What's the worst that could happen?

0:00Welcome to Rework, a podcast by 37signals about the better way to work and run your business. I'm your host, Kimberly Rhodes, joined by the co-founders of 37signals, Jason Fried and David Heinemeier Hansson. Guys, I don't want this to sound like I'm kissing your ass. However, I have always appreciated that I think as business owners, you guys are often just trying things out, experimenting with new things, just like putting it out there and seeing how it works. I don't think a lot of entrepreneurs have that same level of like guts, courage. I thought we'd talk about it a little bit. So this concept of just always experimenting, where does that come from?

0:37I'm just going to open it up and let you guys take it from there. I find it fascinating. Yeah.

0:41David Heinemeier Hansson:I'm not sure how else I would do it, frankly. I mean, what's the alternative? Actually, I'll ask you, Kimberly. So what's the alternative in your mind? I think a lot of people start a business doing whatever it might be and just are like, keep on doing it. Keep on doing it. And you guys are like, let's start a new product. Let's start another one. Let's just see how it goes. Let's start this new initiative. Let's start a new department. I feel like there's been a lot of examples of that in the short time that I've been here of just like trying new things and seeing how it goes. My sense is that most companies actually do do this, but they probably think about it a lot more than we do?

1:19Maybe that's it.

1:20David Heinemeier Hansson:I'm guessing that, you know, a restaurant's like, what are we going to, how are we going to change our menu or whatever? And they put a lot of thought into it as they should probably in a restaurant, maybe, I don't know, maybe I'm just making up an example, but there's probably a lot of consternation and people are paralyzed by a decision and they spend six months trying to test it and get everything verified and trying to become certain before making a decision. I think our point of view is let's do that on the backend. Let's just do something as quickly as we can and try something. And then we'll figure out if it worked later and we'll figure out if it worked for real because it'll be a real thing versus trying to imagine or pre-validate what something might be.

1:54David Heinemeier Hansson:So I just think we kind of probably twist it around, which allows us to do more things and experiment in more ways because there's not a big lead up. It's just like, what's the simplest way to test out this idea? Lowest fidelity, fastest, not always lowest fidelity, but generally the lowest fidelity, like not super high quality because then you could put in four months into something that doesn't work at all. So how do you try to get to something that works well enough to get a sense of whether or not this makes any sense? And then see what happens. And then you either follow the scent or you back off if it just doesn't pan out.

2:26David Heinemeier Hansson:Or maybe you tweak it a few times. But at some point you also say, this didn't work or this totally works. One thing we don't do typically is keep chasing something if we just aren't getting anywhere with it. We might try one more variation, but then we'll kind of give up, frankly, and just try something else. I think a lot of this is also coming from founder privilege, to put it bluntly, in the fact that Jason and I answer not really to a lot. We answer to some abstract sense to customers. So we have to make something eventually that'll pay the bills. But that's a very long run consequence in most cases, unless you fuck it up majestically.

3:04And then we also have to be accountable to our employees, obviously, but there's not this sense that there's a direct boss that's sitting above us and judging everything we do. And if this experiment does not work out and maybe the second one also doesn't work out, suddenly it's a bit tenuous to sit in our chair and we might get canned. That just doesn't happen because that's not the structure we have. And therefore, we don't have to preempt every decision and every experiment with, here's a long rationale for why this was actually really prudent to try it. So even if it doesn't work, I've covered my ass.

3:41Jason and I don't need to cover our ass. If it doesn't work, it doesn't work. And then we just get to try something else. And even just between the two of us, I mean, we have this long running moving average that's

3:54Jason really wants to try something and I'm not sure about it. I am going to let that roll. I'm going to let you see where that goes because I know that the long moving average is that Jason will be right on the average over the long period of time. And therefore it's not worth a big fight. It's just not worth the opposition. In almost all the cases, unless there's something that's truly make or break, and we barely ever have those kinds of decisions, the vast majority of decisions that we do are completely reversible. Jeff Bezos has this wonderful idea of the one-way door, the two-way door. And the two-way door is when you can open, you can walk through, and if you don't like where it leads, you can back out and go back through that door.

4:37And then there's the one-way door. You go through that. That's just what it is. You will live with that decision for eternity. How many one-way door decisions do we have at 37 Signals? Almost none. and therefore it's just easier it's cheaper it's faster it's more rewarding it leads us to let the gut drive when we just go like let's just open the doors and walk through and see if it's somewhere if we like and if where we like we keep going that way and otherwise we will backtrace and therefore we get to open 10 times as many doors 50 times as many doors 100 times as many doors and i'll tell you as someone who's likes to have a lot of different inputs it's just more fun I mean, I remember the number of instances we've had where we really deliberated long over something.

