DHH: $100M+ Advice That'll Piss Off Every Business Guru

you able to give any ballpark for previous numbers let's just say ridiculous i think that's it that's a good ballpark right i feel like i could rule world i know i could be what i want to put at all in in like a day's off on a goal lester year when you all introducing yourselves what do you even say because you've done so many different things that i don't even know like what you take credit for most or what you like hang your hat on well it all depends on the audience if i'm talking to a bunch of car nerds i talk about winning lam lamar if i talk to a bunch of programmers it's all about ruby rails and if it's a bunch of entrepreneurs it's usually about building base cabin thirty seven signals so did you have you ever said base camps revenue no we've never disclosed to full revenues nor profits i think we've said tens of millions or something i don't even know that's one of the great privilege just being a private company it's certainly served as well for many many years when we had the entire project management space in saas to ourselves and we were laughing all the way to the bank because clearly someone else must have realized this was a highly profitable not even niche but category of software and it just took a decade until anyone else woke up to the idea that this could be a good business and then we had competition so very much enjoy the privilege of being a us private company and not having to disclose a goddamn damn thing sam have you ever been if you go to thirty seven signals website sam have you clicked at the bottom this is this little tab that just says nineteen ninety nine have you ever seen this no i'm going to it now what's going say it's amazing so so in general i feel like you guys have done an amazing job of like planting your flag in the ground like yeah this is what we believe and rework was a fantastic book your website right now is basically kind of like a rework it's just a thirty chapters of shit we believe rather than trying to sell you on our software like let me tell our philosophy as founders and entrepreneurs but if you click nineteen ninety nine sam what do you see i see a website that a page that looks sort of like it's from the year nineteen ninety nine and it's all white and it says thirty seven signals manifesto and it's a thirty seven chapter book in plain text and there's chapters like chapter twenty four my cousins buddy and it says my cousin buddy's is a web designer and then you guys then let him do it the money is save having your cousins buddy builds your website only nothing compared to the cost of time money to undo his mistakes and so like very much just like this blast from the past of you guys have been doing this for like you know whatever twenty seven years or something of saying what you feel una and having that be something that like leading with the philosophy rather than leading with like hey here's our features in her product here's of products please use us yeah so a lot of it is simply based in the fact that neither jason and i can shut up about what we believe so it is a natural byproduct of us existing and working that we keep coming up with takes on different topics in our industry how to build a company how to run a company how to do technology how to do design and it would be an awful waste and high opinion if we didn't try to capture sure some of those observations and lessons and distribute them more broadly but there's certainly also a more economic side to it when we got started i think it's in reworked there's a chapter about how to out teach rather than outs spent the competition and there was really our operating paradigm since the beginning because we never raised bc we never had more money than anyone else we always had to earn the money we wanted to spend first and that meant a whole host of constraints on how we could run our business and certainly how we could run marketing because if you don't have a bunch of money to buy ads and awareness that way you have to earn it and the way to earn it is simply to be interesting now i don't sit out to be interesting as a objective i try to be ruthless honest and very forthright in everything that i learned and that in turn turns out to be interesting to some people some of the time because so much of business advice is either being given by people who aren't doing we're observing and d and there's an tire category of that usually pat it to fit exactly three hundred pages and maybe it has a funny exclamation point in the word instead like i think that's the most popular genre right now how to quit my job or something that's what i see at the airports all the time right now or it is from entrepreneurs who active but very often have all sorts of liabilities in terms of what they can say because they have investors or they're publicly listed or whatever and basically just jason and i had another constraints we were in the think of it are in the thick of it running our own business having to make more money than we spend and it also we don't have any of the constraints we don't have anyone who can tell us no now some days i wish there were people could tell me no when i tweet out something stupid or or write something here brain but and the net some the moving average of that arrangement of doing something that is successful enough that people care about what you have to say and then not having that course filter of oh i wonder what my investors are gonna think about this has produced over the last twenty five plus years a steady stream of observations mission statements crazy attempts to do this data the other thing that very often ended up not being what everyone else was doing partly because we weren't consuming the same water now neither jason or i have been in silicon valley we not product of that however much i have tremendous respect for everything that's come out of that place it does have a tendency to produce uniform thinking around a whole host of big topics and thirty seven signals was born in chicago at a time where that had zero tech community of note it wasn't until much later and group on and all these other things