I love this quote. It reflects my sentiments to a T.
I love this quote. It reflects my sentiments to a T.
It's clear that the press would write about revenues if they could, because they write a lot about the revenues of public companies. They're able to do that because public companies have to disclose their revenues.
Private companies never publish their revenues. Including 37signals. So if Jason really believes this is a terrible problem and wants to set things on the right course, he should set an example and start publishing 37signals' revenue numbers.
Jason's problem doesn't seem to be with the reporting; it's only coincidental that it's easier for press to report on the businesses he finds fault with.
In startup's context, fund raising is definitely a change, and revenue numbers may be a change (when they are surprising or previously undisclosed). But building a sustainable business, treating customers well or even being profitable should be long-lasting and timeless. It's interesting to keep reading about these issues in Hacker News, but these are not exactly news.
It's like business fundamentals ("common sense"). The press never talks about them but it doesn't mean the industry doesn't care or doesn't treat them as important.
From the article: "What matters is: Are you profitable? Are you building something great? Are you taking care of your people? Are you treating your customers well?"
All of those questions can be answered without needing access to a companies ledger. Jason answers those questions himself in the article.
I think his point was that stories about those questions don't get as much readership per unit of reporter effort, hence they aren't being written.
Posting 37signals' revenue numbers would have zero impact on that.
And plenty of these plumbers and barbers and cafes probably do great work and treat their employees well. Do you really want to read articles about all of them? I don't. What makes a company newsworthy (unless it's as a case study) is its size, or potential size.
Companies would also pick vendors based on financial stability, for which profit is probably a major factor, although cash in the bank would also be.
Or maybe it would happen if investment rules relaxed and private equity (Private Equity or direct investment like second market in non-public companies) happened, as communicating financials to lots of investors would still be relevant.
In his books he develops a very humanistic look at the role of businesses in our lives. As entrepreneurs, employees, and as customers. I won't be able to do the ideas justice here, but I will try:
A business obsessed with revenue and growth is like a person obsessed with how many breaths they have taken, or how much food is in their pantry -- these are means to an end, not ends in themselves. Food is required for life but it's not the purpose of living. Businesses as conceived by Semler and Fried aren't designed to maximize revenue so much as make the world a better place (#include your essay about google being almost a nonprofit).
It may be that stories of plumbers, barbers, and cafes wouldn't be interesting to you. I like to hear about people living enjoyable lives, delighting their customers, and making their corner of the universe a better place. It's a lot more psychically healthy than reading about people trying to gain the most while providing the least (the tech crunch articles Jason refers to)
So many people seem obsessed with getting a large quantity of money, and only then trying their hand at building a fulfilling life. I have always thought of Semler as running things in reverse: how do we design a seven day weekend that is cash positive?
(Semler's book, The Seven Day Weekend, is highly recommended to anyone who wants to hear more)
then "But articles of that type are case studies, not news"
first "Do you really want to read articles about all of them? I don't."
then "I've been running one for the past 7 years. And I'm interested in reading about others."
I think what you want is for Jason to have said "I wish the technical community were focused on case studies of awesome companies rather than news stories about funding and growth." Which I think he would agree with, and would remove your points.
(Not that case study vs news is a real dichotomy -- what's stopping someone from calling news about a round of funding a "case study about getting funding"? Why can't there be news stories about how awesome the customer experience at X has gotten?)
"Why can't there be news stories about how awesome the customer experience at X has gotten?": If you really want to know, I advise you to read "Storytelling: Branding in practice".
You are logically incorrect. Well, by your own logic. How can you publish news about a current event? To be written as news it has to be happened in the past.
In fact, we see case studies as news (and even less-than-news) all day long here and elsewhere. You can tell by the titles that generally come from blogs and usually look clickbait-y: "How Company/Developer X achieved goal Y," "Why Language Z helped us triple our revenues," etc.
Although one part of me says that the message is good, the other part says - why dont they publish their size? Like you rightly said, the value that many people would attribute to their words would vary based on size.
And the other thing is, many of these concepts that they tout might only work for a particular size. that is another reason we need to know how big they are.
I myself side with the 37 signals guys that profit is king, but that takes nothing away from my friends that are in start ups chasing big coin.
