DHH: How to Build a Profitable Company Without Losing Control

David Heinemeier Hansson (DHH) is the creator of Ruby on Rails and the co-founder of 37signals, the company behind Basecamp, HEY, and ONCE. He has spent 25 years building a software business around one condition: no one gets to tell him what to do. Jason Fried hired him as a contractor out of Copenhagen for $15 an hour. He built the first version of Basecamp with just 10 hours a week — 380 hours in total — and still credits the shortage of time for how good it turned out. He does not trust himself with unlimited resources. Nobody should, he argues. Give a team too much money and too many people and it will build a blob. Forty-some venture firms came calling in 2005. The only investor 37signals ever said yes to was Jeff Bezos, who accepted a term sheet priced so absurdly high they were certain he would walk. They have been sending him dividend checks ever since. Basecamp has been rewritten three times, and the original 2004 version — discontinued in 2010 — still runs and still makes millions in profit. His marketing strategy, borrowed from Kathy Sierra, hasn't changed in two decades: you can't outspend the giants, but you can out-teach them. His product test hasn't either. He builds the thing he wants for himself, and once he'd rather use it than anything else available, he assumes he isn't alone. That's how Ruby on Rails started. It's how Omarchy started too — the Linux distribution he’s spent thousands of hours making and gives away. No investors. No board. And now, with Omarchy, no customers. He calls that last step a retirement from capitalism: still making things, still sharing them, with nobody holding a claim on his time. Show notes: https://www.davidsenra.com/episode/david-heinemeier-hansson Made possible by Ramp: https://ramp.com AppLovin: https://applovin.com/senra HubSpot: https://hubspot.com/startups Deel: https://deel.com/senra Chapters (00:00:00) Cutting Rework From 50,000 Words To 25,000 (00:02:54) Basecamp Was Built In 380 Hours (00:06:46) Unlimited Resources Build A Blob (00:10:22) Terminator Beats Avatar By A 1000x (00:15:24) The Printer DHH Never Wants To Upgrade (00:17:31) Millions In Profit From 16 Year-Old Software (00:20:10) The Beauty Of A Finished Product (00:22:54) I Would Quit Before Working In An Office (00:25:41) Four Uninterrupted Hours Or The Day Is Lost (00:31:21) Tobi Lütke Saw The AI Future First (00:38:51) Apple Pissed Him Off Enough To Switch (00:42:47) The 19 Year-Old Who Beat Apple (00:47:16) If Nobody Else Will Build It, I Will (00:52:02) The Need For Control, Independence, And Freedom (00:53:44) Chef's Choice, Not A Construction-Kit Burger (00:56:50) A New Computer Ready In 2 Minutes (01:00:33) A Cheaper Mac Will Never Win (01:02:27) The Best Ideas Sound Stupid At First (01:03:47) Out-Teach Your Competition (01:06:57) The Algorithms Broke Reciprocity (01:10:53) No Investors Is Freedom. No Customers Is Transcendence. (01:13:25) No One Gets To Tell Me What To Do (01:16:49) Your Moral Obligation To Buy A Ferrari (01:23:19) Costs Are The Only Thing You Control (01:26:49) Bezos Paid For The Promise (01:30:17) The Confidence To Say No To Everyone (01:32:59) The Day A Third Of The Company Left (01:36:49) Marc Andreessen Came To Help Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Speaker 00

  I have a mild skepticism about my own ability to just talk at length about most topics that I care about, because I remember Getting Real from 2006, the brevity. We were so brief. All the chapters in Getting Real, most of them are half a page. Some of them are three paragraphs. And I actually have a deep appreciation for our former ability to be that succinct. And it wasn't like we were trying to. It was just, here's the distillation of this idea down to these three paragraphs, and that's it. Now, what's funny about that is when we wrote the later books, we didn't have that straight-from-the-gut brevity. In fact, when we wrote Rework,

• 0:45Speaker 00

  the initial manuscript that we submitted was, I think, 50,000 words. That was what the publisher got to see, right? And they were very excited. Great, this fits. This is like just the size of the book. And then Jason and I went through it and cut it in half. And it was down to 25,000 words. And the publisher freaked out. They're like, we can't publish a business book that looks like this, that looks like a pamphlet. So we had to pad it with spacing and margins and illustrations to get to it. But it was really that process, cutting it from 50,000 words to 25,000 words, and taking some essays from two pages down to four paragraphs that really made it all happen.

• 1:25Speaker 00

  So I want to retain that ability to distill and sometimes just being able, mechanically, to talk for 20 minutes about a topic is not always the best thing.

• 1:38David Senra?

  I would say, obviously, we talked about this at dinner last night. I woke up, like, my abs are sore because I was laughing so much, right? But I told you this yesterday. It's like, I've been reading your writing for like 15 years. So yeah, you're writing, I think brevity is the right, you know, thing to optimize for there, getting across your point in as few succinct ways as possible. But not in the law...

• 1:58Speaker 00

  That's true.

• 1:59David Senra?

  The art of conversation. The best conversations that you've ever had in your life, you're not like, oh yeah, I talked to this guy for five minutes. It's great. It's like, I talked to this guy for five hours.

• 2:06Speaker 00

  That's spot on.

• 2:06David Senra?

  And so this is why it's so important, why I wanted you on the show like immediately. And we've been working, trying to figure this out for a few months together. It's like, dude, I remember watching like Startup School in Y Comber. You probably did it in like 2008. And there's like lines from that because you were unfiltered. And I think that's like an hour long of just like, this is what's in my mind right now. And here's how I think about things that I still think of 15 years later. Let me ask you a question. The brevity. You've built, you know, so many different products. I lost count of how many of them have made millions, multiple millions in profits, tens of millions, maybe hundreds of millions in profits. Do you apply that, like, this ruthless edit, like Rick Rubin's idea of like this ruthless edit?

• 2:48David Senra?

  I started out with 10. I'm gonna cut down. I think I need five. No, I'm gonna cut all the way down to three. And then be so judicious about what I add back. Like, how do you think about that when you're building products?

• 2:58Speaker 00

  It's even more on our minds now than it used to be. And it was always on our mind. Our initial spiel, our tagline, was less software. When we launched Basecamp back in 2004, it was often contrasted with Microsoft Project and other kind of enterprise-y, heavy tools. And our pitch was always, it's really good, but one of the reasons why it's really good is just less. There are fewer features. There is less to learn. There's less to teach. There's just less. And we focus on making the few things it does do do very well. Now, in this new age where using agents and AI has made it so much easier to implement things,

• 3:43Speaker 00

  it becomes that much harder to stick to those principles because we used to be granted these constraints simply by the fact that it took a long time to build things. And especially in the early days of Basecamp, for example, we built the entire first version on me having 10 hours per week, not per day, per week, to build it. That is an enormous constraint on how you could do anything. Because you can waste 10 hours really quickly, just chasing things around or focusing on the non-essentials, if we wanted to get that product out. And we got it out in 380 hours. And the reason I remember this was at the time, I was a contractor for 37 Signals. Jason had hired me at $15 an hour

• 4:28Speaker 00

  when I was in Copenhagen, Denmark, and he was in Chicago. And by the way, I got paid in Apple gear. That was the other laugh. It's like, don't even send me the money. I will just come to Chicago and you'll give me an iPod and a MacBook and whatever. Anyway, that's how I got started. And therefore, I know exactly how much time we put into the first version. And the first version was awesome because of that, because it had such constraints. Now, if you have 380 hours together with your 10 agents, you can build a monstrosity like that of something that does a million things for a million people. And therefore, that bloat just comes naturally in a way it didn't before. And therefore, our task as software builders becomes so much more about distilling it,

• 5:11Speaker 00

  so much more about killing our darlings, killing features that we think are good but are just too much. And I saw this, especially with the new version of Basecamp, Basecamp 5. This is the first version we've been building with AI acceleration. And suddenly, we had designers who were able to take features all the way to completion. And we're at the cusp of shipping it when we kind of go reviewing and go like, I'm not sure this actually fits. Like, this is expanding the balloon here. If we keep expanding that balloon, it's gonna pop in a way where we lose the central selling point of Basecamp, which is, it's just so easy to use. And it's funny because sometimes you can have that as a high-minded, intellectual guidepost.

• 5:54Speaker 00

  Oh, we want something to be simple to use. Everyone says that, by the way. Anyone who builds software, who builds anything is like, oh yeah, our stuff is very easy to use. It doesn't matter. If it comes from your mouth, it's not credible. But if it comes from the customer, it's very credible. And when we do customer surveys, it is the number one reason why people continue to pick Basecamp. Is it simply simpler to use than the competition? And therefore, it's a joy to get others onto the platform with them because it doesn't require training sessions and whatever. That's gotten so much harder to do, even for us. Because I actually really like this notion of embracing constraints because I don't trust myself. I don't trust us. I don't trust Jason.

• 6:36Speaker 00

  I don't trust my own sensibilities that if I can do everything I want at very little cost, that I wouldn't.

• 6:43David Senra?

  Wait, wait. Say more about not trusting yourself.

• 6:46Speaker 00

  That the constraints on, I don't have enough time, I don't have enough money, I don't have a big enough crew, is what forces that selection process. If you have unlimited time, unlimited money, and unlimited people, you're gonna build a blob. This is actually the reason why when we got started, I was never worried about Microsoft. When we got started, everyone was like, Microsoft's just gonna make Basecamp a feature of Project or Teams or whatever.

• 7:18David Senra?

  For context, in the early 2000s, when you started Basecamp, everybody's like, well, with the pitch, when you, you know, it's like, why are you gonna write the software program? Microsoft's just gonna do it. Because they were just a dominant player. It sounds crazy today, but yeah.

• 7:29Speaker 00

  It does. But our response was always, Microsoft's gonna produce the kind of software that takes 50,000 people to make. Because that's the size of their organization. So they can only produce that kind of software. I'm not worried about that. I'm worried, and still am, about a team of two, about a team of four. Because they will produce software that's competitive with ours because it comes out of the same constraints. And therefore, our threat doesn't come from the behemoth. Now, is that true today when a much smaller team can act as a much larger company? I'm not quite sure. But I do know that I don't trust that if I was running Microsoft in 2004,

• 8:14Speaker 00

  that I wouldn't also have made the sprawling mess that is the office. Or the joke today is, I think they have four versions of Outlook. They have Outlook New, they have Outlook New parentheses Old, they have Outlook New parentheses 2026, right? Like, how do you end up with such a mess by having unlimited resources? It's a little bit like that resource curse, right? If you just have wealth springing out of the ground, well, you kind of don't need to bother with anything else, do you? You don't need to develop your economy. You don't need to develop your society. You can just sit back, relax, and let the money flow. It's not a blessing. It's a curse. So I don't trust ourselves to be able to channel that.

• 9:00Speaker 00

  By default. So this is why I'm quite skeptical about all this new AI acceleration we're having is even us. I think it's quite likely that we could use it wrong to build too much software to get too far away from less software, learnable software that still has to fit in the mind of a human.

• 9:20David Senra?

  Okay, I think that's a great point. I do think like the complexity is because of the resources and the lack of constraints with success. So I study a lot of like the music industry because there's crazy characters and I love crazy characters. And I heard something Rick Rubin said about the first time he ever met Jimmy Iovine. Now, I've had both of them on the show and I've become friends with Jimmy. And Jimmy is a decade older than Rick, so he did basically everything before Rick, a decade before Rick did. And Rick tells the story, the first time he met Jimmy Iovine, he was like, Rick was probably like 19 or something, goes in, plays music for Jimmy. And Jimmy, he said Jimmy's response to it was so surprising, he goes, man, I wish I could still make something that simple. And Rick's like, I'm sure you can. You have. So even if you didn't make more money, the problem is you're iterating more and you're like spending more time on it.