then some life was bred into the chicago tech scene but when we were coming up there was no one there so we just had the luxury of distance to everyone else's eco chamber which meant that original thought was possible i didn't i'm not gonna claim that a home the original thought was good but i will claim that if you look back upon some of the things that we wrote now twenty years ago getting real the first book that manifesto from ninety nine rework from twenty ten a lot of that stuff still holds up because it's focused on fundamentals and focused on extracting lessons from our work producing something that was worthwhile and lasted alright so this episode is all about excellence a while back i shared my personal framework for building excellence in my own life and the team at hubspot turned it into a thirty day operating system you can check out right now it breaks down the systems it took me ten years to figure out and shows how i actually use them day to day these are systems that genuinely change my life so if you wanna build a good life scan the qr code or click the link in the description now let's get back to the show so twenty years ago you were in your twenties and i don't know how successful you were i would imagine mildly successful but still had a lot to go and yet you were giving advice i think a lot of people listening myself included when i hear you talk about teaching versus teaching versus spending i think that's great advice but i'm like i don't wanna give advice when there's so many people that are more successful than me they should be giving advice you know this sort of imp syndrome stuff how did you justify teaching fundamentals teaching a advice and writing a book on work when you're still in your twenties and there was probably a thousand people that were above you that could've have been like what the hell does this guy know part of it i think it's genetics i've been blessed with a completely irr personality that thrive in exactly those kinds of circumstances and i don't give a damn what people think i can and can't say i'm gonna call it like i see it when i see it whether i'm nineteen or fifteen or forty six or thirty seven and the other aspect of that is that both jason and i did spend quite a long time working for other people now long time in the grand scheme of things they've spent twenty years no but i've been working since i was fifteen well even earlier than that but i've been working for other people directly in the sense of i have a boss since i was fifteen so by the time i'm twenty six i've been in business to whatever degree that is either as an employee or running myself for a decade now i don't even think you need that i think what you need is exposure to novel terrain with enough sort of influences and being informed somewhat of what other people think and then like your token generation machine will start producing if you are of the kind of constitution than i am which is one of the ways i try to internalize the best lessons from what i'm going through is to share is the old adage that nothing makes you learn a something better than trying to teach it right very much true when it comes to this now the other fact of that is there's this great paradigm of liquid versus crystallize intelligent if you look at nobel prize winners who win in physics and chemistry and math and so on they all do their formative work in their twenties basically then there's a a decade of application in their thirties and then they get the noble prize for that work they did in their twenties in their forties part of that is just biology i mean i remember when mark zuckerberg set this and it was hugely controversial i think this was in the two thousands he said something to the effect of young people are just smarter and everyone was like you can't say that like that is just so wrong well it's not wrong in a certain category of intelligence this form of liquid intelligence smart ba sign ups firing stuff don't people are smart just like they run faster right like you don't have a lot of i don't know hundred meters sprinter or forty two that's just not part of the human for seek no you get the payoff when you get older that you have more of the slice intelligence you can make more connections if you look at nobel prize winners in history i think the average age is like eighty right like those connections come later so i have tremendous respect for that liquid intelligence that's at once both very smart very quick and also totally ignorant has no sense of the broader world has no sense of what you're allowed to do and not allowed to do have no sense of someone knows more therefore i should shut up right i look upon back upon that time and go like i am so glad i embrace all that ignorance with the fu of early twenty somethings like that's how we changed the world in the very literal sense the new ideas very often come from that vector that's no nobody loves a cautious twenty year old the founder of a c founder of hubspot came on this podcast he talked about in his first company he was making everything up and in his second company he said oh now i i know how i'm gonna do everything differently and it totally failed he goes just because i was ignorant doesn't mean i was wrong and there's there's something to the to to that idea of like you can be both ignorant and correct i'd go so far as to say that ignorance is a benefit for a huge class of problems that you are cursed when you've been through the loop once when you know too much you cannot un concede in the same way you will be locked into paradigm and thought patterns and if you wanna break those paradigm if you wanna break those thought patterns you kinda gotta start from clean slate now that's not universally true in all cases but i do think it describes the case that jason or i went through that we had some input which was working for other people working at a crazy time in our industry maybe second craziest time next to right now which was the dot com boom bust both of us went through it both on the way up and on the way down and saw all the dynamics play out where i think if you compressed those years from let's say ninety seven