When the Series A check clears, most startups send out a bragging press release, the equivalent of flashing your grill. The VC backing is supposed to mean that the company has experienced hands in its corner. That it’s financially solid. A shoe-in for a puff profile piece in a magazine. Eligible for lunch conversation in Silicon Valley.

But if customers actually think about what a venture capital injection entails, it’s not all California Love. The company’s cash concerns might have (temporarily) vanished, but they’re replaced with a new list of problems. As a user you might be looking at any one of the following:

1. The Pivot
Sure, the product as described today sounds great, but if that hockey-stick growth pattern doesn’t emerge in six months, the product you wasted your time and money on might quickly turn into something else entirely.

2. The Talent Acquisition
Big companies like Google love to buy small bands of developers their VC friends tell them about (the risk easily triples if said band comes with Stanford or MIT pedigree). When the developers behind the app are acquired for their “talent”, you can expect a “sunset” to follow soon thereafter. That combination is the perfect euphemism for fuck the app and fuck the users.

3. The Runway
They don’t call it venture capital because you’re supposed to put it back in the bank. No, fool, that green gots to get spent. The quicker the better. So while $10 million dollars sounds like a lot, it might only just buy a company 12 months of runway. You know, once the swanky office in San Francisco has been decorated and the 100 programmer rockstars, designer ninjas, and bizdev suits have been bought.

4. The Pressure Cooker
Once a company takes millions of dollars of other people’s money, they’re instantly under extreme pressure to perform LIKE A TIGER. This kind of pressure can easily lead otherwise decent people to do indecent things with your data, your privacy, or anything else you hold dear. Because the scoreboard has already been set: winning means blowing it out of the park. And hey, sometimes a playa gots to cheat a little to make the magic sparkle, if you know what I’m saying.

5. The Acquisition Graveyard
If the product is strong enough to prevent a talent acquisition, you earn a few more years of fun and games before the product acquisition is likely to happen. With great fanfare some big company will announce what awesome synergies are in store now that the youngsters have “access to all the resources they need to take it to the next level”. The founders will spend two years on “integration” with the acquiring company’s legacy systems, and then – wait for it – their golden earn-out handcuffs will unlock and they’ll be long gone, along with any chance of the product ever getting better.

Of course, every now and then the clock that’s stopped tells the proper time. The fantastical success story somehow ends up being enough to swallow a hundred bad ones, so the crowd still cheers. See, world, we were there when this wee little lad got his first series A round and just look at him now!

Don’t fall for it. Given the odds involved, if you’re a user, or worse yet, a customer of a product, and the company behind it announces venture funding, the proper response is aahhhh, shiiiiiit.

One of the most pervasive myths of startup life is that it has to be all consuming. That unless you can give your business all your thoughts and hours, you don’t deserve success. You are unworthy of the startup call.

This myth neatly identifies those fit for mission: Young, without obligations, and few if any extra-curricular interests. The perfect cannon fodder for 10:1 VC long shots.

They’re also easier to rile up with tales of milk and honey at the end of the rainbow, or the modern equivalents, “compressing your working life into a few years” and “billon dollar waves”.

But running your life in perpetual crunch mode until the buy-out or bullshit-IPO fairy stops by your door is not surprisingly unappealing to lots of people.

The problem is that most “exciting new company” lore is intermingled with that of Startup Culture™. This means it’s hard to find your identity when it doesn’t match the latest company write-up of How Those Crazy Kids Turned VC Millions Into Billions!!!

Most people will look at that and say that’s not me. I don’t have 110% to give. I have a family, I have a mortgage, I have other interests. Where’s my place in the startup world if all I have to give is 60%? What can putting in part-time give?

The good news is much more than you think. The marginal value of the last hour put into a business idea is usually much less than the first. The world is full of ideas that can be executed with 10 to 20 hours per week, let alone 40. The number of projects that are truly impossible unless you put in 80 or 120 hours per week are vanishingly small by comparison.

This is of course nothing new. We’ve been playing this bongo drum for years. But every time I see people crumble and quit from the crunch-mode pressure cooker, I think what a shame, it didn’t have to be like that. It’s the same when I read yet another story about someone who won the startup lottery, and the stereotypical startup role model is glorified and cemented again.