Either is a viable strategy and i think it's terrible that this community doesnt allow both to co-exist as viable options.
I think it does. There are many of us that are focused on either lifestyle or profit-driven businesses and those articles are often received well. What isn't are articles attacking the funded companies' approach.
Personally I believe there are many great lessons to be learned from those local/profitable businesses which if written I'd gladly consume. If the press would only dig for those types of stories I'm sure they would come back up with gold.
As an entrepreneur who is interested in growing a long lasting and sustainable business there are many lessons which I can imagine a seasoned business owner, no matter the market, could teach me (i.e,: how had they dealt with times of feast as well famine. What was it like when they had they'r first repeat customer, etc.).
"What makes a company newsworthy (unless it's as a case study) is its size, or potential size."
To be honest I believe this sums Jason's point in one line.
The current tech culture doesn't seem to acknowledge nor celebrate the stories of those founders, entrepreneurs, developers, or business minds whose offerings are geared towards providing impecable customer service; so that doesn't get written about fairly frequently.
Now I may be wrong in my observations but it would seem as if this current generation of the tech vanguard simply aren't interested in those things. The signal, which has become an ever increasing continuous one, seems to be about more, more and bigger, bigger, bigger.
Hey, maybe that's all there is to it, but I'd like to believe we've got much more in us than simply who can amass the largest seed round, or who has had their Series A round over subscribed.
Again, I may be wrong but just a thought.
The real world is a better movie. Real people, real work, real life make for interesting stories. I would much rather read about healthy business, regardless of size, than sizeable business, regardless of health. Jason Fried was on target.
What makes a company "newsworthy" is a good PR firm!
I believe that businesses in this space are run with old-fashioned tools (management methods, process optimisation techniques, technology) for reasons of tradition and lack of information sharing rather than anything inherent to the businesses themselves. My experiences with business growth accelerators leads me to believe we as a community re-invent the wheel an enormous amount, and anything that helps me reduce that is of interest.
Sure, we have a different metric for success, but that doesn't mean there aren't unusually successful small businesses (that will remain comparatively small) that might have something interesting to say.
Well you know that's not going to happen especially since he made this statement below:
"We have 35 employees at 37signals. We could have hundreds of employees if we wanted to--our revenues and profits support that--but I think we’d be worse off."
So he isn't simply saying that he feels he could expand his business and have "hundreds of employees". He is saying that his "revenues and profits" would support "hundreds of employees".
Think for a second how much profit you need to support "hundreds of employees".
I'll give him the benefit of the doubt that he was misquoted on that. If not, he's simply full of shit. This is BS to challenge Donald Trump.
Second, I think you are underestimating just how profitable 37signals probably is. They have scaled a few tight products with high recurring revenue to a very large number of customers with a tiny team. I've worked at companies with hundreds of employees and knew their revenue numbers and the model 37signals is executing puts those numbers well within reach.
"just how profitable 37signals probably is"
As an aside to this discussion: If they are actually that profitable it's a good idea to fly below the radar and resist making statements about how wildly profitable they are. Doing that might entice competitors to enter the same market and regardless of whether they succeed or not that could kill the goose.
Sometimes of course things are out in the open and it can't be avoided (lines at the restaurant or with public companies, or Oracle posting their 24x7 software support rates where a guy out of his house can do the math). Sometimes you want the publicity for one reason or another. But despite the openness of the internet there are still things that you want to keep to yourself lest everybody and their uncle decides to move into your neighborhood.
37Signals' numbers are not public. "Talk is cheap" as they say.
I don't disagree with what he is saying in the quotes - that people focus too much on raising money as "business success". This is without question. But then again I still do not understand the value of 37Signals (compared to any other software company with aggressive marketing), at least not from the press they get. How are they being any more transparent?
All I know from recent reports is employees supposedly work 4 days a week and they have some sort of brainstorming sessions to come up with new ideas. What does the 37Signals software do? Specifically, not just some marketing buzzword. What does it do that I can't otherwise do without it? Are there some YouTube videos showing the software in action?
How do I know it's not just a Ruby on Rails consulting business for a few steady clients (who have an inseparable attachment to Rails), as opposed to a "unique" software company with amazing products? How do I know they're not just selling a Rails framework? So I have to install Ruby, Rails and a gazilion of their custom scripts to use their "product"?