to two thousand and one like that's only four years that was instruction worth a decade at least maybe two because it was just so much happening you got all the explosion of here's the internet what are we gonna do with it build into the wild castles in sky that came tumbling down in two thousand and one as the dot com boom burst so we had all those inputs right like all those experiences and then we kinda started in the desert when jason and i got going with base camp this is back two thousand and three we start working on it is still wasteland right like the dot com bust have exploded everything you got programmers going back to being chefs or gardeners or whatever there's simply no work to be had because the whole industry blew itself up and in that wasteland we just go like you know what we now have to be scrappy we now have to rely on ourselves we have to be tremendously productive because we can't hire a team of fifty we can't buy tons of servers we have to use open source because we can't afford licenses for oracle databases all of those constraints apply themselves to our situation and then just produces an explosion of creativity because that's meant to break up an happens when you are the deprived in all the right ways you will find out oh there's a better way to do this you will find out the optimizations like a parallel to today is the big scary moment for the us ai industry was with deep seek put out r one and some of this is mythology some of this is bullshit but the storyline at the time was they could not buy nvidia cpus due to export restraints they trained the whole thing on five million i know there's reservations and asterisk behind that but the fundamental principle was they came up with some novel new techniques of using vastly less compute to still get quite far and i think that applies very much to our situation at the time we just we didn't have millions of dollars we had a consulting business that we had to make pay for all these experiments we wanted to do and therefore we just had to be radically more productive i mean this in my case on the technical side was the birth of ruby rails i could not use the same technology as everyone else was using because i had a tenth a hundredth thousand of the capacity if i had to use something else i had to use something or come up with something that allowed me as an individual programmer and technical person the whole operation to build base by myself on the technical side i am forever grateful that these were the constraints we were under if we had raised i don't know twenty million dollars and hired at a hundred people we would just use the same shit as everyone else and we would never have come up with ruby rails do you guys wanna hear a crazy stat nobel winning prize scientists are twenty two to twenty five times more likely to be in some type of performing class so acting magicians singing or some type of like art like drawing or whatever not right twenty two times more likely i read about that and bill girl book and then i just looked it up and it's like a it's like a a study and the reason of bringing this up is i've been i've been obsessed over that fact that that just seems astronomical and then you brought up the idea of crystallize versus liquid knowledge and it just solidifies that it kinda adds to that and and that a crazy stat that is wild and do you know what's funny i mean we all read it and whatever we want and just back towards like that but when i was a kid what i really enjoyed being was the dungeon master so i played dungeons and dragons and other role playing games and most people they just want to be a character i wanted to run the world so i think there were some sort of early indicators that so i like to sort of world built also in game my favorite game of all time is civilization one the original sid myers game which is obviously about world building so some of those things for present early on and having positive experience building and bootstrapping with others having to convince others before you even have money to pay them salaries that they should go in your direct and we should work on this thing together and you should come into my dungeon is i think exceptionally good preparation for running communities running open source running a company you know who else favorite game civilization mark zuckerberg you know who else even way yeah both of them have talked a lot about playing civilization early on and i feel like they almost had to stop talking about it for a while when the p r got kinda bad and it's like they wanna play you know play god a little bit but now it's it's cool again today's episode is brought to you by hubspot as you know that most businesses only use twenty percent of their data that's like reading a book but then tearing out four fifth of the pages point is you miss a lot and unless you're using hubspot the customer platform that gives you access to the data you need to grow your business the insights that are trapped emails call logs transcripts all that unstructured data makes all the difference because when you know more you grow more and so if you wanna read the whole book instead of just reading part of it visit hubspot dot com speaking of facebook and zuckerberg do you favor you've got a lot of things right you know i think you guys were really early to remote work as a concept and you know obviously you know being profitable as the strategies that you know was you know somehow contra at the time but one thing you got wrong famously was you wrote this post called facebook is not worth thirty three billion and you wrote this great post in twenty ten i think facebook had probably just gone public or it was close to it and you basically said facebook's a great success hundred million people use it but it's not worth thirty three billion dollars laid out this case as to why that was not true looking back on this now i guess is do you just look at that as i got it wrong or is it actually i think the colonel of what i was saying was right but you know i guess how do you think about this blog post now i love that blog post and it's funny because people often pull it forward to dunk