5:24Pricing has been one of them. I think maybe we've referenced this example before. But we used to have a much more rigorous setup around analyzing the potential outcome of a pricing change. And I remember one instance a couple of years ago. I think we spent almost four months trying to triangulate. And if we change this and we do the long-run analysis and blah, blah, blah, blah, blah. and in the end just as we're about to go live jason is like there's something down here in the tummy that tells me otherwise let's fucking just do the other thing we do the other thing and it was fine and if it hadn't been fine we would have done like the four months which is a total and other waste and i was like that was a glimpse of what it's like to work at a normal company i was like i fucking hate it i don't want to work at that company that works like that all of the time for all the things.

6:15I want to work in a company where we can just wing it, where we can just go on a hunch, where we can go according to our intuition, and then just trust that over time, that intuition is going to calibrate well enough that we get to stay in business and have fun and spend our time building shit instead of imagining what it could be or how it could be otherwise, or how do we build up these defensive arguments for if it doesn't work, it's actually not my fault. No, it's fucking always your fault. Like this is the other flip side of the founder privilege is that everything is your fault. Like if it doesn't work and we implement a feature and it isn't right, like fuck, it's Jason's fault.

6:51Or it's my fault if we do something on the technical side that's a boondoggle and we waste a bunch of time. That's just what it is. And I think there's just a great clarity when we don't get to skate around that shit.

7:03David Heinemeier Hansson:Another way to put the one way two way door is like just how do you lower the stakes as much as possible with any decision you're going to make. That's really what we're almost always after. And it's just become a natural thing that we do. We don't really talk about it that way. Just like how do we lower the stakes to the point where it's not a big deal? Most decisions should not feel like a big deal because most decisions just don't matter anyway. Most things you do over your career don't matter one way or the other. They really don't. But we puff them up as if everything matters. There's probably a handful of really important decisions you're going to make.

7:34David Heinemeier Hansson:And that's kind of it. And almost everything else doesn't matter. And just recognize that that's true. And even trying to make the things that really do matter feel like they don't matter that much is, I think, a good practice. And it just allows you to move and be flexible and try things out as quickly as you can and see what happens. I'll also say it's an embrace of humility that even with all of our experience, all of our intellect, all our talents, we cannot predict, not even the future, barely to predict tomorrow. And we certainly cannot predict what customers are going to do in reaction to something that we launch or a price change that we make or a new product that we introduce.

8:11So if you embrace that humility and go like, you know what? I don't know. We have to throw stuff against reality to see whether it bounces. There is not another way. We cannot simulate that reality. It is just the fact that we won't know. And no one knows. It's not us that are particularly stupid, I don't think. I think it's that no one knows. And the instinct there is to look at that as a problem to be solved, right? Like, oh, we can't know before we launch. So maybe if we do 500 studies, we can get some. No, just don't. Just throw the fucking ball. Throw the ball. And if it bounces, you're good.

8:47You keep playing. And if it doesn't bounce, find another fucking ball. Okay. So another viewpoint I think that entrepreneurs might have that you guys don't half that I'd like you to talk about is the fear of others or opinions. Like if I launch this new thing and it doesn't go well and I end up having to shut it down, like what are people going to say? Or what is the market going to think? How is that going to look? I don't feel like you guys feel like that or have that.

9:14David Heinemeier Hansson:I mean, I don't think most people think about anything anyway. It's like if it doesn't work, they're not sitting around for months on end going, aha, I told you so. They might say that for one second and you're like, okay, whatever, who cares? Anyway, I mean, it's like, you can't worry about that. They're not thinking about you. That doesn't even matter. It doesn't even phase them. At the end of the day, and you're not really doing it for them anyway, you're doing it for you. And maybe you think the thing you launched sucked and that happens too, and you might feel bad for a minute or whatever, but you got to move on.

9:41David Heinemeier Hansson:Like what's the point in not doing that? I think not lingering on either your opinions or their opinions is the way to be. You just put it out there. You see what happens. This is your best shot is your best effort. And you make another effort and you make another effort and you make another effort and you just don't linger. And if you don't linger, then these things can't bite you. Basically, you just moved on. You've just you've glided past all these moments where the knives are out. You just keep going forward and then they just you leave them behind and you move on. I don't really know any other way to be satisfied with anything.