I guess you've not looked at http://37signals.com before posting this?
> So I have to install Ruby, Rails and a gazilion of their custom scripts to use their "product"?
No. You need a browser though, because it is web-based.
I have looked at their website several times. It just never grabs me. And I'm not inclined to give them my email address to try out their amazing "solution".
Do you also sell something people do not need? And does it make you uncomfortable when people who do not need it mentions that to an audience via HN, the same way 37Signals keeps working to make mention of itself, or have others do so, in publications with large audiences.
If I have no need for a service someone is selling and I never hear about that service, then I have no reason (maybe even no ability) to to state what I think about that service. But if in the course of reading the "news" I am continually reminded of the service's existence, I may be inclined to comment. That is the risk you take with PR and advertising, or internet-based hype in general.
So it seems that 37Signals sells the use of their forum software (constructed from Ruby on Rails, i.e., free software), hosted on 37Signals' computers. I am getting a clearer picture now.
I'm not by any means suggesting that you're stupid or out of your league, but simply that you are talking about something that you are clearly completely unfamiliar with. Have you ever managed a team of people and projects? Once you do you will understand what an incredible pain in the ass it is to rely on email and spreadsheets. Full disclosure- I am NOT a 37Signals customer, nor do I know anybody affiliated with the company. Simply that project management software is a very real need for a very large number of teams. One of their partners created Ruby on Rails to create Basecamp, then released the framework for anybody to use and remained as a core contributor.
Why would you care about that? How could this person from antiquity know anything useful?
Interesting.
I personally don't think it is that great, with many pain points that I encounter - which, I will concede, may be a case of using the wrong tool for the job over any shortcomings in the product itself - but it is better over having no group messaging system at all if you are working with multiple people at a distance.
It's surprising that 37 signals isn't labeled a "lifestyle" company, which is practically like leprosy when it comes to funding and media attention.
I think a lot of people are sick of the crap written on TechCrunch for reasons that are hard to define. Mostly they have turned the innovative process into a form of TMZ, which glamorizes a field that is meant to build things to make lives better. Very few articles have anything to do with companies building these types of innovations, and profits have nothing to do with it. A response might be, well Scientific American writes those stories. Yes, and that's precisely why Scientific American is a respected publication oft-cited by Steve Jobs.
Too many stories on TechCrunch are titled something like "[Insert clever startup name] raises [insert some absurd amount of money] to become the [Facebook, Twitter, Foursquare, Birchbox] for [Work, Finding a cab, Healthfood]. These stories are ridiculous and cover mostly crap ideas that don't solve any real problems.
I just spent 20 minutes writing an email with detailed screenshots of how to add a menu item to a CMS. I can't stand the CMS that this client uses. We inherited it and it blows. They're an awesome client though, nice people, and above else, they're my customer. I have no problem going out of my way to ensure that they've got detailed and easy-to-understand instructions.
A startup that some friends and I started a few years ago: schoolrack.com. Our users were teachers from elementary to high-school. You can imagine we dealt with TONS fo technical support requests from both confused parents and teachers. A lot of teachers are still forced to use IE6. Patience and always putting the customer first is what made us successful. Our users adored us. We'd start at a school and overnight every teacher there would be using us. Our users always had nice things to say about us because we always put them first.
When I worked in Apple retail, they reinforced the same principles. Understand the customer. Put yourself in their shoes. Frame your questions so that they are not misconstrued. Make technology friendly. Know your customer. If they're coming to you wanting Final Cut and a few Mac Pro's, don't try and offer them lessons on how to use a word processor (exaggeration). Of course not every Apple employee is a saint, and sometimes you have a bad experience. We're humans, after all. But the principles work.
Bend over backwards for your customer. Treat every single person you interact with on a day-to-day basis with respect and kindness. Even the UPS who comes to pick up your deliveries.
Customers won't give you, hapless employee, job security if your employers can easily replace you with someone cheaper because you have a flimsy (or no!) contract, nor will customers help you with disputes with management, or wrongful termination, or promotion from within, or even the too-little-emphasized increased potential for synergy between the ranks that unions afford, or any of the many other things that unions afford.
