An intense debate about business models, bubbles, capitalism, quality of life, market share vs. profit share, running a business vs. selling a business, and a variety of other related topics from episode 46 of This Week in Startups. This is really good stuff.
(There’s 47 minutes of material before the interview. The video above picks up where the interview starts. The interview is what’s really worth watching.)
If you’re interested in finding out more about David’s point of view, check out REWORK — now a New York Times and Wall Street Journal best seller.
Jeff Mackeyon 20 Mar 10
Peteron 20 Mar 10
I waited almost an hour for some action to begin – Jason talked too much. Thanks for skipping that boring babbling… Overall, very good interview, if you skip the intro bullshit.
And the bragging, man… (5 mil house, Mahalo jet to get some Danish food? … give me a break).
Bob Yonkerson 20 Mar 10
It’s really hard to watch calcanis. He’s one of those bad interviewers that talk too way much about themselves. He is spending so much time defending mahalo ugh, can’t watch anymore.
Hansson is a very smart. He’s a little Thanks for the post.
R.J.F.on 20 Mar 10
David – You keep saying (here and in the Chicago Business School) that time and success is “not the correlation,” but what you mean to say is not that it’s not the correlation, but that time and success may be correlated, but there is no causation. You can’t say there is no correlation between time and success; but you can argue that time spent does not cause success.
John Downeyon 20 Mar 10
I’ve always had a gut feeling that bootstrapping was the way to go. It’s nice to see all the arguments for both sides.
Fredon 20 Mar 10
DHH has go it right. Calcanis’s ego rules his logic, simply put. He’s still a precocious kid trying to build the biggest wood block tower.
melissa pierceon 20 Mar 10
“Learn it yourself, then do it yourself” “what could I do without the money”
In those quotes, David is singing my song. We’re on the same page. Some things however, I didn’t agree with, he made me question where I was going with my own projects. Thanks for that David.
Matthew Michelson 20 Mar 10
Excellent interview. DHH picks up on some great fallacies by Jason. For example, Jason makes the point that since Facebook took several million and now is making a billion, you should take lots of capital. This is a classic example of the survivorship bias which DHH picks up on and points out. Jason is not mentioning all of the companies that took many millions of dollars and went under. Very interesting and engaging dialog between both of them.
Mikeon 20 Mar 10
Does anybody know where I could download mp3 from this interview?
Larry Clarkinon 20 Mar 10
You can get a download link from this page:
Aaron Mon 20 Mar 10
It’s an interesting point about the workaholics, and that it definitely depends on the business. If you have are pushing out a large piece of software, whether it’s a search engine or OS for example, one needs to put in the hours to get it done. Obviously though the hours need to be productive. 80 vs 40 won’t mean twice as much work done. However, I think that maybe 50 v 40 would mean 25% more work done. Studies would have to prove that to be sure though.
Chris Czelon 20 Mar 10
Wow. @dhh: “I believe in continuing to run a sustainable & highly profitable business.” @jason: “Is that some kind of Euro-Socio-Commie thing?” There you have it; just about everything wrong with US business today. However, debate, is not the right word. Typically, a debate has an even match, this wasn’t even close.
Edon 20 Mar 10
This is best and most engaging interview i’ve seen for a while. I think they both make excellent arguments but David has convinced me that building a profitable going concern rather than working towards a big payday is the way forward. If you concentrate on this methodology then the big payday will come (if you want it)
Maria Luaon 20 Mar 10
Jason, read the book before interviewing a guest, stop fucking talking over your guest and let your guest finish instead of just trying to opinionate without knowing the actual content of the book.
DHH you guys rock, I was very disappointed with the tone of some of your technical presentations (porn) and would like to see you do more to help keep women in technology but I loved the book and really enjoyed this interview. Thanks for your refreshing approach to business.
This interview and Calacanis views really represent all that is wrong with the business world today. Go 37Signals!!!
jasonon 20 Mar 10
amazing guest, amazing debate and amazing comments from the audience.
i think this is up there with the GaryV, Dr. Mark and Annie Duke episodes of TWIST.
David has a great perspective that is really helpful for entrepreneurs.
Warren Benedettoon 20 Mar 10
I’ve heard David make the same statements and assertions a dozen times in various lectures, talks, and interviews. But he really knocks it out of the park in this interview. Maybe it’s because he’s bouncing off of Calcanis, but for some reason he is able to put a really fine point on his philosophy this time around.
