Jason Fried

Loosen your grip on the stick

Jason Fried's drumming lesson: gripping the stick too tightly tires you out and kills finesse. The same applies to business and life: loosen up and you get better control, can sustain it longer, and let the organization expand instead of trying to control every detail.

“Anyway, I realized that like by simply loosening my grip a bit, by lightening up, Um, you end up having better control, you end up playing better, you end up working better, you can do it longer, um, and you allow other things to happen that weren't possible when you're gripping so tightly. I think this is true for business. I think when you're starting a business, you have a really tight grip on things typically, and it's best at some point to loosen up a little bit and let the rest of the organization expand into itself versus you trying to control every last thing.”

Steal thisWhen you feel over-optimized and tense in your business, deliberately loosen your grip: focus on the few things that matter and let the rest run.

Business is the drain, not the beacon, for great ideas

Jason's contrarian theory: Navy SEALs, coaches, and other experts always bring their best lessons to the business world not because business deserves them, but because business pays for and is insecure enough to listen to them. He frames business as the drain all ideas flow down to, not a shining beacon.

“And the main reason is why, in my opinion, is because the business world pays for that advice. It's not that it deserves the advice. It's not even that it's advice that's applicable, but that it pays for the advice. And the way I've been thinking about it is not as this shining beacon on a hill that business deserves all the greatest things. But actually as the drain that all these ideas drain down through business because business sort of just is willing to pay for it and listen to it”

A founder's job is to inject risk into the business

Jason Fried's realization after 25 years: nearly everyone at a company is paid to manage and minimize risk to keep their job. The founder's unique job is to inject risk, because they own the place and have latitude to take bets no one will veto.

“My job as a founder, what I've realized is, is it's to inject risk into the business. Most people, everyone pretty much at your company's job is to manage risk to some degree, to keep their job, to not push too hard or too far. Ultimately, you can get away with certain things that other people simply can't because you own the damn place. You are the original person.”

Steal thisAs founder, deliberately inject risk the org won't take on its own: start new products, run parallel bets, stay off balance in a healthy way.

37signals injects risk by building 4 products and 2 at once

To escape boredom and return to flow, Jason's way of injecting risk is shipping more: four products this year and, for the first time ever, building two products simultaneously across different business models. It makes the team nervous but keeps him from being bored and disengaged.

“which for us means we're going to build a lot more products. Like this year we're going to do 4 products. We're going to, we're going to begin, we've, we're about to start working on 2 products simultaneously, which we've never done before. Um, we'd never built 2 things at the same time.”

Cool wears off, but useful never does

37signals' internal saying. Jason argues making something useful is one of the most beautiful things you can do for humanity, and that not everything in your life needs to be hard: there should be plenty of easy, flowing, fun things too.

“which is that cool wears off, but useful never does. And what you've made is something that's useful. And that is one of the most beautiful things I think you can do for humanity is to make something useful.”

Re-listen to year-old podcasts to see how wrong the experts were

Jason's exercise: go back and listen to podcasts and interviews from exactly a year ago. During the pandemic it showed how certain everyone was and how few of their predictions came true, a reminder that urgency is usually misplaced.

“is to go back and all the podcasts I listen to and listen to May 22nd, 2023. So listen to podcasts that are a year old. And during the pandemic, it was great because you hear all these experts talking about this and talking about that, and everyone's so certain of everything. And you go back and listen, you're like, man, we were so wrong about so many things.”

Steal thisPeriodically re-listen to year-old podcasts to inoculate yourself against present-day certainty and false urgency.

Why goals make you miserable: you set them for who you are, not who you'll be

Jason Fried argues goals are arbitrary lines that breed unhappiness. 37signals' only goal is to be profitable each year; otherwise they just try to do their best work and let the chips fall.

“You know, our goal, our only goal is to be profitable on a given year. We've been profitable every year for 25 years. That's the only thing we look at is we want to make sure that we make more money than we spend. Otherwise, we don't really set goals or have expectations other than just to do our best work.”

37signals: 100,000+ paying customers, tens of millions in annual profit

37signals has over 100,000 customers paying monthly across a diverse product line. Low costs plus high, diversified revenue let them run loose without nervously watching margins.

“We have a huge customer base. Over 100,000 people pay us on a monthly basis for a variety of different products.. And given the fact that our costs are low and our revenue is high and we have a very diverse customer base, things can be sloppy in a good way.”

No is a precision instrument; yes is a blunt-force one

Fried's focus rule: saying no rejects one thing while keeping every other option open, but saying yes forecloses countless other opportunities for as long as you spend on it.

“No is a very precise precision instrument because you get to evaluate a thing and say no to it, and you have the whole spectrum of everything else that's possible available to you at that point. So I think no is a great tool. It's very specific. Yes is a blunt force instrument that kind of damages a lot of things essentially.”

Steal thisTreat every yes as a stack of hidden nos; the longer you spend on a yes, the more opportunities it silently kills.

37signals built a job board in 2 weeks that made $30K/month, then sold it

Fried's biggest regret: they built WeWorkRemotely in two weeks and it generated ~$30,000/month on autopilot, but they sold it to Andrew Wilkinson while consolidating around Basecamp. It now reportedly throws off ~$4M/year in profit.

“We built the job board in 2 weeks and it was generating at the time for us something like $30,000 a month, something like that with no work, like literally next to nothing to do. It was all self-service, automated. Maybe there was a customer service question here and there, but essentially nothing. And I wish we still had that. We could still launch another one. Nothing says we couldn't do it again.”

Most serial 'successes' are just serial sales of companies that didn't work

Fried argues founders who start multiple genuinely profitable, successful businesses are uncommon; many repeat 'wins' are just selling companies that never really worked. That's why he'd rather keep his proven one going.