Customers might help prevent a company going out of business, and that, to be sure, is good for job security. But a company that's flourishing customerwise can still have rapacious or simply bad management.
Business owners do not have an obligation to keep everyone employed, they have an obligation to make a profit, if there's no profit, then they won't be able to employ anyone for very long.
Good employees are an asset to any company. You don't get "wrongfully" terminated if you are adding value of a company.
I will never hire union labor ever. I would close down a business before I submitted to the extortion of unions. If I hire people, I treat them really well because they add value not because a contract says I must. Google employees aren't unionized -- Google understands that to attract the best talent you have to treat people well. Google employees don't need a union -- they know that if they're providing value, their jobs are very secure. It's the lower-skilled workers with chips on their shoulders that are the first to cry about needing a contract to "protect" their rights.
Contracts protect the employees that strive to do the minimal possible under the terms of the contract. Unions have made employees interchangeable because you get paid based on your job title and seniority, not necessarily the value you bring to the organization. The big tragedy is that in union shops, when layoffs happen it's the junior guys that go first, even if they're better workers than the more senior. It's disgusting that years on the job mean more than actual job output. Unions had their place before OSHA came along, but now they are corrupt labor monopolies where the bosses get paid millions each year cronyism and corruption are the norm. If you don't like a company, you're free to quit, but in closed-shop states, if you don't like the union, too bad, you have to be a member (or pay the dues) if you want to be employed in that field in your state. Detroit is 1993 Sarajevo because of unions, while North Carolina is doing pretty well. The difference is the unions.
Wonderful! There you are, being a positive influence on your organization, knowing that you shouldn't need a contract. But! Suppose some manager doesn't recognize that you're being a positive influence? Or just wants to throw his weight around? Certainly, a person in a position of power who wants to throw his weight around shouldn't target someone who's a benefit to his organization. But perhaps he's perverse, or doesn't care, or views you as a threat, or (again) has made a mistake in his estimation of who's "adding value" and who isn't. You shouldn't need a contract in part because your superiors shouldn't do that kind of thing. But hey! They might do it anyway! The wonderful thing about being contract-free, or in an at-will employment state (i.e. almost any state) is that there's no such thing as wrongful termination and you have no recourse if you're fired---"but I was adding value!", in particular, is not going to be effective. In this sublunary world, you'd have to be delusional to maintain that if you're adding value, you don't need a contract.
Actually, I can't resist; let's look at the rest of the first paragraph in this light. How do you know that union employees in, say, Flint, were uninterested in "adding value" to the manufacturers who shut down the factories? People working manufacturing jobs---a skilled trade, you know---take pride in their work and I'm willing to assert, just as blithely as you were willing to assert the opposite, that they'd be plenty willing to try to improve the product, improve processes, etc., if they were but asked (and lots of improvements can, indeed, come from the rank-and-file in that way). It's true, of course, that when residents of Michigan are asked to add value to the company by accepting wages no greater than those commanded in Mexico, they are likely to balk.
Then one of you is wrong.
Yes, bad managers make bad decisions. A contract doesn't protect you from bad managers - it merely makes it easier to stay around to be subject to their badness. Why do you think that's worth something?
Contracts actually make bad managers look better that they would otherwise. Yes, bad managers survive longer when unions are involved. Why do you want that?
Life's too short to work for a bad manager. Of course, if all managers are bad (for you), maybe they're not the problem.
> People working manufacturing jobs---a skilled trade, you know---take pride in their work and I'm willing to assert, just as blithely as you were willing to assert the opposite, that they'd be plenty willing to try to improve the product, improve processes, etc., if they were but asked (and lots of improvements can, indeed, come from the rank-and-file in that way).
We can test that hypothesis by looking at what they demanded through their union representatives. Care to predict the result of said "look"?
I'll save you the trouble - they didn't demand anything to improve product quality or increase productivity.
On a related note, the head of one of the US teachers unions said that he'd start caring about kids when they started paying dues.
You have to turn those "what ifs" into "so whats" because there is always the chance that a manager is going to fire you unjustly. If the organization is setup properly, the loss of your employment would adversely affect your department's profit numbers. Since the manager is responsible for those numbers, one can assume there will be repercussions for a decrease.
