Even if you don't read the article, you should read this story[0] that it links to. Which explains the mindset behind the decision. It's only like 200 words.
I like the story but there's a glaring omission. Financial security. All you have to do to make the story fall apart is introduce a serious illness or handicap in his wife or kids.
but if you spend time in the village you build up a support network and its that support network that helps each other out in times of need.
Sure if all the fish die they're still screwed but you can always find a reason to scare yourself into thinking you'll encounter the uncommon.
I have sympathy for this point of view, but unfortunately the most recent exposure I have to it is a local government deciding not to require Mennonite contractors to carry insurance, even though their competitors must. Apparently it's against their religion to imagine that the Lord would hurt a Mennonite on a jobsite badly enough that the community "support network" couldn't heal him themselves. I feel sorry for the poor bastard who won't get physical therapy and will be stuck in bed for the rest of his life. Maybe the support network could afford the therapy, but he won't get it anyway, because Mennonite elders DGAF. I hope he'll be able to sue the cheap-ass property owner who bribed the city council to pass this stupid exception in the first place.
If you take the anecdote to be for an individual (or just a few), yes.
Now take it to the economy.
Economy != business or individuals. If an individual "saves" it means they forgo consumption, so that resources can go elsewhere. When the economy "saves" (and let's assume we are talking about all of earth) it means - what? The same economic activity but fewer people buy something? Doesn't quite work. We could leave resources like oil in the ground to "save".
On the scale of the economy, there is no "saving" for retirees, not unless you are looking for other nations to fill the gap (but let's look at the whole earth so that won't work unless you find aliens). The currently working population has to produce everything needed for the currently living population. How would "saving" look like, I ask again? They produce much more and put it into giant warehouses to be used 30 years later?
That anecdote for the economy could mean that you stop trying to sell people stuff they don't need (more insurance, more cars, more... stuff). you can still invest into R&D, and more relaxed and less stressed people will be much more productive in this field than stressed ones.
Looking at studies of worker satisfaction and - a bit more unscientifically but still enlightening for its popularity (this and similar ones) - Dilbert cartoons, and also reddit or HN anecdotes and what I see for myself, a sizable amount of the workforce thinks their work contribution is rather meaningless. Still, we are forced to keep going. There is no option to stop and think "hey, my job is actually pretty useless". If you act on such a thought you will be severely punished by society. Anyone who claims that "the market" takes care of all those inefficiencies... well, okay then.
I think it is based on Böll's "Anekdote zur Senkung der Arbeitsmoral" [1] - not only a great short story, but a great title as well ("Anecdote concerning the Lowering of Productivity" - but also "[An] anecdote [meant to] lower productivity").
They do things that I've always felt are right but could not well argue. They are the opposite of most companies in so many ways, especially big corporations.
If you haven't read their books, you might tell me, just work at a start-up. But you really have to go through Getting Real to see how much they differ from everyone else, even your typical start-up. The chapter about doing less than your competition is particularly devastating, different than even most start-ups.
Why join? Start your own, run it like you want it to be run, and not only will you have the reward of working at a healthy place, you'll also have the reward of enabling dozens of employees to live fulfilling lives.
I like to think that Jason Fried/DHH went to the bother of writing all these books and blog posts because they legitimately want to see more businesses run like theirs in the world.
Because, to be perfectly honest, most of us don't want to start our own companies. I know for me, personally, that there's a whole lot of extra stuff that comes with running a company, stuff that I have absolutely zero interest in doing, that I would be required to do if I wanted my company to succeed. Second, I also don't really have any good ideas for what the company would do.
Surely if you had a good idea for a company, the currently zero interest stuff would suddenly become a bit more interesting. Then it would seem that this is more about the lack of any good ideas than the actual starting of a company.
If I have a good idea, it will be for a technical solution to someone's problem. I'll get excited about building that solution...but running the company and all the crap that it involves sounds like hell to me. A necessary evil. The "zero interest stuff" suddenly turns into the "deeply dreaded stuff".
Life will always involve doing shit that you don't want to do.
As an employee for a larger company, if your manager tells you to do crap you don't want to do, well you generally have two choices: do it, or quit.
If you're running your own thing, you suddenly have a few more choices: you can reassess whether that thing needs to be done in the first place. You can suck it up and do it yourself, but perhaps you're a little more motivated than if it were your boss at $megacorp telling you to do it because you directly understand why it needs to be done. You could also delegate it to one of your employees, or to a contractor. Etc.
