The Philosophy of Making Products for Yourself

The Customer is You

The best way to make a product is to be the actual customer. This approach involves making the specific products that you want to use yourself. This has been a consistent method since the age of 15 or 16. At that time, software creation started with a tool called FileMaker Pro, which allowed individuals to build their own databases.

The first product was a database designed to keep track of a personal music collection. Because tapes and CDs were frequently loaned to friends and never returned, there was a personal need for a system to prevent losing items. This product, eventually called audio file, was created purely for personal use. It featured a nice interface because of an interest in art and the process of making things.

From Personal Tool to Global Sale

A small text file was included in the software archive stating that if someone liked the product, they should send 20 dollars. This was uploaded to AOL during the pre-internet era. Eventually, an airmail envelope arrived from Germany, identifiable by its traditional red and blue check marks. Inside was a printout of the text file and a crisp $20 US bill. [0:01:16]

This moment clarified the core concept: make things for yourself because there are likely other people who want the same things. You are the customer and the audience. While everyone is individual, people are not entirely unique; there are plenty of people who will like what you like, just as there are plenty who won't. You only need to find enough people who share your preferences to justify the effort.

The Strategy of Small Scale

This philosophy is closely tied to keeping costs low. If a business has high costs or a large staff, it must find a vast number of people who like the product. By keeping a company small and costs low, the pressure to find a massive audience disappears.

As a solo creator at age 16 or 17, the speaker was making approximately $20,000 a year selling software while starting college. This was a significant side business because there were no expenses. It only required finding a few thousand people willing to pay $20. [0:02:14] If the business had been larger with more overhead, it would have been much harder to find the necessary volume of customers.

The objective is to make things as simple and easy as possible for the creator. By keeping the company as small as possible and producing great work, you only need to find a small "world" of people who truly love what you do. You do not need the whole world to like your product to be successful.

Costs as the Only Competition

A business is fundamentally a simple entity: you must make more than you spend. While you can borrow money for a time, eventually the income must exceed the expenses. In this framework, your real and only competition is your costs. [0:03:08]

You are in business against the cost of staying in business. While market alternatives and competitors exist, you cannot control what they do, how they price their products, or what they release. You can only control your own costs and your own actions.

[0:03:49] They are going to do what they are going to do. What I can control is how much it costs me to run my business and how much I sell my product for. As long as I make more than I spend, I get to stay in business. That is what it is all about: staying in business. I want to keep doing this because I like it, but I cannot continue if I make less than it costs me to make the things I make.

The Only Real Competition

[0:04:13] I am always thinking about how the only competition I really have on an annual basis is ensuring we make more as a company than it costs us to run the company. This is a theme I discuss frequently on my other podcast, Founders. It is fascinating how history’s greatest entrepreneurs were obsessed with watching their costs, from Sam Walton and Steve Jobs in the early days of Apple to Andrew Carnegie and Rockefeller. This theme reappears over and over again. It is one reason why my main partners are Ramp, because they want to help companies control their costs. It was a perfect alignment for the audience and what these historical entrepreneurs have said.

Learning from Early Microsoft

[0:04:52] It is fascinating how a software company can have insane margins and still lose money. I often tell young founders to study the early days of Microsoft. It is arguably the most successful software company of all time and was the first to reach $1 billion in pure software sales in a single year. One of the most interesting stories is that the first 30 employees of Microsoft were Bill Gates, his secretary, and 28 programmers. There was absolutely no fat at all.

The Importance of Keeping Teams Small

[0:05:26] Keeping costs low and teams small is essential. We have 62 people at 37 Signals right now, which feels very good. We have been as high as 80 at one point, but we also built a lot of things when we were much smaller, with 12 people or even just 4 people way back when we started. I have always been comfortable with small teams because they work better.

[0:05:57] Small teams reduce the room for miscommunication. I do not think companies really have communication problems; they have miscommunication problems. When you have too many people and too many layers, someone misses something or someone has to repeat what already happened. I want to avoid all of that and get rid of anything that gets in the way of making good stuff. Often, too many people actually lead to making worse products.

The Two-Person Team Model

[0:06:22] We try to keep our teams small. Any team making something is usually just two people: one programmer and one designer. Sometimes someone else will come in occasionally, but for the most part, it is just two. This keeps us honest by preventing us from making things we cannot build with only two people. It keeps everything tight, simple, and clear.

[0:06:42] When you keep parlaying that approach, you end up with a very tight product with a small surface area that you can see and hold in its entirety. You know how the whole thing works, and your customers can also see and understand the entire product. That is what people want. They do not want complicated software full of things they do not use.

[0:07:01] People might buy complicated software because they are sold on it, but it is not what they actually want. Many enterprise companies sell software to a buyer who then forces other people to use it, and everyone hates those products. However, the people who use our products are the same people who buy them. They are looking for stuff that just works really well. There is no better way to achieve that than to keep the company small and tight, which is why we do not have any middle management.

The Failure of Middle Management

[0:07:31] The company has experimented with adding layers in the past. At one point, 37signals grew to 83 people because a few more were hired specifically to build out teams. However, the leadership eventually pulled back from that expansion, realizing it wasn't helpful. Currently, the executive team consists of only two people: Jason Fried and his business partner, David Heinemeier Hansson.

[0:07:44] While the company employed a COO for a while, and they were good people, there simply wasn't enough work for the role. This led to them performing tasks that weren't strictly necessary. There is a professional cost to this; it doesn't feel good to have someone wasting their career on work that doesn't need to be done. Similarly, the company tried having engineering managers, but discovered it created too many levels between David, the CTO, and the people actually doing the work. This structure turned communication into a game of telephone where information was lost in translation.

The One-Year Rehire Test

[0:08:26] It typically takes about a year to realize these structural additions aren't working. While the COO roles were tested for longer—about three years across two attempts—most new employees are given one year to prove themselves. Fried views the start of the second year not as a standard performance review based on numbers, but as a rehire.

[0:08:53] The evaluation is boiled down to one simple question: Knowing what I know now, would I hire them again? This single inquiry effectively answers questions regarding performance, attitude, and culture fit. This logic also applies to the positions themselves. When evaluating the management layers, the question became: Now that we know what we know now, would we create this position again? When the answer was no, those positions were eliminated and never rehired, allowing the company to return to a smaller, tighter size.

Rethinking Product Evolution

[0:09:33] This philosophy of reduction can also apply to products and features, though rolling back features is more difficult than rolling back roles. Every five to six years, the team tends to reinvent Basecamp, their primary product. [0:09:50] The transition from Basecamp 1 to Basecamp 2 was a total rewrite, as was the move from Basecamp 2 to Basecamp 3. While the shifts from version 3 to 4, and the current work on 4 to 5, are not total rewrites, they provide a chance to revisit fundamental assumptions about how the product works.

The Physics of Design vs. Software

[0:10:05] Fried aims to buck the typical human tendency toward expansion. In the physical world, physics provides immediate feedback on bad design. If a mug were burning hot to the touch, lacked a handle, or was made of a material that melted when wet, the physical limits would signal that the design is flawed.

[0:10:41] Software lacks these natural constraints. Because it is infinitely malleable and there is nothing pushing back against its growth, it tends to expand forever and eventually get worse. Software often follows a trajectory where it improves for a period and then slides downhill into over-complexity.

[0:10:57] To combat this, the goal for every new version of a product is to make it simpler in fundamental ways than its predecessor. While a new version might have more features, the experience itself should ideally be simpler. Navigating this challenge—pushing back against the "downhill slide" to maintain and improve quality over the long term—is considered the most difficult and rewarding part of building products. It is treated as a complex puzzle that requires constant resistance against the natural urge to expand.

The Creative Pressure of Simplicity

Pushing back against the natural forces that demand expansion requires the development of clever and creative solutions. It forces a deep understanding of what a product really is at its core, rather than focusing on what it could be or what others perceive it to be.

The Joy of Insight

The most rewarding part of this process is having an insight. These moments of clarity are unpredictable; they might occur in the shower or during the act of writing software. For some, software development triggers these insights more frequently than almost any other activity, providing constant opportunities to find ways to make a product simpler and better. [0:12:24]

Craft and Technical Excellence

This focus on craft and putting soul into a product is shared by leaders like Kareem, the co-founder and CTO of Ramp. In the financial sector, maintaining a high-quality product requires relentless iteration and the adoption of the latest technology to create better customer experiences. Over the last year, Ramp has shipped more than 300 new features. [0:13:03]

The commitment to using AI is central to this evolution, aiming to automate as much of a business's finances as possible. As Kareem suggests, it is a duty for technical teams to be first movers and push limits to create the greatest possible product experience. By visiting ramp.com, businesses can let AI handle tasks like chasing receipts and closing books, freeing up energy to build for their own customers. [0:13:39]

Context Over Consistency

Similar traits of unpredictable thinking are found in leaders like Tobi Lütke. This unpredictability often comes from holding views that are not strictly correlated with one another. A similar philosophy applies to running a long-term business. Having started a company at age 25 and running it for 27 years, the speaker has maintained profitability every single year, serving millions of customers and generating hundreds of millions of dollars in revenue. [0:14:21]

Despite this success, there is a clear boundary: if the company were ever sold, the speaker has no desire to return to a computer. This perspective is rooted in a preference for context over consistency. Consistency for its own sake is not considered interesting. Instead, decisions are made based on the current context, which precludes long-term planning in favor of making things up as they go. [0:14:47]

The Uniqueness of a Business

While there is a passion for running this specific business, there is no general interest in "business" as a concept. The idea of running another business or starting over is unappealing. The current success is viewed as a unique result of timing, the right team, and the right ideas aligning at the right moment. There is no desire to trade this specific venture for anyone else's business. [0:15:31]

[0:15:33] I don't want to put myself in someone else's shoes. I know how to do my thing, and that is enough for me. I don't have a need to stroke my ego by proving I could do this again somewhere else or turn another project into a success. I actually don't think I could ever do this again, but I don't need to, and that's okay. [0:15:46] Having this sense of being comfortable with what you have built—and knowing that what you are working on now is enough—is a very peaceful place to be.

The Growth Obsession in Tech

[0:15:58] Unfortunately, this perspective isn't discussed enough in the tech industry. The prevailing narrative is always about growing as big as possible, chasing valuations, selling, and doing it all over again. This concept of serial entrepreneurship is quite boring to me. [0:16:19] This reminds me of a conversation I had with John Mackey, where he mentioned how some of his friends just love the process of starting things. In contrast, I have a specific metaphor for this: envelopes and letters.

Zero Envy and the Perfect Fit

[0:16:35] It is important to note that I don't really like "business" as a general concept; I only like running my business. Beyond that, I have no sense of envy. [0:16:45] I don't look at other people's companies and wish they were mine. In fact, trading my business for anyone else's would feel like a downgrade. It doesn't matter who you pick; if you asked me if I would trade, the answer is no. [0:17:02] I would take mine over anyone else's every single time.