It’s almost like we need another word. Startup is a great one, but I feel like it’s been forever hijacked for this narrow style, and “starting a business” just doesn’t have the sex appeal. Any suggestions?

Basecamp just turned 8 years old. Here’s the launch announcement right here on this blog back on February 5, 2004. That’s a long time ago.

We’ve learned a ton since then. One of the most interesting lessons has been the increasing degree to which time influences change.

When we first launched Basecamp, we could iterate rapidly. We were incredibly prolific those first few months. We launched a bunch of new stuff and made rapid improvement every few weeks. Eventually it plateaued and slowed down.

Why is that? Part of it is because many of the improvements we wanted to make have been made. Part of it is that we want to keep Basecamp focused on just a few things. Part of it is that the code base gets more and more tangled over time which makes change more difficult. Part of it is that we’ve also been working on other things.

But that’s nothing new. Those concerns have been part of software development since the start.

What’s new with SaaS (Software as a Service) products like Basecamp is that legacy doesn’t just build up in the code base, it builds up in customer expectations. People get used to the way things are. Even things that are broken or complicated become things some customers want to protect from change because they’re familiar with the intricacies of how those things work.

In the traditional software world, new releases were bundled up into distinct versions. And it was up to the customer if they wanted to upgrade or not. If they didn’t like the opinions of the new version, they could stick with the old, familiar version. If the new version didn’t solve any new problems they had, they could keep using the version they already had.

Not so with SaaS. When updates are deployed, they’re deployed instantly for everyone. That’s not always the case – sometimes you phase in a release – but for the most part the end game is the same: This is new and it’s making its way into the product. This means customers often don’t get the chance to opt out of changes in the SaaS world.

All of this is managable for companies and customers as long as the changes are incremental and somewhat predictable. And the younger customer base the easier it is to manage. But every once in a while a company has brand new opinions about a problem they’ve already solved before.

What then? Do you totally change the existing product to fit the new opinions? What about all the customers who are used to the way things currently work? They’re going to be upset. They’re going to feel forced and bullied into something brand new they didn’t ask for and can’t ignore. No one wants to feel like that. It’s often a recipe for a lot of turbulence.

This is why change gets really hard as a SaaS product matures. Existing customer expectations are some of the strongest forces pushing back at a company with new ideas.

This is the situation we found ourselves in with Basecamp last year. We had all new ideas about how to manage, organize, collaborate, and run projects. While some of the fundamental tools were the same, the application of these tools, the way in which they interacted, and the entire execution was different. Making the current Basecamp work the way we wanted the new Basecamp to work wasn’t possible without completely forcing huge change on people who didn’t ask for it. That wouldn’t fly.

I think there’s only one fair way to introduce significant change like this: Let people choose change. I don’t think people are afraid of change, as a concept. They’re afraid of change that’s forced upon them. That isn’t change, it’s violence. And violence is never customer friendly. Just about every time I’ve seen a big transition go wrong in this business it’s been because customers were forced to change, not offered the option to change.

This is why we decided to do the right thing. Design, develop, and launch an entirely new version of Basecamp along side the existing version of Basecamp. The new Basecamp is entirely opt-in. You can even use both at the same time, if you’d like. But if you prefer not to change, you won’t be forced to change. If the current Basecamp works well for you, you can continue to use the current Basecamp for as long as you’d like.

We’ve put in an extra months worth of work to make sure the optional transition is as smooth as possible. We’re excited to share Basecamp Next with everyone soon.

I recently read and watched “Moneyball”, and enjoyed both greatly. It’s a great story in and of itself, but I also found it to be an interesting parallel to the state of the “web software” industry today.

Moneyball starts in the week before the 2002 baseball draft, with a set of meetings that pit Oakland A’s general manager Billy Beane against his team of scouts. The scouts’ primary mechanism of evaluating players was visual – did the guy look, walk, and talk like a major league baseball player? On the other hand, Billy, with his assistant Paul DePodesta, had a largely objective system for evaluating baseball players based on things like how often they got on base.

Billy won the fight over talent selection and picked players that met his system, even if his scouts disagreed. This pattern continued throughout the season, and the A’s went on to set a league record for consecutive wins.