This all assumes that the organization is a well-oiled machine, but since a vast majority aren't, you have to assume that you will be fired for any reason. The good thing is that if you can provide value to one company, you may have a good chance at providing value to another company (especially if it can be quantified on a resume). These are known as transferrable skills, and they're what good employees retain in order to get a high-paying job.
Most employees at auto manufacturers do not have this same leverage. They can't threaten to leave for higher salaries or better working conditions because they are in large supply, small demand. Forming a union gives them this leverage so that they can negotiate at the same level as their employer.
I feel like the negativity towards unions is a result of some recently holding more power than the employers and getting unsustainable pensions and other extravagant benefits. But when the balance of power is closer then unions have been successful and often in necessary in making sure that employees are working in a safe environment, getting paid a living wage and generally not being taken advantage of.
TLDR; Labor unions are not all bad/good. They simply give employees the same leverage as their employers in industries where the supply for workers outnumbers the demand. It's not good for that balance to get out of hand in either direction.
Spoken as someone with specialist skills that are in sufficient demand and business critical enough.
> I will never hire union labor ever. I would close down a business before I submitted to the extortion of unions.
So in other words, clearly people need contracts - and some will need unions -, since you're making it very clear you have preconceived notions about employee behaviour based on external factors that have nothing to do with their job performance, and you're not the only one.
Unions were formed because people realized their negotiating positions were excessively weak compared to the employer-side who held all the cards. E.g. getting to the 8 hour working day, for example, took American unions many decades of struggle to achieve (and the rest of the world commemorated that struggle by making May 1st the international day for workers demonstrations in direct response to the Haymarket massacre)
> Contracts protect the employees that strive to do the minimal possible under the terms of the contract.
Contracts also protects great employees of employers that strive to do the minimal possible under the terms of the contract.
Somehow you seem to expect that employees should trust you implicitly.
> If you don't like a company, you're free to quit, but in closed-shop states, if you don't like the union, too bad, you have to be a member (or pay the dues) if you want to be employed in that field in your state.
So why are you making your arguments about unions in general when you then go on to describe features of unions in some locations that are by no means universal?
There's no doubt that there are unions that have managed to push things too far, but your argumentation is like saying all companies are bad because some companies have been abusive.
Unions (and companies, countries, etc.) can't ride the wave of their past successes forever. Saying that unions were a good thing 100 years ago is not an argument that they still are.
I don't think it's at all arguable that unions--at least American unions--are detrimental to the health of the businesses their employees work for.
Fundamentally, these unions are parasitic. They treat the wealth of its host as a given and find ways to extract more of that wealth. The flaw behind this is that the wealth of a company is not a given--it depends upon the customers, and the more you try to extract wealth from the company, the greater the impact on the customer. Either that, or the company just goes flat broke[1]. A company that doesn't have these additional costs and distractions is more able to focus on the customer, or at the very least can do just as good a job without going flat broke. The experience of US automakers vs foreign competitors, or Boeing vs Airbus, or unionized retail vs. Wal-Mart and Amazon, bears this out.
[1] If the company just goes flat broke, then the union isn't a problem per se, just a con game on shareholders. Airlines are an example: http://philip.greenspun.com/flying/unions-and-airlines
The free market generally does not have the power to correct for overreaching management. In many cases the signal necessary to make a judgement is not propagated to consumers, at least not in such a way that it will cause a change in consumers purchasing decisions. This is where unions are necessary to correct against overbearing and unrealistic management. Society is stronger, and the economy is stronger, when the "wealth" of a nation is well distributed among everyone. Wealth here being everything from health, leisure time, assurances against bodily injury, etc. Unions are but one tool to ensure this equitable distribution.
I'll agree with that, but I think regulation and Big Government™ are a better solution and unions have outlived their usefulness. You can tell because most people who advocate for unions just rest on past glories.
Can you explain this claim? Specifically, why "overreaching management" is bad for consumers, and why the market can't correct for it?
As to why the market won't necessarily correct for it, is because many times overreaching management is effective (at least in the short term). Degrade working conditions to cut costs and the consumer benefits. The information about how these lower prices were brought to the consumer is usually lost in the process. That signal simply doesn't reach all interested parties, and thus they aren't able to adjust their behavior in response. Some situations it can work, for example a business where customer service is a large part of the experience. The signal of overreaching management does eventually filter down to the consumer.