[0:17:08] The underlying thought is simple: I built the company I want to work at. I built the business I want to be in. No one else has that because it was made specifically for me. [0:17:18] I love what I have built, and it is a perfect fit. I don't want to wear someone else's clothes, do someone else's tasks, or live up to someone else's expectations. We have our own way of doing things, and that is it. [0:17:34] If I had to do my work someone else's way, it would just be a game of charades. I think there are a lot of people out there playing entrepreneur, and I have no interest in playing that game.

Envelopes versus Letters

[0:17:44] When I talk about playing entrepreneur, it involves several things, but it ties back into the envelope metaphor. [0:17:51] Early in my career, I remember being an envelope guy, but I realized there are two sides to a business: the envelope and the letter. [0:17:56] The envelope is the outside shell; it is the business vehicle and the brand that holds the contents. The letter is the product or products inside.

[0:18:07] I am a product guy. I love the product, and that is really all I care about. The business side only exists because it has to hold the product; it is just the vehicle the product travels in. [0:18:20] Early on, I spent time thinking about the brand, how big the business could be, and how to describe it. That is all envelope work. [0:18:33] While that is fine, you have to know who you are and what you want. You might be an envelope person or a letter person.

[0:18:46] I know I am not an envelope person. I don't want to build shells just to fill them, sell them, and start over. I want to work on the letter itself. To me, the envelope should be the thinnest possible thing required to hold the letter. [0:19:03] Playing entrepreneur often means spinning up businesses constantly, giving them names and logos, trying to raise money, and obsessing over valuations when there is no substance inside yet. [0:19:16] In many cases, there is nothing there but losses, followed by a mad rush to exit at a specific valuation for the benefit of the people who put money in.

The Rejection of Business as a Financial Instrument

Treating a business strictly as an asset or a financial instrument is uninteresting to me [0:19:28]. When a company exists primarily to be flipped at a certain valuation for investors who put money in, it becomes something other than a creative endeavor. I want to make things and build products; that is what we do at 37signals. The idea of a business being nothing more than a financial tool is anathema to me; it is actually repellent [0:19:45].

The Physics of Business: Thin Shells and Thick Products

I use the term thin shell to describe the ideal envelope for a business [0:19:50]. This concept is rooted in basic physics: the more mass an object has, the more energy it takes to change its direction. A thick business is heavy, massive, and hard to change. In such a company, there is too much distance and space between the organization and the customers, or between the organization and the product. You have to compress through all that mass just to get to the thing that actually matters [0:20:25].

My vision is that the thing that matters—the product—should be big, while the rest of the business should be as thin as possible [0:20:33]. At 37signals, we have tried to build a very thin business wrapped around a thick set of products that are good, solid, real, and generate real profits. The business structure itself is just enough to hold everything together. This isn't the only way to see things, and many people more successful than me disagree, but my goal is to show that you do not have to go big. You can remain thin, focus on the product, find people like you, and reach a place where enough is enough [0:21:19].

The Rocket into Orbit Metaphor

I find the traditional hockey stick growth chart unappealing [0:21:26]. I prefer the metaphor of a rocket into orbit. You must get off the ground and break free of gravity, which requires significant force, but there is a point where you simply want to sit in orbit and maintain your position. In orbit, you fluctuate slightly within a comfortable range, but you are no longer pushing super hard or breaking a force.

Maintaining a level of quality and enjoyment while orbiting is a wonderful place for a business to be [0:22:01]. I wouldn't encourage someone to try to reach orbit in their second year—you need that initial ride up to break free of the forces holding you back—but you should eventually find a place to settle in. Many people are constantly busy trying to grow as large as they possibly can, but I always ask: "Why?" [0:22:21]. If you are already massive and you become twice as massive, so what? Unless someone is growing just for growth's sake, I am a big fan of getting somewhere and then holding that position [0:22:38].

The "So What?" Philosophy and Contentment

One of the maxims I repeat most often is "So what?" [0:22:44]. For example, I am certain that we are leaving money on the table at 37signals. We do not constantly optimize our pricing, and we are not performing AB testing at every moment. There is surely some formula we are not following that could lead to more growth or more revenue.

When faced with those missed opportunities, my answer is simply: "So what?" [0:23:19]. I am very comfortable with where we are. We have a great business with high margins and very predictable results. We make new things all the time and we enjoy ourselves. I don't want to mess that up. I think people ruin their businesses all the time because they reach the right size but cannot be content there. They push a little too much and too hard, and they end up losing what they had [0:23:43].

was great about what you were doing. [0:23:45] There is a persistent idea that there is money being left on the table or that there is always a way to optimize, but this often lacks interest. Even if a specific formula could lead to more growth or revenue, the response is simply so what? If a business is already successful and predictable, there is a serious risk that pushing too hard will destroy the very things that make it great.

Distinguishing Financial and Product Optimization

[0:24:00] There is a natural revulsion toward optimization when it is applied strictly to numbers. [0:24:11] Context matters significantly in this regard. Optimization for the sake of increasing a figure from 5 million to 5.1 million through various tweaks is uninteresting and feels like a chore.

[0:24:25] In contrast, optimizing a product to make it better for the creator and the customers is a worthwhile and enjoyable task. Squeezing an extra hundred thousand dollars or even a million dollars out of an existing success is described as boring rather than fun. [0:24:51] The goal is to spend resources making the product better, which is the primary reason for being in business. Once a company is doing well enough, marginal financial gains should no longer be the priority.

Rejecting the Traditional CEO Identity

[0:25:07] While an outside observer might argue that a different leader could double the business overnight, that possibility does not change the current approach. [0:25:17] There is a general dislike for the term CEO or Chief Executive Officer, as the title feels disconnected from the actual work. [0:25:34] The reality of the job involves making products and running the company alongside David.

[0:25:47] The core of the business is making decisions, creating products, and hiring great people who bring zero drama to the team. The focus is on taking care of employees and customers while striving to make products that are good, with the humility to recognize they can always be better. [0:26:20] Yesterday involved answering 200 emails from customers, which some might consider an irresponsible use of an executive's time, but is actually seen as a vital activity.

Designing a Life and Business

[0:26:35] Many successful entrepreneurs and founders bond over this singular focus on products rather than corporate mechanics. [0:26:51] This perspective is rooted in identifying primarily as a designer. This identity involves a high level of thoughtfulness regarding the design of everything in life, including how the products and the business itself fit an individual's personality.

[0:27:20] Although factors like family and children mean one cannot always control every outcome, the objective is to live within a system that produces pride and happiness. [0:27:32] A critical part of this philosophy involves considering the thickness of the envelope, which represents the distance or barriers between the person running the company and the actual customer.

Direct Connection and the UPS Model

Reducing the gap between the person running the company and the customer is essential [0:27:43]. A classic example from over 100 years ago is Jim Casey, the founder of UPS. He realized that his executives, influenced by incentives, would often tell him only what he wanted to hear. To avoid this and get useful information instead of constant praise, he would have a driver take him through the streets. Every time they saw a brown UPS truck, he would pull over to talk directly to the person actually doing the work for the customer [0:28:18].

Immersion in Customer Support

Jeff Bezos has also railed about this issue for a long time. He famously required every executive to spend time—whether a day, a week, or a month—working on customer support [0:28:34]. We practiced a similar initiative called everyone on support, where team members rotated through for a day. While we haven't done that specific rotation for a bit, it is something we should start again. Both David and I still handle support personally today [0:28:48].

The Challenge of Scale and Personal Touch

When I lived in Chicago, there was a grocery store down the street called Olivia’s. The owner knew his customers personally, greeting them as they walked in and knowing their families [0:29:08]. It actually frustrates me that I cannot have that same experience with the hundreds of thousands of people who use our products. I could walk past 75 of our customers on the street on a given day and wouldn't even know it [0:29:24].

To bridge this gap as best as possible, every person who signs up for Basecamp sees a letter from me containing my signature and my actual email address [0:29:41]. I want customers to email me directly; there is no AI, no assistant, and no levels of management between us. We also include our email addresses in our books. I want to understand their language, how they describe our products, and how they use the lever we have built for them to move something [0:30:21].

The Value of "Real" Small Businesses

I find local businesses, like a dry cleaner that has been there for 40 years or a local grocery store, much more interesting than a billion-dollar corporation [0:30:42]. Small businesses feel real. A ten-billion-dollar business feels like a concept or an abstract entity, whereas at a local dry cleaner, you drop off a shirt and pick it up from the person who owns the place. That is their living, and I connect with that [0:31:13].

I want to be able to see the entire surface area of a business and understand it as a single object [0:31:30]. Massive entities with tens of thousands of people and billions of dollars are difficult for me to hold in my head or understand. That might be a personal shortcoming, but I find the smaller, real businesses far more compelling [0:31:41].

The Appeal of Comprehensible Business

[0:31:43] Understanding massive entities isn't a priority for me; it is simply not my thing. I prefer smaller businesses, and most of our customers are small business owners. I genuinely do not care about enterprise customers and do not want them. I like small and medium-sized businesses because they are more like me; I understand who they are and what they do.

There is a specific value in a business that does not expand beyond a single person’s comprehension. You can understand a dry cleaner or a local shop completely. I have a deep love for craftsmanship, which I think comes through in my writing. There is a story about a sandwich place in Chicago that illustrates this perfectly.

The Poetry of "Enough" at Vinny's

[0:32:23] I believe the place was called Vinny's, located on Chicago Avenue. It was a sub and Italian sandwich joint. Their policy was simple: they were open as long as they had bread. Once they ran out of bread, they closed for the day. They weren't interested in the compensation of making more or getting more sacks of baguettes. They would just run out, often around [0:32:52] 2:30 PM, and they were done.

There were no hours posted on the door. They closed when they were finished. To me, there is something poetic and beautiful about that. It comes back to the idea of having enough. They sold enough, so they were done for the day.

Avoiding Infinite Expansion

[0:33:10] While they certainly could sell more, the question is: where do you stop? If you stay open until 6:30, you might as well stay until 7:00, or 7:30, or 8:00 if someone is still at the door. You can see how this cycle never ends. A business can easily consume everything in your life until you begin to dislike it because there is nothing else left.

[0:33:44] Being done at 2:30 PM is healthy. I believe a business actually lasts longer because of those boundaries. You are less likely to get bored or burnt out compared to the approach of maximizing and filling every moment of your time and energy. While I am an objective observer looking in from the outside—and I recognize they might personally wish for more revenue—I see a beautiful thing: a long-standing, family-owned business that supports itself and its employees while making great food.

Longevity as the Ultimate Reward

[0:34:43] When asked if I am proud of how long we have stayed in business, I would say fortunate rather than proud. If I were given the choice to make the exact same amount of money in 15 years that I made in [0:35:02] 27 years and be done, I would still choose the 27 years.

I choose the longer path because I enjoy the work. The money is just a side effect of the process. I love what Patrick said in a previous interview: The reward for good work is more work. It is about the ability to keep going.

[0:35:34] The beauty for me is that we have managed to build a system, a company, and products that sustain over a long period. This allows us to enjoy our craft and our work for decades. We are in control of that sustainability.

we can be [0:35:49]. The market can change, and anything can happen at any time. However, a builder can control their costs, their quality, and their messaging as best as possible. The goal is to make the best thing and keep making that thing over time. This is the core objective: to avoid trading positions with anyone else and instead focus on the craft at hand.