“As far as actually finding people who've started multiple businesses that have been profitable businesses, and really successful businesses, it's not that common. It's really hard to do.”

Jeff Bezos bought 37signals shares in 2006 with no board, no control

Bezos invested in 37signals as a secondary purchase in 2006, putting money in Fried's and David's pockets rather than the business. The deal had no board and no control; Bezos found them after using Basecamp and seeing Fried speak at a 2005 conference.

“We did take some money from Jeff Bezos though, back in 2006. 2006 or '07, it was '06, I think. It was like a secondary thing. So he bought some shares from me and from David. So that money went into our pockets and never went into the business. No money's ever gone into the business except customer revenues. And we did that to take a little bit of risk off the table because in 2006, Basecamp was 2 years old, the product.”

Elon and the cracked rocket skirt: cut the crack, keep the margin, launch

Fried recounts how SpaceX found a crack in an engine skirt before launch. Instead of a multi-month NASA-style rebuild, Elon asked if they could just cut out the cracked section, confirmed the propulsion loss fit within margin, and launched successfully.

“He goes, there's a crack in the skirt. He goes, let's get rid of the crack. Could we get rid of the crack? And they go, well, if you get rid of the crack, you're going to lose some propulsion. He goes, okay, how much propulsion are we going to lose? They're like, this much. He goes, we can lose that. There's enough margin here. So let's cut the crack out and go. And that's what they did. And the launch was successful.”

Sell software once, not forever: Campfire for $299 you own + the code

37signals' Once line sells installable software you buy one time and own, including the source code. Campfire is $299 once for unlimited users, delivering ~90% of Slack's core features as a 'generic' alternative to overpriced SaaS.

“And we think companies should have the option to spend money once and not a lot, a few hundred bucks and own the thing. And not only own the thing, but get the code too. So you can modify it and screw around with it as much as you want. This is not something that has been happening for many, many, many, many years. We think it's time to bring it back.”

Steal thisFind a commodity SaaS category still priced like a luxury and sell a one-time-purchase, self-hosted 'generic' version users own outright.

Open with a statement that plants a question in the reader's head

Fried's copywriting move: the first line of the Once page is 'something happened to business software,' a statement (not a question) that makes readers ask 'what do you mean?' and pulls them in, building agreement until they feel the problem themselves.

“So one of the things I like to do is you'll see the first sentence on Once is something like, something happened to business software. Now that is planting a question in people's heads, but it's not a question. I'm not asking a question. I'm making a statement. And now they're like, well, what do you mean? Right. And now they're bought in because they ask themselves the question like, oh yeah, what do you mean something happened? Now they want to find out what happened.”

Steal thisOpen landing-page copy with a curiosity-planting statement, not a question, so the reader supplies the question and reads on to resolve it.

The Church of Recurring Revenue

Fried reframes SaaS subscriptions as the 'Church of Recurring Revenue': you keep paying over and over for essentially the same thing. Some products (a magazine) justify a subscription because they deliver something new; software mostly doesn't, since you have 90% of it on day one.

“Church of recurring revenue. So it's done very well for a lot of followers and people who attend the Church of Recurring Revenue. But the thing is, some things make sense like this, like a magazine or newspaper. This is kind of old school, right? But you pay subscription, but you'd get something new literally every week, day, month, whatever it was. Software, I know it's improving, but it's improving around the marginal edges. You already have 90% of it on day one when you bought the damn thing.”

Design hooks, not towel bars

Fried's design metaphor: hooks can't be mounted or used wrong, take little space, serve multiple uses, and scale; towel bars have one use and break easily. He hunts for the 'hook' in every product, the simple element nobody can misuse.

“And for me, I'm always looking for the hooks in product design. Like what are the little things that just are, are so simple and straightforward and everyone knows how to use them and you can't get it wrong and you can't use 'em wrong. And actually you can use 'em in a bunch of different ways that weren't intended. And it still works compared to a towel bar.”

Steal thisFor each feature, ask: is this a hook (simple, hard to misuse, multi-purpose) or a towel bar (single-use, easy to break)? Design hooks.

Start with the novelties, not the table stakes

Fried's product rule: build the differentiated, novel features first because table-stakes parity (e.g. matching Google Calendar) won't win anyone, and if you save novelties for the end you'll run out of time and the public will only demand more 'normal' features.

“So we always start with the novelties, the things that don't exist anywhere else. That's what makes your product differentiated. That's what makes it worth considering. To say we made Google Calendar a little bit better, not worth it.”

Steal thisBuild your weird, differentiated features first; if you wait until the end you'll never ship them and will drown in table-stakes requests.

Negative visualization: a 27-year run is plenty

Fried and David practice negative visualization, pre-accepting that the business could flame out. After 25 years of doing exceptionally well, he reasons that even if a market shift killed it in two years, that's an enviable run, so he sleeps easy and treats the company as not his identity.

“David and I both practice this idea of like negative visualization. Basically, look, we've been at this 25 years. We've done exceptionally well. We've been incredibly fortunate. If this thing all flames out in 2 years because of something we did wrong, a major market shift, competitive shift, whatever it is, you know what? That's okay too. It will be painful to some degree, but it's okay. If we have a 27-year run, geez, I mean, what more can you ask for?”

37signals tried $5M in ads, then quit: it was 'vanity money'

After two decades of zero paid ads, 37signals committed to spend $5M for the first time. A few months in, they concluded it was vanity money doing nothing, and that their low price points ($15/user or $299 flat) leave no room for high customer-acquisition costs.

“last year we're like, we're going to spend $5 million for the first time ever on ads. We started getting into it in a few months. We spent a bunch of money and we're like, this is just, it's vanity money because this isn't doing anything for us.”