I've been in the industry for about 10 years - at tiny startups, growing startups, mid sized agencies, large companies - and I'm realizing more and more that the odds of running your own thing seem more favorable than the odds of finding the perfect team with a delightful manager where you will only ever work on the things you want to work on, in the environment you want (maybe you want every other wednesday off to hang out with your kid. maybe you don't want meetings after lunch because that's when you're the most productive. etc.)
Of course, that equation is different for everyone - depending on your priorities and interests, you might be better off just working for $megacorp, taking the good with the bad.
But I find it a little mind blowing that my comment is so controversial (currently at -1, with only dismissive replies) on a board dedicated to entrepreneurship.
I will also add (and I'm not saying anything new here, just parroting what 'patio11 and others have said over and over over the years) that most programmers are better equipped than they think they are when it comes to generating meaningful value that can be turned into, at the very least, a living where they get to call the shots.
You were downvoted because, quite frankly, your post, and this response, quite frankly, came off with the attitude of "If you don't start your own company, you're an idiot." That, combined with the kneejerk response of "start your own company!" combined with the fact that many of us just plain don't want to do that; we don't want the assload of hours and commitment it comes with that we'd rather spend with our families generally means that such suggestions do not contribute to the discussion.
Not to mention, this is "Hacker News", not "Entrepreneur News". While there is a good deal of overlap, most of the content here is technology related, not business related. I don't see many articles being posted here on how to choose a health plan for your company, for instance.
I reread my posts carefully after reading this reply, and have a hard time seeing what part(s) of my posts convey "If you don't start your own company, you're an idiot". If you could quote said parts, that'd be helpful.
"That, combined with the kneejerk response of "start your own company!" combined with the fact that many of us just plain don't want to do that; we don't want the assload of hours and commitment it comes with that we'd rather spend with our families generally means that such suggestions do not contribute to the discussion."
Again, not sure what makes it a "knee jerk response"; pointers would be appreciated. As far as the "assload of hours", "never seeing your family", etc... this is exactly what Jason Fried and DHH are writing about. These are _not_ requirements to running a sustainable business. If you read Fried and DHH's writings and find yourself nodding in agreement at every word, I guess there are 2 takeaways one could get from it: the obvious "I really should work at Basecamp!", and the perhaps a bit less obvious "whoa, you can run a sustainable business without killing yourself, and those 2 guys are documenting their process - I could do the same!". I think the latter is not to be overlooked.
If you feel strongly that starting a company isn't for you, nothing wrong with that. But harshly attacking HN posters who merely suggest that this could be a worthy option just defies common sense and civil discourse.
When someone says, "Man, that place is great; I wish I could work there," and you respond with, and I quote from your original post, "Start your own, run it like you want it to be run," that is a kneejerk response.
And you weren't "harshly attacked." You were called out for putting too much into the cult of the startup. And yes, at the beginning, you do have to put in those hours. Ask the people who started Basecamp; in the beginning they did put in those hours. Once those hours were no longer necessary, then they eased back.
Per the parable, there is a altered version in which the business man, sensing the fisher man is not open to ventures, strikes up a similar conversation with another fisherman who does agrees to expand fishing to better provide for his family and community.
As a result the original fisherman finds his fish stocks are sapped by the growing fisher man's venture, and, unable to afford a boat to go into deeper water, finds himself bankrupt and working for the businessman who would have been his partner.
The issue with that version is it ignores that you aren't just sitting on your hands but rather ensuring that your customers stay your customers. But it does beg the question - Are you growing to a better future or just improving the same day over and over?
It sort of seems to me that the story continues to have a clear villain, the business man, and a clear victim, the other fisherman who will spend 20 years scaling before he gets back to the life he wanted—and so the right plan is for the original fisherman to treat the businessman and his American ideas as a threat to the community.
Tell the other fishermen that if they go along with the businessman's plan to destroy the community and sell it to American interests, they'll be excommunicated from the village and their original business will be dead long before the businessman returns with lawyers. But if they change their minds, they'll be welcomed back with open arms.
Well, you can always modify it as the fisherman being unable to compete with the influx of capital to a competitor and ends up having to work for them.
That the community would be hit by a natural disaster but the prospering fisherman provides the influx of cash for emergency relief whereas doing nothing meant no means of recovery.
The story of preservation/destruction of habitat, the community improving/declining, the prospering fisherman rising but still (not) finding time to enjoy chatting with friends, and other dramatic flairs to help sell whatever flavor of capitalism you believe in.