Reverse Engineering Through Product

There are great products everywhere, and admiring them is natural [0:36:13]. One way to evaluate a company is to look at its products rather than the organization itself. If a product is exceptional, the company is likely exceptional too. If a product is lacking, the company likely shares those flaws. People who can create a truly great product are almost always interesting individuals to talk to.

The Anatomy of the Concept 2 Rower

The Concept 2 rower is one of the few perfect products in existence, standing alongside the paperclip in its simplicity and effectiveness [0:36:57]. It has remained priced under $1,000 for a very long time. While the company produces bikes and ski machines, the rower is the standout. It has gone through various iterations, but each version is simply an improvement on the same theme—slightly better each time.

The machine is large but easy to assemble. Its display is a black and white LCD, not an LED, with five rubberized buttons [0:37:26]. It runs on C or D batteries, requiring no electricity, no plugs, and no recharging. If it stops working, you simply replace the batteries. There are no touch screens to fail; it is reliable, durable, and does exactly what it is supposed to do with no unnecessary additions.

Longevity and the Fallacy of Three-Year Plans

Admiration for other companies does not mean a desire to be them [0:38:08]. The preference is to continue current work for as long as it remains fulfilling. Longevity is the goal, but it is achieved through a day-to-day or year-to-year approach rather than long-term planning.

There is a certain mystification regarding people who attempt to figure out the next three years or 1,000 days today [0:38:52]. It is contradictory to be able to plan a thousand days in advance while being afraid to figure out tomorrow when it arrives. The best way to be around for the long term is to figure out today, then tomorrow, and then the day after that.

The Squirrel Metaphor for Direction

The business functions without a rigid plan, focusing instead on direction [0:39:16]. This can be visualized through the metaphor of a squirrel running across a field. A squirrel has a rough idea of its destination. It scurries, stops, looks around, and scurries again. It does not know the exact path it will take, but it knows where it is headed and course corrects as needed. In the same way, the company identifies a general direction and adjusts its path as it moves forward.

The Six-Week Planning Horizon

At our company, we typically think about only six weeks in advance. That is the extent of our forward planning. Over the last 27 years, there have been very occasional projects that required us to look further ahead. For example, we recently left the cloud and AWS to run our own infrastructure in data centers. That was a much larger project that demanded more foresight.

However, 99% of our projects take six weeks or less, and many take much less than that. Six weeks is the absolute most we are willing to think ahead. If the squirrel metaphor represents our direction, the six-week mark is where the squirrel is headed. It is not super clearly defined; it is generally defined, and we figure out the specifics as we go on a day-to-day basis.

Course Correction and Autonomy

The teams figure out the path as they move forward. I, or David, or someone else will set the general target. We do not set financial targets, but rather a directional idea. We tell the team, "We are headed in this direction with this idea; figure out how to get there on your own."

We check in when needed, and I am happy to provide help or review work as we go, but the process relies on constant course correction. I find this to be the most honest and real way to reach a good destination because you generally know more about things the closer they are to you.

Focusing on Tomorrow

I have no idea what will happen five Mondays or five Fridays from now. Since today is Thursday, I have a much better idea of what might happen tomorrow than I do about what will happen five weeks from now. Therefore, I worry about those distant dates when I get there.

My focus is on nailing tomorrow. I want to get tomorrow right, make the right decisions tomorrow, and then make more decisions on Monday, Tuesday, and Wednesday. By making small decisions all the time, you avoid putting yourself in a position where you have to make huge, frightening decisions. This approach has worked for over 27 years.

The Perplexing Question of Five-Year Success

I am frequently asked by different people what success looks like five years from now. I am always perplexed by this question. My answer is simply: I don't know. I don't care. Five years is so far away that it makes no difference. While it is a directional question, I don't have a specific answer for it.

People often answer that question today based on who they think they are going to be in the future. But you don't actually know who you will be then. Pondering it is a bit silly. A great life is really just a string of great days. If you focus on making each 24-hour period good, you end up with a life you like.

Laying Bricks and Unbroken Habits

The process is like laying bricks. Today I am making a podcast, tomorrow I will make another, and a few days later, another. I let the score take care of itself because I enjoy the work and want to make a great product.

When people ask about the future, the answer is often just "more of this." I know I will be reading books forever; that is the only unbroken habit I have had for over 30 years. I will always want to talk to smart, interesting people who do great work. That is what success looks like, until the day I decide I don't want to do it anymore.

Then you simply change. [0:43:55] While there is a slight separation in perspective here—with some joking about jumping off a cliff if they were to stop—there is a realization that interests naturally evolve. Jeff Bezos once shared a philosophy that has been kept close to heart: "You don't find your passions, they find you." [0:44:23] It is a belief that reveals itself over time; we often find ourselves deeply involved in things today that we didn't even know existed ten years ago.

There is a profound beauty in being empty and open to the world and how it presents itself. [0:44:50] You might find that you love one pursuit today and something entirely different tomorrow. There may even come a time when you no longer like what you are currently doing, and that is perfectly okay. While the hope is to continue this work until the age of 80, remaining open to the possibility of change is essential. [0:45:08]

The Fallacy of the Five-Year Plan

The entire idea of a five-year plan is arguably a ridiculous construct. [0:45:16] Instead of looking so far ahead, the focus should be on getting tomorrow right. Success can be found by identifying small units. A day is a good small unit, as is a simple decision. The advantage of this approach is that if you screw up, the stakes are low. If tomorrow is difficult, it is over in 24 hours, and you can move past it. [0:45:41]

This stands in stark contrast to big, heavy decisions that take eight months to consider, involve numerous people, and require endless contingencies. If those large-scale decisions go sour, the ramifications are incredibly difficult to manage. [0:46:01] By making things small and focusing on tiny units, you can throw away what doesn't work without significant loss. The goal is to have enough good units in a year rather than one singular great plan. Building with these metaphorical bricks makes you significantly more anti-fragile. [0:46:36]

Some might argue that this approach causes you to miss big opportunities, but that is a secondary concern. If you can stay alive doing the thing you love and running the business you want to run, you don't necessarily need every other big opportunity. [0:46:50] The focus should remain on the work at hand, making it work over and over again for as long as you wish to do it.

Thinking Differently and Spotting Patterns

Brad Jacobs, who has started eight separate billion-dollar companies, observes that extremely successful people all have one thing in common: they think differently than most. [0:47:05] They have rearranged their brains to prevail and achieve big goals even in turbulent environments where conventional thinking often fails. Jacobs noted that these great business leaders are essentially pattern spotters. [0:47:32]

However, you cannot spot patterns if you cannot see all of your data. Most businesses currently use only 20% of their data because the other 80% of customer intelligence—hidden in emails, transcripts, and conversations—is effectively invisible. [0:47:42] This is the problem that HubSpot addresses by bringing all data together, allowing users to see the patterns that actually matter. When you know more, you grow more, which is a pattern that never fails. [0:47:59]

The Question of Perspective

When looking at the world, one must consider the width of their own perspective. [0:48:05] It is worth asking whether you operate with a narrow aperture or if your view is more expansive. Understanding how you process the world around you is the first step in determining how you will navigate it. [0:48:12]

The Power of a Narrow Focus

[0:48:13] There is a specific reason for not worrying about the vast array of other opportunities in the world. The focus remains squarely on building the business in a particular way—creating a perfect business for oneself. While this might appear to be a form of obliviousness to some, it is not meant in a destructive sense. It is simply a lack of concern for what others in the industry are doing. Whether this focus is described as narrow or wide is secondary to the fact that the work is being done on its own terms, regardless of external actions.

Avoiding the Trap of Competitive Parity

[0:48:41] Paying attention to how others make their products is a rare occurrence. There is a deliberate choice not to pay attention to them. [0:48:50] When a creator spends too much time watching the competition, they often begin to believe that things must be done a certain way. They lose their openness to alternatives because those alternatives are not visible in the existing market.

[0:50:09] This leads to building out of fear. A company sees a competitor launching a new feature and feels they must meet them to achieve parity between products. This results in a cycle of following everyone else. Instead of looking at software, it is more effective to take inspiration from outside the industry.

Sourcing Inspiration from the Physical World

[0:49:23] If inspiration is needed for product design, it should come from sources like the Concept 2 rower, or from buildings, furniture, and watches. These things outside of the immediate software world can be admired and understood to get a person fired up. [0:49:46] People often ask how these external influences help build the business, but it is not necessary for every interest to have a direct business application.

[0:49:58] These influences exist in the world and form a person's perspective, often without them being aware of it. Admiring a variety of things, like enjoying a walk in the woods or watching the sun rake over the hills at 4:45 in California, provides more value than looking at a piece of software. [0:50:26] There is more to be learned from nature, the ocean, and great architecture than from a competitor's product.

[0:50:42] Being in the software world provides enough exposure to it; there is no need to soak in it. The only "soaking" in software should be in one's own work. That is a sufficient area of focus.

Galapagos Island Product Design

[0:50:55] The concept of Galapagos Island product design refers to the beauty of things that have evolved in isolation. [0:51:29] There is something compelling about things that develop on their own, uninfluenced by external forces. Conceptually, it is useful to think of a software team as an insular group.

[0:51:52] By focusing on solving a problem in a unique way without paying much attention to the rest of the industry, a team can avoid the slippery slope of imitation. [0:52:08] The software industry sees a tremendous amount of copying. When a product becomes successful, almost every subsequent product for the next three years looks exactly like it. This pattern indicates a lack of original evolution.

Avoiding the Industry Trap

[0:52:18] There is a significant danger in the common industry practice of copying successful products, which often leads to a landscape where every new offering looks identical for years. We intentionally avoid this trap. Our products, such as Basecamp and Hey, look and work differently than anything else on the market. While some people may dislike our specific aesthetic or functional choices, we have an expanding group of customers who love what we do, and that is sufficient for us.

Direct Communication and Purposeful Writing

Our landing pages reflect this difference; they are essentially letters that describe what the product is and the reasoning behind its existence. I focus on building the kind of company I want to work at and hiring people I want to work with. [0:53:02] I personally handle all of the writing for the company because I want every word to land with meaning.

I apply a "thin over thick" philosophy to our communication. I prefer content that is concise and gets to the point without becoming sterile. I believe there should be a sense of rhythm and momentum in writing that carries the reader through the text. [0:53:39] This is my favorite aspect of the work—simply doing things in a style we enjoy.

Authenticity in Presentation

This preference for authenticity extends to our product demos. I perform the launch demos myself, and they are typically long and unedited. If I make a mistake a few minutes into the recording, I do not start over; I simply keep going. [0:53:53] The goal is to make the viewer feel as though they are sitting right next to me, looking at the product together. It is a real person showing a real product, complete with my name, signature, and email address.

We are not a corporate entity hiding behind a structure, nor do we have a board of directors or a CEO and CTO who are inaccessible to customers. [0:54:36] It is just us running the show, and we keep our processes open for anyone to see. We open-source the majority of our work and share our knowledge as transparently as possible.