• 10:05David Senra?

  I just listened to a podcast I did four years ago on the partnership between Ben Franklin and George Washington, because it was July 4th. And I'm listening to it, I'm like, fuck, one, this is good. Two, it's good because it's simple. It's because of what I left out of it. I think I'd fuck it up today.

• 10:20Speaker 00

  Yes. And I think I had that analysis quite early because I saw it in things like movies. The first Star Wars movie is just incredible. When you think about the technology they had in the mid 70s to produce a space odyssey as timeless as that, that still looks incredible. You put it on a big screen today, no one's going like, oh, the effects look stupid. No, they're going to load, the effects look incredible. And then you look at what George Lucas did when he had 100 times the budget. He had all the computers in the world and all the staff in the world to produce whatever Jar Jar Binks was in the 2000s. And it was awful. And that's exactly where that distrust of my own ability to handle increased capacity

• 11:03Speaker 00

  come from, because you can look at so many of the greats and go, what they produced when they had nothing was truly spectacular. Another one I love is James Cameron. The first Terminator movie is one of my favorite movies of all time. It was made on an absolute shoestring budget and it still beats Avatar by a thousand times. Now, there are also people who like Avatar and I'm sure James Cameron does, that's great. I don't. I like Terminator. And I like it because it's low budget in a way that doesn't feel low budget. It's constrained, therefore you have to tell a tight story with a real focus on just that action flow. And it's incredible. And it was exactly the same thing as I was saying earlier where I read chapters we wrote

• 11:44Speaker 00

  for Getting Real back in 2006 and I think, damn it, I wish they came out that brief by default today. I have to work a lot harder now to be that succinct. I still want to. And it's also, as we talked about, there's office formats where it's great to be able to pontificate at length, but in writing, having that brevity and in software, having that ability to distill and say, no, no, no, no, no, is an incredibly rare gift. And it can be spoiled so quickly by an influx of money. This was one of the reasons why I was always so skeptical about venture capital when it came to software, because I saw time and again, people raised an enormous amount of

• 12:25Speaker 00

  money, hire hundreds of people and produce crap software. And I thought, if we're able to produce Basecamp, and by the way, by, I think, 2007, we had four major projects or products. We were launching one a year while we were also running Basecamp, while we were seven people at the company. So my, my brain couldn't even comprehend, what do you do with 100 people? How do you even apply them towards software to make it good? And the answer was, in many cases, well, you don't. You apply them towards software and crap comes out, because there is not that funnel. There's not this narrow part that forces you to go like, well, I can't have it all. So now I have to figure out, out of the 100 things customers are asking for, I can do three. Damn, they better count.

• 13:08David Senra?

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• 13:51David Senra?

  a massive competitive advantage that compounds over time. Ramp is the only platform designed to make your finance team faster and happier. Many of the top founders and CEOs I know run their business on Ramp. I run my business on Ramp and you should too. Go to ramp.com to learn how they can help your business save time, save money and grow revenue. That is ramp.com. I found one of my all time favorite quotes when I was reading the book Zero to One. The quote says, "The single most powerful pattern I have noticed is that successful people find value in unexpected places. And they do this by thinking about business from first principles instead of formulas." That is exactly what AppLovin has done with their advertising platform.

• 14:32David Senra?

  AppLovin connects you with over a billion potential new customers inside mobile games. AppLovin allows you to capture undivided attention. AppLovin ads are full screen video ads that are watched for an average of 35 seconds. That is retention that blows other ad platforms out of the water. And you can launch on AppLovin in minutes. You set the goal and AppLovin achieves it. There's no complex setup, no expertise needed, and AppLovin scales quickly. They can put your ads in front of over a billion potential customers. Other businesses have seen immediate results, have scaled to hundreds of thousands of dollars of spend per day and increased their revenue by millions.

• 15:14David Senra?

  So you want to get started quickly before all of your competitors are on AppLovin. And you can do that by going to applovin.com. That's applovin.com. Tie this to what you were saying last night about there is some benefit to almost like not changing any software. And you compared it to the fact that you buy the same printer over and over again. Talk about your relationship with your printer.

• 15:36Speaker 00

  Oh my gosh. The Brother HL2340WD. I think that's the model number of my beloved printer. The reason why it's so beloved is it was the first printer I ever bought that I just plugged in and it worked. There was no fucking firmware, there was no nothing, there was just a functionality. I just need black and white prints, often because for whatever reason, it needs a wet signature. So I can't do dark designer, whatever. So I print something out, I sign it, I scan it. That's the job. I am not interested in anything else this printer could conceivably do. I just want that to happen and I want it to happen consistently, exactly the same way

• 16:21Speaker 00

  10 years from now. This is a solved problem for me and I love the printer. Even though I'm not a mega fan of Brother, it's not because it is some amazing piece of technology that is built in just this beautiful way. No, it just does a function. And I think about that and my relationship to the printer every single time we move things around in Basecamp. Because I know we have a huge contingency of Basecamp customers who treat Basecamp like the printer. Once upon a time, they had a problem. Things were falling through the cracks, they weren't organizing well, they'd start the project on email and turn it into a mess. And they looked around, maybe they got a recommendation from a friend, they signed up for Basecamp and they went, yep, that's it. That's just the job. And now they just use it.

• 17:05Speaker 00

  And they don't want things to move around all the time. They don't want all the new features that we're so excited about, because it solves the one job that they have and that's enough. Now, you got to weigh that when you're making products with the fact that you're also going to sell to new people. And if you're trying to sell a product that looks like it's 15 years old to new people, that's a little difficult. But we've done it in multiple ways.

• 17:27David Senra?

  Yeah, how have you solved the problem? We've tried all the

• 17:30Speaker 00

  Options, but the one option I still really like was we rewrote the whole thing three times. So there was the first version, came out in 2004.

• 17:40David Senra?

  Which people are still paying you from the month?

• 17:44Speaker 00

  Yes, yes, that's exactly the point. So we rewrote it three times, but we kept the old versions. Normally, what always happens in SaaS and in software is a new version comes out and everyone just has to get it. They're forced to upgrade to it.

• 17:56David Senra?

  Yes.

• 17:56Speaker 00

  And you actually feel like I've lost control here. I bought a thing that did the job, and now you're making me learn things. The new version of Basecamp 5 is certainly better. It's a vastly superior product. I'm just not in the market for a better product. I'm in the market for the product I already bought. I don't want something different. I want the shitty thing I already have because I know all the ways it is broken, if it is, and I've made peace with that. So for Basecamp, we kept those old versions. The version we launched in 2004, we stopped selling in 2010, 16 years ago. We still have customers on it. As an individual business, it's still making millions of dollars.

• 18:36David Senra?

  In profit.

• 18:38Speaker 00

  In profit, because there's basically no expense to it, right? There's no additional development. There's a little bit of maintenance. You just gotta keep sure it's secure and bring it forward and so forth. But it's basically pure product because also those people who've been using a product that's been discontinued for 16 years, they don't bother us very much. They're not like, oh, this thing, how do I use that? No, they know how it works. That's why they keep with it. And the magical thing for me is, in that cohort, 2004, 2010, there's a ton of people who love Basecamp. I get this all the time. Oh, we use Basecamp. I love it. And I'll take it, oh, did you try the new features? Like, oh, no, no, no, we use the old version. I'm like, how old? Oh, yeah, the original. We signed up in like 2008. I'm like, wait, what?

• 19:21Speaker 00

  You haven't seen any of our good ideas in the last 16 years? And you're still over the moon about what we sell? I think that's incredible. Now, it has trade-offs, right? Like, there are software products that just get stuck with their initial cohort. And then they just age with that cohort, and I think that's fine. But it also just cuts you off from new customers. So I want to have both things, and we do to some extent. We have three major versions of Basecamp. That initial version, then we did a Basecamp 2 that lived from 2010 to 2015, or 12 to 15, I think, only three years. And then we have the current version of chassis, as we like to call it, that we've evolved twice, but it's still the one where we bring people forward.

• 19:58David Senra?

  So what's that word you just said? Shassy?

• 20:00Speaker 00

  It's chassis. That's what we call it. Like, you know how carp makers?

• 20:03David Senra?

  Oh, chassis, okay.

• 20:04Speaker 00

  Yeah.

• 20:04David Senra?

  Okay.

• 20:05Speaker 00

  Yeah, I guess.

• 20:05David Senra?

  I thought you were saying sassy.

• 20:07Speaker 00

  Sassy. It's a sassy chassis. That it's the original code base, and therefore we're bringing customers along with it. And it totally has those trade-offs. We just had it. We just launched Basecamp 5. I think it's an incredible version of Basecamp, the best one we've ever made. And a substantial amount of the feedback was, why did you fuck with my printer? Yesterday, the button was here on the right. I just want to push that, and now you moved it somewhere else. And I go like, I totally get it. I totally get it. And I actually wish we had more of a capacity in software to accept finished products. This is one of my great envies of people who make physical products. By the time you ship, I don't know, a knife, it's done.

• 20:50Speaker 00

  There's no firmware upgrades. There's no patches. You may, I know, sharpen it over time. You may fix it if it breaks. But otherwise, that is a finished scoping. Same thing with movies, same thing with music. You ship that album, it's done, right? I think there's something really beautiful about that. And people intuitively just understand that that's how it is with physical products or cultural products. With software, they don't get it. With software, if you don't upgrade, especially a SaaS software, in like three months, you're like, is this dead? Is this out of business? No, fuck, it's just good as it is. Can we leave it for a second? Can you appreciate just what you have? That would be, that would be great. And we have a fair amount of that software because we've been in business for over 25 years. And we've created a bunch of things.

• 21:36Speaker 00

  And I've always thought, you know what? Not everything that we've ever made is something we're gonna want to continue to evolve forever. Fine, but we should keep it around. And this is one of the promises we've made to the customers we have. We're gonna keep it until the end of the internet. That's our moniker for this. Either that, or as long as we're in business, whatever comes first. And therefore, we allow someone who bought Highrise, for example. We made a CRM tool, a customer relations tool, that made millions of dollars, our second biggest hit after Basecamp, that we ran for many years. And then at some point, we were just done with that. Neither Jason or I ended up using it because we don't actually interact with that many people, that we need to detract from things. It had this core user base. We're super happy with it, and we're still running it for them.

• 22:19Speaker 00

  It's still a multimillion-dollar business, and I'm super happy, but it's frozen. It's done. It's finished software.

• 22:26David Senra?

  It's funny that you made a CRM because I think you've said before that you don't like people.

• 22:32Speaker 00

  That is one of the reasons why we haven't made version two of that. I, I don't, I mean, I like people actually in the abstract. It's funny, I've heard someone say that, I don't know, people in groups, I like them individually. I'm sort of the opposite. I like people in the abstract. Individually, I have more of a problem with it. So I don't interact with that many people on a daily basis.

• 22:54David Senra?

  How much of your time do you spend alone?

• 22:56Speaker 00

  Oh, the vast majority. The vast majority. And in fact, it's funny because at 37 Singles, we work remotely. We have about 60 people.

• 23:04David Senra?

  Yeah.

• 23:05Speaker 00

  And twice a year, we all meet up and spend a week together. And it's really great. You get to see people, and I cherish that because you need that human connection. You need to sit right in front of someone to re-establish trust batteries and charge things up and realize it's not just all avatars and taxed. It's actually real people. But at the end of that week, I'm always like, as much as I love these people, as much as I love this company, I would fucking quit and live as a hermit in the forest rather than work with them 365 days a year in an office. I'm just not built that way. I am not built to be in an office and work with someone all the time. And in fact, when I look back upon my career, it only took off when I closed my door

• 23:47Speaker 00

  and not see anyone for long stretches of uninterrupted time. I mean, when I got started working in technology, I worked in open offices. And you know what? My productivity and my creativity was a bit of a flat line. I just got exhausted.