right like hey look seventeen years ago you got a thing wrong and what i love eating even more is it's often b right you're like eight wait a minute isn't your business to be wrong nine out of ten times wasn't your last fund just wrong on the vast majority of all the investments that you made oh okay well let's start on that premise but i don't care i don't even care i love that article because it's both a good example of being wrong and accepting that in terms of outcomes yet trying to draw better conclusions than just like i got it wrong at the gambling table right like i should've have bet on facebook if i bought stock at that time rather than say they weren't worth it i would have made so much money right and a great term that i learned from this poker book is called resulting and poker there's this concept of you analyze will not just analyze you know what the odds are given the cars that you have the carson the table one are the odds that you're gonna make whatever hand you're trying to do right and if you d yourself into thinking i should keep playing sixteen percent hands i should just go all in on sixteen percent because do you know what i won the last three your idiot it and you're gonna lose all your money that's not how to win in poker the way to win in poker is to make sure you predominantly play that have the best odds just as much if you go all in on a hand that has eighty seven percent odds of success and you lose you're an idiot if you draw the conclusion that you shouldn't have gone in on that hand tony shouldn't have gone in on that hand so resulting is evaluating your decision on the basis of the outcome alone now obviously you can't divorce those two things but you gotta do it on a longer trend line everyone is gonna miss a shot not just one shot that's gonna miss a hundred shot of a thousand shot a million shots over the course of their careers in fact this is why the b parallels so important vcs have gotten tremendously rich being right ten percent of the time i mean isn't that i mean that's an incredible stat for me that you're able to build such wealth of being so wrong so often but let's even dig into the merits because i love the case of that too when i did that analysis on facebook they did not have a monetization strategy what they had was a lot of traffic and i pair or or i pattern matched that traffic on under this is two world but there was something called blue mountain i think back in to the cards website yes yes they were tremendously popular at the time they had a ton of traffic right and all the traffic brought them was ruined because they did not have a mechanism for dirk turning that traffic into gold it was just trash it was trash traffic it was just people who wanted an knee card and what are you gonna do with that maybe today you could make it work they certainly couldn't at the time my analysis was facebook is trash traffic is just a bunch of people talking about all sorts of shit that isn't intentional in the way that a google search for example is at the time the surveillance capitalism paradigm was probably already under well under construction but not widely distributed like that this was the a camino that was gonna turn absolute trash traffic into gold because surveillance capital flipped it on its head that it did not matter whether intent was there if we know everything about everyone at all times all that matters is eyeball time because now we can pinpoint whether or not should be shown or not shown on the basis of who they are not what they're talking about so they could be talking about the most the ranged stupid stuff and we can make better ads happen because we can target with those individual than a golf magazine online could do on golf ads right like i don't know if that person is currently having buyers intent for buying a new set of clubs but you know what facebook probably knows whether you're within ten miles of the gold store right now you're driving towards whether you could be swayed one way or the other so i didn't see that i did not realize the power of that a and by the way nobody else did either because if they did they would have gone like holy shit facebook has invented a me why they only worth thirty three billion they should be worth half a trillion let's just go all in bed the house no one did that right so anyway i love it for all these things i love it for resolving i love it for this example of a when someone really does figure out like a complete unlock on the entire internet business in that right moment when they also have all this trash traffic that would otherwise have been worthless and then i just love do you know what i was wrong and i remind myself about that on like at least a yearly basis sometimes more often than that when some bc needs to dunk it pulls out a sixteen year old blog post i i just sit back and smile yes you should have some humility about your predictions can i tell you guys about a a funny interaction ahead with your business partner jason so hey dot com so if you guys are listening and go to hay dot com that's one of my favorite landing pages you guys are wonderful at writing copy you're obviously great at design but like copy which i think is like the forgotten skill set in in in internet internet copy writing is sort of like a lost star you guys have not lost it you and jason both have it and i texted him and i go hey i'm working on a new landing page for my thing and i'm using hey dot com as inspiration what's the conversion rate of your landing page because it looks great it sounds great is it effective and he goes you know what i i haven't really looked at it and i was like what do you mean you don't look at the the conversion you don't know if it's working he's like no i've i've never really thought about it i just know that like it felt good and and i and i think it's good therefore we just ran with it and i was i was in awe of that reply that was the opposite of what i would have expected can you talk a little bit about the tension between good taste which i think you have and also following data because you have bills to pay and you want the you want a good outcome and you want to