What’s amazing about this (and everything in Getting Real and Rework) is that everything David is saying is common sense. But because the entire tech industry is sooooo far from common sense, it sounds revolutionary.
If our grandfathers heard this, they’d laugh at the idea that anything but profits matter. I doubt there was some farmer in the 1800’s who said “I’m going to build a huge farm, grow tons of crops, then let people come in and take all the crops for free. Then, once there’s enough people, I’ll figure out how to monetize them.” You wouldn’t hear, “I had to take investment money so I could buy all the massive harvesting machines and hire all the workers needed to run a farm of this size.” No. You start with a small farm, grow and sell your crops, then plow those profits (literally) into more land, more equipment, and more workers.
Maria Luaon 20 Mar 10
Further reading in regards to workaholics and why it does not work – “Slack” from Tom De Marco
Justinon 20 Mar 10
Great quote from dhh: “if you haven’t already learned to make your own money, you’re not going to learn it when you have to take someone elses.”
Jason Grunstraon 20 Mar 10
Superb video! Very inspirational. Thanks for sharing (and skipping the beginning).
Anthonyon 20 Mar 10
Any high-level executive from prior generations would be amazed this is even debatable.
Before you could get big money for any silly idea, DHHs philosophy was the MO of the world’s best managers. At least the most amazing guys I know all feel that way.
A Guy From South Americaon 20 Mar 10
Great interview! Finally a smart interviewer with the right confronting questions.
kon 20 Mar 10
This was one of the best twist episodes ever and what made it that good was the guest. I wouldn’t say Jason is all wrong, sometimes you have to find a lot of venture capital, either because you’re in an industry like drug development or you just can’t wait for the profits because of the competitors, you need the speed, you need the scale, but yes all too often those profits never come.
Peter Cooperon 20 Mar 10
We should be glad people have different opinions. While the 37signals and DHH gradual and profitable approach is very good and suits a lot of us.. without the more bolshy, money up the wall types, we probably wouldn’t have services like Facebook or Google around. Variety is great.
Marc Gayleon 20 Mar 10
This interview actually surprised me.
I, didn’t really like Jason Calacanis before and was skeptical about his motives and his modus operandi, but this interview showed him in a new light to me. He actually isn’t all that good, and I am glad that both DHH & himself were honest with their beliefs and spoke up about them.
This really is one of the better business interviews I have seen, contrasting both the VC-backed approach with the 37s build from internal cash flows approach.
Great job guys.
Jon 20 Mar 10
This isn’t an interview. This is Calacanis trying to justify his approach to himself and his audience. Painful.
Jon 20 Mar 10
It’s clear that Calacanis can’t even get his mind around the idea that it’s not all about the quick cash.
Jon 20 Mar 10
Justin Jacksonon 20 Mar 10
Overall, a really great debate. Great to see David challenged with good questions, and great to see Jason challenged with solid arguments.
Normally I find TWIST way too long; I usually don’t last more than 5 minutes. This “interview” was quite engaging.
theevoon 20 Mar 10
Calacanis is asking about hypotheticals. @dhh is keeping it real.
jasonon 20 Mar 10
actually, if you watch the entire interview “j” you’ll see that I’m clear that my first two businesses were built exactly as DHH describes.
when I’m asking a question it is sometimes to get information out of the person I’m interviewing—and not an endorsement of the question by me.
i do believe-and have-built businesses both ways.
However, if you look at the top 100 internet brands in the world and the United States the common denominator is going to be venture capital + amazing entrepreneurs. That’s just a fact: google, yahoo, ebay, facebook, twitter, etc, etc, etc.
you’ll find very few wikipedias and 37signals in the list of top 100 sites—they are the exception, not the rule.
Anonymous Cowardon 20 Mar 10
Calacanis… “you’ll find very few wikipedias and 37signals in the list of top 100 sites—they are the exception, not the rule.”
That’s golden. The top 100 of anything, when there are 10,000,000 of something, are the exception, not the rule. There are a lot more 37signals and Wikipedias – smaller companies kicking ass slowly (and quietly, for the most part) and making millions of dollars in profits – than there are of the “top 100”. There are more than a few sites in the top 100 that aren’t profitable either. Who cares if you are in the top 100 if you can’t even keep your head above water without other people’s money?
