The Pied Piper of Pay [Forbes] is a piece that profiles David…
You can tell a lot about a culture by the sort of person it ostracizes. David Heinemeier Hansson, 29, a successful tech entrepreneur, is something of an outcast in Silicon Valley. Here are the pronouncements that have earned him his banishment: Companies should not be ashamed to charge for their products. They should expect to be able to make money off their customers. Finally, they can’t use volume to turn losses into profits…
“Startups these days are getting all the wrong lessons,” says Hansson. “[They think] that all that matters are users, that they should take on plenty of debt from venture capital investments because something magical will come along at some point and everything will be okay. But you can’t make up something in bulk that is a losing prospect to begin with. Isn’t that self-evident?”
Read the rest of the piece to see what DHH thinks of Twitter and Facebook.
(Note: There are a few inaccuracies in the piece, most notably that Ruby on Rails is a 37signals product which impacts our financial success. Not so, it is an open source framework.)
john galt
on 04 Jun 09There is nothing wrong with profit!
http://www.amazon.com/Capitalism-Ideal-Ayn-Rand/dp/0451147952/
Mauricio Gomes
on 04 Jun 09Wow, this is a surprisingly well written article. It’s not all Web 2.0 bubbly.
It’s also funny that he refers to David as an outcast for wanting profits. Where the hell have all the gone entrepreneurs gone to?
Brad
on 04 Jun 09Calling DHH an outcast in Silicon Valley is sensational, a contrarian sure but I hardly think they’d shun him or anything if he showed up there.
Brian Armstrong
on 04 Jun 09Agree with Brad above.
Also isn’t his comment about business plans incorrect as well?
‘he mocks the widespread notion that new technology ventures shouldn’t worry about business plans or revenues but should instead work on acquiring customers, even if it means giving away their products’
I think he mixed that up. Revenues yes, business plans no.
And acquiring customers, even if it means giving your product away for free doesn’t make sense. They aren’t customers if you’re giving it away for free.
AndyC
on 04 Jun 09Followed the link to the Forbes article. Wow, for 29 you’re looking old 8)
Tim
on 04 Jun 09I’ve noticed a lot lately that Matt is the primary poster to this blog.
Does that imply his time is less value than the rest at 37signals – how are busy building/improving/designing.
Sarah
on 04 Jun 09Who’s the picture of in the article? It certainly isn’t David. If it’s the writer of the article, that’s an odd practice…
Tim
on 04 Jun 09@Sarah
I completely agree. Poor design on Forbes part.
That is in fact the journalist, Lee Gomes, who wrote the article.
http://images.forbes.com/media/authorbox/leegomes.jpg
JF
on 04 Jun 09Does that imply his time is less value than the rest at 37signals – how are busy building/improving/designing.
Not at all. It implies it’s currently a big focus of his responsibilities. Matt is one of our primary content producers.
Mike
on 04 Jun 09I thought 37s was Jason’s company, is David running around telling everyone he’s the boss?
Alejandro Moreno
on 04 Jun 09I had never read Forbes before, and this piece (of shit) is inaccurate on so many little things, that I’ll never read Forbes again.
It seems as if the author didn’t do any research at all!
Pierre
on 04 Jun 09I think everyone should start their own microbusiness that generates profit, even if it’s a dollar a day. The best way to do this is charge real money for your product. I’m a big believer in that piece of the 37Signals philosophy. Of course, it’s possible to make a LOT of money getting VC funding and gaining huge traction and selling your revenue-less company to someone else. Don’t get me wrong, I’d love for that to happen to me. But the reality is it’ll probably never happen to me, or to you. You’re much better off going for singles than home runs. I’m glad to see this Forbes article shine some light on the subject. I feel that constant media attention on the few revenue-less lottery winners out there dissuades regular people from starting a microbusiness.
Eneas
on 04 Jun 09The article of Forbes.com is a parochial piece of “we have to educate our users to pay for all now!!” dogma, the great bussines model of Encarta.
Michael Troy
on 05 Jun 09Wow. This article is really poorly written. It feels like next to no real research has been carried out.
Michael Troy
on 05 Jun 09I loved this piece -
“He is especially unpopular with venture capitalists, since he argues that abundant VC money allows companies to avoid figuring out what their business is or if they even have a business besides finding a greater fool to one day buy them out.”
Mike
on 05 Jun 09I love the tone of the article, it makes David out to be some pariah of Silicon Valley. I would imagine most of Silicon Valley could give a crap.
Michael
on 05 Jun 09Mike, David is a partner at 37S. So he is one of the bosses, though I would guess Jason and Ryan own more of the company.
Tim
on 05 Jun 09@Michael
Is Ryan a partner?
Colin Nederkoorn
on 05 Jun 09There are some good quotes in there, but some things that I felt were inaccurate or misleading.
The title “The Pied Piper of Pay” has negative connotations. Are paid app developers rats that DHH is leading to their death?
No credit is given to the rest of the 37signals gang for anything. It makes DHH sound like a quixotic lone crusader against facebook, twitter and the rest of the established internet.
The author seems to think that rails makes 37signals money and that’s what customers are buying.
Good quotes from DHH, but it’s clear the author doesn’t get it.
Michael
on 06 Jun 09Tim, sorry about that. For some reason I thought Ryan and Jason co-founded 37S, but I see from Wikipedia that’s not the case. So I have no idea, but I DO know David is a partner because he said so here: http://www.loudthinking.com/about.html
Brian Christiansen
on 07 Jun 09Wow, this is a pathetically written piece. However, it could have been interesting if the author focused on the part he understood (A successful entrepreneur goes against the VC grain) and got someone else to write the parts that involve the technical, and the facts around DHH & 37s.
When a piece this simple is done so poorly, it always makes me wonder if the other things I read, that are not about things I know well, are as poorly written. It really casts a bad light on Forbes.
Vitaly
on 07 Jun 09@brian
So true. And i’m afraid the rest of them just as inaccurate. Every time I read an article on a subject I am very familiar with, I see how wrong it is. So, it must be the same for the rest. :(
This discussion is closed.