Sure it does. I, the customer, see both the price and the service. If I'm willing to pay more for more service, I can do so.
And, this signal also reaches the employees as well. If you don't like it, go elsewhere. If you're right about how valuable your service is, customers will make the same choice. If you're wrong....
There are often niche producers who target the small fraction of consumers who care, and market their wares in part based on this. For example, see Fair Trade coffee producers (appealing to do-gooders) or American Apparel (appealing to US nationalists).
Your claim that markets can't transmit this information to interested consumers seems incorrect.
Seriously, you need to work on your language and mindset if you think profit is evil.
Profit is just a surplus of outputs for inputs given. It's what makes people get out of bed in the morning. It is most definitely not evil.
You say "profit" like it's a bad thing. It's not, it's what funds new good things. And, reducing costs is a good thing. It produces "more".
BTW - Management's goal is to extract as much profit for managers, not for the enterprise.
One big problem with the corporate model is that no one has a long term interest. No one at GM ever got fired for agreeing to the contracts that broke the company. Instead, folks did get fired for not giving in.
Even if that's true, unions aren't a balancing force to the "incentives for all sorts of bad things". The only role that unions will play here is in trying to get their cut.
Actually, that's wrong. Unions will often actively help commit said "bad things" because they'll benefit. For example, unions are often quite protectionist.
The question isn't whether unions are good or evil, it's whether they're actually a counter to a specific evil that companies might commit.
Since that evil produces more money for the company, you need an example where a union did something to reduce a company's profit other than by trying to increase the union's cut.
Unions are not new, so if you're going to suggest that they're useful for doing something, you should have actual examples of them doing said something.
All of those things are the union (members) taking more of the profit.
"work environment" (as you're using it) isn't some abstract good that the unions are protecting. It's "what do I have to do for the money I make?"
Changing that balance one way is reducing the union members' take. Changing it the other way is increasing the union members' take, that is, trying to reduce a company's profit by increasing the union members' share of the revenue.
We're still waiting for "an example where a union did something to reduce a company's profit other than by trying to increase the union's cut."
>The question isn't whether unions are good or evil, it's whether they're actually a counter to a specific evil that companies might commit.
The specific evil being detrimental work environment, its obvious that unions are a balancing for to that.
I'm not trying to be snarky. I'm trying to point out that your thinking is muddled.
> I was clear that I meant "profit" in terms of money.
And the things that you listed were benefits received by union members, benefits that cost money, which reduces profit. What do you think the same money for less work is?
> clarified my point by listing the ways unions benefit their members.
No one is suggesting that unions don't benefit their members. Your claim was that unions were combatting some evils. I asked for an example, and you started ranting about profits, so I pointed out that the only effect that unions have on profits is to increase expenses that directly benefit their members.
> If you consider work environment, etc as part of "profit
Work environment is expense. Profit is revenue - expense. Which statement do you disagree with?
Some work environment details affect quality and/or productivity and some don't. Of the former, some provide more increased revenue than their costs while others don't.
Do you really want to argue that unions only ask for work environment and compensation things that "pay for themselves"? (Given your model of management, unions don't have to ask for those things.)
If you've got examples of unions acting other than in their own self-interest, let's see them instead of vague theories.
How can you be so certain that unions act a certain way yet not have any examples?
>Work environment is expense. Profit is revenue - expense. Which statement do you disagree with?
I have no problem with the definition of "profit" you used, I already made this clear. All that matters is that we're on the same page.
>No one is suggesting that unions don't benefit their members. Your claim was that unions were combatting some evils
I clearly defined what "evil" I spoke of that unions are a balancing force against--"overbearing" management. Things like dangerous work environments, extreme work hours, lack of health insurance, etc. It is clear that unions are a balancing force to this "evil". If you disagree with this, then provide an argument. This is the only point I've made. I never claimed that this wasn't in the self-interest of its members. Your points are completely tangential to anything I've said.
This does not at all correspond to my experience.
If true, so what?
You're assuming that this undefined "good management" has value that isn't reflected in the customer experience. That's simply not true. Even if the bad management only directly affects employees, they affect customers. (Good employees leave unless shackled by seniority rules, which is the only rational way to run a union.)