Daniel Meadeon 20 Mar 10
Probably one of the best interviews I’ve ever seen, I like the honesty between both DHH and Jason, and I like that they both were not afraid to question each others views.
More interviews like this are needed for start-up entrepreneurs because its the honesty they can learn from.
Davidon 20 Mar 10
@dhh is twice a smart as the other guy. DHH understands the meaning of enough and happiness.
Erlendon 20 Mar 10
“there’s an alternative, which is just to fucking build a profitable business” – pure gold
Luke Luxon 20 Mar 10
Dear Jason Calacanis,
Can you stop talking for 5 sec, please! You are interviewing yourself.Regards
Thanks David Heinemeier Hansson for the advice. “Clear goals and Profit, profit, profit”
Evanon 20 Mar 10
The web is now home to published media and software-as-a-service applications. It seems to me that these two totally different product categories need to be approached in radically different ways (and eCommerce should be approached differently yet again.)
This interview features two thought leaders from both camps, which is great, but I feel as though this schism needs to be taken into consideration when reviewing such discussions.
Benjamin Welchon 21 Mar 10
I just finished REWORK. It was fucking awesome. I just love the push back against the “now I’m supposed to…” “everyone knows” bullshit that leads people down every other path than the one they want to be on.
This interview is filled with debate gold. God this is good internet TV. I almost went to make popcorn.
Tradon 21 Mar 10
Great interview and even better book. Rework is the best business book I’ve ever read. I couldn’t put it down.
Jason has his points and I always love listen to him, there are times that he makes TWIT. He also thinks too big for most of us. He has resources that can’t be touched. I just want to make a profit. Now, if a private jet was to come along because of the profit I make… that would be nice too.
Keep up the good work, both of you.
Alexon 21 Mar 10
Calacanis seems to be more interested in making a dollar instead of being passionate about what he’s involved with. David might enjoy his wealth but his main priority is finding ways to increase revenue by making his product/company better. Thanks for the interview, it was very enlightening on David’s part.
Brian Armstrongon 21 Mar 10
Freakin LOVED this interview.
Benon 21 Mar 10
It’s always interesting listening to people who aren’t full of shit talking to people who are. DHH hammered Calacanis.
One question I had though: how exactly does profitability represent one’s impact upon the world. It seems like there’s probably more to that equation.
pier0on 21 Mar 10
As someone else pointed out above DHH’s views are just common sense, but they sound revolutionary in today’s world. Other than that, Calacanis’ TWIST shows are always pretty interesting. Even when guests are not too good, the other segments of the show provide for some good food for thought.
Ivanon 21 Mar 10
OMG, Jason is full of shit.
Johnon 21 Mar 10
Sorry, but I don’t have any respect of Jason Calacanis after his iPad Twitter hoax
End Tagon 21 Mar 10
You guys need better HTML filtering—that “hoax” link wasn’t terminated, making the ENTIRE REST OF THE PAGE into a twitter link. I can’t even click on the text fields here.
As for JC’s assertion about practice, the distinction he’s missing is that’s all ROTE PRACTICE. Repetition of mechanical actions. Playing a piece on the piano or practicing jumpshots in the NBA is not a creative act.
You can’t force creativity. You can churn out subpar pulp novels or pop songs or caricatures but none of those make you the best writer, musician, or artist. In fact they will likely ingrain bad habits of half-assing things all the time.
With programming, what you usually find with workaholics is a lot of wasted time. You stay up til 6 am chasing a bug that you would have caught in 5 minutes after you woke up if you just went to bed and got enough sleep. Then you introduce more bugs because you’re tired.
Those startups that pull insane hours writing unmaintainable crap to get acquired by Google - they have to re-write it all anyway. Not JUST to scale, or to improve it - but because the code you write when you’re in a hurry is kludges all the way down.
You can put in 20 or 30 good hours a week. 50 hours on top of that is usually exponential back-off on productivity, debugging things that were introduced after the cognitive inflection point.
Workaholism is usually a sign of poor time management. In the computer games industry, another term for it is the “Deathmarch”. What good is it if you burn out? And you probably WILL burn out, BEFORE you finish whatever it is you’re working on.