I really like their approach but I want to comment on the Mexican Fisherman story.
Neither the fisherman nor the banker have it right. You see, the banker may be overly ambitious, but the fisherman is not taking precaution against future's uncertainty. You can be sure DHH has enough money and he doesn't need the headache of running a big business. The fisherman, on the other hand, may want to consider the day he cannot fish and not expect the seas to provide until his very last day.
The fisherman feels shame and regret for having to turn to friends and family. Especially now his community is struggling as a result of having to bail out the finance sector.
The banker is happy to be getting on with business as usual.
The fisherman gets little support from community, because they are still pissed he testified against popular community member back then. Closed small communities often work that way.
It's insane how making a profit seems to considered "uncool" in the business world. Basecamp and particularly Jason Fried's writings (I realize this is particular article is by DHH) are super inspirational. I wish that building a solid, profitable business as opposed to being so focused on growth and finding more investors was more of the norm.
Not sure which business world you're referring to. The only place where it may be uncool is in the heady realm of start up culture. Most other business only survive by being in the black.
Yeah, I'm talking about start-ups whose focus is getting and staying in the black (profits) as opposed to putting all the focus on growth and getting more and more VC. And as I mention below, I'm not ragging on the latter, just wish the former was more prevalent as that is the atmosphere I, as a developer, personally prefer.
I doubt that anyone on the business side considers it uncool to build a small but profitable company. It's definitely cooler than having a VC shove you along the path to an acquisition by BigCorp Ltd.
Engineers sometimes consider those companies uncool, but that's just because they usually can't pay market rate for the best engineers.
I just mean it seems to be the path-more-taken. I'm basing it on my limited experience and my reading about running a business (which a did a bunch of but certainly never did an in depth study). A lot of companies I look at while looking for employment either want to sell or trying to grow to a mammoth size. Don't get me wrong--there is nothing wrong with that! It's just that I personally prefer to take the paycut and work for companies whose owners are slowly building a lifestyle and tightly knit team and wish I would see more of that pop up in job listings.
Its definitely not. VC funded startups are 0.1% of the global businesses out there. For every VC company there are 100k small businesses working on being productive and profitable.
So much this (not the case with Basecamp who pay SF rates apparently), if one doesn't want to run the business side of things - propping up business, chasing up invoices, early HR etc, then such a small business will usually not be able to pay him as much as Facebook or Google...
So it's it's good enough for the founders but not good enough for other talented engineers who'd otherwise join.
...and yes, maybe saying "uncool" is a little hyperbolic... I sorta got that impression while reading about starting a business, but that was a while ago and I can't cite my sources.
shrug VCs seem to prefer 1 hypergrowth startup and 20 failures in their portfolio to 17 solid, growing, profitable startups without hypergrowth and 4 failures.
This is because the portfolio strategy (1 hypergrowth + 20 failures) is the best strategy from the VC perspective. It's nearly impossible to know which startups will succeed (high uncertainty decision making), and very difficult to know how big the successful ones could be (open ended results).
If it were simply as easy as building 17 solid startups to just 4 failures, I'm sure there would be more investment in that area. It seems much more likely to have maybe 5 solid startups (20% annual profit), 5 with possibilities (losing 20-30% per month) and 11 failures.
Entrepreneurs suffer from their biased perspective; of course my startup could be solid and profitable, because otherwise why would I continue working on it? Therefore it seems rational to assume you can identify prospectively profitable startups.
My opinion is that VC investment is a crapshoot, where nobody knows the odds of a given company. They're buying lotto tickets, and they'd rather buy $5mm tickets that have a max prize in the billions, instead of a $100k ticket that has a max prize in the millions.
To change the current system, all we need to do is come up with a guaranteed way of evaluating whether a startup will be profitable.
"If anyone could identify early-stage companies with a 75-100% chance of being profitable, wouldn't we see an investor niche that supports this?"
We can't do that for the current style of VC investing. Why would we need to do it for a more modest form?
The other bonus is that profitable startups usually need less VC money. So given the same amount of funds, VCs could spread their investments out over even more companies.
I'm a little confused, but I think you restated my point. The portfolio approach appears to be the optimal strategy in an open game like startup creation, where the upside is potentially infinite and the uncertainty is really high.
I guess I was asking if there are other explanations for why this is, or if the strategy appears to be optimal to others.