• 24:02David Senra?

  Hold on.

• 24:03Speaker 00

  And having folks around.

• 24:04David Senra?

  Let's go back to this. Let's say hypothetically, you're up 16 hours a day. How many of those 16 hours are you alone?

• 24:10Speaker 00

  Oh, man, at least half of it. And the other half is spent with family. Like, the amount of hours per week that I spend with sort of strangers and longer interactions is small.

• 24:23David Senra?

  Is that increasing with age, or were you always like this?

• 24:28Speaker 00

  I was always like this. I was always an introvert. I always appreciated my own company. And I always appreciated just the lack of interruption, the lack of noise, and the lack of stimuli, really.

• 24:40David Senra?

  I feel the same way. Everybody, they watch my podcast. They're like, you're not an introvert. I'm like, no, no, like, I would spend half, things have changed now because new shows have been fucking crazy, but before, you know, I ran a solo history podcast with no employees. Spent half my waking hours alone in a room with books, like you see books everywhere. Like, books are everywhere.

• 24:59Speaker 00

  Yeah.

• 24:59David Senra?

  And there's a great line by Kanye that sounds like something that you just said. He goes, so much personality, what do you want from me? I can be by myself and enjoy the company. And it's just like, I just enjoy this better than most of my interactions with, especially if you don't control the environment, like an open office.

• 25:14Speaker 00

  Yes. I have a really deep-seated hatred of the open office. I worked in quite a few, and I ended up just with a burning desire to see it all just go up in smoke. And a commitment, in fact, to make sure I was successful enough that I never had to return.

• 25:33David Senra?

  But remote work is everywhere now. They don't understand. You guys published a book called Remote in 2013, if I'm correct?

• 25:39Speaker 00

  Yes, that's right. Yeah. Well, before anyone did it. Now, what's funny is, I mean, I've seen the full cycle, right? So during COVID, everyone goes like, actually, remote work's amazing. And we get just as much done. And then as soon as that was over, we were like, oh, I guess we still have that 10-year lease. We better get people back into the office. Now, that's a bit of a cynical view. I totally get that there are individuals who thrive when they're around others. And actually, I think the common form of leaders and entrepreneurs is actually people who do like to be around others a lot, who do like to be interrupted. That's the mode they exist in. That's not my mode. I'm in, Paul Graham has this builder version manager mode, or schedule. And the schedule is all about, if you're a builder and you get interrupted

• 26:22Speaker 00

  just a handful of times in a single day, that day is a waste. Because you will never get into the flow. You will never get into this long stretch of uninterrupted time, and therefore you will not feel in the, not just mood, but moment to solve the deep problems you gotta deal with. And that, to me, that was really the breakthrough for my career, certainly on programming, that I just, I can't use a 45-minute chunk of time, an hour and a half even. I don't know. That's not gonna turn out to something. If I have four hours, okay, now we're talking. I can actually attack a problem and feel like I can get all the way into it. And part of that is I hate repeating myself. This is one of the reasons when, in the early days of 37 Singles,

• 27:05Speaker 00

  we did these workshops called Building a Basecamp. Eight hours. We'd just go through everything that we learned building software products, and let's share. So we build those up. I could stomach three. And by the third time, I was saying exactly the same thing according to a script. I was like, I'm gonna blow my brains out. I just, that does not have any stimuli for me. I can't do it. So therefore, I needed to not repeat myself. I needed to get into that novelty of it and the ability to have these long stretches of uninterrupted time to do that. That's where I find it, right? Like, that open space. The funny thing too is, It's not just people I can't have around to work. I can't even have a mess. This is why I posted some pictures of my office here in Malibu on Instagram.

• 27:50David Senra?

  It still goes viral every few months.

• 27:51Speaker 00

  It does. It actually just got picked up in sort of some content mill that keeps putting it out because it creates so much engagement. But one of the key moments or points of feedback I would get on that is that's not a real office because there's not a mess. Like, it doesn't look like the desk is used. And I'm like, dude, you don't understand. If I have shit all over my desk, I'm not creating work because my mind will just go to the shit. And it's a bit of like that Marie Kondo where you go through simplifying your home and throwing out all this stuff, and it actually creates free mental space. It does for me. And therefore, I need this pure cocoon.

• 28:35Speaker 00

  It's actually a form of procrastination, and I need to run out of obvious things to procrastinate on before I'll start the real work. This is also one of the reasons why I got so into building software tools, Ruby and Rails, everything else. Many of these tools are functions of procrastination. I have a thing I need to do. For whatever reason, I can't get started on it, but I can do all this other stuff around. Oh, we need this wrench. I should just build the wrench. Like, yeah, yeah, let's wait with the table for a bit. I mean, I really need the table, but first I'm going to design a wrench from scratch so that I can put that damn table together. And that can be a very productive form of procrastination, but it is also just a reality of how I'm able to produce work.

• 29:17Speaker 00

  And I've just come to terms with that, at peace with that, very early on in my career, realizing I cannot work for eight hours a day, sitting next to other humans.

• 29:26David Senra?

  So this reminds me of what I want to get to. So you're close friends with Toby Luque. We've had amazing people so far on the show. I've enjoyed every single conversation, but that conversation with Toby is the one that I don't think more than a week goes by without me thinking of it. It's probably when people are like, oh, what should I start with? I'm like, just go there. I was on the phone with a founder who's asking for advice. I was like, man, I need more context of what's going on. I go, but basically on what you said, I go, just go watch this Toby Luque episode, then call me and we can talk. He texts me, he's like, within three minutes, Toby's already dropping like gems. And the reason Toby's interesting to me, and I want to get to like your relationship with him and then his influence on your adaptation of, adoption of AI, is because, one, he's like your favorite founder's favorite founder. And so there's a lot of other founders that I admire.

• 30:09David Senra?

  And like my friend Kareem, who's the founder of Ramp, which is like my biggest partner. Kareem, he's very similar to you, very similar to a lot of great entrepreneurs, like divinely discontent. He like makes something, everybody says, this is great. He's like, it could be better. And he's just, he's never satisfied. Therefore, he doesn't like a lot of other founders, doesn't like a lot of other products. And but he speaks very highly of Toby and likes the way he thinks. And then when you realize about Toby is like, everybody says, oh, like, you know, I'm an independent thinker. But Toby actually thinks through every single thing for himself. So therefore, he has all these ideas and beliefs that are not correlated with one another. So when I ask him a question, I have no idea.

• 30:48Speaker 00

  That's the hallmark of a great debating partner. You don't know what they're going to say.

• 30:52David Senra?

  Exactly. And that's why the conversation was like incredible. I was like, oh, this is, this is phenomenal. And if I didn't have to catch a fight, we would have, we were talking before and after. It was like, man, I have to have this conversation again. So you said earlier, what I also admire about you, and I've been following you for a long time, is like, you'll have an idea, an opinion, you're very fucking vocal about it. But then if you get new information, you'll immediately be as vocal as changing your mind.

• 31:14Speaker 00

  Correct.

• 31:15David Senra?

  And you mentioned that Toby really influenced your thinking about using AI. Can you go into that?

• 31:21Speaker 00

  Yes. So I was as excited, I think, in the abstract as anyone by the advent of AI. We get to see ChatGPT and all of that early, three plus year ago enthusiasm for the general distribution of AI. Incredible. We can make computers do that? Wow, I love it. But I had a far greater skepticism of how soon and how much it's actually going to have a material impact on how I write code, for example. And that was informed by what was present at the time. At the early stages of this AI revolution, we were getting autocomplete. You were sitting in Visual Code or Studio or whatever, and you were trying to write

• 32:06Speaker 00

  something, and the AI would be like this pestilent coworker who's like, let me drive, let me write it for you. I'm like, can I just think for a second? Everything we just talked about, like that isolation, I want to be able to sit and I want to be able to think and not get constantly interrupted. It was that on steroids. It was the open office on steroids. It was everyone walking by, like, hey, can I write on your keyboard? No, you can't. Get your grumpy fingers off. I want to type this shit myself. So I didn't like that at all. And I therefore locked in on thinking, this is what AI is going to be. And Toby clearly saw much further ahead. His eyes were much further up. It's funny. Now I'm racing with Toby, and one of the things we talk about all the time is where are your eyes?

• 32:49Speaker 00

  The difference between a great racer and a mediocre racer is very often, where do they look? If you're looking at the turn in, where you're supposed to turn, not at the apex, you're not going to hit it. It's like the old adage, you go where you look. So this is why, don't look at the tree, you'll steer right into it. And training your eyes to look ahead, further ahead than what you think, is actually quite difficult in racing, and I think it's quite difficult in business and life in general. And he had an eye that was just looking further ahead than I was. And he was going, yeah, but it's not going to be like this forever. Intuitively had this understanding of the evolution. And I'm, I'm still not entirely sure, like, what did he see?

• 33:33Speaker 00

  Like, why didn't I see it? And I'm actually a little frustrated on my own behalf that I did not have the same conviction as Toby did, as early as he did, towards seeing, yeah, you don't like it right now, but just imagine two more years of this. And he wrote a memo to the company internally, I think in 23 or early 24, way before agents doing the work on their own, going, I've seen it. This is the big switch. This is what we've been waiting for. This is why I'm here as a CEO, to identify those kind of discontinuations in the trend line. And we need to be a very different company to be able to position ourselves for that and take advantage of that.

• 34:15Speaker 00

  And now I get a first row seat to the fruits of that, being on the board of Shopify. I see just how far ahead they are in these. Half the time, when I'm getting the presentation on the Shopify board of internal systems that Toby has, it's like, this is better than anything commercial. Like, how do you have these incredible tools? They have a tool, for example, called Scout that analyzes the customer feedback that they get, so that their product managers are very well informed about what are people asking for, that just sucking out from all these channels where they can ask it anything, oh, what do people think about this feature or this feature? And then they get an answer. And I go like, damn it, I want to buy this. Can you please commercialize this? And he's like, no, just kind of build it for ourselves. Or River, the current system that they have for employing agents to do work and open PRs

• 35:00Speaker 00

  and everything. Everyone is working towards that. Shopify is already there. And the reason they're already there is that Toby saw it just so much earlier than the rest of us. Now, there were other people who saw it, but most of them already worked in AI. Toby was running this enormous company at the time. And it's actually quite difficult, I think, at least it looked difficult to me, to be able to be as focused as he is on that main business. I mean, Shopify has a million things going on, and then also having your gaze that high up, looking that far forward towards the next apex, what's coming, and then acting on it. And it was his incessant, oh, look at this, look at this, look at this, that got me from, yeah, I like AI, but it's sort of abstract too. Okay, fine, I'll install Pi.

• 35:45Speaker 00

  I'll install this, I'll install that, I'll give it a try. And then realizing, oh, actually, yes, this is going to change everything. And that nudge, having someone just constantly nerd snipe you, as in like, hey, I know a little bit more, or not even a little bit, a lot of bit more about this specific thing. And I'm like, that can't stand. I cannot be the person in this relationship who's not up to date on this shit. So Toby nerd sniped me into just leveling up and diving deeper and setting things up and giving it an actual try. And so much of the ability to move your opinion comes from not these abstract ideas,

• 36:25Speaker 00

  but from touching things, from actually setting up OpenClaw or whatever, and getting some experience with it, and then having this instinctual feeling of where things are going to go, that you're not going to get from just reading someone else do it. You can read a write-up of anyone else using something else, but it's kind of like trying to learn how to drive a race car by reading a book about it. You could pick up some pointers, but until you get behind the wheel, it's not going to internalize. It's not going to be something you can actually perform. So I credit Toby heavily with that, just being a guiding star. And what's so incredible too is, he's not running a startup. Well, he is. He would probably say that he is, in some sense, in like abstractly, right? Like day one kind of thinking. But it's a company of 7,000 people.