Doing something 20 hours a week and taking 6 months to launch is a lot better than spending 80 hours a week for probably not even that much sooner of a launch (productivity is not linear), because you’ll be too sick of it even if you manage to launch it. Launch is only the beginning. 37signals is still going a decade later.
Even if you’re VC-backed, most vesting takes FOUR years. Consider how many hours a week you can stand to do something before you get ill at the very idea of it. You need downtime in order to preserve the uptime. It’s like bodybuilding—you break down muscle when you work out. It only grows when you REST.
Keep in mind that PG didn’t even go see a movie for 3 years while he worked on ViaWeb - which lost money for 3 years, by the way. He didn’t enjoy it, was super lucky to sell it - dot com bubble, which also saw Yahoo buy GeoCities and Broadcast.com after buying ViaWeb, for an idea of their irrationality—and never wants to work on a startup again. So if losing all joy in work sounds like a good idea to you, by all means, work on stuff you can’t wait to get rid of… but you’ll just go broke if you can’t get round after round of VC until another bubble comes along to buy your money-losing business.
Incidentally, now PG invests tiny amounts of money in startups which almost all have no plan to make money, so his returns have been poor. YC needed Sequoia’s money just to keep putting $20k at a time into these bad bets.
He lost money for 3 years with a startup, now he loses money as a startup investor. It’s exciting to preach the gospel of “magical money-losing incantation that inexplicably makes you rich”. Yes, it’s funny that rich people will blow money on junk. It still doesn’t make junk a good business bet.
Sean McCambridgeon 21 Mar 10
And here we are deep in the wake of the Great Recession with greedy egomaniacs who haven’t learned that short term gains and short term thinking have been the collective downfall of many economies in the early 21st Century. There will always be someone there with a great sales pitch overclocking the system.
On the left we have a game player building ideas that sell. On the right, a problem solver building ideas that work. Even though you both sounded close to the same page in the end, the debate has more to do with your approach to business than your execution of it. If you asked each other, “Why do you do what you do?” it would be night and day.
Matt B.on 21 Mar 10
I’m 11 months into my startup and I truly CANNOT WAIT for that “event/moment” when I make enough and realize I don’t have to worry about mortgage payments.
Andy Traubon 21 Mar 10
This interviewer is a schmuck. This interviewer has an agenda. This interviewer doesn’t listen well. This interviewer gets in the way. This interviewer interrupts his guest a lot. This interviewer talks about himself too much.
How did this guy get his own show? Seriously, who would pay for this guy to do this? He must be paying for it himself. Sorry to get so personal but this isn’t anywhere near journalism…maybe it wasn’t supposed to be journalism. I can’t tell…I give up.
Richardon 21 Mar 10
Why does he keep looking up to the top-right?
Nicolason 21 Mar 10
The comment by the moderator about their being no more mom-and-pop businesses is just absurd.
There are mom-and-pop businesses all over the place. We don’t know about them yet because they are small and unknown BUT in most cases profitable businesses.
The moderator is just making Heinemeier point for him and doesn’t even realize it.
Kahlil Lechelton 21 Mar 10
wow this is a biased crowd here. I don’t think you will find any show in the near future that is so valuable to entrepreneurs/starters anywhere. Jason talks a lot yes but he showed respect in the interview and David did an amazing job talking about his views. You could see that they both had fun and what also became clear to me is that depending on the situation both can be right. Like in any good debate with two extreme points there is also truth lying in the middle.
For me that was an episode that I wished for since a long time. I wanted to see Jason and 37signals discussing those topics and it was one of the greatest episodes of TWiST ever. Thank you for that.
But just because you guys think like David there is no reason to badmouth Jason and the work he does with his show at anytime. It provides incredible value, inspiration and motivation for many people to actually START something.
Chris Deeon 21 Mar 10
The bit about europe being a place where it is impossible to get VC funding without taking huge personal liability – utter nonsense.
Berserkon 21 Mar 10
New definitions of ‘interesting’:
1. This guy is an idiot.
2. This guy is a communist.
3. What planet is this guy from?
4. I’m sooo much better than this guy—f-cking idealist.* *
I got the feeling that the double one-fingered salute was (in part) meant for Jason..
Adion 21 Mar 10
“wow this is a biased crowd here.
But just because you guys think like David there is no reason to badmouth Jason and the work he does with his show at anytime. It provides incredible value, inspiration and motivation for many people to actually START something.”