If it is the best strategy, any discussion about unicorns versus profitably invested smaller startups is moot, because it's based on the assumption that the investment class should do something that's strategically suboptimal.
>This is because the portfolio strategy (1 hypergrowth + 20 failures) is the best strategy from the VC perspective.
Duh? You say that as if it should be considered surprising. It would be surprising if it were an irrational preference, not a completely rational preference.
The real question is why the economy is geared towards such an uneven distribution of returns. I don't think it's a law of nature (e.g. economies of scale) because for pretty much all corporations there are massive diseconomies of scale that offset that. You just have to work at one of them to see how manifestly inefficient they are, and yet they still dominate and investors still exhibit an exceptionally strong preference for them.
I think may be an artefact of the American tax and legal system which allows the use of size and wealth as market leverage to an extreme degree. Investors prefer to see one big Uber/Microsoft/Google over a hundred smaller Uber/Microsoft/Googles because that one big company, can legally use its size to crush smaller, more efficient competitors and thus achieve monopoly or oligopoly power which it can safely use to wring profits out of customers without fear of being undercut.
If the legal and tax system cracked down on this phenomenon instead of covertly encouraging it (e.g. with stuff like tax holidays for Apple) I think VCs would probably adjust their preferences accordingly.
Can't it simply be explained by the mathematics of decision making under uncertainty in open and complex systems?
This is an interesting discussion; is it shapeable market forces (US tax and legal system) that creates these incentives, or is it something more inherent to trying to predict the outcome of a really complex problem?
It sounds like you believe it to be the former, whereas I believe it to be the latter.
>Can't it simply be explained by the mathematics of decision making under uncertainty in open and complex systems?
Yes, my whole point is it is an inevitable outcome of the the confluence of immutable randomness, immutable human nature and the structure of our economy.
However, that doesn't mean that it's a fait accompli - the structure of our economy is mutable via law and taxes. That tax system and laws help discourage lots of competing Ubers and encourage one big monopoly Uber. The question you have to ask is - is that really the most desirable outcome?
>whereas I believe
Belief is for gospel preachers and anarcho-libertarians. It's not rational to apply it here.
It seems they have calculated that they make so much money from having that 1 hypergrowth startup in their portfolio that it blows away a dozen total failures or even a dozen moderately successful companies.
Tricky part is that companies that have the potential for hypergrowth look awfully similar to terrible ideas that will clearly crash and burn.
How can you predict a profitable company in the first place? If you could do that then you would just have all hypergrowth companies and make even more.
Controversial opinion incoming, but I've found their writings less valuable over time and see them more as opinions with an elitist tone. This is coming from someone who owns a copy of Rework and might just go over it again for it's unique quality of life advice.
Lately I've really noticed that you don't just get advice anymore, you also get a little bit of commentary on how the rest of the tech industry is dumb or insane or both because those fools are doing it the old way and we're doing it our own progressive and enlightened way that we figured out on our own after we sat down, put on our critical thinking caps, and tried something different, and lo and behold it worked.
This latest exercise stands out as particularly offensive because there really isn't any advice or wisdom worth sharing. They're just telling us that Basecamp had the best year ever and they don't feel like improving on it so they're not hiring at the moment. Correction, it's actually a hiring freeze. Same thing, except the phrase "hiring freeze" is normally used in the context of something bad. They're going to use it in a different context to, you know, get more claps on Medium. On top of all this they felt the need to do a little compare and contrast between what they're doing vs what the rest of those unenlightened fools in the tech industry are doing, i.e. reinvest profits into new ways to grow.
Whatever. There are plenty of businesses that are happy with where they're at and settle-in, Basecamp is different because they're a tech company and they feel the need to blog about it. As for those companies that are growing, well, I think it's perfectly fine to keep growing, just don't turn your company into the equivalent of foie gras.
It's just disappointing. I looked up to them, still kinda do, but this is just marketing spin designed to make something boring and innocuous look radical.
If this were a Medium post, I'd give you lots of claps.
And I'd highlight this...
> They're just telling us that Basecamp had the best year ever and they don't feel like improving on it so they're not hiring at the moment.
And...
> There are plenty of businesses that are happy with where they're at and settle-in, Basecamp is different because they're a tech company and they feel the need to blog about it.
I do enjoy their approach, quite a lot actually. But I'd enjoy it more if they spent more time sharing real experience and learnings (and failures), and less time projecting often absurd things on mainstream "entrepreneurial culture" while telling me how they're so much better.