10:10David Heinemeier Hansson:If you're just going to wait for other people to validate you or to make you feel good or bad about yourself, like you're kind of in deep shit, that's not a really healthy way to live, I don't think. And it's not a healthy way to run a business. That's not to say that sometimes you see someone who says something and it bums you out about something you worked really hard on or whatever, but it should be bumming you out for a moment and you move on. It can't just be this perpetual thing that sticks to you. You got to shake the burrs off and keep going. I'd go even further to say that if people are not hating some of the time on what we're doing, it's uninteresting.

10:44And I am far more terrified of that reaction than I have someone who's getting a strong emotional reaction to what we make. Because usually, as Kathy Sierra would say, there is a balance in the universe when that happens. There's going to be someone, if someone is hating what you're doing and there's some modicum of quality to what you're doing, it's not just a piece of shit. There'll also be an opposing force that actually really likes it, right? And I know humans are trained to focus on the threat. So they will focus on like the one person on the internet that's just like, well, that's shit.

11:15And then it won't even register that there's a hundred or a thousand who really like what you do, but you can overcome that. And as Jason says, you're not overcoming it by never experiencing those emotions. You will experience those emotions, but like a little cloud that just keeps moving and you don't have to stop what you're doing. You just watch the cloud and like, oh yeah, that's a negative emotion. Keep going. And then it's sunny again. And it's sunny because you've created something that creates a reaction rather than putting something out there that no one gives a damn about. That's a true death.

11:46Certainly now in this attention economy, blah, blah, blah, that you have to create some sort of reaction and you don't care so much about the people who hate it. You actually want some of that balance in the universe to emerge to validate the people who do like it. And then as Jason also says, what else are you going to do? you're going to put all your talents into making something nice, something good, something you're proud of. And maybe that works in the sense that a ton of people like it. Maybe medium works that some people like, or maybe it doesn't work at all. It's just you who liked it, but what else were you going to do?

12:19Like not put in all your talents and it's stress about what other people were going to react to it in advance. How would you even know? What would you know about what could happen or not? So if you're not going to change your actions, if you're not going to change your approach, what good does it do to stress about it in advance? You just go like, you know what? I'm just going to apply my best here and trust again in the long moving average that if I keep applying my best, eventually I'll hit on something that works. And you know what? Maybe it won't. That's the odds of business. Maybe you'll be really good and real talented.

12:51You're at the wrong time. You're working in the wrong industry and nothing works. Okay, well, that's your lot in life. So you better fucking just embrace it. Be proud of what you've built. Even if no one shows up and keep moving. Okay, excellent. So when you guys are doing a new experiment, trying something new for the first time, whether it's pricing or a new product, do you have a guideline for how long you're giving that before you have to make a second decision? Does it vary from item to item? Like, how long do you give something?

13:20David Heinemeier Hansson:I mean, it's not decided upon up front. You kind of get a feel for it. But I don't really know how to answer it other than that. It's pretty amorphous. I mean, for example if you're going to do a price change you got to give it some time because you got to see how trials convert and so you know you can't like turn around two days later and go signups are down it's just stop stop stop like they might be down but conversion might be up significantly it might pan out you just don't know so you got to give some things the time they deserve whatever that might be and then sometimes you might be like well i think there's something here that's not quite right yet but we could tweak it one or two times let's see how that goes and you got to give that more time you're not going to revisit it you're just going to do it and you're going to move on because it didn't matter that much anyway.

13:59David Heinemeier Hansson:It was just like an idea or a new headline for something or a feature change. You're just going to do it and you're going to move on. You know, like one thing we don't do for better, for worse is we don't reevaluate every little thing that we do. We don't do something and then look back on everything we do and decide if it was a good or bad idea. We mostly just keep doing new things and things that are really bad ideas will eventually be redone at some point because they're bad and you'll notice they're bad and you might want to revisit it. But we don't do these postmortems on every little thing we do.

14:28David Heinemeier Hansson:I think that a lot of companies get stuck in that process. And then what they do is they tell themselves stories about why something worked or didn't work, and they believe their own stories. And they really don't necessarily know exactly what happened, but they've come up with some conclusions they can all agree on. And then from that, they try to learn from that. And you're like, well, you may be learning the wrong thing, but it's a comfortable thing. Who really knows? So we just like, I don't like the whole looking back and figuring out how long things are going to be given. You just kind of do the things.

