231: How to Do Your Best Work by Working Less, With Jason Fried of Basecamp

Ditching Growth and Setting Up Camp How Jason Fried and David Heinemeier Hansson turned their backs on lofty goals and created a profitable tech company quite unlike any other. Growth is exciting. Sales boosts, climbing revenue, and eager investors are all signs of a happy, healthy company. Right? Basecamp founders Jason Fried and David Heinemeier Hansson beg to differ. While they rejoice in revenue and profit as much as the next set of tech company founders, they define success a little differently. Instead of chasing arbitrary growth goals and deadlines, they simply aspire to do their very best work day in and day out. Instead of always expanding their line of software products, they double down to perfect the one they already have. Instead of scrambling to hire more people when revenue is climbing, they enact a hiring freeze so as to not lose sight of their mission. Critics might call their approach too timid. Others call them brilliant. Fried and Hansson don’t care much either way. They’ve followed the startup road less traveled and have pitched sturdy camp at the end of it—all while remaining profitable and highly respected. Today, Basecamp is one of the leading project management and team communications tools on the market, while boasting remarkable employee satisfaction. The duo also have a new book out explaining their unique take on startups and how they’ve found success. Setting Up Camp The origins of Basecamp date back to 1999, when Fried started 37Signals as a web design company. It’s since transitioned to a web development company, specializing in project management and team communication software, and became Basecamp in 2014. The transition to web development happened in the early 2000s, when young Danish developer Hansson responded to Fried’s blog query about PHP. Hansson had been a fan of 37Signals for years and jumped at the chance to help out. After a handful of emails, Fried decided it was easier to hire Hansson as a programmer than learn to code himself. The firm created Basecamp’s flagship software product in 2004 and drummed up 45 customers in its first year. The idea was simple, but met an important need in the modern workplace: It allowed for real-time, remote communication to help teams identify what needs to be done (and when) and work together smoothly and efficiently. In the following years, the pair saw their product achieve steady growth, which also caught the eye of venture capital and private equity firms. Even so, working with investors never made sense to Fried and Hansson. They didn't want to sell any control of Basecamp or be forced to exit their business on someone else’s timeline. But they did need money to continue developing Basecamp and its products. In 2006, the pair was approached by Jeff Bezos himself. In exchange for a yearly dividend payout (but without making any other demands or staking any other claims to the company), Bezos purchased a piece of ownership and became a member of Basecamp, LLC. This arrangement worked well for Fried and Hansson as they didn’t have to sell control of their business to raise money, and the purchase was a lucrative investment for Bezos. “[After Bezos’s investment], the appeal of selling the company subsided and allowed us to pursue our mission to build a wonderful company to work in for the long term,” Hansson said. Fried and Hansson maintain a fiscal relationship with Bezos, but that’s about it in terms of what they’ve taken from the richest man in the world. As for perspectives on growth, productivity, and culture, Basecamp has blazed a trail of its own. It Doesn’t Have to Be Crazy at Work Or does it? Fried and Hansson’s latest book introduces a new perspective on the modern-day entrepreneurial hustle. They published this book to “[send] out an alternative beacon,” Hansson says. The cover of It Doesn’t Have to Be Crazy at Work features a big red “X” crossing out words like "packed schedules,” "80-hour weeks," and "overflowing inboxes." Sadly, a lot of today’s business literature and role models celebrate crazy schedules, packed days, and little sleep. “[This has] been a predominant narrative for quite a long time,” Hansson says. Pushing back on the norm, It Doesn’t Have to Be Crazy at Work argues that this kind of lifestyle isn’t healthy, sustainable, or necessary. “You can do great work in a normal eight-hour day and 40-hour week,” Fried says. Basecamp’s culture and success is a testament to this ideal. The 20-year-old business has been profitable every single year since it started, and the company’s 50-plus employees work a totally normal schedule. “At Basecamp, it isn't crazy at work,” Hansson says. “Crazy at work should be an exception; it shouldn't be the norm, and certainly not be an aspiration.” The (Mis)Guiding Principles of Goals and Growth As of 2018, Basecamp has more than 100,000 companies utilizing its software. But unlike most tech companies, that number goal doesn’t dictate their work. “We have no interest in building [our] company to a certain amount of dollars or size,” Fried says. In Silicon Valley, businesses often feel the need to dominate industries and destroy the competition. Basecamp isn’t driven by those criteria, and they’re definitely not driven by constant growth or lofty goals. “We've always felt that we don't need to chase anything but profit and quality...and quality of life, for both our employees and customers,” Fried says. To Fried and Hansson, it’s much more about running a sound, sustainable, profitable business. Instead of prioritizing OKRs or various other acronyms, they simply focus on doing the very best work they can every day. “The idea that a goal should be driving you harder. ... I don't understand why that'd be,” Hansson says. “People forget that goals are figments of their imagination.” He explained that as a primary indicator of what success should look like, goals are not helpful. They’re arbitrary measures of success or failure…and falling short of one can make you feel bad when you shouldn’t. Moreover, goals are often determined by looking at others. “They become this death of enjoyment by comparison,” Hansson says. Basecamp does set a few loose, top-level goals, such as “build a good product,” “create a great place to work,” and “treat customers with dignity, honesty and kindness.” But what about specific metrics, like sales, retention rate, or customer success? “We can look at [those] numbers, like retention rate, renewal rate, etc., to see how well [Basecamp is] working,” Fried says. “But we don't have goals around those numbers.” To measure the success of their product, the team simply uses it themselves. They actually use it more than any other company. By employing their own product and improving it every day, they’re able to better understand their customer experience. And when it works better for them, it works better for their customers. “We judge our success by how we feel about our work, and the customer reaction and reviews,” Fried says. They ask themselves, “Are we proud of what we did today? Are we proud of the way we did it? And ultimately, do customers like the product?” How Basecamp Approaches Success Such a nebulous approach to growth and goals is sure to make employees feel adrift, right? One might think so, but the opposite is actually true for Basecamp employees, they say. “[We believe] work should be a pleasurable experience,” Hansson says. “Success to us means we set our own agenda, control our own destiny, and have a sense of independence,” There are very few meetings at Basecamp, and that’s not just because they are a mostly remote workforce. The company does have an office in Chicago, but even those who live nearby only come in a few days a week. “We’re a writing-heavy company,” Fried says. Instead of insisting on weekly stand-ups or organizing project check-ins, the pair encourages their employees to chronicle all updates, ideas, and thoughts. This gives employees