Dallas P. asks:
Looking back on your history, what was the 1 big, risky decision that you had to make. And how did you come to the answer. (and was it the right answer?)
We take pride in not making big risky decisions. It’s not that we’re risk averse, it’s that we’re small decision friendly. We think the best way to avoid big mistakes is to make tiny decisions.
Molecules vs. Atoms
Big decisions are molecules. Each molecule is made up of multiple atoms. Each atom is a separate decision. We prefer to deal with decisions on the atomic level.
The problem with big decisions is that they’re hard to make and hard to change. And once you make one the tendency is to continue to believe you made the right decision even if you didn’t. Big decisions are full of Pride, Politics, Posturing, and Persuasion. Changing direction after making a big decision is admitting you made a big mistake. Humans don’t like admitting that—especially when jobs, careers, and mortgage payments are on the line.
Think big, decide small
Making tiny decisions doesn’t mean you can’t make big plans or think big ideas. It just means that we believe the best way to achieve those big plans/dreams/ideas is one tiny decision at a time. Tiny decisions allow for easy course correction. Changing your mind about something small is a whole lot easier than changing your mind about something big. When’s the last time you really changed your mind about a big decision? It’s rare on your own and ten times as rare in an organization when other people are involved.
You asked for one, I’ll give you two
1. The Jeff Bezos investment
We’ve always believed that outside money is plan B. We believe in bootstrapping, self-funding, and making your customers your investors. We said no to over 30 VC firms since we first launched Basecamp in Feb 2004. But then we got a call from Jeff Bezos’ people letting us know Jeff liked what we were up to and was interested in investing in 37signals.
We had tremendous respect for Jeff. We loved Amazon, we loved what we’d read about him, we asked people we know who knew him and they loved him too. So we said, sure, let’s see where this goes.
After a couple of trip to Seattle we decided to work out a deal. This was a big (expensive) decision. Time, lawyers, selling a piece of the company—these were huge decisions for us. We’d always done things our way and answered to no one but ourselves and our customers. So this was big.
The decision was based on gut, primarily. We didn’t need the money for operations, but we really valued Jeff’s experience, advice, opinion, and general business sense. He built one of the world’s best retailing operations in a few short years. From an idea, from scratch. He’d been through that we were going through. We wanted a guy like that in our corner. We thought that was valuable so we took a chance on it. As with any tough negotiation there were times when both sides were on the verge of backing out, but everyone persevered for the better.
So far so great. We’re happy with the deal, happy with Jeff’s involvement, and happy with Jeff’s team. Good people, good support, good ideas, and pretty hands off. It feels like an idea situation for both sides.
2. Highrise restart
About half-way through the initial development of Highrise we took a look at the product and didn’t like it. We’d gone to far without Getting Real. We weren’t using it while we were building it, we were “complexifying” simple things, we were saying “wouldn’t it be cool if…” too often.
When we finally got honest about it we didn’t like it. Instead of trying to convince ourselves that we could salvage it, we decided to scrap it and start over. That was a big decision and it was most certainly the right one. The product we would have built would have sucked. The product we did build was great.
The Highrise experience reiterated the advantages of tiny decisions. We let a bunch of tiny unmade decisions snowball into one big critical decision. And then we put off the big decision so long that we’d finished half the product before we got up the stones to say “No, this sucks, we have to stop.” We definitely wasted a lot of time and chipped away a fair bit of morale.
But in the end it was the right decision. We started over, got real with our work, and produced something we’re very proud of.
Thanks for the questions!
So far we’ve received about 75 questions since posting the Ask 37signals announcement. We’ve earmarked a handful of especially good ones to answer so far. We’d love to answer yours. Please send it along to svn [at] 37signals dot com and use the subject “Ask 37signals”. Thanks again!