14:53David Heinemeier Hansson:Some things do have some time. Most things don't. Just keep moving forward is mostly the suggestion I would have rather than like going, okay, in 45 days, we need to look back on this and decide if this was good or bad. When you're doing a lot of things, you can't do that. If you're doing one thing, maybe you can do that. But usually we're doing a bunch of different things to launching a bunch of features, improving things in a bunch of different ways. So we don't really set aside that time. That's my general take on it. I don't know if it's helpful or not, but. Now, to be fair, we actually used to do some retrospectives.

15:23We did them on larger product launches and certainly on larger feature launches as well. And as Jason said, what was the outcome? We would sit around, I was going to say in the circle, all of it was on Zoom, which is even worse than the circle. But just going through like, oh, what are the lessons we can extract from this? And the lessons were always fucking stupid. They were like, next time we should probably communicate a little more. Like, what does that mean? Who has ever gotten that extraction and gone like, oh, yeah, communication. I totally forgotten about that. If we do that a little more next time, it's going to land.

15:57No, it doesn't. Because that's not actually how most people learn. A lot of the learnings that happen in product development are exactly those kind of intuition tunings where it's difficult to precisely articulate what it was, what you picked up. But like practice, you're just like, oh, I've been through some of these experiences and I now have a better shape of what the next project should be like. You don't need to talk it to death. And in fact, if you do, you end up with, as Jason says, this illusion that you've learned anything that's finalized, that you have extracted something from the universe in a causal relationship.

16:36If we do this, then that happens. No fucking way. That is just not how anything goes. So having that, again, humility, that reality will surprise you all the time. You can think you've extracted a handful of lessons. You can apply those lessons to the next project. And it's an even bigger bust. In fact, I'd go so far as to say many great artists, product builders do much of their formative, great work when they know less. In fact, I look back upon some of the early work that we did when we knew so much less than when we know now with a glimmer of just envy. Holy shit, I used to write so succinctly.

17:16We would write chapters in Getting Real, the book from 2006, and I read one of those essays every now and then. I'd go like, man, that was tight. I need to get back to that, not the yabba-ty-yabba-ty-yap and just extrapolating, just like get back to that. I knew so much less. I had so much less practice and so forth. So there's a lot of times where accumulating knowledge just accumulates baggage and you now move slower because it's constantly weighing you down and you think, what about this thing? What about that thing? No, if knowledge does not lead to action, it's useless as a mode of driving a business forward.

17:52And I think, unfortunately, the vast majority of knowledge accumulation does not lead to action, even for us. So be careful about how much knowledge you take on. Okay, so we talk a lot about our products that are successful at Basecamp. Hey, tell me about, and you guys have launched a lot of things over the years. Are there any of those that you would consider a failed experiment? I don't know that we use that word very often, but things that like don't exist anymore that you can kind of speak to, maybe something that has led to something else. We always say like one product leads to something else.

18:24Is there something that has failed that now has led to something better? Yeah.

18:29David Heinemeier Hansson:I mean, again, I just don't even like the word failure because it's not like things don't work out. Yeah. It's like, okay, so it's such a heavy word. For me, it's like some things work out better than other things. Other things just don't work out at all and you move on. Like, it's not a big deal. Like, when I hear that, I'm like, not a big deal. When you hear about failure, people get saddled with that. It's a very heavy weight. They're afraid of it. I'm not afraid of the idea that some things work out better than other things. But I could be afraid of like, that was a failure and that was a failure and that was a failure.

18:57David Heinemeier Hansson:I mean, there's a lot of things, again, that you do that just don't really pan out the way you wanted them to. And if you have this history of failures behind you and it like holds you down, then you become afraid to do new things. I just don't like the word, frankly, at all. There are definitely things we've done that have not worked out very well. Like Basecamp Breeze was a product we launched. I don't remember when this was, a number of a decade plus ago, which was basically supposed to be like a mailing list, like a single email address. Anybody can mail like a group mailing list, basically kind of thing.

19:24David Heinemeier Hansson:And it just didn't really work. It kind of had some uptake and then it just kind of petered out. And I think we originally charged for it. Then we was like, we just refunded everybody and just like closed it down. Is it like a newsletter? Like, I don't know what it what do you mean? It was a single email address. The idea is that like newsletters are too complicated for most people. If just a group of 30 people want to email each other, just like create a single email address that can all email on that whenever any email goes to that address, it gets blasted out to everybody. It's like a group email address, basically.

19:51Got it.