The question is how do you brainwash people? How do you immerse them? We just drop people in and let them figure it out. We don’t have a training program. We use campfire all day long, it’s the most important product to us, so when a new person comes on they get in and see how we work together. When people are expecting the big plan to come down the pipe and they don’t then they figure it out. We hire from the open source world and pay attention to people’s code and how they interact. We’ve hired administrators for short term contracts and hope to hire them but they haven’t swam in the culture so we part ways.

Q: Are you as a company working on one thing at a time?

A: We have a variety of products, Ruby on Rails, and there’s a lot of stuff going on at once. Find that multitasking is hugely overrated. People stick to a product for a few months before switching off to something else. Work on basecamp for 2 months before switching off to something else. “All hands on board for backpack” – in theory sounds great, in practice it doesn’t really work. Project teams focus on one product for a longer period of time before moving off to something else.

Q: Do you all do the same things?

A: No, we have 5 programmers, 1 sysadmin, 2 and 1/2 full-time designers, 1 writer, 1 customer service person, but most of the company is made up of programmers. All of our programmers have huge respect for the customer experience and design. We don’t program first we design the interface and we make it work. Push back, trade, make concessions.

Q: What’s the best way to motivate users to give feedback?

A: People love giving you feedback. Every time you make a mistake they give you feedback. Give people great products and you’ll get feedback. Most of the time we just sit there and we get e-mails for support and sales questions, customer forms, we get 150 emails a day. Go out and find it when it’s not in your sphere or you’ll just hear about it. Often they’re more than happy to give it. Most of the feedback is going to be negative, “great but I wish it could do X”. You don’t want pure praise, you want people to be honest.

Q: How does that feedback influence?

A: Going to be talking about this at the keynote. You have to take it all in and then you have to make decisions on behalf of your customers. Decide what they’re actually trying to tell you. You have to be a museum curator and think about what makes sense for the product. An editor, a curator, looks at an entire universe of options and picks a few of em. We don’t keep a list of all the requests of all people send us. We did but it became a huge ass list. What we do is we listen to everything people say then we forget about it and the things that are truly important will keep coming up and be more obviously important. Let the customers remind you of the things that are important.

Q: Do you do your initial mock-ups with sharpies?

A: Typically Ryan, Jamie, and I sketch on paper first. Cheap and fast. Then Jason goes straight to HTML over Photoshop. Photoshop is an abstraction, it’s not real. Jason goes straight to HTML and actually use the real thing. If he is sharing a photoshop mock-up.

Via KrisJordan.com