I prefer to be direct and clear with people rather than using marketing tricks or persuasive language. Some potential customers might feel we are too small to trust, but I am not interested in convincing them otherwise. We present what we do and what our product offers, and people can take it or leave it. I believe this is the most honest way to operate.

The Inspiration of Navajo Rugs

[0:55:18] I strongly believe in doubling down on authenticity and leaving mistakes in. This approach reminds me of an experience I had in Mineral Point, Wisconsin, a small town located about 50 miles west of Madison. While wandering through the town, I found a gallery that looked like a junkyard from the outside.

I knocked on the door and met a unique character, an elderly man who collected Navajo rugs. Although he has since passed away, his collection was remarkable. [0:56:11] The rugs were beautiful, featuring simple patterns and vibrant colors that resonated with me deeply, though I prefer not to over-analyze exactly why they spoke to me.

Embracing the Imperfections of Navajo Rugs

[0:56:22] Analyzing why we find something beautiful can often ruin the experience. It is better to simply acknowledge whether something speaks to you or not; for whatever reason, the Navajo rugs did. [0:56:29]

While examining the rugs, I noticed what appeared to be errors in the geometric shapes. The rugs are defined by patterns of stripes, squares, and triangles, but many of them were not quite right. A triangle might not be perfectly shaped, or a stitch might be clearly off. I asked the collector about this, suggesting that the weavers could have easily unraveled the work to fix the mistake. [0:57:01]

The collector explained that the Navajo do not view these as mistakes. Instead, they see them as a moment in time. He compared it to walking on a path or climbing a mountain. If you trip or stumble, you cannot take that stumble back; it simply happened. The Navajo leave these in their rugs because they are a record of what occurred during the creation. [0:57:33]

Moving Beyond the Concept of Mistakes

[0:57:36] This philosophy is something I have tried to incorporate into my own work. While I do not want to leave typos in text, I am comfortable with making a mistake in a video. That is how things happen in the real world. These are not truly mistakes; "mistake" is just a concept we impose on ourselves when an outcome differs from our original intention. [0:58:09]

Perhaps our original intentions were wrong to begin with. A rug is not worse because a stitch is off; in fact, it might even be better. I strive for this same lack of fear in business. I do not want to build a company that is afraid of itself, afraid to do anything wrong, or afraid to have an opinion. [0:58:27]

Human-Centric Business and Directness

[0:58:32] Many companies today are paralyzed by fear. They rely on PR departments and lawyers before they can publish anything because they are terrified of saying or doing something wrong. However, I believe people want to do business with people, even if they often have to deal with companies to get the products they need. [0:58:51]

This human connection is likely why I enjoy the dry cleaner, the grocery store, and running my business my own way. Our company consists of 62 people who are all accessible and reachable. There is no large corporate structure to hide behind. There is a thinness and a directness to this approach that has an aesthetic value I find difficult to explain. [0:59:20]

The Quality Beyond High Quality

[0:59:25] This reminds me of a concept discussed by the architect Christopher Alexander. He noted that in native villages, buildings were created without architects. People simply built places to live, work, and worship. [0:59:46]

There is a certain quality to those structures that might not meet a textbook definition of high quality, yet they are beyond high quality because they are a perfect fit for the people who need them. That is the kind of environment I want to build: a company that is a perfect fit for us and what we need. The business model relies on the belief that there are enough other people out there like us to sustain it. [1:00:19]

The Human Element in Podcasts

[1:00:20] This philosophy aligns with why some people are drawn to podcasts. There is a natural preference for thinking in terms of people rather than companies. In a podcast format, it is impossible for a person to hide who they are. After listening to someone speak for hundreds of hours, their true character inevitably becomes clear. [1:00:39]

Authenticity and the Endearing Nature of Mistakes

When you listen to a podcaster for hundreds of hours, it becomes impossible for them to hide who they really are. Listeners hear the good parts, but they also hear the mistakes. This transparency is often endearing. For example, a friend named Lulu recently sent a text regarding Founders episode 337, which focused on Napoleon’s maxims. She found it hilarious that the recording included mispronunciations of various French names.

The decision not to edit those moments out reflects a refusal to put on airs. If you do not speak French and are reading from a book, it is more authentic to simply read phonetically than to attempt a fake accent. This contrasts with the behavior often seen on television news, where a reporter might adopt a forced Hispanic accent for a single Spanish word; it often feels like they are trying too hard.

If you do not know how to pronounce a word, you can admit that to the audience and move on. No one truly cares about perfect French pronunciation of seven words out of five thousand. What matters is the story, the person telling it, and the reason it is being told. Figuring out what actually matters is a vital part of that process, whether in storytelling or in making product decisions for a business.

The Strategy of Writing the Vision First

In business, determining what matters is part of the fun of product design. This process often involves writing the copy for a landing page or a manifesto before the product is even created. This is similar to the approach used by Jeff Bezos, where a press release or vision statement is drafted at the start.

For the email service Hey, the introductory letter was written in the middle of the development cycle, well before the product was near completion. This allowed the creators to define the "why" of the product while it was still being built.

Identifying with People Over Companies

Followers of a creator’s writing for 13 to 15 years often develop a sense of loyalty that goes beyond the specific utility of a tool. Many users purchased Hey not necessarily because they needed a new email service, but as a way to support the people behind it. Even if a solo worker does not need team-based project management software like Basecamp, they might still subscribe to a new offering because of the goodwill built up through years of public teaching.

This highlights the fact that people identify with other people, not with companies. In many cases, the "use" of a product is the act of support itself. It is a way for the customer to pay back the value they have received from years of free insights and writing.

Reclaiming the Beauty of Email

During the development of Hey, a pre-launch page was released months before the software was finished. The letter on that page addressed why so many people have come to despise email, despite it being a fundamentally beautiful medium. It reminded readers of the wonderful feeling of receiving a message from a grandparent, a loved one, or an old friend.

The problem is that email has gone off the rails, becoming dominated by spam, sales pitches, and endless meeting requests. The goal of the project was to bring email back to its original, positive state. This vision was articulated while the team was still figuring out what the product would actually be. They were moving forward one day at a time, guided by the philosophy of the letter rather than a finished feature list.

The Love Behind the Product

[1:04:32] There is a specific kind of love behind the creation of a product. While it might sound silly to some to say they love a piece of software, it is a different version of love, akin to the feeling a creator has for a podcast they have made and listened to before anyone else. It is a sense of being happy with the work.

[1:05:01] A certain warmth and tone come through when you make something you are truly proud of. While I am proud of running the business for 27 years, the business itself is just the envelope. I am truly proud of the products that sustain the business. I love getting them as right as I possibly can. There is warmth in sharing something you have finished and want to put out into the world, whether it is an entire product, a single letter, or even just the right word in the right place.

The Miracle of Decentralized Email

[1:05:42] The actual creation of email is a miracle, though we have often treated it poorly. It is amazing that anyone in the world can get in touch with anyone else without being locked into a specific platform. To write to someone on WhatsApp or Signal, both parties must have that specific app. Email, however, is as beautiful as the web. Just as anyone with any web browser can use HTTP to connect to any other website, the same is true for basic email. These are wonders of the world.

[1:06:24] Email became despised because companies like Apple, Google, Yahoo, and Microsoft made email products they simply did not care about for a long time. People could tell that no one cared. At our company, we care. While we use Basecamp internally, we use email for the outside world, and I want to use tools that I love and that matter to me. If I am going to spend my day in an email tool, I want to make one that I am proud of and have a love for. That is why we described Hey as our love letter to email.

The Identity of a Toolmaker

[1:07:19] I identify strongly with the idea of being a toolmaker, similar to how Toby Luke describes himself. Although I tell people I am in the software business so they understand what I do, I do not particularly like that term or the phrase "tech industry." I do not consider myself a "tech person." I make tools that just happen to be made of software because that is what I know how to do. I do not know how to build things out of wood, but I know how to build with software, code, design, and conceptual ideas.

[1:07:54] We make levers. A tool is simply a lever that allows you to do more than you could without it. It allows you to move more things, organize more people, develop better ideas, and see those ideas through. The purpose of a tool is to make progress.

Inspiration from the Physical World

[1:08:12] I find a great deal of inspiration in physical things outside of the business, such as watches and cars. If I ever do anything else in the future, it will likely be something physical. In the software world, I barely look at numbers. I know you...

The Tangibility of Physical Work

[1:08:39] Numbers on a screen, even when they represent massive success, can feel abstract and difficult to truly internalize. One does not necessarily feel the weight of those figures. Mark Leonard of Constellation Software once noted that one of the most fulfilling jobs he ever held was not the process of compounding 50 million into 80 billion through pure software. Instead, it was building stone walls. Even thirty years later, he can return to those specific walls and point to them, knowing he personally created something that still exists in the physical world [1:09:16].

Texture, Patina, and the Aging of Objects

The draw toward physical things is often instinctive, much like a preference for certain flavors. There is a fundamental reality to holding and touching objects. I find a particular fulfillment in texture. While most modern software is designed to be very flat, I prefer incorporating simulated texture through gradients, colors, and lines into our digital products to mimic that physical sensation.

Physical objects possess a quality that software lacks: the ability to age with grace. Software can look dated, but it does not develop a patina. A great building or a well-made brick becomes more beautiful as it gets older. Bricks collect age, grow stronger in character, and build into other structures. We are from the physical world and are a part of it, which is why it is essential to stay close to things that are real. I would much rather be on the ground—walking or driving—than flying in the air, simply to stay connected to that reality [1:10:41].

Nature as the Ultimate Design Library

My appreciation for the physical world extends to collecting rocks found at the beach. These are not crystals, but simple stones with interesting patterns and textures that I find at the tide pools in Malibu. Nature offers the most sophisticated textures, patterns, and colors available.

[1:11:15] When young designers are starting out, they often look through corporate identity books or publications like Print magazine to find inspiration for business cards, layouts, and color palettes. However, the best designs are already outside. A leaf is a masterpiece of survival and evolution. If you want to find the perfect color palette, you should look at a bird, the ocean, or the way light reflects in a tide pool rather than looking at a book. These things are fundamentally real. While making software is enjoyable, the contrast of the non-digital world is what makes it sustainable [1:12:32].

Stepping Away from the Screen

Despite a career built on software, there is a strong desire to eventually move away from "computing" entirely. If I were to sell the business, I would never start another one. I would like to shut my laptop for a year and walk away. I would keep a phone to stay in touch with people, but I do not have a biological or personal need to compute. There is a distinct difference between staying connected and the act of computing, and I look forward to the possibility of simply closing the screen [1:13:08].

Computers as Tools and the Essential Outdoors

[1:13:11] While computers are arguably the most amazing tools humans have ever made, it is possible to take significant time away from them without detriment. However, a disconnection from nature would be far more problematic. If a person were unable to go outside for a year, the psychological toll would be immense; it is a fundamental need to be out in the world, and many believe that such isolation would lead to insanity.

