We’re on a simplification kick at 37signals. As we grow, we’re trying to simplify our business even more. Growth generally brings complexity, but we want to see if we can go in the other direction.

Questioning assumptions

Simplification usually starts with questioning assumptions. Why do we do this? Why do we need this? Is this really necessary? Is it just inertia? Are we doing it because that’s how we’ve always done it or are we doing it because it’s better? Are we just following conventional wisdom or is there newer wisdom we should be considering?

Why do we need employment contracts?

One of the things we’re beginning to question are employment contracts. When a new employee starts at 37signals we make them sign an employment contract. The contract was drawn up by our lawyers a few years back, so there are no incremental costs each time we bring on a new employee, but is that good enough reason to keep this inertia going?

The contract is about five pages. It outlines some basic responsibilities we have to the employee and the employee has to the company. Starting salary, an overview of benefits, vacation time, confidentiality, and general expectations on both sides. But that’s really only a paragraph or two. Everything else is legal-cover-your-ass-speak. Like most contracts, it’s basically a big “I don’t trust you and you don’t trust me” document. What a terrible way to welcome someone to the team.

How often are these things actually enforced in a business like ours? And if people aren’t really enforcing them, why are we writing/signing them? “Just in case” feels like a pretty weak argument to go through all the cost, trouble, and rigamarole. Is “Imagine if someone…” enough reason to have the first step we take with a new team member covered in legal mud?

What if we became a handshake company?

So we’ve been thinking… What if we did away with these employment contracts entirely? What if we became a handshake company? Plenty of small companies work this way, why can’t we? Aside from each person’s salary, we could post all our responsibilities and their responsibilities on the web.

We could make a ”/workinghere” page at 37signals.com that clearly lays out what employees can expect from the company and what the company expects from the employees. It could be a living document too. Things change, benefits change, rules change. That’s just how it goes. You read it, we shake hands, and we start working together. In the event that it doesn’t work out, we ask you to leave or you quit. That’s how it is anyway – employment in the United States is at-will. Every employment contract I’ve seen includes a line about at-will employment. So what are the dozens of other paragraphs really for?

In this day and age it seems crazy to even consider ditching employment contracts, but why? Why have we become so dependent on lawyers to control every relationship inside our companies? Why is “just in case” the default answer when asking questions about contracts? It sounds more like insurance than legal counsel. And the premiums are sky high.

What’s your experience?

What are your experiences with employment contracts? If you own a business, do you require employment contracts? If you are an employee somewhere, have you signed a contract? Has anyone here ever had to actually sue or litigate an issue specifically related to an employment contract? If you’re an employee, do you feel more or less comfortable joining a company that makes you sign a legal contract? Does anyone feel good about signing these things?

Would love to hear everyone’s thoughts.

Shoe designs have been straying away from simple for quite a while now, so I was pleasantly surprised when I found the Nike Free 5.0 V4 on Zappos. Ignore the name of the shoe for a moment (5.0 V4 ??).

Here’s the outside profile shot:

Not much fuss, nice and straightforward. I had a Nike Free shoe before and I really liked it. Ready to buy. Then I switch to the inside profile shot:

Dammit. Same colors and materials, but the design language feels different. 25 dot cutouts, saddle-shoe like styling, capped toe, wedged-in Nike logo. I recognize some of this design is functional, but it still hit me as a two-face shoe design. One side’s great, the other not so much.

Thought I had one.

We’re working on some new stuff which involves designing a screen for managing users. It’s a bit of an R&D project at this point, but it’s not that far away from being real.

We designed the UI and we liked the way it looked and worked, but then we started asking some questions. Why is this there? Why does that work the way it works? Why would someone want or need to do that?

When we questioned one specific UI element (which dominated the design), we found ourselves defending it with an “Imagine if someone wanted to…” That’s when the red flag went up.

“Imagine if…” is always a red flag. It doesn’t mean the imagination won’t prove to be right, it just means slow down, step back, and get back to what’s real for a moment.

Any scenario can be imagined. Any use case can be dreamed up. But is this something a majority of the people will really need? Is there solid ground beneath this feature or is it floating in fantasy land?

When we hit these bumps we almost always end up with the same decision: Kill it. We can add it back later if it’s a real problem. Until then, we’re just playing with our imagination. We’re better off with less to start. More can come later if it’s really necessary.

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.

REWORK, our new book on starting, building, and growing — or not growing — a business was released one week ago today. The book is selling out around the country and rocketed to #3 on Amazon.com’s bestseller list. Thanks to everyone who picked up a copy and spread the word.

But there’s this book right ahead of it by this guy named Karl Rove. Heard of him? Turns out his book just came out too. And he’s all over the press (well, part of it) pitching, pitching, and pitching.

We wondered how we could compete with Rove on the bestseller list. We don’t have the luxury of friends in high places. We don’t have national TV exposure. So how could we be Rovian and beat him at his own game? One thing immediately came to mind: An attack ad.

With a wink and a grin, we present the truth about Karl Rove’s “Courage and Consequence: My Life as a Conservative in the Fight” and 37signals’ REWORK:

Spread the word. Find out more about REWORK.

Please direct all press/media inquires to Jason Fried at [email protected].

(Special thanks to Steve Delahoyde from Coudal for putting this together so quickly. We presented the idea in rough form late Thursday afternoon, and by Saturday morning we had the finished product uploaded to the Basecamp project. We owe you Steve.)

There are two kinds of companies I really like. One that ignores the competition entirely. And one that picks a fight. Method, and their new laundry detergent line, is a great example of the latter.

The new Method laundry product eschews the standard awkward, heavy, messy jug for a svelte, light, one-handed, easily stored, pump-powered dispenser bottle. It’s so much better.

They claim it works better too, but I’m not concerned about that for this post. Even if it works just the same, the form factor is a huge win.

I’ve run out of laundry detergent so many times because I haven’t felt like lugging home one of those big jugs when I was at the store (I often walk home and one of these jugs weighs nearly as much as everything else I’m buying). I’m always like “I’ll get it another time” and then it’s too late. But the new Method bottle is just like a bottle of water. There’s no barrier to carry.

The pump dispenser is perfect fit for laundry detergent. My pour spout detergent bottles almost always leak, drip, or get dirty from dust and grime that is attracted to the gooey viscous liquid. The pump ends all that. Four pumps for a normal load and you’re good to go.

Yes, there are more important problems in the world than laundry detergent, but I’m still glad Method picked a fight and kicked ass. This is a wonderfully designed product with a form factor has been taken for granted for too long. Good for them.