• 37:10Speaker 00

  Most companies, even technology companies that get to that stage and has that level of both history, Shopify's been around for 20 years, is that large, 15% of world GDP on e-commerce, is.

• 37:25Speaker 00

  Occupied with the problems they have at hand. So to be able to be further ahead than like, I felt like I should have been running a much smaller company was a great way to sort of almost shame me into getting up to speed. So thanks, Toby.

• 37:38David Senra?

  The best businesses I've studied all figured out the same thing early. Your team is only as good as the information they're working from. And today, that team includes people and agents. But most generic agents only have limited information and don't know the most important aspects of your business, like your actual customer conversations, your sales history, what worked last quarter and what didn't. This is what HubSpot fixes. It connects AI to your real customer data. So when you ask AI to write an email, it knows this customer asked about pricing three weeks ago, it knows what campaign brought them in, and it knows that customer already contacted support twice this month. And that changes everything for a startup. When you're hiring, new team members can see how you actually sell. When you're fundraising, your data is clean and ready.

• 38:21David Senra?

  And when you're scaling, you're building on something designed to grow with you, not rebuilding from scratch. It's the same platform that more than 300 startups who have grown to over $1 billion in valuation grew their businesses on. And now HubSpot for Startups offers this service at up to a 90% discount exclusively for eligible startups. Visit hubspot.com/startups to learn more. That is hubspot.com/startups.

• 38:48David Senra?

  Have you had a chance to nerd snipe him back since then?

• 38:51Speaker 00

  Yes, on Linux. So I switched to Linux about two and a half years ago. And first, I had this soft on-ramp, as most people who switch to Linux, I used Ubuntu. That's the most popular Linux distribution. It's fine. I mean, actually, it's great in many ways because Linux has all these different distributions. They have Ubuntu and Fedora and Red Hat and whatever, but it's all the Linux kernel. Like, the magic of Linux is the Linux kernel and then the ecosystem of all these tools that are around it. And whether you package them in this one way or package them in this other way is not the make or break of it. So just getting into Linux for me was a huge thing. I'd been on the Mac for well over 20 years. I was completely a Mac head, as in thinking, this is, a Mac is computer.

• 39:36Speaker 00

  Like, I don't want to use another computer. Windows certainly is not for me. I don't know. Linux is for people who like pocket protectors and just the kind of nerd that I can relate to, I can respect, but it was not a me thing. Then finally, Apple pissed me off enough that I thought, I cannot in good conscience continue to spend money on their products if I have such deep disagreements with how they run the company. So, fine, I'm gonna try something else. And as I said, I gave Windows two weeks and I realized, man, shit, I can't do it. I'm gonna come crawling back to the Mac if there's not something else. But thankfully, there was Linux. So I discovered Linux, spent like five minutes realizing, okay, maybe I can do this. After two weeks, I'm like, okay, fine, I can. I'm committing to it.

• 40:18Speaker 00

  I'm gonna burn the boats, off with the Mac computers, committing to Linux. And then, of course, just getting completely sucked in, oh my God, I can do everything on this thing.

• 40:27David Senra?

  But didn't you say you discovered like a subreddit or something like that?

• 40:31Speaker 00

  Yes.

• 40:31David Senra?

  That really was like the turning point in this, correct?

• 40:33Speaker 00

  Yes. One of the reasons I loved Apple as a company and their stewardship of the industry was their design, was their taste. They make beautiful products, mostly. They certainly make still beautiful hardware. And for a very long time, they were also the leading bar for software quality, just sweating the details and making sure everything was aesthetically pleasing, which to me is an incredible part of why I like computers in the first place. I like all the little subtlety. I like just the right font, just the right border curvature. I like things to look nice and behave nice. And Apple, for the longest time, was the undisputed leader in that, especially when

• 41:18Speaker 00

  you compared it to Windows, which was the epitome of having no taste, of having no sensibility about how things should look and having no cohesive vision for what a computer should be. It was all these disjointed parts.

• 41:34Speaker 00

  And then I find Linux and I look, man, this is like even a Timo version of Windows. It looks like a cheap copy of something Redmond would have made, and that was already crap. Why would I want that? Well, on Reddit, there's this amazing subreddit called runixporn. And it's basically a showcase for these nerds who spend, in many cases, hundreds of hours personalizing their Linux distribution and setup, to the point that it doesn't look like anything else you've ever seen, to the point where it looks like it was made for a movie, like a hacker movie where you see like all the Matrix characters scrolling down the screen and just it looks cool.

• 42:17Speaker 00

  Now, sometimes it just looks cool and it doesn't actually work that great. But when I discovered that, I went, if these nerds individually able to make Linux look this cool, if I just take it back 20%, not as over the top as what they're trying to do, and bake it all into Linux, we can make something that's competitive with the Mac.

• 42:37David Senra?

  Paul, and you said something interesting, I mean, I know you're a crack, that they were like kids. You told me this story about some like 22-year-old Polish kid that like smoked Apple.

• 42:45Speaker 00

  Yes. So this is one of the other things I love about this ecosystem. Everyone goes by a handle. It's like the early days of when I got into computers. The reason I actually got into computers was for video games, and I didn't have enough money to buy the video games. So I got into pirated video games, which meant I got into the WAREs scene. It's with a Z at the end. Everyone had a handle because it was kind of like illegal. You were trading copyrighted goods. My handle, by the way, Webster. I don't know why that was or whatever. It was Webster. And everyone else in that scene had a handle. And I hadn't really thought about handles in a long time. The demo scene at the time had the same thing, but then I discovered this Unix porn and

• 43:27Speaker 00

  this subculture of people who work on this, and they all had handles. And this one Polish kid who goes by the handle of Vaxfree had built the tool that three-quarters of everyone on this Unix porn subreddit was using to build their, the RICE, that's what it's called, the RICE. They rice out the Linux distribution. It's called Hyperland. And it's just this one, I mean, I call him a kid, he's, I don't know, 22, but when he first made the first version, I think he was 19, 18.

• 44:00Speaker 00

  One kid out of Poland comes up with this window manager, which in its essence is not a new concept. There've been these window, tiling window managers on Linux for a long time where you basically, you don't move windows around with your mouse, they tile. So you open a new window and they reposition and all the windows are already available. But they all look, again, like they were made by people who did the Timo version of Windows, like just not aesthetically pleasing, maybe highly functional, maybe fast and maybe productive for certain people, but I need the aesthetics to live. I need it to be beautiful.

• 44:31David Senra?

  And Apple never did this the way you thought.

• 44:32Speaker 00

  And Apple never did this. Apple has been stuck, as has Windows largely, although they're sort of trying to ape some of these things, in the original Xerox pattern. Like, you're Windows, you have a mouse, you drag a window around, and a lot of the interaction with the operating system is the mouse. And the mouse is an incredible tool for learnability. Anyone who has a just a rough conception of like how I move this thing around, they can use almost any app because everything is sort of explained. But if you're interested in productivity, it's a terrible tool. This is why all the cracked programmers, they're all about their keyboards, right? And they're all about hotkeys and shortkeys. And they require a lot of investment to learn, but if you learn them, you can fly.

• 45:15Speaker 00

  It's just like putting on a goddamn wingsuit and you go 200 miles an hour and there's cliffs all around and it's not explained how everything works. You have to learn, you have to internalize it. And I was like, I've been using a computer for, I don't know, 40 years. I've always used a keyboard, yes, but I've not been driving my computer through the keyboard. I've always had that little mouse. And here is an operating system, Linux plus Hyperland, where I can drive it all through the keyboard and it can, A, be super fast into use because everything's just a keyboard command. It can look amazing. And the core engine to make that work, that tiling window manager, Hyperland, is made

• 45:54Speaker 00

  by this crack kit from Poland that goes by a handle and has an anime avatar. I love it. I mean, it's just such a throwback to what computers used to be when they were more about fun and this artsy expression. Like, the funny thing about the original WARE scene, the pirated software scene, was it was kind of overlapping with the demo scene. And the demo scene was all about, how do we use these wildly underpowered by today's standards computers to make incredible computer graphics? So they put out these demos and these two scenes would meet. The demo scene would produce the intros to the cracked game so that you'd see this really

• 46:35Speaker 00

  cool video before the game loaded up that basically, this game was cracked by Evilhead 24, right? And I just, wow, it looks so cool. This is a resurgence of that, that computers can be fun in that way and they can be a bit whimsy and they can be made by pseudo anonymous individuals. And to combine some of it can be better than the top five most valuable company in the world, a trillion dollar organization that has 40 years of history caring about this and unlimited resources, unlimited people, and still the crack kit from Poland can beat him.

• 47:16Speaker 00

  Absolutely amazing. So then, once all those pieces started falling together, I was not just sold, I was, I flipped. As you said, I used to have a perception of Linux that this is a server tool. I use it, all the servers we've ever run, Linux. But running it on the desktop, that sounds like something for people who like to update the firmware on their printer. Not fucking me, man. I don't want to update the firmware in my printer. I just want the things to work. And I realized, you know what, that's not all Linux could be. Linux just has all the Lego pieces. Someone could put those pieces together for you. And you could get the Millennium Falcon, or the Taj Mahal, or something incredible that looks great and is ready to play with.

• 48:01Speaker 00

  And I went like, well, okay, if no one else is gonna do that, I will. I'll take half of Unix porn, I'll take Vaxxer's cracked Hyperland, and I'll slap it on top of Arch Linux, and we're gonna make Omachi. And that's what I've spent like, a shocking number of hours over the last year.

• 48:22David Senra?

  Thousands.

• 48:23Speaker 00

  Thousands. Yes, that's probably fair at this point. That it became an obsession, and it became an obsession in the same way we were talking about where it's not because I had a grand roadmap, oh, I need to do this, that, and the other. I just picked up the thing and went, here's 75 things that are wrong. This thing is slightly misaligned, this is not right, the colors are not correct, it's not all integrated, the themes aren't coherent and so on. And then I fixed five of them, put it back down, like, oh, that's better. It's, it's more pleasurable to you. Picked it up again, fixed another five things. Picked it up, picked it up, picked it up, until I finally had something that felt like, this is good. And not only is it good, it's goddamn better than whatever else is available commercially, certain than what Apple has to do.

• 49:08Speaker 00

  And again, better is this, it's better for me. But what I always realized is that every single piece of product that I've built started there. I gotta make something that's better for me, and if I can get beyond that point, that I would rather use this than that. I know I'm not alone. I know I'm not that special. I know that there's gonna be tens of thousands, maybe hundreds of thousands, potentially even millions of other programmers, or just computer users who like computers, who's gonna be like me, who's gonna appreciate the same aesthetics, who's gonna appreciate having an operating system they actually own, that can migrate, especially now with agents, they can make bespoke and their own.

• 49:49Speaker 00

  But they just don't wanna put in 2,000 hours upfront to get access to that kingdom. So if I give it all to them in a prepackaged Omakase, ready to use, chef choice, uh, choice edition, then they can get invited to it. And I did exactly the same thing with Ruby back in the day. There's great parallels between these things. When I first picked up Ruby back in the early 2000s, it was an obscure programming language out of Japan that only a handful of people in the West were using. And it didn't have a killer app. It just, it looked really good, and people were using it for small things here and there. And then I went, this is incredible. This guy has the right vision for what a programming language should be. If I take it and apply it to the thing I wanna build, web applications, I wanna build Basecamp,

• 50:34Speaker 00

  and then I built the tooling around it, I can get other people to realize the magic of what's here. And it's exactly the same thing with Omachi. Linux is incredible. It's one of the seven wonders of the software world. It is the largest open source code base in the world, it's like 40 million lines of code. Like, literally, millions of man-hours have been poured into that collective pro, uh, process in a way that was not always obvious it was gonna work. Like, we talked about Microsoft a bit. The famous quote from Steve Ballmer back in the early 2000s was that Linux was a cancer, that it was gonna eat everything, it was gonna be very disruptive and very negative for the software industry, and it turned out exactly the opposite. Today, Linux runs on billions of devices. Basically, anything embedded is Linux.