be great you know you're you race race cars data and like the weight of your car and i don't know about racing precision matters data matters and yet you seem to be a follower of taste first this is the luxury of margins we have had the luxury of margins since day one because we built something people liked and we did not balloon the company to follow that interest we grew the company as we needed exactly to the point where we were not deadly frustrated by our lack of progress on the ideas that we had which meant that right from the early days and through some period of times we had ridiculous mortgages i mean truly when i was telling and confidence others about our margins they were like no no you gotta i mean gross right and i'm like no that's not and they were like what do you mean i've never heard of a business like are you able to give any frame or any ballpark for previous numbers if you're comfortable let's still be understand not really i mean let's just say ridiculous i think that's that's a good ballpark right and certainly if you compare to any of the public saas companies like as we were in a different industry right like often industries have tendency to core less around a certain profit margin and it seems like public market saas is coalesce less around like i don't know minus ten percent or something minus twenty percent ridiculously long stretches up on an on unprofitable growth partly because there's all these other hacks of how you get money out of the business while leaving nothing for the shareholders like stock based compensation and so forth but that's a different discussion our focus from the beginning was the more margin we have the more freedom we have the more freedom we have the more we could just focus our time on what we like to do and you know what it just so happens to be the neither of jason rye love running min inertia ab b test to squeeze out zero point zero one and that's very often what's needed if you wanna tweak something you run a thousand of these experiments right like not two you just you stick to it and you keep grinding away and i think grind is actually a good word here because this is something i often hear entrepreneurs talk with such pride in their voice yeah i i grind like this just why i'm working a hundred hours a a hundred twenty hours a week i'm just grinding grinding and grinding i'm like okay i don't wanna do that like my life is far too interesting to waste it grinding grinding is the stupid shit you do in world of warcraft when you're beyond no thank you i don't wanna do that so can we just get to a place where our intuition affords us the success of our intuition affords us to just do whatever the hell we want whenever the hell we want it that'd be a great place to be and we arrived at that place very early on in the lifecycle of the company but i will also say what's interesting about this is that i like numbers i actually like statistical analysis i like rigor i like the confidence into bolt not to the point that i wanna run these ab test myself but to the point that like i have great respect for the statistical tradition and we for many years had essentially a data scientist sort of on staff someone who would crunch those numbers do those reports try to eat it out and after tri that for over a decade jason i finally came to the conclusion conclusion in honesty that we never did what the numbers told us to do what we would do was we would do whatever the hell we wanted to do and then if the numbers supported that we'd go like those are good numbers and if the numbers didn't support that we'd go like yeah i don't know this probably some fact that you haven't calculated it and we just thought at the end why are we doing this well partly why we're doing this because we listen a little too much to other people telling us is this is how you're supposed to do things now i am not saying that this doesn't work for some definition of work i'm saying we didn't need it and that is a much nicer place to be and if you are able to get there you should embrace it with full gust if you have the margin to not waste the precious hours you have allotted on this earth doing shit that would bore you mindless don't like we never had the obligation to squeeze the lemon for its last trial we never had the investors going like hey why is this quarter fourteen point seven nine percent you promised me sixteen point two five go get the last two percentage points for me we never had that we never had that pressure and therefore we got to act reckless in some definition of prudent business operations and i'm so immensely proud of that reckless first of all because we have outlast about seven generations of competitors and others in the saas space who did all of that right who did all the statistical analysis who who squeezed the lemon in all the way you who the based their copy because for a hot second it converted slightly better and we didn't and we're still around so part of what when i take away from that is a what a nice front b maybe all this statistical analysis is a bit of hoc poc and the reason i say it is not because the numbers aren't right or the math doesn't math but because very often the missing ingredients to getting to the capital t truth is unknown when you keep drilling down on a set of data that is highly limited and does not describe the world as it exists you're gonna steer yourself lying on that you're gonna think you found the truth and you're not hearing from all the customers who's not signing up you're not hearing from the word mouth that takes eighteen months to materialize because those things can't get computed but isn't that an absolute i mean i think your way works wonderfully and i identify with it and i wanna copy you but you're on the board of shopify they probably break so many dogma or rules that you believe in and it's worked out really well this is the great thing xi checked is this polish or check i think philosopher has this great a monologue about how he hates wisdom i'm like how can anyone hate and the reason he says that is for every wise ac axiom you can find another that says the opposite that also sounds wise and both