When you are focused on something, it’s inevitable to become biased about something else. You can say the exact same thing about people who are looking for angel investors.
The problem is that most of the business magazines and out there promote buy out deals and talk all the time about top 100 companies.
They talk about round 1, 2 of investment etc.
The strategies that they are presenting are of no use for people who want to make a profitable company that generates each month 5 figures or more.
The “magic pill culture” infiltrated even in business.
Talking about increasing your profits each day with 1$ is boring.(Even though by doing this you will get from 0 to $365 /day. $365/day translates to almost $11k/month) Talking about how to be paid $100 million in a day is not boring, it’s exciting!, it’s like buying something you can not afford on credit card. Humans are suckers for these types of behaviors. They would work 10 times harder to get something for nothing.
I also think that starting something is overrated. Doing each day something that advances your project is hard but it pays off.
Nwokedion 21 Mar 10
Try Mixergy.com—I think it’s faaaaaaaaaaaaaaaaaaar better than This Week in Startups.
Phil McClureon 21 Mar 10
Best tech/business interview I’ve seen in a long time. Thanks.
Erwin Blomon 21 Mar 10
Interesting, when you say a few million is enough, you get the question ‘are you a socialist?’ Is that the jason definition of a socialist? ;-)
Ncuon 21 Mar 10
I guess the debate goes down to weather you want to make a business using credit (taking VC money) or you want to do it using debit (bootstrapp).
my 2 cents!
Chuckon 22 Mar 10
I’m a little surprised that no one in the comments here seems to understand Jason’s argument.
There are some kinds of business that rely on critical mass and speed and that require funding prior to profitability to get there.
I’ll say that again, some kinds of business require funding to gain the mass and speed they need to win and thrive.
It just seems silly to write off the entire idea of funding just because some software companies and investors may get carried away with it.
Chuckon 22 Mar 10
Also, people are piling onto Jason here unfairly.
DHH is saying, “venture capital is bogus idea,” and wouldn’t you know it? That’s an entire industry. It’d be lazy on JC’s part not to press that point as hard as possible.
And how is it people can say, “Man, JC is an idiot and he’s a terrible interviewer, but wow was that the best interview ever?”
Dan Bolandon 22 Mar 10
Calacanis struck me as pretty condescending. I commend DHH for being a good sport—if Calacanis had told me that I have a “simple view of life” I would have been tempted to smack him.
Dave Mon 22 Mar 10
I think this crowed is a bit biased (obviously) and looking at this as a black-and-white right-or-wrong take-sides debate. Even Jason and DHH tend toward this as well, they’re both arrogant in their own ways. These are two strong guys with different approaches to getting things done and being happy.
Both models work. We all know this. We can see successful sustainable companies that have used one model or the other. We have seen failed companies that used one model or the other. Every model has different risk profiles and success rates and even definitions of “success.”
Both models can be effective, have been tested in the real world, and most people who choose one model over another do so intentionally as a rational individual and accept the risks. I don’t think we need to debate that, beat people up for their choice, or idolize others for theirs.
So if you like Jason or like DHH or like to hear conflicting views and funny/nutty/interesting spins on things, it’s a great video to watch. Not really an interview, not really a debate, more like an entertaining exchange of well-known ideas between two strong personalities. I don’t know what to call that. Fun TV, I guess.
But let’s not devolve into a stream of religious flames, let’s each pick the business model that makes us happy and get back to work.
Jeff Putzon 22 Mar 10
Both models work, but let’s be brutally fucking honest here… the Googles and Facebooks of the world are fringe cases. The valley culture of the exit event is a myth 99.9% of the time, and yet, so many are hell bent on chasing it.
I run a goofy little site called CoasterBuzz for roller coaster enthusiasts, and have for ten years. I’ve been asking users for money since 2001, when the ad market tanked the first time. It has been sustainable ever since, and while not making me rich, it has been my “unemployment check” whenever I lost my job. Who cares if I’m not trying to attack some big problem? My Internet business in Internet years might as well be a 70-year-old, and it still works.
DavidDon 22 Mar 10
Amazingly great interview/debate – good job by both!!!
Michaelon 22 Mar 10
Neither of them can stay on topic. It’s annoying. I still found the video interesting, though.