A New Golden Age for Computing

The present is an incredible time for computers, reminiscent of the excitement surrounding the web in the mid-to-late 1990s. It is a unique experience to live through both of these transformative moments. Despite this technological fascination, there is a lingering desire to engage with the physical world, such as working on a stone wall or playing with bricks. While the speaker acknowledges they do not currently know how to build such structures and must remain practical regarding their software company and bills, the interest in physical, tactile creation persists.

[1:14:17] The motivation for continuing in software is no longer strictly financial, as the bills are taken care of, but the comparison between twenty-seven years of digital work and the physical toll of manual labor like masonry is a notable reflection. There is a certain beauty in the idea of playing with physical materials even if it is not one's primary profession.

The Analog Philosophy of Christopher Nolan

Christopher Nolan is a figure whose personal philosophy highlights the juxtaposition between high technology and analog living. He expresses a deep desire to live in an analog world. Despite producing some of the most technologically sophisticated films ever created, he famously does not own a smartphone and has no GPS. To reach him, one must contact his assistant. He purposefully places himself in situations where he must interact with the world directly, such as asking strangers for directions in a new city rather than relying on a digital map.

[1:15:23] When Christopher Nolan wants an actor for a movie, he does not email a script. He prints it out physically, flies to the actor's location, and sits with them while they read it. Once they are finished, he takes the script back. This commitment to physical, in-person interaction is shared by those who prefer physical books and refuse to conduct remote podcasts. There is a distinct preference for talking on the phone or meeting in person rather than texting, driven by the feeling of well-being that comes from being outside and away from a screen.

The Importance of Knowing Yourself

[1:16:21] The most significant aspect of these preferences is not the specific choices themselves, but the fact that an individual knows who they are. It is vital to eventually figure out what you actually like. Many people never reach this realization; instead, they like what they are supposed to like or what is expected of them by others.

Many individuals grow businesses or make life decisions based on external expectations rather than a personal sense of identity. They are, in a sense, running someone else's business because they lack a clear sense of what they are all about. [1:17:02] Finding what you are truly into is a wonderful achievement, and while those interests may change over time, having that clarity in the moment is essential for a fulfilling life.

The Unity of Digital and Physical Preferences

You do not need to pick sides between the digital and physical worlds. They are essentially the same thing. We live on a speck of dust in space, and in that context, the distinction between the two disappears. It does not truly matter what you like or why you like it; what matters is that you recognize your tastes and treat yourself to the things you find beautiful.

Maximizing Energy for Performance

A defining trait among the founders and extreme winners is an excessively high energy level. To be the best at what you do, you must maximize your energy and output. This focus on performance is why I partnered with Function, a health platform I used long before they became a sponsor.

Function provides access to comprehensive blood tests and lab testing to monitor internal health markers. As a member, you can test over 100 biomarkers, including hormones, toxins, heart health, inflammation, and stress. The platform provides a straightforward analysis of results along with advice from expert doctors on how to improve testosterone and stress hormones or reduce toxins. You can join for $365 a year, which is essentially $1 a day. By visiting functionhealth.com/enra and using the code senra25, you can receive a $25 credit towards a membership.

The Evolution of Self-Identity

Trusting your own judgment is a skill that develops over time. While designing products for yourself as the primary user is a good indication of this trust, fully figuring out who you are is a longer process. For many, a true sense of self comes more into focus later in life, often through major life changes like getting married and having children. Looking back at a younger version of yourself—perhaps someone who acted differently or moved through the world with a different energy—can bring a sense of gratitude for who you have become.

Using Slights as Competitive Fuel

In the early stages of a career, having a chip on your shoulder can be a powerful motivator. This resentment often stems from a need to prove yourself when you are young and trying to break into a field where people do not yet believe in your talent. Competitiveness often arises specifically when someone slights you or tells you that you are not good enough.

Early in my career as a web designer, I submitted a website design to an award program, likely the High-Five Award. I received a response from Dave Seagull, a significant figure in the design community at the time. He wrote back saying, "You suck. Literally, you suck. Find another day job." I loved that response. There is a unique satisfaction in being told you cannot do something or that you are not good at it. It is similar to being 5'7" and walking onto a basketball court; you know people are underestimating you, and that creates an opportunity to prove them wrong.

The Fuel of Underestimation

That kind of stuff fired me up. [1:21:24] As far as finding confidence, I probably had a lot of that early on when people would say, "You're just one guy. How could you do this?" or "How could you do that? You don't know what you're doing. You don't have a degree in this." That fired me up for a while.

There is a point, however, where you want to launch and then find a place to settle where you come into your own. I think I did that in my 40s. I am 51 now, so settling into my own happened about a decade ago. I also had some psychedelic experiences during that time which helped as well.

Perspectives on Resistance

When the topic of psychedelics arises, it brings up a previous interaction with John Mackey, who had encouraged their use. [1:22:06] While the tech industry and the Bay Area have created great products, some observers feel there is an excessive amount of drug use in that environment. For those who value their mind exactly as it is and do not wish for it to change, there is a strong resistance to drugs.

This resistance is often rooted in personal history, such as having a cousin who died of a heroin overdose or a father who used drugs his whole life and went to jail for selling them. [1:22:52] Having never seen someone high on cocaine make a great decision, the choice to avoid drugs entirely is seen as the necessary opposite to those experiences.

An Avalanche of Insights

The discussion turns into a conversation where the roles flip, and the speaker explains that his interest isn't in convincing others to use drugs, but in the pursuit of insight. [1:23:18] For him, the experience was an avalanche of insights. It was fascinating to realize the mind could understand things in ways previously thought impossible.

For example, he perceived an idea not just as an abstract thought, but as a three-dimensional object that could be turned around to see what was behind it. [1:23:49] This wasn't just a new perspective; it was the ability to literally see the other side of an idea. These experiences regarding the nature of existence were fascinating, offering a sweetness similar to candy when gaining a new insight about something one previously thought they knew.

The Radio Analogy

Having had these experiences three times, the speaker notes that while he might not know himself better in a traditional sense, he feels more expansive. [1:24:49] It revealed that there is more to the world than what he originally thought he knew.

He compares the mind to an old car radio from the 1950s, like one found in an old pickup truck. These radios have a needle, a dial, and a glass window showing the channels. Most of the time, a person is tuned into a single channel—they are 95.7.

Psychedelics allow one to turn the knob and tune into something else that has always been there, but remained at an unheard frequency. [1:25:33] Just as a radio picks up signals that exist whether or not you are tuned in, turning the knob reveals what is already present. All experiences serve as a mirror, a reflection, and a detail in the process of self-understanding.

a crumb that creates the pile of you. [1:25:56] It is not necessarily about a single, massive breakthrough, but rather the fascination of learning things that are insightful. [1:26:06] One specific experience involved a conceptual three-dimensional puzzle. After puzzling through it and enjoying the challenge of the problem-solving, the speaker eventually turned the object around and saw it from the back. [1:26:41] It was dead simple.

The Principle of Inversion

[1:26:42] The core lesson from this experience was the instruction to turn everything around. This is the concept of inversion. The idea is that everything is a lot simpler from behind because the back of things are real, while the front of things are often just "fronts." To truly know what something is, you have to get behind it. [1:26:59] This is not an insight that is constantly or consciously applied, but it remains a revelation that provides a different lens through which to see the world. [1:27:18] It is valuable to have multiple lenses available, especially when they are harmless. [1:27:26] The speaker notes they are not a doctor and provides the necessary disclaimers that this is distinct from substances like heroin or cocaine, but concludes it was a very worthwhile experience.

The Creative Act and Daoist Philosophy

[1:27:39] When reading Rick Rubin’s book, The Creative Act, the speaker felt a deep resonance, as if they could have written it themselves. [1:27:54] Rubin’s philosophy suggests we live in a magic world where intelligence does not only come from the brain. It requires being comfortable with ambiguity and the state of not knowing. [1:28:15] There is a strong element of Daoism in this perspective—the practice of not knowing, not trying, and not doing. The world works in magical ways that cannot be fully comprehended.

[1:28:30] This ties into a "make it up as you go" philosophy of business, which involves going with the flow. [1:28:40] There is something honest and real about that approach. Things just happen, and one does not always need to know exactly why they occur. [1:28:56] Instead, it is important to feel into them, pay attention, and trust your intuition and gut.

Intuition and Business Blubber

[1:29:02] The speaker identifies as a fully intuition and gut-driven entrepreneur, even though they do not particularly love the word entrepreneur. [1:29:14] While there must be a business structure around the products, the focus is not on metrics. As long as the business is profitable, the specific numbers are not a primary concern. [1:29:24] A key component of this strategy is ensuring there is enough blubber in the business.

[1:29:34] The concept of blubber refers to having cushy margins. [1:29:48] The goal is to avoid running a business with such tight margins that there is no room for mistakes or the fear of making them. [1:29:56] Having these margins allows for the possibility of screwing up without it being fatal to the company. [1:30:04] While businesses can go out of business and the reality of that risk is acknowledged, the philosophy is to take risks without putting the entire entity in jeopardy. [1:30:14] There is a willingness to take plenty of risks, provided the foundation remains secure.

Avoiding the Risk of Betting the Farm

[1:30:15] I am not going to do something that is going to bet the farm unless we absolutely had to. If I ever find myself at the point where I have to bet the farm, I feel like the business is essentially over already. Frankly, I am not interested in the prospect of betting the farm; it is not even fun. I would much rather just keep the farm than risk not having it at all.

This mindset leads to a philosophy of maintaining a significant margin of safety. This involves keeping a lot of cash on hand and maintaining high profit margins while still paying close attention to costs. [1:30:36] We watch our expenses carefully. David recently wrote an article about our decision to move off the cloud, which is going to save the company something like $10 million.

People often ask why we are putting in so much effort just to save $10 million. The answer is simple: it is our money. We do not have outside funding, and I have never wanted any, even though many people have offered it to us over the years. Our capital comes from our customers through revenue, so we take very good care of it. If you want to stay in business long-term, your only true competition is your own costs.

Maintaining Discipline and High Margins

[1:31:13] To maintain this margin, we keep the company small. We don't spend significant money on marketing; over 27 years, our marketing spend has been a mere rounding error. We don't waste money on stupid things or blow it on unnecessary expenses. Instead, we save it and keep it, which allows us the freedom to make mistakes in other areas where we enjoy experimenting.

I would never want to run a business with tight margins, such as a grocery store operating on a 1% or 2% margin. [1:31:45] It has always blown my mind how many companies in Silicon Valley lose massive amounts of money while being in the software business. Software is the highest margin product in history. It consists of bits. While there are some data costs, they are basically zero when all things are considered.

It seems incredibly irresponsible to me that there are big, well-known companies blowing billions of dollars without ever making a penny. I suppose that is just my small business entrepreneur mindset, but I truly do not understand that world.

The Necessity of Fat Reserves

[1:32:30] Going back to the concept of blubber, these are your fat reserves. While it might be "cool" to have 6% body fat, it is not a healthy way to live for a long period. If you are stuck in the wilderness, you need something to burn. We have lived through the dot-com crash, the 2008 financial crisis, and COVID-19 because we have fat on the bone. It is vital not to operate right at the bone.