of them were extracted from moments of success for that individual in those circumstances and that's a bit of a deflation thing because it could very easily sort of descend into nothing matters nothing is true and everything is just post modern i don't believe those things at all but i do believe that wisdom is very contextual this is all the way back to newton and einstein and the theory of relativity when you go fast enough like all the neat physics rules that are really helpful for calculating the apple dropping on your head they just start breaking and suddenly time and space and everything is relevant so you gotta know your universe you gotta focus on like your set of circumstances and one works in your context and what works for a startup up and a small company selling to other small companies is not gonna be the same as what works for a shopify what what's the most interesting thing you've learned from being in the shopify business or toby you know if i just said what are the biggest kinda like lessons takeaways that anytime you let a smart person go experience kind of a new novel environment i'm always curious like what's the one or two things that stand out to you good question some of it is just awe like shopify last year grew almost thirty percent year over year i'm like i would have been happy to go thirty percent year over year like i don't know very early on our life cycle they're doing it from a base that's just unfathomable like the law of big numbers gets kinda wacky right when you're already doing billions and billions of you're growing at that rate it just it feels like you found a glitch it right the matrix somehow and what i love even more about it is you can come up with all the sorts of reasons for why that is but you know what even at the board even toby don't really know like why did it take shopify if what is it gonna be twenty two years to get to this moment where it just had its best years since the craziest of the peak covid years isn't that fascinating like in many ways the company is doing what it's done since to created snow devil i just want a toolkit for me to create a great looking store rather than be in the bizarre of amazon right like pretty simple mission and it just been chipping away that for like twenty plus years suddenly the charges just go like don't don't don't and all these theories are urges that like we don't actually know the amount of stuff that people don't know is amazing i mean i wrote a blog post the while back basically putting that to the point of nobody knows anything and i think that's a good general take on the big questions nobody knows anything whether we're talking about climate change or what ai is gonna look like in two years or why shopify is able to grow thirty percent year over year and you're twenty two no one knows anything we can have all these theories very very little of it gets to be reduced to irr proof in the sense of a math equation we could talk about this board of directors of shopify forever it's so fascinating on on toby bio for board of directors the last sentences he says that he was on the court team for ruby on rails so i assume that you've known him for costa of twenty five years is there any cool stories that you've had about him or leadership lessons that we can learn because it's very rare i mean building he's built like the seventeen largest company in in the world that's rare it's also very rare where he's been at the helm the whole time is there anything anything cool about like the evolution of like a computer nerd to being like a proper ceo of a ten thousand person company is there anything cool that you can i can learn about that what's funny to me is that you pos that as he went from one form to another form not true at all he's still a computer nerd absolutely as much as i'm a computer nerd actually he's more of a computer nerd than i am most days i the direction of travel of him sending me cool tech up and he's sending him cool text stuff i i think it's in to favor so he's still that person now obviously what he is also is now the head of this giant corporation that is responsible for i think i saw some like fifteen percent of i mean world e commerce a notable share of world gdp i mean that's mind blowing in a way that i'm really happy that toby at least doesn't give any appearance of internal into his character composition he's very much still the computer nerd and i think this current phase that we're in with the ai and the agent explosion just demonstrates that to a he was incredibly early on this stuff some of the public memos that are out from shopify you can check their dates and then you can check to predictions and i just got give immense respect to that because i was not that early in fact to helped drag me into the light on some of this and some of them it was also just like i had to see with my own eyes the agents do what they're not capable of doing before i fully flipped on it but he was just really early on it and so much of that came from that nerd perspective most what we've had a lot of really amazing people on here and like the like baller like da from hubspot they will reference toby as like he's the guy of doing that of like being able to see a little bit into the future and behaving in such a way that is he's just right a lot totally and i mean some of his is because he's smart so some of it is because he's got that nerdy conviction i think similar to what i have i i'd like to believe that we're similar in many ways and that's why we get on so well i've known each other for twenty plus years is that a little bit of isolation maybe because of that nerd upbringing that you have the whole world telling you x and you're actually like let me just check on the cover oh do you know what it says why i'm gonna bet on why even if the whole world is in on x and to see that continuity i should say is incredibly rare and i think part of that is the answer to why now which shopify if i add you know what compounding deter over twenty some plus years has tendency to add up and it adds up in irregular ways where it sometimes takes quite a long time before the inflection point comes now i mean we