Joshua Hooveron 22 Mar 10
Aside from Jason’s overly aggressive (interrupting far too much) interviewing style, I think we’re seeing two very opinionated people with rather large egos have a discussion. That’s not a bad thing. Pretty interesting actually. But let’s not kid ourselves, neither Jason nor David are lacking opinions or ego. Both have some serious biases when it comes to their approach to building a business and both are feeling the need to defend those biases vehemently. All in all, it makes for an entertaining show.
Nick Hammondon 22 Mar 10
Great job David.
Dave Mon 22 Mar 10
The exit event is not a myth. It happens, it works. Sometimes it produces value for the buyer (Apple – PA Semi), sometimes it doesn’t (AOL – Bebo). Buyer beware.
So what’s your real point/grudge/anger? Here’s what I think is bothering you:
The mindshare and attention given to large enterprises (Google/Amazon/GE/etc) and exit-driven companies (Mint/AdMob/etc) is disproportionate to their numbers and success rates.
The mindshare and attention given to celebrities is disproportionate to the value they generate.
So what do you get from this? You get more people starting exit driven companies and thus driving down the success rate of that model. Also, you get more people moving to Hollywood to become a big celebrity and thus driving down the success rate of that model.
You get dreamers thinking they can beat the odds. A couple will make it and get all the attention, most will fail miserably and no one ever hears about it.
I guess that makes you angry/annoyed? That dreamers are being sold on low-success-rate models? That realists aren’t getting enough attention? It all works itself out, it’s just uneven distribution of attention that bothers you?
Sounds like the person who complains about celebrity mags. I guess you can be angry about it and look down on those who buy those magazines or want to be celebrities.
I, for one, am glad YouTube and Brad Pitt exist, despite all the failed attempts by other dreamers. I also don’t pick on my friend for reading TechCrunch or my aunt for buying US Weekly.
37s seems to think the uneven attention is a problem and they’re doing something. They’re publishing books/blogs about their philosophy and getting attention. Genuine guys doing what they believe and succeeding (their blog does well and I assume their book is doing well). I’m rooting for them.
Jason is contributing to this uneven distribution of attention because that’s what interests him and he’s succeeding (TWiST is doing well). Another geniune guy doing what he believes. He’s doing something crazy (Mahalo) and trying to beat the odds. I’m rooting for him too.
So my point is if you’re angry about uneven press coverage, either get over it or do something about it. But chances are you just react emotionally when it’s brought up, and you’ve already moved on. The world keeps on turning.
Benon 23 Mar 10
Jason Calacanis commits, over and over throughout this interview, various selection biases, and someone already has identified his faulty reasoning due to survivorship bias, but here’s his basic mistake:
to prove his point about some claim, call it X, he uses ONLY the “top” companies in the entire world to show that X was possible, without understanding that DHH is talking about PROBABILITY. For instance, in regards to taking VC money versus growing a small business profitably and gradually, JC uses Google and Facebook as examples without considering the uncounted hundreds of thousands of failed VC-funded companies. Did JC completely forget about the IPO craze and the dotcom boom & bust? Surely he didn’t, but he’s just so stubborn, close-minded and attached to this ideological commitments that he REFUSES to see anything BUT the monstrous success stories that show it’s “possible” to become the next Google. JC completely fails to understand what DHH is asking and arguing, namely how probable it is to actually make profits: DHH simply points out that it is far more probable to start and run a company that can GENERATE PRODUCTS by PROVIDING A PRODUCT or SERVICE users are WILLING TO PAY FOR than to try to be some ridiculously improbable success story (this is why DHH keeps using the powerball lottery analogy, which JC still does not understand).
JC basically has his head so idealistically and ideologically in the clouds that all he can dream about is the possibility of “being big”, while DHH is pointing out the REALITY and talking and thinking in terms of PROBABILITY: it’s more probable to start and grow a profitable business than try to take VC money to build some “big” company with high users, high revenue, but also such high costs that the profits are either non-existent or too small to justify the investments made in it.
JC talks passed DHH throughout the interview, without understanding anything he’s saying, and takes various opportunities to talk about himself and the two businesses he started to defend that he did what DHH and 37signals do. JC continually uses fallacious reasoning by his commitment of the selection bias by only selectively recalling and referring to SUCCESS cases: the 0.0000000000000001% of companies (e.g. Google) and VCs (Sequoia) that have been profitable, while IGNORING the massive and statistically more significant evidence AGAINST his claims.
