One Sentence Summary:
Detailed yet easy read on the inner workings of Basecamp, one of the first 100% remote bootstrapped software companies, that can be applied for any entrepreneur
Below are notes I've taken while reading the book. This is not a comprehensive summary but thoughts and ideas I've found valuable. I recommend reading these notes after you've read the book first to compare our thoughts. I can't stop you if you don't want to so I guess you can use the below as an idea of what you may get out of the book yourself if you read it... though if it ain't clear it's cause you didn't listen to me.
37signals was the first company. It was a web design consulting firm. They developed Basecamp to solve an internal project management problem. But their clients wanted it and soon that tool became the company itself. Same story as Hootsuite, social media consulting company that developed an internal tool customers ended up wanting more of. My belief that a sustainable and valuable company that I will enjoy the process of making must be born from "scratching my own itch" stands.
Learning from successes is MORE valuable than failures. "When something succeeds, you know what worked - and you can do it again". A HBS study found successful entrepreneurs have 34% future success rate. Compared to people who have failed and/or are starting from scratch who both have the same 23% success rate. Success breeds success and that is what counts. Don't overvalue failures.
Don't overemphasize planning. My POV is to limit yourself down to a small number of goals (4 or less) and just focus on running with those. Everything else is a distraction
Big isn't always better. It has to fit the business model of a company. If growing was always the best, then why doesn't Harvard or Stanford take thousands more every year with campuses all over the world? Understanding why you are growing and the purpose of it is important.
"Workaholics aren't heroes. They don't save the day, they just use it up. The real hero is already home because she figured out a faster way to get things done" -> It's the quality of your hours. Most people can get a phenomenal amount done in 8hrs of pure concentration. Most are just shitty at using their time. pg 26
"Everyone should be encouraged to start his own business, not just some rare breed that self-identifies as entrepreneurs" -> Don't we all want control over our lives? pg 28
Though, when building a business/product don't make a me-too. Make something where your customers will MISS IT if it no longer was in service. Something that genuinely improves the quality of life.
Story of Vic Firth, drumstick maker is fascinating. Scratches his own itch. Makes amazing drumsticks. Now dominates a niche with 62% market share. The value of making yourself "customer of one" is that you can assess what you made quickly and directly.
"Don't let yourself off the hook with excuses. It's entirely your responsibility to make your dreams come true" -> You will make time. If you actually want something bad enough you will make the time regardless of other obligations. This is actually a way to test how much you really want something. pg 40-41
"When you don't know what you believe, everything becomes an argument. Everything is debatable. But when you stand for something, decisions are obvious." -> Hence the value of having guiding principles and visions to help build out your mental model. Without it, you will be lost in the desert. Build your compass. This also means you will say no to many things that may seem interesting or tempting. pg 44.
"Act like an actual business and you'll have a much better shot at succeeding" + "A business without a path to profit isn't a business, it's a hobby" -> Especially important, if I want to bootstrap my business, is how would I generate a profit. pg 56
"Building to flip is building to flop" -> So many wantrepreneurs I speak with are focused on the exit strategy. The big acquisition payday. Then what? If the point of starting and running a business isn't because you enjoy it, then you shouldn't start at all. Not like you'd succeed without that love for running one. pg 59
"Constraints are advantages in disguise. Limited resources force you to make do with what you've got" -> Force yourself to get creative with limited capital, time (i.e. deadlines). Even limiting features and functionalities to the simplest and bare forms is important. pg 67
Focusing on constraints leads to the idea of cutting out 'good' stuff to focus on delivering the great stuff. Cut out the fat (and your amibitions) and just focus on delivering the great essentials. Fancy steak restaurants make you buy the sides separately on top of the steak. Just focus on the steak, not having great sides too. Ignore the details and get the outline done. Iterate after feedback #agile.
Question to help narrow in on your MVP: "If I took this away, would what I'm selling still exist?"
"Decide and move forward" -> Only way to build momentum. You make a mistake? That's okay, you can correct it. pg 77
"The core of your business should be built around things that won't change. Things that people are going to want today and ten years from now" -> People/Culture of the business comes to mind as the core internal foundation. This is also the mindset for investing in companies as well: what is the core value proposition the company is providing its customers? For Amazon it's the convenience of fast shipping with the ease of having everything I want in 1 place. pg 85
Always look to sell everything you've put time into. Even selling the process. Basecamp used to blog about how to run a company based on their philosophy. That became a book they started selling. There are many things I've done I could write about or sell. It's a matter of putting it all online. As Derek Sivers says "if it's not online you didn't do it".
"Is it really worth it?" -> Should be the cornerstone question before making any decision. Understanding what upside you are deciding to choose for and what you will forego is important. It is important to decide first but you still want to make sure the decision has been thought through for value. pg 103
Productivity requires ALONE TIME. This means NO INTERRUPTIONS or DISTRACTIONS. Focus on CREATING this space by waking up early or setting time blocks. That is why your environment is so important. Focus on stretching out these alone blocks for as long as possible. Constant distractions can hinder your progress.