say this but shopify went public i mean over a decade ago at a one billion dollar valuation i mean that's a hall of fame early investment you could have made because shopify if i didn't do as so many other companies do now which is essentially reserve all the upside to insiders under their vcs and then go public when it's already kinda plateau right like from where they were to where they are now an amazing ride for the public investor if they were long for it but yeah i mean tremendous respect it's funny because i mean i just joined the board a year and a half ago and it came out of conversation actually where i was making the argument to toby that boards a bullshit and at all the boards i've ever been on were boring snooze fest dealing with min shoe to rubber stamp things for auditors and whatnot and he was like i don't know i think we have a pretty good board i was like okay and we started talking and then we had talked for a few hours of five and then suddenly i did come to realization you know what yeah i probably just been bored because i've been dealing with things at a scale too similar to my own and i'm not learning anything shopify dealing at a universe apart in terms of scale while still using some of the same things that i'm passionate about shopify is the biggest ruby rails shop in the world obviously i'm very passionate about that many of the other aspects of it has great overlap but i don't know that scale i'm like that sounds like a fun challenge let's just do it and of course toby wears right like is there bullshit on the board of that scale of course there is but it's actually a small minority and most of it is just really interesting stuff dealing with problems i would never see day to day in my own business you mentioned with ai you're like toby kinda dragged me into it a little bit what's been your evolution with ai so you know couple years ago what was your opinion what were you playing with and then now what do you see i thought it was amazing since they one and been a chat gb user since the first days of that interface and just love that we were able to make computers do this right from the get go i really like computers i just liked them for their own sake not even always for productive purposes i just like computers some of my favorite time it's just sitting in front of the computer doing the computer stuff learning computer things even if it's not directional towards a specific goal and this even from the get go even when chat gp was dumbest rocks and couldn't count the rs in strawberries was just fascinating i'm like i still don't get it i mean now i look into a lot of it now transformers works and whatever back forth and temperature and all of it i'm like i still don't fully get it like how is it yes i know next token but how does it turn to this how does it cost plays so well as an intelligent being maybe the reason i'm surprised is because i have the wrong model of human consciousness maybe human consciousness is far closer to token prediction than any of us would have cared to admit or even investigate seriously before and the models as we have him as as they came to be work quite close to that and we have discovered intelligence in some sense but the time i is still that from the get go awesome love it it's not changing my day job and the reason i say that is i'm very particular about how code looks and what it feels like and i was about to say correctness that's not even like at the top part of it i'm like i'll get to correctness when i love the aesthetics and on aesthetics alone the model which is not that good for a really long time that's one part it the other part it was the early eight not even agents because they weren't agents they weren't doing tools the early l the early ai was auto complete right you're in your editor and then it tries to complete the rest of it and i hated that it was like having someone interrupt my train of thought every five seconds to usually be wrong and i say wrong not in a factory correct way of does this program execute but wrong in the sense of like this is not the code i wanna write and i don't like what you're producing so i didn't like that form of using ai and therefore didn't really use it that much for quite a long time i used it as a pair programmer as a better google as a better stack overflow as a here i have a problem can you have a look at it oh you taught me what the solution was let me go off and write it and this takes us all the way up to the interview i did with like friedman in the summer of last year where i was essentially giving this spiel right like hey i don't like what it produces i'm extremely impressed you'd be a fool not to take this super seriously and as a directional path for where we're going but it's not yet it's not in my business yet and then i even i think early december i did know interview at had some revisions on it and then from there it was like those realms could have been a decade apart because the models that dropped in late november i think opus four five was november twenty seven or something that class of intelligence suddenly switched from i don't like what it's making to holy shit what okay i'm gonna merge so the last three months i'd say has been the most churn in my mental approach to computers in the entire time i've been using them more deep questions and more workflow changes have entered my personal life my day to day life my eight hours in front of that little screen than in any time before that and now i'm probably thoroughly killed and i don't necessarily say that with like because that also means like i'm actually now in the herd right like the herd certainly in out of silicon valley is like ag is imminent and even between now in ag we're gonna go through such an intelligence explosion that hold on two stocks right yeah i'm actually now in the in the consensus on that which i'm always a little skeptical about i always wanna try to look for the other angle but it's just not undeniable at some point you just gotta admit that the math math and that the agents are incredibly capable programmers i thought when i talked to le last summer that it was gonna turn everyone into