It’s the same fallacious reasoning high school athletes use to decide that they’d rather make the attempt to “go pro” using Lebron, Michael Jordan, and Kobe Bryant as examples of highly successful sports stars, without considering the ridiculously higher number of uncounted people who failed to make it in sports even though they were skilled. It’s the same fallacious reasoning little high schoolers make to justify their attempt to become rappers, using the successes of Lil Wayne and 50 Cent as their examples and evidence.
Noah Flemingon 23 Mar 10
I loved rework. I also am a huge fan of TWIST and a big fan of Jason C.
I love this debate.
No need to hate on either guy. It’s a great debate. Jason’s got a history and has made his $$$ a different way. Doesn’t mean one is more right than the other. They both got there using different methods.
I agree with David however about banking on an exit strategy or hoping to build the next FB, YT etc. It’s like he says, winning the powerball – very rarely going to happen
It reminds me of all the new guys making some money and coming on the scene as VC’s hoping to hit the powerball and just buying very expensive lottery tickets.
Amazing debate. Thanks
Otoon 23 Mar 10
It’s interesting that Jason could not grasp the concept that David actually really likes what he does. More (or a lot) of money is not as important to him as getting paid nicely for something he LOVES to do and can do it the exact way he wants… since he’s independent and does not have investors.
Very good interview. I can’t stand this “lets make a website and sell advertising” bs anymore.
Sparagion 24 Mar 10
I love DHH’s lotter analogy.
I think there is a place for both strategies and most of it comes down to timing. 37Signals is looking real good b/c there is not as much VC money out there and they’re very profitable.
I also think using examples like Google, FB and Twitter are senseless b/c it’s like hitting the lottery. At the same time, I know people that sold companies to larger companies for lots of money. The buyer dissolved the company after 1 year b/c it did not fit in. The seller still made off like a bandit. The point is that big companies are not all that brilliant b/c of their tunnel vision. I think people like Jason realize this, but don’t want to say.
Just like Seth Godin. He wants everyone to give everything away for free and most of his money came from selling out to Yahoo, which is one of the biggest suckers out there. That’s as close to stealing as you can get, without doing it…...just an opinion.
Jonas Sekamaneon 24 Mar 10
A follow-up question for David or anyone else at 37 signals:
Was your initial goal for your Out-Teach Your Competition efforts profit? Or is profit a post-rationalization of the Out-Teach Your Competition efforts?
As I see it Out-Teach Your Competition started with the Signal vs. noise blog and stuff like that. But that wasn’t profitable from the start nor did it have the prospect of becoming profitable, did it? And therefor something else along the line must have may you say ‘hey, lets start this (non-profitable) blog, and lets out teach our competition’... but what?
How did you (then, not now) justify starting the blog, when it didn’t correlate with your goal of profit?
Benon 24 Mar 10
even Paul Graham doesn’t get it:
“But remember that ramen profitability is not the destination. A startup’s destination is to grow really big; ramen profitability is a trick for not dying en route.”
what is this RIDICULOUS fascination about “growing really big”? Did these guys (Calacanis and Graham) completely forget the whole “Too Big to Fail” debacle that we just went through in 2008-2009 with bloated financial firms, and of course the dotcom bust with bloated internet and tech firms?
DHH’s message is so simple it can be stated in one word: PROFIT. A business is sustainable and will grow and will have value if it PROFITS. end of story. there’s really NOTHING left to talk about after that, and nothing left to argue about.
Anyone else who wants to go maximize EYEBALL ACTIVITY and HOPE to get bought out “one day” are welcome to take such a gamble. Let them continue dreaming about becoming the “next Youtube” or “next facebook”. There’s really NO use talking to these fools though. Let them go about their own business and see how well they will do.
DHHon 24 Mar 10
Jonas, SvN is our main marketing arm. We don’t spend big bucks on advertising, but we spent lots of time on SvN and other out-teach avenues. It’s how we get the word out, build an audience, and ultimately a customer base.
So SvN is in my mind highly correlated with our goals and profits. If we didn’t have a voice and an audience willing to listen, we wouldn’t have the success we do.
Dan King - Viewpoint.proon 25 Mar 10
Both guys had huge success at early stages in their careers, hence the justifiably confident egos. Entertaining to hear them debate their differing opinions.
This discussion is closed.