[1:33:00] Because we are structured as an LLC, whatever money is left at the end of the year goes to the members. Currently, the unit holders consist of myself, David, and two other people on the cap table. Additionally, 10% of our profits are distributed to our employees every year.

A Longevity-Based Profit Sharing Model

[1:33:19] Our profit sharing is based on longevity, not seniority. The two are not the same thing. The distribution is determined by how long an employee has been with the company. Every month you are here, you accrue units, up until you hit 10 years, at which point you have maxed out your units.

We distribute profits based on those units regardless of your role, salary, or title. [1:33:42] This means that if you have been here for 10 years as a principal software engineer making hundreds of thousands of dollars, your profit-sharing bonus is exactly the same as someone in customer support who has also been here for 10 years and might be making $90,000 or $100,000.

[1:33:56] This is real cash. We do not deal in options, RSUs, or stock-based compensation, which I find to be mostly nonsense unless you are a well-established public company. Our bonuses are based on actual profits. We have been profitable for 27 years, and these annual distributions are meaningful. To put it in perspective, for the year 2024, about 20 out of our 62 employees had reached...

Because the total books for 2025 have not yet been closed, the 2024 data is the most current, showing that those 20 individuals received six-figure bonuses. This occurs year after year as real cash. This is the advantage of a simple business with a simple cap table organized as an LLC that shares real profits.

Many competitors hire staff by promising significant stock options, but often the value of that stock trends downward. Those employees are promised a future they may never see. The priority here is to pay people with real money that can be used for a down payment on a house, college tuition, or a vacation. This annual distribution of real cash is the result of a business with sound fundamentals, high margins, and high profits. As an LLC, the company is essentially required to distribute these funds annually, as leaving money in the entity would incur taxes.

The Evolution of the Inner Monologue

The journey of self-discovery, similar to the path discussed by Rick Rubin, often involves gaining a deeper understanding of oneself in one's 40s, sometimes through psychedelic experiences. Looking back to the ten-year mark of the business, around age 35, the internal monologue was not negative, but it was notably more aggressive.

There is frequently a gap between an individual's outward expression and their internal state. This is sometimes referred to as RBF, or resting face. Even when a photographer like Mike captures a stern or scowling expression, the internal reality is often one of immense fun. In those moments, the drive is to wake up and do it all again the next day, regardless of how the face appears to an observer.

The Case Against Business Postmortems

A core principle is the refusal to look backward, a sentiment shared by Jimmy Iovine, who famously said he has no rearview mirror. Looking back is essentially telling yourself a story about what you remember, which is rarely the objective truth. It is often perverted by time and the millions of events that have happened since.

This perspective is why business postmortems are avoided. Many organizations spend immense energy looking back at a launch to figure out why it succeeded or failed. In reality, it is almost impossible to know for certain. One minor change in the world or the timing could have led to a completely different result. If you seek certainty in the past, you will find it only because you have convinced yourself of a specific narrative.

Instead of analyzing the past, the focus remains on learning by doing and moving forward. Learning from mistakes does not require a lengthy look backward; it takes only a second to realize you did not like a result and decide not to do that again. Redoing the past is impossible, so the only way to learn is by making more things and trying new approaches. This is not an attempt to ignore the past or absolve oneself of things they are not proud of, but a recognition that the person in the past is no longer the person of the present.

The Philosophy of Moving Forward

[1:38:23] That person who did those things in the past was who I was at that time, and that is that. I am moving forward. This perspective relates to a common struggle many people face: the negative inner monologue and constant self-criticism.

Learning from Rick Rubin

[1:38:36] Rick Rubin has a fascinating answer to the question of whether he possesses an engine of constant dissatisfaction or self-criticism that makes him feel he could have done better. His response is essentially that you couldn't have done anything different than what you did.

[1:39:06] Rubin explains that he is pleased with the work he has done and is excited to keep working because it is fun. He views making things as his reason for being on the planet. If a project could have been better, he would have kept working on it; if it can still be improved, it isn't finished. Once he has done everything possible to make it the best it can be, he cannot do more. Therefore, there is nothing left to be critical of.

Work as a Moment in Time

[1:39:35] Every creation is like a diary entry. It is a reflection of a specific moment in time, whether that moment spanned a day or a year. [1:39:42] I see things exactly the same way. I did what I did, whether it was my best or my worst. It is done, and now I move to the next thing.

[1:39:56] This does not mean being an [ __ ] to people or acting without regard for others. Other people remember your actions, so it is important to be a good, honest person. Some might hear this philosophy and see it as an excuse to do whatever they want without ramifications, but there are ramifications. However, those actions are now written in history.

The Problem with Targets and Measurement

[1:40:19] I have always tried to do the best I can, which is why I avoid traditional business metrics. We do not have revenue targets, sales targets, or user targets, beyond the basic goal of remaining profitable. A target should not make me do better work. I should do better work because of the pride I take in it, the seriousness with which I approach it, and the enjoyment I find in the process.

[1:40:50] Doing the best I can is all I can or should be doing. I don't need a target to tell me I could have done better if only I had aimed for a specific number. The target is the work I am doing right now. This is why I dislike measurement and prefer to focus on the product. The product itself is the measurement, not the statistics of how many people have used it. Money and numbers are ultimately the byproduct of making something good; they are not the reason to do it.

The Illusion of Certainty

[1:41:26] People are constantly in search of certainty, but I believe it is nowhere to be found in most businesses. If you are manufacturing widgets on an assembly line and a part comes out wrong, you can trace the mechanical failure back to a specific machine. You can find a certain answer there.

[1:41:54] However, most businesses are not mechanical in that way. They are a complex series of decisions, ideas, timing, market conditions, competitor actions, and even your own mood on a given day. Trying to pinpoint a single answer for why something happened so you can "know" what to do next time is dangerous. It gives you a sense of certainty that isn't real. This is why I often say I don't think I could start Basecamp again today and expect the same results.

The Impossibility of Reproducing Success

[1:42:30] There is absolutely no way I could start Basecamp again today. I have seen many friends who sold a company and assumed their success was due to a personal mastery of company building. When their second attempts fail or struggle, it causes a deep internal crisis, making them question who they really are.

[1:42:47] It is a significant realization to admit that you might not actually know why a business succeeded or why another failed. [1:43:00] It is nearly impossible to build a successful company; only a tiny percentage of people in history have accomplished this. [1:43:12] This is why I started a show to celebrate those who have accomplished this goal and to highlight role models who build products that improve lives. Those who have been doing this for multiple decades possess immense wisdom and knowledge acquired through long-term experience.

The Tragedy of Regret: The Trader Joe’s Story

[1:43:30] We often bond over the desire to create differentiated products rather than "me-too" versions of existing things. Joe Coulombe, the founder of Trader Joe’s, had a completely unique product that he poured his heart and soul into. He eventually wrote an autobiography where the vast majority of the pages detail the difficult but rewarding process of building the business.

[1:44:00] However, driven by fear, he sold the company, likely in the 1970s or 1980s. [1:44:11] He lived for at least three or four more decades, spending his time on investing, real estate, and consulting. Yet, in the final paragraph of his book, he admitted he was not true to himself and deeply regretted the sale. Joe Coulombe passed away the same week his book was published, a life ending with a visible sense of regret.

The Diminishing Returns of Entrepreneurial Energy

[1:44:53] This pattern of regret is common among people in their 30s who sell a major venture and believe they can easily replicate the success because they have decades of life left. Most people cannot reach the same heights again. If you try to jump a hundred times, you simply cannot match the height of your first jumps because you are exhausted.

[1:45:22] This leads to a tragic outcome where an entrepreneur might build something that is still an incredible achievement, but they cannot see its greatness because it is not as large as their previous work. Others may also view it as less than, which creates a terrible cycle of dissatisfaction despite continued success.

Negative Visualization and the Future of SaaS

[1:45:45] My partner David and I discuss these risks through negative visualization. We practice considering what would happen if the landscape changed entirely—for instance, if AI were to render the SaaS model dead within three years.

[1:46:02] Our answer is that we have had an incredible run of 27 years, and perhaps we will reach 30. We should be happy and proud of that rare and fortunate experience rather than feeling devastated if it ends. [1:46:25] I would not try to start another business after this one. I would do something else entirely, as I don't believe I would want to attempt to recreate this success.

[1:46:32] I don't think I could do it again. It is totally fair to admit that I don't think I am good enough again to do what I did before. I simply do not have the stamina, the drive, or the thirst and hunger required to build a brand new software company from scratch. While I might still have the curiosity, I know that curiosity alone wouldn't be enough to carry me through that process.

Early on, I was more aggressive, younger, and pumped up. It was the early days of the industry where we were pioneers, and there is a specific kind of energy that comes with that which you just don't have a second time. It's fun to have had that, but it is not something I can replicate.

Bob Dylan and the Magic of the Past

I saw an interview with Bob Dylan on 60 Minutes [1:47:07]—I believe Morley Safer or someone similar was asking him about songwriting—where he discussed his process. Dylan was reciting one of his great songs, and despite being in his 80s, he still had an incredible memory for those lyrics. He said something to the effect of, "I used to be able to write music like that. There was a certain magic to it, and I don't know how I did it."

He admitted that he knew he couldn't do it again, but he could do other things now. Seeing that was powerful because it showed a mature human being [1:47:43] acknowledging that while he did something incredible before, that period has passed. He can't do it anymore, but he can do other things.

The Entrepreneurial Identity Trap

This perspective is important because if you identify solely as an entrepreneur and then you sell your business, your identity is often tied up in that role. You feel like you have to go start another business to maintain continuity and be that person again. If you can't achieve those same heights, you feel like a disappointment.

I have seen this in friends who have sold businesses, and it is sad to see them unable to recognize that what they did was incredible in that specific moment. These are moments in time and periods of experience [1:48:28]. What happened then belonged to that time.

Lessons from a Psychedelic Journey

To illustrate this further, I can look back at an experience with psychedelics—specifically mushrooms [1:48:44]. During a session with a guide, I recalled my first time doing it, where I had an incredible experience while listening to a specific song. It felt like I learned everything in an instant.

The next time I did it, I asked the guide, "Can you play that song again at some point? I want to see if I have that experience again." She was non-committal, saying we would see. Eventually, she played the song, and I was aware enough to realize that I had no experience at all. It was blank and empty [1:49:25].

The Impossibility of Reliving the Past

After the song ended, I broke out in laughter. I realized that, of course, you cannot have the same experience again. You cannot have the same experience twice, and in a way, you don't even deserve the same experience twice. It is not possible to relive something. That thing happened then, and this is now; they are detached and separate [1:49:50]. They can never be the same.

Realizing this was a wonderful thing. I now apply that lesson to my life with my kids. They are currently 11 and 7 years old. I am never going to have the experience with my 11-year-old as an 11-year-old again. Once he turns 12, that previous experience is gone.

Savoring the Present Moment

Because of this, you have to really savor those things now [1:50:07]. Recognize them for what they are in the present and recognize that you will never get them again. You shouldn't be sad about it; it just is what it is. These are the types of experiences I carry with me from those times, and they hopefully affect the way I move through the world today.