When I started writing I thought if I proved X was a stupid thing to do people would stop doing X. I was wrong.
—Bill James in his 1984 Baseball Abstract

In many ways, the “web software” industry is still where these scouts are. For most people, the primary way of evaluating their software is with their own eyes and emotions. Over the years, people have tried to bring some objectivity or framework to do thing this with things like “personas”, but the process is still a largely subjective one, just like a scout looking at how a player swings and never really looking at whether he gets on base.

The reality, of course, is that this is no longer necessary. Just like baseball in the years since Bill James coined “sabermetrics”, we have the tools now as an industry to do better. We can identify the outcomes we want to see, and we can objectively evaluate a design in the context of those outcomes.

It’s never been easier to test your designs and find out what works where the rubber meets the road. You can use a tool like Optimizely for any site or something like A/Bingo in a Rails app and have a test running in a matter of minutes. Measuring and understanding behavior in other ways has also never been easier—there are new tools and startups helping to do this every week.

For Billy Beane and the Oakland A’s, using data was about leveling the playing field between their meager salary budget and the huge budget of teams in places like New York and Boston. For the web industry, the playing field is already fairly level – it doesn’t take much more than a web browser and a text editor to build something. What data does for web software is reduce the role that blind luck plays. You’re more likely to – on average – find success if you evaluate your work using real data about the outcomes that matter.

You can choose to keep working like those scouts did and go on gut instinct alone. It might work for a while, but I think most people would say that baseball’s moving forward now, and the people who haven’t made the switch are being left behind. Our industry will move forward too—do you want to be left behind?

Some of the best decisions and designs at 37signals have emerged from intensely contested debates. Not just between Jason and me, but from anyone in the company. When sparks fly, some truly great ideas come to light.

The catch is that the heat must arise around the decision itself. Debates go off track when personal biases or old grudges come into play. So long as each party sticks to the merits, adding some fire will only unearth new angles and concerns.

This energy is so important to how 37signals operates that I consider it every time we make a hire. Is this person willing to fight for what they believe in? Will they stand up to me, Jason, or anyone else in the company if they think we’re wrong?

Detecting this rebel streak requires looking at a person’s full persona: online debates, choice of technology, writing or work samples, often just the ability to debate or question the interviewer in person.

Sometimes it’s easier just to detect a negative. Someone who’s unlikely to ever question you or your ways. A “yes man” who has only wonderfully great things to say about everything we’ve ever done. That’s a red flag.

Regardless of how you do it, find people with enough spark to care, fight, and campaign for what they believe in. What pushes you and makes you question your beliefs will make your company that much better.

Apple’s last quarter was the second most profitable quarter of any company ever in US history. Only ExxonMobile topped them slightly in 2008 when oil was at an all-time high. That’s an astounding and awe-inspiring accomplishment.

But that’s not why some of us are so proud of what Apple’s been able to do; it’s much more personal.

When I switched to Apple back in 2002 after the introduction of OS X, it felt like a renegade position. The world was running Windows and anyone bothering with a Mac was by definition an outsider.

We had to deal with incompatibilities of all kind. There was the ridicule of overpriced shiny white plastic. We were somewhere in between the “first they ignore you” and the “then they laugh at you” state of adoption. But for those of us who endured it, the result was not disillusion but a hardening of the resolve.

Macs were (and are) just better. Not just because they were better built or put together, but because Apple was a better company. A braver company. A company that stood for higher ideals. When compared to the empire of Microsoft and the Dells, Sonys of the time, it simply felt like they were more right.

When I looked at that, it seemed like an injustice that Macs and Apple were the odd ones out. Like quality was being held back and barred a chance to shine just because the dominant gorillas in the room had so much power and inertia going for them.

I campaigned tirelessly to enlighten my fellow classmates at Copenhagen Business School about this injustice, about why they should get a Mac. I managed to convert my entire study group and a fair number of other people too. It was invigorating to be able to convince people of the fundamentals.

This battle is not that old. There are plenty of veterans who remember how it used to feel to evangelize the company and its products as an outsider. I still do it by habit even though we’ve long since moved into the “and then you win” phase of adoption.

Still, financial results of the likes Apple delivered yesterday serve as an affirmation of all that energy spent telling their story. Believing in the underdog. Like your favorite home team who couldn’t get into premier league while growing up just won the Superbowl, the Stanley Cup, and the World Series all together for the 10th time in a row — and you were the only one to believe in them. It’s an immensely satisfying feeling.