• 51:19Speaker 00

  Uh, anything server is Linux. The one final thing it hasn't cracked is the desktop. And I just go, why? Why shouldn't it? We can just make it so good that at least technically-minded people will realize that this is just a better option, and they'll pick it, of course they'll pick it. Because if I show them something that's better, of course they'll realize. I mean, that's a pretty naive instinct to it, but that's my driving principle. If I make something better, people are gonna realize it's better and they're gonna use it.

• 51:47David Senra?

  Okay, but this is actually really important, because last night I kept going back, you know, basically, I have these conversations selfishly. I just like, there's shit in this person's head that is valuable to me. I can pick out, you might give me 50 ideas, I might grab two and use them in my life, and my life is a better, as a result of that. And so I'm intensely interested in that. So last night I kept asking a question, I wasn't getting the right answer. I was just trying to figure out what actually drives you, right? You, you mentioned earlier, um, you know, I thought this was absolutely ridiculous, where people forever would describe you and Jason and the business you build as like a lifestyle business. It's like, I don't know, the guy started out making $15 an hour, now he's in $15 million car. What kind of lifestyle is that to you? You live in a one-bedroom apartment and have to kiss this VC's ass so that you can make payroll next month. Like, which lifestyle do you want?

• 52:30David Senra?

  I don't know what you're talking about here. I thought that, that critique was, you know, pretty weak if you actually analyze what's going on. But what I realized, like, it's not money. Obviously, you grew up without money. I, I grew up without money. Once you get money, you realize, yeah, it's valuable, but it's like, the, the return on it diminishes really, really rapidly. Right? So you're definitely not driven by money. I was like, okay, well, this guy's just like introverted and, uh, just loves making things. You're definitely driven by making things.

• 52:54Speaker 00

  Yes.

• 52:54David Senra?

  But then you have this other element that maybe, in my opinion, tell me if I'm wrong, you have this like fierce desire or almost need for control and independence and freedom, right?

• 53:07Speaker 00

  Yes.

• 53:08David Senra?

  And so, we started talking about Omachi, am I saying it correctly, last night? And then you, you realize to the point where you're like, yeah, if, if anything happened with Basecamp, like, I wouldn't start another business, because I wouldn't want customers. So like, me and Rob, my partner Rob, we're, he was over here this morning, we were laughing about what you said last night, so I wanna get to that. Where you're just like, yeah, it's like, you have like, fuck you money, and you have financial independence. But then there's another thing, that you transcend, you don't even have any customers. And your whole thing is just like the love of making something for yourself.

• 53:35Speaker 00

  Yes.

• 53:35David Senra?

  And then putting it out to the world, making something great. And the reason I bring this up is because, explain why you named it Omachi?

• 53:44Speaker 00

  So Omachi is three words put together. It's Omakase, which is chef's choice in Japanese. And it's usually applied to restaurants, like you go to a sushi restaurant, and they just start serving you great food, because they know better. They've been making this goddamn sushi, uh, for a very long time, and the chef who gets to be the one who picks it has probably been making it for decades. What do you know? You don't know shit. You don't know what's good. You don't know when to order it should come in. You should just sit down and hand over your sovereignty for this meal to this person who's more competent than you, and then open your trap and eat it.

• 54:24Speaker 00

  And it'll be delicious. Like, this is actually the best way to experience, uh, all sorts of things. That there are people in this world who have spent more time than you getting really good at figuring out what quality is, and they hand you that quality so you can just enjoy it. What I found is, a lot of people have a very difficult time articulating what they want, but they can appreciate quality instantly. They can just know, oh, this is good. Yummy, this is some great sushi, right? They don't know what to ask for, how to season it, or whatever. Funny anecdote, one of the things that always tripped me up when I came to the US originally, that will crack Jason up, is the notion of the construction kit burger.

• 55:07Speaker 00

  So, my mind was blown when I came to the US from Denmark, and I would order a burger, and I would just be handed the parts. Like, here's the bun, here's some lettuce, here's some pickles, here's the meat, and I'm like, what is this? A construction kit? Am I supposed to put it together myself? You can't even assemble my food for me? And I'm like, there's something deeply American about this, like, no, I know best. No, you don't know shit. You are ignorant as fuck. Let a chef prepare the food for you, goddamn it. Why would you wanna get your hands dirty like this? So I had that reaction right from the get-go, that I love delegating my limited sovereignty when I don't know something, or I don't know more than the other person about a given thing, right?

• 55:52Speaker 00

  I want the best people in the world to prepare the services and products and food that, um, that I then get to enjoy. Because it's like leveling up cheating, almost, right? And I thought, you know what, uh, I really like that principle. And I will also apply it in reverse on my own accord, that if I know something about programming, about using Ruby, or about using Linux, I can pour all of that competency into a package that you just have to sit and enjoy. So that's what Omakase is. Then the other part is Arch, we talked about that. That's the Linux distribution run by a gang of volunteers for the past 20-plus years. It doesn't have an organization, it doesn't have a lot of fundraising,

• 56:33Speaker 00

  it doesn't have a commercial structure around it, it's just a bunch of nerds who share the burden of distributing Linux. Amazing. And then the last bit is Hyperland. So that spells Omachi, and it turns into being it's this sort of constellation where I take, there's a trillion tools in Linux land. There's a million ways you could configure your system, you can have all these themes and apply them. I will pick them for you. I will not give you a construction kit burger. I will give you an Omakase sushi meal, and you may do substitutions, you may realize, I don't like that pizza. Fine, fine, fine. But you're gonna start from a base that works. You're gonna install this system, by the way, in four minutes.

• 57:17Speaker 00

  This was one of the things I got obsessed with really early on. I would get a new Mac computer, I actually just got a new one for some testing I needed to do. And I would set it up, and I think the last one took 42 minutes to set up, because it needed a software update and needed some things. I'm like, this is unreasonable. These computers are about a trillion times faster than what put us on the fucking moon. And you're telling me it takes 42 minutes for a new computer to be ready to use? This is preposterous. So I just got obsessed with this, how quick can we install a system that's fully ready to go and use? And we got it down to about two minutes. You insert that USB key with Omachi on it, you fill out, well, this is my username and my password, and then two minutes later, you're ready to rock. All of it is there, right?

• 58:00Speaker 00

  And I just thought, so many of these things we just take for granted, oh yeah, getting a new computer. It's just hours of work, setting it up and getting it ready for real work. Like, no, it's not. Someone could just do that for you. And collectively, we could save trillions of man-hours every year. This is part of why I love actually sharing these things, because I get this indignation about world productivity. Like, when we're subjecting humans everywhere, millions of them, maybe even billions of them, to shitty tools, shitty setup processes, we're robbing the world of progress. You could have taken that trillion hours that people have spent. Forty-two minutes setting up a new computer and applied them towards productive outcomes. And I don't know, we'd have flying cars by now.

• 58:45Speaker 00

  And I just feel like, you know what, if I can assist in that process somewhat and take some of that drudgery out of the world gears, I've done my little part. I've added a little bit of oil so that everything glides a little more seamlessly. And especially if we do it in a way that's aesthetically pleasing, I've actually contributed to delight and lightness in the world. We should all be surrounded by beautiful things, including beautiful computers that just work out of the box and are ready to use. So that became sort of that dual mission. A, I wanted the very best computer for me. Suddenly I had found all these building blocks where everything I was ever annoyed about with how the computer worked, I realized I could change it. All the code was there.

• 59:27Speaker 00

  Everything could be rewritten and reconfigured so I could get exactly what I wanted. And that just became an obsession. I had this affliction where when I see something that's not quite right and I have the power to fix it, I, nothing else matters until it's perfect. I will polish that thing until every single quarter millimeter is perfectly round and just, I cannot do anything else. And in fact, it's not always great, I will say, as a person who has other obligations in life than rising Linux. There were moments of that journey where I essentially just went on a hermit trip and just went, I will learn everything there is about this. It's just that I can make the perfect computer. And it becomes a bit of an obsession.

• 1:00:11Speaker 00

  And thankfully, it doesn't last because at some point, like the ball literally is a perfect sphere and it's beautiful and it has just the right texture and light and color. And then I go, okay, now I've made this beautiful thing and I enjoyed it more than anything else. This is the best computer I've ever used in my life. So if it's so good for me, it should be good for other people. I should share it. And so I did with Amachi. And what's funny was, I actually made a version before Amachi called Amakub, where I took that Ubuntu thing we talked about, like that thing everyone who starts on Linux uses, and I tweaked it a little bit and made it look more a little bit like a Windows or a Mac. It felt familiar. And the misconception that I had, and I think a lot of people in the Linux world have had,

• 1:00:54Speaker 00

  if we just make it as close to Windows or Mac as possible, then they'll come. But no, they won't. Why would you want, again, the Timo version of Mac or of Windows? I don't need a cheaper version. Then you have to appeal to these high-minded ideas. Well, it's free software as in speech, noises and beer. Yeah, okay, there's 0.001% of the population who gives a fuck about that. Most people just want the best thing. And your job is to give them that if you want to win them over. So I just went like, no, let's make something that's radically different. Like this computer will not work like anything you've used before. In fact, you won't even be able to operate it right out of the box because it's all keyboard-driven and you'll have your little mouse and you're like, there's nothing on the screen.

• 1:01:38Speaker 00

  Where's the icons to click on? And I will go like, no, here, let me show you a cheat sheet. You gotta learn these 15 key bindings. Before you can do anything on this computer, here's your syllabus. Sit down and study, boy. And by the time you have learned the first lesson, you are ready to use this computer. And there, we've already forked the timeline, right? I've already said, like, every other computer in the world is very focused on like, oh, let's make this as approachable and as learnable as possible. And I go like, no, fuck that. That option is covered. It's great, but let's get something else. Let's build something else. And then it took off. And I found that that's very often true about products.

• 1:02:19Speaker 00

  You enter some domain and you think like, oh, I can just, if I, who's the best? Can I just copy them and then I'll do, I'll do a slight tweak? That's not gonna work. That's not gonna cede anything, right? All the best ideas that actually turn out to have an impact on something, they sound stupid at first. They're not intuitive because that's where all the value has been locked up. It's been locked up in this misconception about what people actually want because most people don't know what they want. You actually have to give it to them in a form that's beautiful and approachable and quirky and a little bit weird and maybe a little bit off-putting at first. I find that in all sorts of different domains. Some of my favorite car designs, when it first premiered, the McLaren 720S, it has these

• 1:03:01Speaker 00

  sunken-in headlights that when I first saw it, I thought, this is the ugliest car I've ever seen at this level. Now it's one of my favorite car designs at all. So I think you gotta be able to work in that space where you have a high tolerance for people telling you what you're building is stupid, what you're building is ugly, what you're building is never gonna work in the real world. When I get that feedback, I know I'm on to something. Now, you can't just get that feedback. There's also gotta be a few people who like what you're doing. But Kathy Sierra, who is one of my all-time greatest writers on what animates users and good products and...

• 1:03:38David Senra?

  I'm gonna interrupt you because this is the power of ideas. This is why I'm addicted to podcasting. Because I didn't know who the hell Kathy Sierra was until I learned about her through your and Jason's writing, then I go consume her. And you're like, the best way to market is to outteach your competition.