Congratulations. You've figured out how to make me want to apply to your company! In the same way that I will never stop wanting to move to Norway, since they don't want me, I will now forever desire to work for Basecamp... I am so easily manipulated.
Getting into Norway doesn't seem too hard - but I'm open to be told why I'm wrong.
Here is what I found:
"Broadly speaking, the award of a residence permit depends on two things: your country of citizenship and your ability to financially sustain yourself and any dependents. This generally means you need a job offer, or you must prove financial sustainability if you are coming to Norway to study or for some other reason.
It is possible for some people to move to Norway as a job seeker, but this is only allowed for a relatively short period of time. If you don’t manage to find employment during that time, you will have to leave the country, and there is a waiting period before you will be able to return." - https://www.lifeinnorway.net/norway-immigration-guide/
Interesting. I just recall reading an article that went on about how your best chance of getting in is to marry in, which is unlikely for myself as I'm happily married already!
There was never anything specific about Norway (as compared to the other Scandinavian countries that generally top happiness indexes and such) just that the article said that I _couldn't_ live there.
>your country of citizenship and your ability to financially sustain yourself and any dependents. This generally means you need a job offer, or you must prove financial sustainability if you are coming to Norway to study or for some other reason.
By American standards Norwegians are all racist assholes.
Because of the quote above. It's kind of tongue in cheek. That immigration policy is basically the core of the Republican immigration policy. In the US this is considered "far right wing," racist, cruel, etc. But no one applies this standard internationally, so basically no one considers Norway or any other country with a similar immigration policy to be racist.
The only thing novel here is the blogging/marketing. Lots of profitable companies don't hire when they don't need to - they don't brand it a "hiring freeze", blog about it and have strangers fawn over the concept.
True but it’s a necessary counterpoint to the VC-fueled greed that you see reflected in the majority of articles from tech founders. Cancerous growth is the default aspiration of young people coming into tech.
It’s notable that Amazon, despite record growth, is also in a hiring freeze for nearly the entire Retail business. Leadership is also simplifying the management chain to reduce bureaucracy.
Just a question, I don't use Basecamp or similar products-- does Basecamp have competitors who are great at product and execution and who are pouring more resources and time and focus (like, where the team doesn't split their time between their product and a major OSS project like ROR) into their offerings? Is there no such competitor that has a better product that poses a threat to Basecamp's retention of users?
Amidst the craziness that is the startup battlefield, its always a breath of fresh air to hear from the Basecamp founders. I feel more people should take this realistic approach to starting and running companies, and stop putting their life's work on 17 red.
Anything larger than ~50 people and it becomes harder to maintain the company culture. Kudos to them for recognizing that they're happy where they're at.
Who will be the first to hack into this now unhireable fortress and get a job with them? They have just made getting hired there a quest for every rails developer in the world. Changing the hiring and recruiting process, turning it on its head.
If support volume grows, there are three options: 1.) hire more staff 2.) keep staffing levels the same and force workers to take on more for the same pay or 3.) look at why support volume is growing and a) fix some avoidable reasons that require support ( small fixes in UX can go a long way ) , b) automatically solve some of the support issues ( improved documentation ), and c) have the support staff build themselves better tools so they can more efficiently handle the support volume rise.
If you are an owner, #3 will not only improve your products, but also likely to make your entire company much more valuable over time. If the staff are also owners or there is a system in place such that the staff benefits when the owners benefit, they will likely be on board for #3 as well. If #3 is not sufficient enough to provide support, then hiring should be done.
How do the employees feel about it? I’d bet a lot of money they’re in the top 5% retention among tech companies. Also they’re probably pretty happy to avoid the constant churn and failed projects of working in a company desperately chasing hypergrowth.
I imagine customers are pretty happy too knowing that they aren’t at risk of the company being flipped and the product discontinued or bloated in order to attract the next order of magnitude growth from corporate buyers who will themselves never use the product.
Your last sentence is the most laughably ironic since the entire VC game is to extract value from the energy and drive of young people with the promises of Facebook riches which will only ever materialize for a vanishingly small number of individuals, especially amongst the rank and file.
It's ironic is because Basecamp is the anti-VC tech company. They have better work-life balance, more modest ambitions, and less buzzword-worthy tech than the prototypical SV company. Assuming this is about hoodwinking some of the best-treated employees in tech shows goes against everything they've been preaching for the last 15 years.
[0]: http://renewablewealth.com/the-parable-of-the-mexican-fisher...