Nowadays we have to deal with the fact that Apple is the gorilla not just in the room but in most of the houses on the block. That’s a scary proposition in its own right. Far too many resistance movements turned drunk with power once they beat the incumbents and ended up being just as bad (or worse) than those they displaced.

While Apple has certainly shown that at times they’ve let their power corrupt, they’re still guided by the fundamental principle we fell in love with: Superior products through superior design.

There are, however, lots of people who make great products with great design. There aren’t lots of Apples who can spread that luxury to the masses and convince them of the benefits like this company has done. When you hear regular people talk about how much they love their iPhone or iPad, it really hammers home what Apple has done not just for themselves but for anyone trying to create better products and hoping to win markets because of them.

I’m well aware that this level of gushing is somewhat unbefitting in public, and I normally wouldn’t indulge the impulse. I’m just so proud of Apple that I’m willing to look foolish saying so.

No other company has inspired me more when it comes to marketing, design, focus, and even capitalism than Apple. Make the best damn product out there, charge a profitable price, and win the world.

When I worked with clients on a time and materials basis, I hated logging hours. I hated having the stop watch’s tick tock over me, being forced to account for every increment of time. Or, as it often happened, trying to remember after the fact where the hours went. I never met another developer who liked it either.

So, when 37signals launched the 37express idea, I thought about how cool it was (this was before I joined the company). Turning consulting into a product and charging a fixed price for it. No time-tracking, no tick tock, just clear expectations of what the client was going to get. It really opened my eyes to “you can refuse to do the shit you don’t want to do” way of running a business.

Other judo solutions to avoid time-tracking I’ve seen from consultants have been simply day or, preferably, week rates. You have my attention for this amount of time. Whatever we get done, we get done. I’m not going to break it down into 15-minute increments. Love it.

Similarly, I have almost equal wrath for the expense report. I’ve always felt that if you hire and pay me a good wage, why on earth would you want to always be checking in on me, forcing me to justify a $200 software purchase, or a plane ticket to a conference, or whatever else I might need to do my job well. Keeping paper receipts around and dutifully marking them down. Fuck that.

Now if you have multiple, concurrent clients, and you’re making them pay for your individual expenses, fine. You’re going to have to assign who paid for what steaks and who paid for what strippers.

But the legitimate moaning I’m hearing from people over expenses reports is when they’re being forced to do them purely for internal bookkeeping. This seems like a complete relic from the days when people would pay businesses expenses in cash. Nowadays your credit card company keeps all this on file. What was paid, who it was paid to, who charged it, even categorized. All the data is there. Asking people to fill that in again by hand just seems insulting.

Optimizing your business for happiness is about a lot of things, but taking out all the needless administrative minutiae seems like one of the easiest. Why aren’t you?

Taylor’s post about our growth in 2011 included a bunch of numbers showing how the pistons inside the 37signals engine are pounding faster, but it all got swept away by what seemed like an innocent side-note: The 100 millionth file was called cat.jpg.

Being as it is that the internet is constantly accused of being just an elaborate way of sharing pictures of cats, sharing pictures of cats, we thought that was funny. But it wasn’t. We shouldn’t make jokes about anything even remotely related to people’s data.

Because the natural train of thought from there goes: Hey, if they saw the file name cat.jpg and shared it with the world, what’s to prevent them from sharing other data? Actual sensitive data, like Downsizing-Plans-2012.pdf? Hell, what if they’re actually looking at my secret new logo and leak it to the press?

That’s a completely legitimate train of thought to ride and it was our mistake to get it on track. So let’s start with first things first: We’re sorry. We made a mistake. We should have thought it through and remembered that storing your data with someone else in the cloud hinges on a fragile layer of trust. We poked that trust in the eye and it was wrong. We shouldn’t have checked the log files to see the name of the 100 millionth file.

So what’s a business to do from here?

Remote working might still be the minority configuration, but there are plenty of enlightened companies around who do get it. Here’s a list of five current positions from our job board:

• iOS/Mobile Developer at Art & Logic
• HTML5 Mobile Developer at Viva Creative
• Open Web developer at Nested Interest LLC
• Rails Developer at Big Cartel
• Dev Ops Engineer at Big Cartel

If you want to post a remote-working position on the job board, please use “Anywhere” as the location. We’ll highlight these positions again in a few weeks.