• 1:03:51Speaker 00

  Bam. That's all I do. That's literally what I do. Bam.

• 1:03:55David Senra?

  That fucking idea helped build both, like, the first podcast, which then helped in turn build this podcast. It was super valuable to me.

• 1:04:02Speaker 00

  It built all of 37 signals.

• 1:04:03David Senra?

  If you could buy that idea in my life, literally, it's worth tens of millions of dollars to me.

• 1:04:08Speaker 00

  Yes. And it's all down to Kathy Sierra and her writings on the internet in the mid-2000s. So outspent versus outteached, just to linger at that, because I think it applies to all of this. As you said, it applies to podcasting, it applied to Basecamp.

• 1:04:20David Senra?

  It applies to every fucking thing.

• 1:04:22Speaker 00

  It applies to everything. Because when we launched Basecamp, we didn't have any money, we had a tiny team and Microsoft had all the money and all the, whatever, they could swallow us up. What we then had to fight back with was not more banner ads, right? We're not gonna outspend them on a marketing campaign. That was never gonna happen, but we could outteach them. We could have better insights and we could share them and people could resonate with that and then reciprocate by buying our products, at least some percentage of them, even if it's a small percentage. That has been our operating strategy for literally two decades and it's exactly the same thing.

• 1:04:54David Senra?

  I gotta interrupt you again. It's also better for the world.

• 1:04:57Speaker 00

  Yes.

• 1:04:58David Senra?

  Because you guys are putting so much more, you're capturing a tiny percent of the value that you've created. You put out so much more value. Now, even a tiny percent of a huge number gives you a $15 million car, which you won't have to keep hitting on, right? But like, but like, the world is big. The internet is very big. But I told Jason this, who now I've become friends with and just like love spending time with. We just had lunch together and I went to go look at the construction projects he's doing right now. And I was like, dude, I was by myself, like I didn't have any employees for 10 years. You make project management software, my project's in my fucking head. All I could do is buy your books, which I did. But I was like, I'm so glad, I just, as soon as you had, you did, hey, I was like, oh, now I can give you money.

• 1:05:34Speaker 00

  Right.

• 1:05:35David Senra?

  You're hitting on something that's really important, that why what Kathy says is valuable. And this is something that Charlie Munger would talk about, who's my hero. It's just like, if I can only learn from one person to be Charlie Munger. And he's like, there's a deep desire in human nature that is ever-present and never-changing, and it's the desire to reciprocate. I feel you have done something for me by writing those books, by going on those podcasts, by talking at Spark School. And as soon as you give me an opening to reciprocate, I will do so. I'm really tight with the Spotify team, right? Daniel, Gustaf, all the top people there, Alex, everybody else, Roman. And, you know, we, I fucking fly to Europe. I've been there four times in like 14 months just to talk podcasting because I'm obsessed with this.

• 1:06:17David Senra?

  And the crazy thing in these common conversations is there's just like, you know, a weird thing that we see in podcasting is they have like private feeds and you can do like, you know, this content's free, if you wanna buy another podcast, it's X amount of dollars per month. Like, most people never even listen to the content. They're just looking for an excuse because your podcast gave them so much value.

• 1:06:38Speaker 00

  Yes.

• 1:06:39David Senra?

  That will always work. It worked today, it worked 100 years ago, and it will work 100 years from now.

• 1:06:44Speaker 00

  I choose to believe that. I don't actually know if it's true, but I think it is how we built a business up until this point. I will say that I'm starting to see cracks in that reciprocal exchange.

• 1:06:57David Senra?

  Tell me about that.

• 1:06:58Speaker 00

  It's not because the human part of the link is broken, it's because the algorithms have changed things. So for Jason and I, for the longest time, what we did was exactly that. We're just gonna outteach. We're gonna put out so many observations, lessons, experiences, software, open source, whatever into the world, and we're just gonna hope that a small percentage of that trickles back. And it used to work, especially on Twitter, where you'd build up a following, and if someone followed you, they'd see all the stuff you're sharing. This is Gary Vee's jab-jab left hook.

• 1:07:32David Senra?

  Yeah.

• 1:07:33Speaker 00

  And you do all the jabbing, you do all the, here's free stuff, here's free insights, here's free observations, here's free software. And occasionally you'd go like, and now we have a new version of Basecamp, check it out, right? What's broken now on the social platforms is that my followers don't see anything I post unless it goes medium viral. Because everyone is now in the algorithmic feed. So I follow someone, it's just like this little drop in the signal, and it kind of breaks that reciprocal exchange, at least on those social platforms. This is one of the reasons why I love podcasting. There you have subscribers who actually get things straight into their feed, it's not that good with me. And I love newsletters. I have newsletters, well, and a bunch of my long-form writing goes into that because

• 1:08:18Speaker 00

  then I'm assured that at least it shows up in their inbox. But both of those outlets are minority outlets compared to the behemoths that it's social media. And I've seen some of it break down a little bit. I don't know what that means. I'm gonna continue regardless of whether it works as well as it did in the past, it does in the future, and I'm still gonna bet on the fact that someone who does get exposed to the ideas we have or the free software that we give away is gonna feel some connection to what we have. And then if there is an opportunity, maybe not even for themselves, but they spot it in others, like, as you said, hey, I'm one person, I don't need Basecamp. But you hear of someone who's complaining about setting up projects on complicated click-up or not-working email, and you go like, you should check out Basecamp.

• 1:09:01David Senra?

  We're starting to use it for the podcast because...

• 1:09:03Speaker 00

  Oh, you are?

• 1:09:04David Senra?

  Because they're amazing. We're vastly increasing the amount of episodes we're doing and the amount of people I have to talk, like stuffing's top of my funnel for interesting people I want to talk to. And me and Rob, who we had dinner with last night, we like, we go back and forth and we're going over text messages. And then the other day, I was like, bro, what happened? Like, I think we're like losing the thing here. He's like, we should use Basecamp.

• 1:09:21Speaker 00

  You're the classical example.

• 1:09:22David Senra?

  This is the point, though. You guys have provided so much value to our lives. We're not like, oh, maybe we use Basecamp or maybe go look around. It's like, I don't even give shit. These are my guys, I'm just gonna use their thing. Deal is how the best founders turn the world into their talent pool. I've been studying how history's greatest founders operate for a decade. And one thing they all have in common is they understand that recruiting and hiring the very best talent is your most important priority. A players recognize other A players, which is why top companies like Ramp, Shopify, Eleven Labs, Uber and DoorDash all use Deal. Many of the top founders I know have personally invested in Deal after using their product. And what they discovered is that Deal is the best company in the world at building infrastructure for global hiring. Deal will help your business hire, pay and manage any worker anywhere in the world.

• 1:10:07David Senra?

  So you can retain the best talent anywhere and spend the rest of your time focusing on what you do best, delivering value to your customers. The founder of Eleven Labs has a great description of the value Deal can give your company. He said, "We built Eleven Labs to break down language and communication barriers. With Deal enabling us to hire and support exceptional talent anywhere, we can accelerate our innovation and bring more voices, stories and ideas to every corner of the world." Deal is trusted by over 40,000 businesses. Learn how they can help your business today by going to deal.com/cenra. That is deal.com/cenra. I want to go back to a fundamental understanding of you though,

• 1:10:48David Senra?

  because I love this transcendence of like you deeply desire independence and freedom and control. And so that's why you're anti-investors and you don't have a board of directors. It's just you and Jason making all the decisions, right? But then you introduced this other level of transcendence last night. It's like, "Oh, no investors, it's one level of freedom. How about no customers is even higher?" So your point is like, "I'm gonna put 2,000, 4,000 hours of my time into this. I'm gonna craft it, I'm gonna make sure everything is perfect and then I'm gonna give it to you." Yes. But then you said something last night where you're just like, "Well, what if they have like feedback for you?" Like, what was your thought to that?

• 1:11:23Speaker 00

  I love feedback. If it's well-grounded in solid observations that can give me new insights. But a lot of feedback you get on the internet does not fall into that category. It's just like, "You looked at this for five minutes. I spent 4,000 hours and you have some knee-jerk reaction and you want to tell me how to do it? You want to tell me what I should do and what I shouldn't do? Well, you can go fuck yourself, right?" And I actually get that indignation, just stemming out, I've been working on it. But just this sense of like, "This is not a reciprocal exchange. I gave you something of tremendous value. Now, you can choose to ignore it or say it's not right for you. That's completely fair, right? Like, that's a good exchange. Like, okay, thanks for the gift, but no thanks.

• 1:12:07Speaker 00

  But if you take my gift of 4,000 hours and you go like, "Well, I'll give you five minutes and then I'll just dump shit on you." What? You didn't pay me anything. Like, that's a privilege you have to pay for. If you want to tell me ill-considered feedback on anything I make, you gotta pay me. And you can do that with Basecamp and you can tell me-

• 1:12:30David Senra?

  And then you're a customer.

• 1:12:31Speaker 00

  And then you're a customer. And then I know we have a different relationship now. I will actually say thank you, even though I think maybe knee-jerk reaction too on my part, that this is not the most well-considered piece of advice. I will take it in because we've had an exchange and there's a reciprocal nature there. But I actually appreciate more to transcend above that and I don't have that obligation with you. I am sharing something with you and I don't owe you anything. I mean, you technically don't owe me anything either if you don't accept the gift. But if you take the gift, you actually do owe me something. You do owe me just a modicum of respect to look at this more than five minutes before you just dump your shitty ideas onto me.

• 1:13:13Speaker 00

  Or even worse, it's not so much about the ideas, it's when people try to tell me what to do. And this is a-

• 1:13:18David Senra?

  Go straight back-

• 1:13:19Speaker 00

  This is what I hit on last night. That's nerve, right? The nerve is, I have worked very hard in not just my life, but in business to have damn near close to total independence. So no one can tell me what to do. No one can tell me no. No one can tell me what to work on. No one can tell me what to do. And Jason and I have structured our entire business around that concept of pure independence. We don't have any investors who get to tell us what to do. We don't have a board to tell us what to do. We do have customers. And they get some claim, some of the time, to sell at least an aggregate what to do. Because if no one wants to buy the things that we're putting out there, like, the business is not going to continue.

• 1:14:04Speaker 00

  So they get some good influence there. I find that tolerable. That's a tolerable exchange. I put a product into the world, you pay me some money, I will listen to you. Fair. But I appreciate the transcendence to the next level. I don't even have a commercial relationship with you anymore. We can still have a great relationship. One of the reasons I enjoy open source software so much is because I get to collaborate with like-minded people about making things better, right? So if I give you the gift of 4,000 hours on Amachi and you then tweak a few things and you send a pull request back on GitHub and say like, "Here's something." I go like, "Awesome, now we're in business, now we have a little club. Let's make this amazing together." And that feels so pure.

• 1:14:49Speaker 00

  And not because I'm against capitalism at all, I'm a huge fan of capitalism. But I've also realized that at some point, when I retire, it will actually be a retirement from capitalism. It'll be a retirement from customers and the economic exchange. And 30 seconds is quite likely my last business. I've made the money I needed to make to live the life I-

• 1:15:12David Senra?

  Three times.

• 1:15:13Speaker 00

  Yes. That I would enjoy to live for the rest of my time, right? So at some point, either the business ends just because circumstances end or Jason and I just get tired of it. And then I will transcend to the next stage of not having any customers at all and then continue to make things and continue to share things, but without any claim other people have on my time or my attention or where I want to go with it.

• 1:15:38David Senra?

  Okay, so this leads us to another thing I want to talk to you about, which is that capitalism actually works, right? And what I like about you is like, people in the tech industry act like they don't like money, right? And my point is like-

• 1:15:51Speaker 00

  They pretend act like they don't like money.