Think judo technique. Most out of doing least. 80/20. Go for simple, barebone non-glamour. Focus on making actual progress, not the illusion of it through fancy processes and long hours.
"The longer something takes, the less likely it is that you're going to finish it" -> So break it down. Pick enough low hanging fruits and you'll have enough to open up a market stand. But you need the constant stream of quick wins to build momentum. Try to ask yourself what you can do in 2 weeks. pg 115
SLEEP -> "What distinguishes people who are ten times more effective than the norm is NOT that they work ten times as hard; it's that they use their creativity to come up with solutions that require one-tenth of the effort. Without sleep, you stop coming up with those one-tenth solutions -> Find the key questions that need to be addressed for everything. pg. 121
Humans are terrible at forecasting. Ergo, break project timelines down into smaller chunks. A unique thought Jason had here was to change one 12-week project into 12 one-week projects. Mindblown. Then further looking down on 30 hour tasks as 6-10 hour chunks by breaking them down even more. It's about breaking tasks down so that you can deal with them quickly. Have a small to-do list for the week and have it be easily knocked out for the day
A line from Paul Graham hits me here: Do something you love doing that others hate doing. It's about putting yourself into the product to make it a unique thing no one else can offer. Zappos had amazing customer service where the reps were empowered. "Pour yourself into your product and everything around your product too: how you sell it, how you support it, how you explain it, and how you deliver it". I think this becomes part of the story you'd be selling, as well as, the culture you would be shaping.
"Underdo your competition" -> If you just try to outdo your competition by matching how much they spend, the number of features they have etc.. then you become a defensive company that chooses to follow instead of lead. pg 144
No is the default. It's either a "Hell Yes" or "no". Ignore pleasing the minority at the cost of the majority. Just recommend your competitor to those minority customers. Everyone will still have a win-win that way. If you can't love your product, you won't be able to believe in it, ergo won't be able to convince customers about it.
If customers want a key feature. They will constantly ask you for it, so no need to write every single feedback down. Just focus on the ones that keep on repeating.
"Build an audience" -> Share valuable information in any medium you want to build an audience. That is the "sustainably captive customer base". pg.171
Out Teach > Out Spend your competition.
Chefs make cookbooks of their recipes. But they have no fear of a customer reading it and ousting them. Because he knows once you read about his moves you are effectively playing his game, not your own. Same with business. Share everything you know. Use it to build the story and teach. pg. 177
"Marketing is not a department" -> Everything everyone in the company does will effectively translate as marketing for the company. Customer service is marketing, answering the phone or email is marketing. Your entire website is marketing. It's a mindset shift to install in your company culture for sure. pg. 193
"Trade the dream of overnight success for slow, measured growth. Start building your audience today. Start getting people interested in what you have to say. And then keep at it. In a few years, you too will get to chuckle when people discuss your "overnight" success" - pg. 197
Hire only when necessary after you've done everything you could. You should be running a business you love being a part of running so hiring to constantly shirk duties isn't a viable long term strategy. Only hire when you need to.
Hire slowly. I'd rather run an intimate dinner party than a club.
Resumes = ignore it. Cover letter. if the first paragraph sucks, the second has to work that much harder. pg. 211
"How long someone's been doing it is overrated. What matters is how well they've been doing it" -> I agree. 2 or 5 years doesn't mean much. Rather it sometimes shows you are average and complacent as fuck. Instead of trying to accomplish the 2 year stint in 6 months.
"Clear writing is a sign of clear thinking". pg. 222
"Culture is the by-product of consistent behaviour" -> So, habits. A system of habits actually. pg. 249
Build a rockstar environment by focusing on trust, autonomy and responsibility. You develop them by giving people the privacy, workspace and tools they need. Use an environment to create rock stars, not try to fill your company with a hodge podge of them.
"When everything constantly needs approval, you create a culture of nonthinkers" -> Banks and government organizations. Creating boundaries of requiring approval may actually make them want to test boundaries and abuse it as a way of rebelling out. Effectively, you treat them like teens and they will become teens. pg. 255
"You shouldn't expect the job to be someone's entire life - at least not if you want to keep them around for a long time" -> it's about BETTER hours, NOT MORE. Force people out by 5. Create these constraints so they think about maximizing their time for full effectiveness. If not you'll have people just drag out hours that hurt themselves and the company. This is how mediocrity will brew slowly. pg. 258
"Policies are organizational scar tissue" pg. 260
The four letter words never to use: need, must, can't, easy, just, only and fast pg. 265
"Inspiration is perishable" -> ideas are immortal but inspiration is not. If you are inspired to do something... you have to do it now!! When you are inspired it will multiply your productivity. But you must execute on your inspiration before you can unlock its wondrous powers. Too many people just put it off and it just dies. That's why all the people in their corporate jobs just have the ideas left with them. But they've pushed of the inspirations long enough that many will die with regrets of not executing on it. pg. 271