A Simpler Definition of Success

In the context of selling a company and perhaps finding that a subsequent venture isn't as financially successful or well-respected, we have to look at how we define success. The best definition of success I have ever heard came from Steve Jobs [1:50:50]. It was beautifully simple: "Did I make something I'm proud of?"

Redefining Success Through Pride and Repetition

[1:50:55] The definition of success is often overcomplicated, but Steve Jobs offered a beautifully simple perspective: "Did I make something I'm proud of?" This is a powerful metric that applies to everything from a podcast to a massive company. Beyond pride, another way to measure success is by asking if you would want to do the exact same thing again the next day. If the answer is yes, then the endeavor was successful.

This isn't about the money or external accolades; it is about whether you would choose to spend your time and energy on that experience again, even if the outcome might be different. If you are not proud of what you said or if you hurt yourself in the process, you wouldn't want to repeat it. Knowing what you know now, the question of whether you would hire a person again is the same as asking if you would want to do what you just did again. If you would "play replay" on the trajectory of the experience, that is enough of a definition. [1:51:30] Success is about the experience and how you spend your time, not just the financial outcome.

The Human Tendency Toward Complexity

[1:51:50] There is a curious human propensity to take something simple and make it complex. Even though people crave simplicity and abhor complexity, they naturally trend toward adding more layers. In a 2023 podcast episode, Rick Rubin interviewed Jimmy Iovine and shared a story about the first time they met. At the time, Jimmy Iovine was already a legend in the music industry and ten years older than Rick. Rick played a song he had produced for Jimmy, and Jimmy responded with a sentence that changed the way Rick thought about his work: "I wish I could still make something that simple."

Rick was confused, noting that Jimmy had far more experience and skill, but the point was that you don't know what you don't know when you are starting out. As you gain experience, you tend to think you need to add more and make things more complex. Jimmy Iovine has a specific skill for getting right to the heart of an issue with a single sentence, but the natural trend for most is to expand and add. [1:53:01] Adding more things often happens because owners feel people will get bored or because they feel the weight of external expectations.

The Pressure to Expand and the Loss of Connection

[1:53:15] Business owners often put immense pressure on themselves, especially when they take investment from the outside world. To return that investment, they must grow at a certain rate, which can lead them to become unmoored. They lose the connection with why they started the business in the first place. Instead of running their own company, they find themselves running someone else's business. They have effectively created a job for themselves where they work for their investors.

Taking a simple idea and adding layers to it can blow it up in a direction that, in many cases, makes the situation worse. It puts the owner on a track they cannot get off, where only one specific outcome is considered a success. This removes the optionality and freedom that many entrepreneurs originally sought. [1:53:58] When you are on that track, you lose the ability to pivot or enjoy the process because you are bound to a singular, rigid goal.

Independence as the Ultimate Business Metric

[1:54:02] The most critical factor in business is independence, which is fundamentally tied to profitability. As long as a business makes more money than it spends, it maintains its independence. This independence means that no one else can tell the owners what to do. There is a specific excitement in doing things that "no one would let us do," a topic that often comes up in discussions between founders. Doing the things you aren't supposed to be doing is a major part of the joy of entrepreneurship.

[1:54:32] It is interesting to note that most traditional businesses do not follow the path of seeking outside capital. There is no dry cleaner or pizza shop raising VC money. These businesses focus on the fundamentals of staying in business through their own earnings, which allows them to retain their independence and stick to the simple core of what they do.

The Mirage of Venture Capital and the Loss of Options

[1:54:41] Most businesses in the world, such as a local dry cleaner or a pizza shop, do not raise venture capital money. However, in the tech industry, it is common for someone with an idea to immediately seek outside funding. The moment they raise that money, they effectively cut off almost every other option. While these founders believe they are expanding their opportunities and experience, they are actually removing nearly every possible off-ramp outcome.

By taking that path, they are forced into a singular outcome: they must become a big business or they fail. Some people do become very rich following this model if that is their specific goal. However, most people blow right through what would have been a perfectly good, sustainable business that is now deemed not good enough for an outside investor.

[1:55:18] Being in a position where your business is considered a failure by someone else, even if it is fundamentally functional, is a difficult place for an entrepreneur. You end up giving up a good business because it no longer meets the growth requirements of your backers. At that point, if you cannot raise more money, the business often falls apart. You have built a company that needs more money to survive, leading to layoffs and eventual closure because you have no options left except for that one specific path.

The Value of Optionality and Independence

[1:55:34] I am a significant advocate for optionality. We have the choice to go through an IPO, to raise more money, or to sell to Private Equity, but we simply do not want to. We could even choose to quit, but we don't want to do that either. Having these options is what I consider to be gold. We can keep going for as long as we want, provided the business remains profitable and survives.

I would like to see more people prioritize this way of thinking. Many founders are blinded by the mirage that a large sum of money allows them to do anything. In reality, it restricts them to doing exactly one thing: building a massive business. That is not a wide range of options; it is a very narrow mandate.

Timelessness and the Purity of Design

[1:56:12] There is a strong attraction to timeless things and a craving for simplicity while abhorring complexity. This is evident in the design of certain iconic products over time. For example, if you look at a Rolex or an Omega Speedmaster, or even a Porsche 911, they have maintained a consistent design language for decades.

[1:56:47] Looking at a Rolex design from 1960, it appears basically perfect. It contains everything one needs and nothing they don’t. When you compare it to an updated version from 2010, you see a variety of additions. While the newer version isn't necessarily bad, the original attracts me because of its purity. It represents the purest form of the initial idea.

[1:57:11] I love ideas and insights. Someone originally had the insight to design a watch that looked a specific way, and every subsequent design was based on that initial concept. Using the Rolex Daytona as an example, the original model from 1963 is, in my opinion, aesthetically superior because it is the purest execution of the concept.

Everything added to the design since 1963 has been layered on because of the commercial necessity to sell more units and release new models. A company cannot simply continue to sell the exact same first version forever; the world requires new products. However, that doesn't change the fact that the original remains the pure form of the thing.

Functional Evolution vs. Conceptual Purity

[1:57:56] Whether you call it the essence or the purity, the beauty lies in the initial idea and the first execution of that concept into a three-dimensional product. I noticed this even with the equipment at my old gym, specifically the early Concept 2 rowers.

[1:58:42] Looking at the early models and comparing them to the changes made over the years, the evolution was primarily functional. They began using better materials that lasted longer, but the core idea remained. [1:58:53] This idea of a product that is so fundamentally good right from the start is what I find most compelling.

today, even after years of evolution, demonstrates the value of purity in design [1:58:55]. This consistency creates a stronger brand attachment because changes are functional rather than arbitrary. Improvements are made to materials and longevity rather than just adding features to sell new models. In contrast, products like watches often introduce new dial colors solely as a marketing tactic to move more units without actually making the product better [1:59:15].

The Pitfalls of Modern Smart Homes

This trend of adding features without improvement is a central theme in a viral essay regarding smart electronics [1:59:22]. A recent experience renting a brand-new construction house for visiting parents highlighted these frustrations. Despite the expectation that a new build would be free of leaks and issues, the home was cluttered with unnecessary digital interfaces [1:59:48]. Thermostats have transitioned from simple, intuitive dials to touchscreens. While a product like Nest is excellent because it updates the classic, functional round dial design originally created by Henry Dreyfuss for Honeywell, many generic versions are now large, rectangular, and cluttered with extraneous information like weather forecasts [2:00:12].

Screen Overload and Design by Specification

There is a growing tendency to install massive screens, such as a large iPad-style alarm panel, simply because the technology is available. If a screen exists, designers feel compelled to fill it with content, leading to "big black glass things" that are overly complex [2:00:26]. This over-engineering extends to basic appliances; for instance, a modern dishwasher may require registration through a smartphone app before it can even be used for the first time [2:00:35]. When a user simply wants to wash dishes, they may find themselves unable to do so without calling a house manager to navigate an app. This is a clear case of adding complexity that fails to improve the core function.

The Great Regression in User Experience

Many of these digital systems are slow and laggy. On a modern thermostat, it is often difficult to distinguish whether the displayed number is the current room temperature or the target setting [2:01:00]. Modifying a schedule becomes a chore because it is buried within a convoluted, unresponsive menu structure. It is highly unlikely that the people who build these products actually use them in their own homes [2:01:15]. Instead, these products are built to a list of abstract specifications rather than being refined through actual use.

This phenomenon, described as the Great Regression, is also visible in televisions. You no longer simply turn a TV on; you boot it up [2:01:33]. It can take 12 seconds just to reach a menu, and it is often impossible to simply return to the channel or input you were previously using.

The Return to Tactile Feedback

While technology can slide backward, there are signs that lessons are being learned. In the automotive industry, many manufacturers are beginning to move back toward physical buttons and dials [2:02:30]. The exception is Tesla, whose software integration remains outstanding, but for most other companies, putting every control on a screen has proven to be a mistake. Large screens lack tactile feedback and prevent the development of muscle memory. Without a physical button, a driver must take their eyes off the road just to confirm they are changing a setting. This shift back to physical controls suggests a realization that while technology can get worse, failures eventually lead to a better understanding of what actually works for the user.

[2:02:51] me to go into a new home with the state-of-the-art stuff and see how backwards it was. I am in technology; I am not a Luddite, and I am not afraid of this stuff. I get it. But to see how bad it has gotten, particularly with something as simple as light switches, is revealing. When we rented the place, the agent who found it and handled the negotiations mentioned that the owners wanted to do a walkthrough. I assumed the walkthrough would be a standard tour of the house, but it turned out to be a tutorial on how to use the lights. I found myself thinking, "I have to do what?"

The best interface ever created was the simple switch. It works on and off, and it is beautiful. It is almost as if this technology has not been discovered yet, or rather, it has been forgotten. This is reminiscent of the lost art of Roman concrete. Even today, we do not fully understand how the Romans built concrete so well that it lasted this long. There is a lost art there, and I feel the light switch is a lost art as well. It is gone for now, but it will be rediscovered one day, and people will realize it is significantly better than current technical failures. While there is a room and a place for all sorts of advancements, there are also regressions, and it is unfortunate that the technology industry is the one selling these to people.

The Ruthless Edit and Timeless Design

[2:04:13] This brings to mind a concept from Rick Rubin called the ruthless edit. When making an album, Rubin might tell an artist who has recorded 30 songs to pick only the five they absolutely cannot live without. This results in a five-song album that is perfect. Before adding a sixth or seventh song, he asks if it actually makes the work better. Often, you are adding to something without making it better.

The through line here is timeless design, like the 1963 Daytona. There is nothing to add to it that would make it any better; it is already perfect. This same principle applies to Porsche. The silhouette has remained remarkably similar over the decades. In Malibu, near the Palisades on the right-hand side of PCH, there was a burnt-out car that sat for about a year. Even though it was completely destroyed, you could immediately tell it was a 911. In contrast, the other cars next to it were also burned out, but you had no idea what models they were.