• 1:15:55David Senra?

  Exactly.

• 1:15:56Speaker 00

  They all do.

• 1:15:56David Senra?

  Yeah, exactly. And so my point is just like, there is, how you make money actually matters.

• 1:16:00Speaker 00

  Yes.

• 1:16:00David Senra?

  But to me, it's like, the best definition of business I ever heard actually came from Richard Branson. He says, "A business is just an idea that makes somebody else's life better." That is why, and there's infinite ways to make somebody else's life better. So therefore, there's always going to be infinite opportunities in the future.

• 1:16:11Speaker 00

  Yes.

• 1:16:11David Senra?

  If you make a product that other people love and it makes somebody else's life better, that they decide to give you their hard-earned money in exchange for, like, that is the system working. What I like about you is like, again, I think you guys had this counter-narrative. We're just like, you know, we prized independence, we want to do things for decades. You know, we want to build the products for ourselves first and then just find the other like-minded people. But you're not shy about like, "Yeah, like, here's my Pagani and here's this floating desk in Malibu that now goes viral all the time." And so we talked about this a little bit last night and you said this very lightly. He goes, "Yeah, that's an example that capitalism works." It's not just like you're, "Look at the shit that I have." That's not what you're doing.

• 1:16:49Speaker 00

  I actually think there's some obligation of people who've been able to make things work to show that it did work, that it is a carrot that you put out to others. I think it's completely legitimate to be motivated, in part, by wanting to have nice things, that you have a dream car that you aspire to. I certainly had that as a kid. I thought like, "Oh, look at all these cool cars." Like, I didn't have any concept that I'd ever have an opportunity to reach that and afford it, but it was part of a driver. I think that's a good thing, part of capitalism. We want to better our lot. And some of that is material and there's no shame in that whatsoever. And not only that, I think there's a second order of capitalism. You have an obligation.

• 1:17:31Speaker 00

  If you sell a product or service and you make a lot of money on it, put that money back into the system. Send some of that money to the craftsmen of Italy to create you a beautiful Ferrari, right? Like, there's someone who has to stitch that seat such that it's just right. There are engineers who are putting together that car such that it exists in the world. We would not have Ferraris to pine for if no one bought them. And who can buy them? The people who've been successful in other parts of their business. So therefore, it is your moral obligation to buy a Ferrari if you do really well, or Lamborghini, or Pagani, or whatever floats your boat. But you should be sending this forward. This is how we get to have nice things. Not everything can just be boiled down to like needs.

• 1:18:16Speaker 00

  Man needs more than just bread to live. We need beautiful Ferraris, even if we don't own them. This is one of the things I love so much about cars, is that they're actually a shared collective enjoyment. The number of times I've driven in a nice car, especially with kids, because kids have not yet internalized this filter that they're supposed to be cynical about wealth and nice things, they go like, "Whoa." And then you rev the damn thing and they go, "Yeah." Right? There's just an instinctual human attraction to beautiful things that make noise, right? It's just joy. And why would you be ashamed of that? Why would you be reserved about that? Unless you feel like you're guilty about how you made your money. I mean, there are some people in the world who probably should be a little guilty

• 1:19:00Speaker 00

  about how they made their money and maybe they don't buy the Ferraris. But for anyone else who's made legitimately good services or products and had success with them, they should be able to celebrate that. Now, is there a line where you turn over to a bore of a bragger that's nothing about this? I bought this, I bought that? Yes, there is. But you can settle that line. We don't have to be either or. You can both be passionate about the things that you're creating and- Validate why you've made your money in a reasonable way. Because you made something good that other people want to pay for. And then here are the fruits of that labor. And this is capitalism and it's beautiful. It is absolutely beautiful. It's worth celebrating. It's worth exalting. It's worth making an example for.

• 1:19:44Speaker 00

  And in fact, in my personal case, I mean, a lot of this also could just be post rationalization because I like nice things and I don't want to feel guilty about it. But let's just put that aside for a second and focus on the fact that we build 37 Singles in a kind of weird way for a software company. Most of our peers, they raised a bunch of money from VCs and they did all sorts of other things. We built a software company out of Chicago at a time where there was absolutely nothing fucking going on in Chicago inside of tech. And we built it on 40 hours a week. We built it on having a life next to work. We built it on going for the long term. We built it on taking profits out of the business rather than just chasing higher valuations. And therefore that is a counter narrative to how you can also build a business.

• 1:20:29Speaker 00

  And I want to validate that that is a reasonable thing to pick, even if you also want a nice Ferrari. These things are not in opposition. You mentioned the lifestyle business thing, right? I always loved that because people were like, oh yeah, you're just running a lifestyle business. Yeah, I have a business and a lifestyle. What the fuck do you have, right? You just have a business? Or why would you not want a lifestyle? And my lifestyle happens to include a fucking yellow Lamborghini. So it's not like I'm giving anything up in terms of the material fruits of capitalism, right? Like, these are actually compatible notions. And therefore, if someone is looking at which way should I go? I'm starting a new business. Should I raise a bunch of money? Fine, that's one path. And if you need to invest a bunch of capital in, I don't know, factories or GPUs or whatever,

• 1:21:13Speaker 00

  you should probably raise a bunch of money. I don't have anything fundamentally against that. I have something against this notion that this is the only way to go. And I also do have a little bit against it when it comes to software, right? Like, I always felt it was just a waste. Why are you raising all this money just to have a bunch of programmers to sit around, right? Like, just build it yourself. You don't need as many as you think. That was our model. Tiny team, building great software, having good success, not taking any money, then producing profits. Like, I know this is a bit of a foreign term in much of Silicon Valley. Like, that's the money you get to keep when you've taken your revenues and minus your expenses, right? And when you get to keep that profit, you actually become interested in increasing it. And that increases your efficiency. And I think actually this is part of my aesthetic appreciation of capitalism.

• 1:21:57Speaker 00

  And this is why I care about cost so much. Because that appreciation is what makes the entire system more efficient. If I'm hiring three times as many people as I actually need, I'm robbing the world of those people who could have gone to do other productive things rather than spin their wheels at my little business when I could have gone away with a third, right? And then also, the more money I spend on expenses, the less I get to keep for your yellow Lamborghinis. So it's really quite simple.

• 1:22:24David Senra?

  And you have to, you can think of the Italian craftsmen.

• 1:22:27Speaker 00

  Exactly.

• 1:22:28David Senra?

  When you're going through your expenses and using Ramp, because they're my biggest supporter and the best expense management software, like, if you don't do this, if you're not running your business on Ramp, think of the poor Italian craftsmen. So this is something that history's greatest entrepreneurs repeat over and over again. And in fact, we were talking last night, I'm going to pull up the group chat that we're in with Jason, because I dropped it in there while we were talking last night. Like, you kept hounding on the fact that you just get off on like clipping expenses and like finding it. And I think it's the same kind of refinement of your product design. And I showed you this quote and you're like, oh shit, I didn't hear this. This is great. And so I'm going to read this. It used to be in every single Ramp ad. It says Carnegie, Andrew Carnegie, Carnegie would repeat his mantra of time and again. He says, "Profits and prices are cyclical, subject to any number of transient forces on the marketplace.

• 1:23:10David Senra?

  Costs, however, can be strictly controlled, and any savings achieved in the costs of goods were permanent."

• 1:23:16Speaker 00

  Yes.

• 1:23:17David Senra?

  He said that 150, almost 200 years ago.

• 1:23:19Speaker 00

  It's remarkable how that goes directly to my kind of thinking on. Because I know how hard it is actually to increase revenue. Like, if you already have a going business and you want to grow massively, it's very difficult. It's very difficult to convince customers to part with their money. I try very hard to do so. As a business, try very hard to do. Everyone tries to do that, right? And it's outside of your control to a large degree. What I can control is my inputs. I can put out the best damn software product I know how. I can talk about it. I can outshare the competition or out teach the competition and therefore create this reciprocal relationship with potential customers. But ultimately, I don't get to choose whether they put in their credit card or not. They do. I do get to choose how much money we spend on servers.

• 1:24:02Speaker 00

  I do get to choose whether we squander that revenue on needless cloud services rather than just owning our own hardware, right? These are things within my control and I love things that are within my control because I have this direct input on it and I can immediately see the result of me taking an action. If I cut off a recurring, I mean, it's funny because at this point, I really shouldn't have to worry about, I don't know, a $2,000 a month recurring expense on something. But oh my God, the satisfaction I get from striking that line. Replacing it either with something that's free or just slightly lower cost is a key part of the mechanics of the business I just really like. Because I also just have this aesthetic appreciation of an efficient business.

• 1:24:46Speaker 00

  Like an efficient engine or an efficient computer that's not wasting cycles on things that doesn't propel it forward. Expenses are exactly that. It's taking out this, these inefficiencies. And very often what I find is when you take out expenses that shouldn't be there, it's not just about the extra money you get to keep. The whole thing gels better. When you have a smaller team with better people, with higher competence, it's just more fun to work with a tight crew. I don't know many entrepreneurs who don't look back upon the early days with longing eyes, right? Like, just this lost love. Remember when we were just 10, around the table?

• 1:25:26Speaker 00

  Now, you get other benefits and I'm sure, I mean, Toby commands an army of 7,000 and can do very different things now and impact the world in very different things. But in terms of just that tight loop of working on something with a small team, it's incredible, right? And a lot of that comes from how do we make that small team, that small company as efficient as possible? Because then we can reach further and we have more resources to do things and so forth. So I just, I love expense reports. I didn't know this about myself, by the way. This is some of these amazing things you discover, I should just do it, right? As I told you last night, if you told my 18-year-old self that, you're going to love going through expense reports. You're going to love finding little lines that you can put a marker around and then go hout until it disappears.

• 1:26:10Speaker 00

  I would have said, that sounds like an accountant. That's not me. But it turns out it is and I love it.

• 1:26:17David Senra?

  All right. So you mentioned the yellow Lambo a couple of times. You bought the yellow Lambo after Bezos bought into a chunk.

• 1:26:24Speaker 00

  Yes.

• 1:26:24David Senra?

  Very early days when you basically bought your own admission, didn't have much of a business.

• 1:26:29Speaker 00

  Yes.

• 1:26:30David Senra?

  So he gave you a bunch of money, whatever, millions of dollars. You're like, hey, I got a couple million. I got to give at least 200 grand to these Italian craftsmen.

• 1:26:38Speaker 00

  Yes.

• 1:26:38David Senra?

  Right? So you buy the yellow Lambo. But more interesting than the yellow Lambo to me is what you said, where you said that the, what Bezos did, what Jeff Bezos did for you and Jason was gave you the confidence to go for it. Can you explain that?

• 1:26:49Speaker 00

  So in the early days of 37 Singles, we'd launched Basecamp. It was taking off quite well and we got a lot of interest and outreach from VCs. We counted 40 some at the time. And this was 2005-ish. I still had very vivid memory of the dot com boom and bust. I had seen what happened to some of these VC-funded companies and the internal mechanics of that, and I didn't like any of it. And I also had all these ideas about efficient businesses and what it takes to work. So we didn't actually want VCs. But going back to this point about trusting yourself, I didn't fully trust myself not to get tempted by a $20 million check, a $50 million check, whatever the number was

• 1:27:30Speaker 00

  at a time where my bank account said, I don't know, $8,000. Funny thing. My bank account did say slightly higher than that. When I came to the US, I think I had like 50 grand that we worked up as we started Basecamp. And the first thing I did as soon as I landed was Jason took me to an Audi dealership and I bought an Audi S4, my first car, cash. And then it was basically all the money I had in my bank account. So I just blew it all on the car and I thought like, we're going to make it back. But this, this notion that we had something that was taking off, but this is all fleeting. I had great humility that like, I'd seen many other businesses, oh, it's popping off and then it's leveling off and then it crashes, right?