I'm sure he's trying to tell us he values the little-guy/gal. Great!, we do too, but then don't pretend her job is more exciting than a whole industry, and you're just sitting around in gushy anticipation of your fresh flowers. ugh :p
Also, painting the valley as "sick" and "disgusting", feels one sided.
Sure there are problems with some startups being over-hyped, but bubble or not, companies are getting real shit done here, and it's pretty unique place, simply in terms of raw tech innovation density. Giving credit where due, doesn't need to take away from all the rest of the good stuff that goes on elsewhere in the world too, like at 37 Signals, Chicago IL.
see the sickness in our industry
He's not in "our" industry. He runs a small business that makes good money, and it happens to use technology. Not the same thing.
Are you profitable? Are you building something great?
These are not always relevant questions for a startup, depending on what phase of its life it's in. You certainly try to build something great—or better yet, solve a problem!—but you may very well have to change (yes, I mean "pivot"). See Inside the Tornado for info about having to not worry about treating customers well at some stages.
I'm not sure I'd call any of 37 Signals' services all that great, however, if by "great" we mean innovative. There's nothing special about them except that they were there early and they're simple. But that's not what I'd call innovation, and I don't think it makes them great. I think his cocky attitude has a lot to do with the constant feedback loop in the town he lives in. In SV, I don't see many founders praised for judging other people's work; usually, they're too busy trying to build something truly great, even if it's yet another photo-sharing site. Hell, Flickr was just another photo-sharing site, but I think of that as far, far greater than something like Basecamp.
Pot, meet kettle.
> He's not in "our" industry. He runs a small business that makes good money, and it happens to use technology. Not the same thing.
I presume you're defining "our" industry as consumer focused Internet services that plan to IPO or get acquired? Not sure everyone would agree with you, I don't.
Your comment actually reiterates what he's talking about. The mentality of what a "startup" is and how you go about building it is (in his opinion) a bit toxic.
To tell you the truth, the longer I live in Silicon Valley the more I agree with his point of view.
I guess I had naively been assuming that a "startup" was effectively a phase in business, where you are working hard to build a product early in the businesses life. You are "starting up." However, I assumed that the end goal is to make sure that product grows and supports a viable business that enriches customers lives and provides a stable business for the people involved to do what they love.
Reading Sabats comment though, it sounds like his definition of a startup doesn't involve starting a small business. If it doesn't, then what are you doing? I have some things in mind, but I leave the question open to others to fill in.
The biggest problem in Silicon Valley is that people don't think about what they're building. There are so many stories of founders receiving millions in funding and startups being acquired for tens or hundreds of millions of dollars that it creates a really unique subculture.
That subculture is what Jason Fried is referring to. I don't have a problem with it per se but I do wish everyone here would stop and ask "is this the best way to create value for customers?".
There's a lot of talk here about changing the world and delighting customers but if you look deep into most of these venture backed companies it is strictly about big exits. It's what the VCs want, what the media hypes and what founders (blindly?) follow.
Your statement is both pedantic and incorrect.
I may be a bit off, or poor in my ability to communicate my point, but it it seems you are appealing to authority in your argument for the use of IPO as a verb.
My anecdotal evidence dates back to Netscape, so 1995. Shortly thereafter, the Valley was deluged by people with limited knowledge of financial markets who might have been reaching for the faux sophistication you describe, but this was before all that (and long before SOX). Bankers still usually got it right back then, but they didn't do most of the talking.
Anyway, I'm all for pedantry. I do take issue with your assertion that inappropriately verbing the acronym will hold younger entrepreneurs back in some way. I do not believe it.
It seems to me that you might have some special reverence for the term. Fair enough. Surely you've seen this happen before though, to lesser words?
> He runs a small business that makes good money, and it
> happens to use technology. Not the same thing.
As opposed to what? Having no business (making no money), hyping everything out of proportion and having technology for technology's sake? > if by "great" we mean innovative
Any justification for this lame definition? I call the service great if it is really useful for customers and make money for the owners. Sure, inventing a way to put pants on over your head may be innovative, but how it is great and what's the point?I got pretty tired of all that useless social hypeware with no purpose (other than burn VC's money) and business model.