Dosage and the Essence of Product

[2:05:32] Jerry Seinfeld has an interesting concept regarding dosage. He suggests that dosage matters in performance. You might see a stand-up comedian for 45 minutes and think they are great, but if they go for an hour and 15 minutes, your opinion might drop. They should have stopped at 45 minutes. It is incredibly difficult for us to stop adding complexity and just let a product sit as it is.

Going back to Rick Rubin and an exchange he had with Jimmy Iovine about 40 years ago, Rubin would argue that a simple piano and a beautiful vocal sounded great 50 years ago, they sound great today, and they will sound great 50 years from now. When he helped revive Johnny Cash's career, they recorded a song called Hurt, originally written by Trent Reznor of Nine Inch Nails. Reznor wrote it as a 21-year-old man talking about regret, but hearing a 75-year-old man sing it when he can't go back and fix it makes it a much deeper cut.

The point is that a great vocalist with a guitar sounded great 50 years ago and sounds great today. We need to go back to the essence of what we are actually building. Many people building products today are missing that essence; in many cases, they are not even using their own products.

Focus on What Does Not Change

Jeff gave some advice way back when he was first met, which was to focus on the things in a business that do not change. While there will be plenty of things that do change, it is vital to focus on the constants. [2:07:00] The examples he provided were based on Amazon: ten years from now, people are not going to wake up and wish that customer service was worse. They are not going to wake up and wish it took longer to get a product, nor will they wish that prices were higher.

Core Essence and Selection

These are the core essence elements that Jeff clearly invested in. Speed is a primary factor, as products are coming faster than ever. Selection is another constant; people are not going to wake up a decade from now and wish they could not get a specific item on Amazon. [2:07:34] More selection, faster delivery, great customer service, and fair prices are the fundamentals. He even emphasized competing against others to offer a lower price, even if Amazon does not sell the product directly. These are the things in his business that he knew would never change. While he can explore many other areas, he does not lose sight of those basics, which is a principle he instilled in others.

The Challenge of the Basics

It is very easy to lose sight of the essence or the core fundamental basics because they can become boring. [2:08:08] After doing the same thing for a while, there is a tendency to want to do something else, which can lead to losing sight of what really matters.

The Rarity of Long-Term Commitment

People who have run companies for as long as 27 years are rare. If you look at the average length of time the guests on this program have been working in their businesses, it is likely around 30 years. There is a deep interest in people who do things for a very long period of time. [2:08:34]

The Math of 54,000 Hours

There is often a disagreement about whether a person works hard if they only put in 40 hours a week. However, when you spread that effort across 27 years, the numbers tell a different story. [2:08:51] Last night, the math was calculated: 40 hours a week over 27 years adds up to approximately 54,000 hours. Very few people have worked on the same thing for 54,000 hours. This approach is described as laying bricks one day at a time. It may not have been an intentional grand design at the start, but the work simply keeps adding up until the past becomes a substantial foundation. [2:09:27]

Lessons from The Distance

There is a great deal of admiration for things that have stuck around for a long time. There was a podcast called The Distance that ran for a few years, focusing on businesses that had been around for 25 years or more. [2:09:41] While twenty-five years might not seem long in some contexts, it is quite long for most businesses. Most of these were family-owned small businesses that succeeded because they nailed a few specific things and got them right.

Sustainability Versus Flukes

If a business has been around for that long, its success is not a fluke. Something can be "hot" for a while as a trend or a fad and then disappear, but being around for a long time signals that something is repeatedly right. [2:10:13] It signals that the business is right enough to stay in operation. Many of these businesses are tight; for example, a dry cleaner might have thin margins that are just enough to get by, but the owners would rather be doing that than anything else. They stay in it for the long term. Even if it is not a "great" business by some metrics, it is a sustainable business, and a sustainable business is a great business if it can keep going. [2:10:35]

The Evolutionary Wisdom of Conifer Trees

[2:10:37] This perspective on long-term sustainability aligns with the insights derived from nature, much like the evolution of a leaf. Mark Spitznagel explores this concept in his book, The Dao of Capital. Spitznagel, who runs a hedge fund, dedicates an entire chapter to the study of conifer trees.

[2:11:01] He explains that conifers are the trees most capable of surviving in the most extreme environments on Earth. Having evolved over an extreme time period, they offer deep insights into resilience. Spitznagel draws parallels between these trees and great businesses that manage to survive by adopting similar strategies of persistence and adaptation.

The Oak Tree Philosophy

[2:11:17] There is a strong preference for viewing a business as an oak tree. While Jeff Bezos famously used the analogy of Amazon starting as an acorn that grew into an oak tree, the focus here is less on the seed and more on the characteristics of the mature tree.

[2:11:34] Interestingly, the naming of Amazon itself followed a specific logic. In the early days of the internet, directories were listed in alphabetical order, so Bezos wanted a name starting with "A." He initially considered "Abcadabra," but changed it after people misheard it as "cadaver," which was not the association he wanted for the "everything store."

[2:12:00] The appeal of the oak tree lies in its stability. Oak trees, particularly the burr oak common in the Midwest, are slow-growing but can withstand intense storms. They are not flashy, but they last for centuries. This stands in stark contrast to the cottonwood tree, which grows very fast and makes a lot of noise in the wind. Cottonwoods are messy, dropping cotton everywhere, and they typically die after about 75 years, often falling hard.

[2:12:38] For a business, being "flashy" or leaving signs everywhere is less important than building a solid foundation and adding a little bit of growth every year. This approach creates a stable structure that can weather any storm.

Survival as a Competitive Advantage

[2:12:52] In the technology world, there is a constant cycle of new products being labeled as "killers"—a Slack killer or a Basecamp killer. When a business has been around for a long time, it becomes clear that many things are supposed to kill others, yet very few can actually withstand the test of time.

[2:13:16] The hardest part of business is simply sticking around. If people ask how to compete, the most effective answer is often just to stay in the game longer than everyone else. By staying in the game, a company remains positioned to get lucky.

[2:13:33] Success often comes from an innovation invented by someone else that a company can leverage. For example, Coca-Cola did not invent refrigeration, but that external technology drastically expanded their market.

Moving Beyond "Cosplaying" as a CEO

[2:13:48] Tobi Lütke of Shopify provides a modern example of this evolution. During a difficult period for the company, including a significant drop in stock price following a huge spike, Lütke realized he had been "cosplaying" as a public company CEO. He was doing what he felt he had to do in that role rather than being himself.

[2:14:14] He eventually realized that there isn't just one right way to run a business; there are probably at least a hundred. This realization allowed him to return to a more authentic and effective leadership style. If given the chance to do it all over again, the path taken would likely be the same, as those difficult periods are often what allow a leader to realize what they were doing wrong and how to grow.

The Filter of Time and Deserved Trust

[2:14:23] While there are at least a hundred different ways to do the same thing, time remains the ultimate filter. It is the best and perhaps only filter to trust for businesses, ideas, books, and even people. A significant influence on this perspective is Charlie Munger, who emphasized building a "seamless web of deserved trust" with high-quality individuals. The only way to truly identify high-quality people is through the passage of time.

Lessons from the Snowball Effect

[2:14:53] In the case of Charlie Munger and Warren Buffett, they maintained connections with the same people for decade after decade. The 700-page biography of Warren Buffett, titled Snowball, highlights how many friends he gathered in his 20s, 30s, and 40s remained by his side well into his 70s and 80s.

For a business, time carries most of the weight. This maxim, also drawn from Munger, suggests that one should master the handful of big ideas in disciplines such as biology, physics, and economics. As noted in Poor Charlie’s Almanack, these few big ideas carry most of the freight.

Prioritizing Durability and Survival

[2:15:33] Prioritizing durability means focusing on survival. This relates back to the concept of having "blubber" or a margin of safety, organized into small units. Pricing is a vital part of this strategy. For instance, at Basecamp, the maximum any customer can pay is $299 per month. It does not matter how many users a company has; that is the price ceiling.

While a competitor might eagerly accept $50,000 a month for a client with 2,000 seats, that type of revenue is intentionally declined. The preference is for a "static" group of customers, similar to the equal-sized dots on an old television screen.

Building a Resilient Customer Base

[2:16:28] A robust business should be able to lose 10 or even 100 random customers and continue without issue. The danger lies in acquiring outlier companies—"whales"—that the business cannot afford to lose. By equalizing pricing and ensuring no one pays significantly more than anyone else, the business creates a foundation of small, individual units.

[2:16:54] This structure ensures the business is not like a game of Jenga, where the loss of one piece causes the whole structure to fall. Because every customer is essentially equal, software can be developed for the entire base rather than being dictated by the needs of a handful of high-paying enterprise clients. Durability is built on a large volume of small things rather than a few large, fragile dependencies.

The Role of Intuition in Decision Making

[2:17:30] Much of this strategy is driven by intuition. Intuition is making human decisions that you are comfortable with and being willing to stand behind them. It is a collection of many inseparable factors—experiences, observations, and insights—that lead to a final choice.

[2:18:20] This gut-driven approach applies to everything from pricing and product features to names and new offerings. In this model, decisions are not reached through formal testing; they are reached through the refinement of intuition. Whether it is a product name or a specific feature, the process relies on making a decision as a human and sticking to it.

Decisions Beyond the Spreadsheet

[2:18:28] The process involves a total rejection of focus groups and formal testing. While AB tests might be performed occasionally "for fun," they never influence decisions that actually matter. There is a deliberate choice to avoid looking at numbers as a primary driver. No spreadsheet has ever dictated a product decision, as there is a risk in overvaluing data simply because it is presented in numerical form.

[2:18:59] Great care is taken not to let a spreadsheet carry more weight than a personal feeling or intuition. However, intuition has its limits; it is not a license for recklessness. One would not, for example, throw $50 million at a Super Bowl ad without justification. Every action is ultimately based on what the team wants to do and what feels right. The goal is to "feel into" these decisions until there is a sense of total comfort with the choice, regardless of the eventual outcome.

Refining Intuition Through Action

[2:19:24] Refining intuition is not something that can be practiced actively; it is a byproduct of making decisions. It is a matter of area under the curve—the more decisions one makes over a long period, the more that intuition is sharpened.

[2:19:51] Making a high volume of choices takes the edge off the process. It is like tumbling stones until they become a smooth orb that feels right in the hand. Reaching this stage means being able to make a decision without fear, but with excitement. There is an acceptance that even if a decision goes wrong, it was still the right decision to make in that moment.

The Necessity of Independence

[2:20:21] A critical component of using intuition is the freedom to act on it. Intuition is stifled when it constantly hits a ceiling where someone else can say no. To truly enjoy and utilize one's gut instincts, one must have independence and optionality. Being in a position where no one can prevent a decision from being executed is essential to the process.

Closing Reflections and Resources

[2:20:43] The conversation concludes with a reflection on the value of sharing these long-held ideas. After years of reading and thinking, the ability to discuss these principles openly is a highlight of the work.

[2:21:02] For those looking to further explore the minds of great builders, the Founders podcast serves as a deep resource. Over the course of nearly a decade, the show has covered more than 400 biographies of history's most significant entrepreneurs, extracting actionable ideas from their lives and work for modern application.