• 1:28:15Speaker 00

  You can sell promise. That is one thing the VCs will buy any day of the week, right? A promise. There's a trajectory. There's traction. This is going places. It may be small now, but if we keep plotting the lines, it's going to go to the moon. I'm going to get in early. And you can make some money off that. We didn't want those people on board. Jeff showed up around the same time and we thought it was the same pitch. But it turned out it wasn't, right? Like, he was not interested in the regular VC deals. That wasn't why he was doing it. I'm not actually 100% sure why he was doing it. I think he just enjoyed getting involved with companies and people that he has an interest in. Anyway, he reaches out and we basically flippantly tell him no.

• 1:28:57Speaker 00

  And then politely, his team reaches out again, like, no, actually Jeff would really like me. And you're like, okay, fine. I mean, anyone who's actually built something, this is one of my beefs at times with some quarters of the VC community, like, you're just a money person. Which, it's actually weird why I consider that to be a derogatory, but I do. Like, if the only thing you do is money, I'm skeptical of you. If you've built things and you've made money, let's talk. But if it's just about the money and the allocation, I don't know. I'd rather talk to some builders. And Jeff is certainly a builder. Absolutely built something in a very, very different way than we had built our things, right? Like, he went, let's just raise all the money in the world and I don't care if we don't make anything for 20 years. It was just polar opposites in a lot of ways of how we build our business. But that was also just interesting.

• 1:29:42Speaker 00

  Don't you, Andrew, with yourself and a bunch of people think just like you, who will say all the same things that you think and will think all the same thoughts that you think? Jeff had very different thoughts and it was very appealing. So anyway, long story short, we end up giving him a ridiculous term sheet. It was just like flippantly, I mean, almost offensively overvalued. Like, there was not a lot here. There was some promise, but we then took that promise and then we just drew the line to the moon and said, we want to be paid as though we were up here. And this is such a stupid number for the time. He's not going to take it. And then he took it. And it turned out to be an amazing investment for him. I mean, I actually wish I had some of the gumption that Jeff has to see that far into it.

• 1:30:24Speaker 00

  Like, we've given him his money back many, many, many times over, and he still owns the plot. And every quarter or so, we send him another check. Here's your dividends, and we keep on doing that. But that gave us the confidence to say no to everything else. It gave us the reassurance that if this wasn't going to pan out, we at least didn't have to go look for a job like the next Monday. And that was an incredible gift. And Jeff then followed up with that gift, not just with the money, but with the advice. And the advice was usually, we'd meet with Jeff once a year in the early years, and we'd have dinner. And Jason and I would share our trials and tribulations. And Jeff would go like, we'd ask Jeff, like, here's the situation. And Jeff would go like, what do you think? And we'd go like, well, I think we should do that. That's a good idea. You should do that.

• 1:31:09Speaker 00

  And it sounds so simple. It almost sounds like it doesn't have any value, and it actually had all the value in the world. He could have replied with all, like, you should do this thing, and given us a detailed plan. But just that confidence, here's fucking Jeff Bezos, king of the goddamn world in that sphere, telling us he believes in us. He thinks that our thoughts are valuable and good. And the funny thing is, neither Jason or I, I think, generally have a deficit in self-confidence. But like, it's like, there's self-confidence, and then there's Jeff telling you, no, you're right. Oh, my God, rocket boost. Let's strap in. Let's go. And then, in some ways, I think, he turbocharged sort of just that brashness, that indignation. That like, hey, here's a different way of building things, and we're not shy about sharing.

• 1:31:54Speaker 00

  That we build it in a very different way. And a lot of that came from Jeff, and we owe him a tremendous gratitude. And I actually, when I look back upon the things I regret, I regret not being a little bit more grateful for that. Like, in the long run, it was a really pivotal moment for not just the business. It could have gone a very different way. We could not have gotten Jason's offer, and six months later, some VC would have given us a massive check that sounded super impressive, and it would have destroyed the business. And then we would have sold our independence, and we would have been fucking miserable pricks. And that didn't happen, and it's thanks to Jeff, so.

• 1:32:27David Senra?

  That's beautiful. I got one more thing I want to talk to you about, which I thought was very interesting. Because, again, I think this speaks to your idea of like, you're pretty fluid in your, you have strong opinions, sometimes weakly held. And even though you have been known as like, you know, basically a VC critic, what you shared with me last night was that in the most difficult time of your business, that Marc Andreessen was the single most helpful person to you.

• 1:32:54Speaker 00

  Yes.

• 1:32:55David Senra?

  Can you talk about what was a difficult time, and what did Marc do for you?

• 1:32:59Speaker 00

  So in 2021, we had a huge blow up at the company. This was peak woke insanity era. This was everyone posting proclamations about political ideas on corporate pages that had nothing to do with each other. And it was an era where there was an activist group inside almost every tech company in the world, pushing these companies to do all these, almost extorting them to do all of these things. And we kind of got boiled like a frog a little bit at 37 Singles, Jason and I, where we had probably seen good intentions in places where there weren't any, and allowed things to kind of roll. I mean, it happened quite quickly.

• 1:33:44Speaker 00

  It wasn't like something that had been building for 20 years. Within, I don't know, from 18, I'd say, was where you started to see the first inklings of there's an activist core minority who suddenly have all these ideas of what the company should and shouldn't do, and what's kosher and not, and what's offensive and not, and pushing on things. And we're like, ah, we can manage. And then by 21, it became clear that if we didn't do something, this could eat the entire company, the soul of the company, the feel of the company. And we could end up with a business we didn't want to be in. This was our business. And I've had moments during that time where I've been like, yeah, you know what? Maybe it's time to retire, which is fucking preposterous. I still like what I do. I liked the best majority of people I worked with.

• 1:34:29Speaker 00

  I liked the business. I liked the technology. Why would I want to retire from that? Oh, it's because there's this miserable contingency that's poisoning everything. So we just went, okay, let's just put a hardcore stop to it. And the stop was Jason and I deciding, we're just going to end it tomorrow. No more discussing politics inside of our work channels. We're not going to settle, I don't know, Palestine question inside the same space where we're discussing features in Basecamp. That is not an appropriate venue for having these things. And in fact, incredibly divisive to introduce that kind of political energy into a professional environment. And we did that, and we made some other changes.

• 1:35:13Speaker 00

  But it was really that thing about politics that ticked people off. Because there was this core contingency inside of companies, very ideologically wedded to the idea that our business was a vehicle for their political aspirations for all these topics. And then there was the larger context of the internet, and especially Twitter at the time, that was very engaged in all of these topics, right? So it just blew up. We put out a memo saying, it's over. And we also knew it was going to be contentious. So after it proved to be contentious, we doubled down on it and said, do you know what? If you can't see yourself at a company where we're not going to discuss fucking Palestine during work hours with your random coworkers,

• 1:35:54Speaker 00

  we will pay you up to six months' salary to go somewhere else. And at the time, the job market in tech was just booming, right? Like, everyone was getting offers left, right, and center. So this was an incredibly attractive offer. Here's six months' salary, and you can get a new job on Monday. It was almost like a mega bonus for getting the fuck out of there. And it was the best money we've ever spent on anything related to culture, maybe anything at all. Of all the things that I bought, that peace of mind we bought with those payouts was just priceless. Because what it did was, it didn't just cut out surgically just that bit of cancer. It cut out a thick ring around it.

• 1:36:34Speaker 00

  And what we ended up was a culture that was completely cured of all that insanity in one swoop. Now, the patient had a little bit of a rough going for a while. And it was that rough going where Andreessen came in. Because we were a small company, 60 people. So at the time, 20 took the offer, 20 left. Like, that's almost a third of the company that decided to leave in that moment. And we got to a point where we were thinking, not that many more have to leave before. I'm starting to get worried about whether we can keep the lights on. And it was actually Toby, who then put me in contact with Marc Andreessen,

• 1:37:16Speaker 00

  because Marc had been exposed to these phenomenon at other of his portfolio companies. And just even getting that initial exposure, hey, there are other people struggling with this, by the way, even though you're getting skewered right now on Twitter and being haunted by the mob. Like, this is happening all over. You're not unique in this way. And that's some reassurance. And by the way, here's a bunch of contacts. Do you need someone to come in and help do programming operations or whatever? I know this, I know this, I know this. And I was just, I was floored by the generosity. Because I think, well, I don't think, Marc and I haven't always seen eye to eye on these things, right?

• 1:37:57David Senra?

  Exactly.

• 1:37:58Speaker 00

  Especially in terms of venture capital. He's been one of the main faces of venture capital for decades. And I've been kind of critical at times. And it was just a realization that all those grievances we might have thought to be so big once upon a time were actually miniscule. We were fighting the white walkers on the other side of the wall. And all our internal squabbles were going to be for nothing if those fuckers got inside the wall and destroyed everything, all of it. And that felt like a real threat at the time that could have happened. They could very well have just ripped the whole thing apart. And Marc clearly saw that, that this was a collective, almost existential threat to the entire industry.

• 1:38:42Speaker 00

  If these activists were able to take over these institutions in the same way that they have taken over academia, we would be fucked. And not just for a little while, but potentially for decades, that couldn't stand. So clearly, when Jason and I stood up and said, we're not doing it, right? There were a bunch of people who said like, great, but they're going first. So they take a bit of the heat, but also let's help them. And Marc was incredibly helpful, not just in terms of these contacts and instructions. We ended up not needing, but it was very powerful. When you have literally 40,000 people on Twitter calling you all the worst things in the world, even the strongest individual might go for a second like, holy shit. Like, the mob is coming for me, and there's no one else there.

• 1:39:26Speaker 00

  And there are other people there. There were people there. Toby was there. Marc was there. And it was incredibly helpful to give us the fortitude to go like, no, do you know what? We're going to stick with it. We're not going to grovel. We're not going to apologize. We're not going to revert. And then what Marc also did was he gave me a syllabus for understanding the history of wokeness, going all the way back to the 60s and beyond, that this didn't just come as lightning from a blue sky. This had an institutional grounding that was set in motion, particularly in the 60s. The long march through the institutions, Herbert McCusay, and a lot of the Frankfurt School. And all of these groups that had designs on how to reshape society

• 1:40:07Speaker 00

  and create the revolution they so dearly wanted, but with a timeline and a roadmap that was demarcated in decades, that it wasn't just like, well, we're going to put some together, and then in two years, something's going to happen. No, they were sitting in the fucking 60s fantasizing about how to overthrow everything in the 2000s, right? Actually incredible in like a Dr. Evil sense of it. But when you're on the receiving end of it, it seemed a little less incredible. And it was, it was just difficult not knowing. Like, where's this coming from? Why is this happening all of a sudden? Well, it wasn't happening all of a sudden. There was this long history of it. And when you understood that history, it made a lot more sense. And it gave more of a purpose to the rejection of it, right?

• 1:40:52Speaker 00

  Like, we weren't just making a rejection for our little corner of the world. We were chipping in, in the great civilizational battle of where this country was going to go, of whether the white walkers behind the wall was going to win. And we were like, no, they're not going to fucking win. Get on that fucking wall, take your goddamn spear, fired with maximum velocity.

• 1:41:11David Senra?

  David, this is awesome. Anytime you're in town, text me and we'll run this back as much as you want. Thanks, man. I hope you enjoyed this episode. Please remember to subscribe wherever you're listening and leave a review. And make sure you listen to my other podcast, Founders. For almost a decade, I've obsessively read over 400 biographies of history's greatest entrepreneurs, searching for ideas that you can use in your work. Most of the guests you hear on this show first found me through Founders.