a project manager of the old type the kind of project manager was not really doing the things just telling other people what to do and then you got this little churn and then you get the feedback and i realize that's not true at all it is more like i've grown eighteen arms and seven more brains and i'm operating twenty two screens and i'm still doing all of it even if i'm not typing every character myself and my progress when the stars are just right is just unbelievable and incredibly addictive and that's in some sense a little bit like that facebook thing which you know what i was wrong about how quickly this was gonna radically change everything like i thought it was gonna happen i thought like gotta i have a few years right and then suddenly from december onward we live in a completely different world i have to thank you for that le friedman podcast hey great podcast six hours long b i bought three ads with le friedman the fur for my company hampton the first ad went on like he doesn't tell you what what's it's gonna go on first ad went on like i ran more thing and i was like jeff was not like target audience that's not gonna work the second one was like a jeffrey epstein video or i i it was like sub subconscious and the the third one was you and i was like yes got it so your your episode actually made our ad profitable so thank you then there we go are you you know so i read your work i've i read your books i think it's great i copy a lot of your stuff i'm inspired by your stuff because i wanna build a company like you what about what you guys have built today do you think is foolish or what what have you built over the last twenty years that a lot of people admire a lot of entrepreneurs and business owners admire that you think is silly to replicate today and and you would like advise someone who has like a two or three million dollar company if you wanna be a bootstrap five fifty million dollar or whatever you guys are a company a year and be as profitable as we we are and have this life don't actually copy what you see now because that won't work today i don't have a straight answer to that and partly it is because i can see some of the things we've historically been doing work less well than they had and some of it is exactly this that being able to generate attention is not as transferable as to business outcomes as it used to be and there's a great gary has this book jab jab ride hook love the book love the concept in basis is give give give jab jab jam a lot of times just give be kind go out there share all the stuff and then occasionally you give it a right hook you call to action buy my stuff right and that's what pays the hundred jab is that occasionally there's a right hook that lands what i've seen and some of it is just a reflection of the dynamics of social media is that the ride hook doesn't travel anymore because all the main media outlets or social media outlets in particular where both jason and or i are strong the algorithm she's never gonna show you stuff it used to be that having a ton of followers meant that a ton of people just saw your stuff now the great irony here is that this is what people complained about on facebook back in like twenty twelve i have all these followers but i can't reach him melissa by ads yeah that's a demise of buzzfeed in all these huge companies just the not actually quite what's happening now because from what i can tell ads on x still don't really work we tried them a bit maybe they work better now never work for us what works is viral right like what works is sharing really interesting stuff don't mean by action in a negative connotation it also has that but it also is something positive you sharing something novel with people who interested and they engage with it but the trickle down has kinda stopped so that trickle down of like i share a lot of interesting stuff on a daily basis and then occasionally i'll ask you to check out my new product or something else then to check out my new product like that stop working so i'm not sure our historic long run strategy of build a large audience and then good things will happen is necessarily true anymore i think there's still something to it but is it viable as your sole strategy being someone new i don't think it converts or works as well as it once did so that's the thing that doesn't work now i still wouldn't say that i still think just for your own identification you should try to share interesting things interesting thing that's actually how you learn more i wouldn't try to teach what you've internalized lies you make it sinking deeper and i also think it's just good to share for the sake of it regardless of the outcomes but i can also see what happens to people who share share share and never see something back the odds of that person ending up bitter is pretty high one of the things that both means sam love is anybody who sort of plays their own game by their own rules and i think whenever we had jason on or you on like that's one of the things that we like and respect the most in fact i almost joined thirty seven singles when i was very young i was applying to two jobs one was in san francisco and like the tech world and the other one was gonna be with thirty seven those are really i went to san francisco instead did you get the interview sean i did get the interview but i got the other job first and so i'd i never even took i never even went with that with it that's awesome but it was a company i was studying it was like if i'm gonna join one company i like these guys i like how they roll i like that they have their own like the drum beat right and so you guys have for a long time just dump things your way i think both you know for you i think you're kind of like an engineering hero for a lot of me and sam or not developers but like i think a lot of developers respect you because you you have a a strong opinion in a way you roll technically i think there's the thirty seven signals part of things and then there's the outside of it right like doing the races and just living life a certain way we talked to jason about his houses and how he's like a craftsman then he's got taste and things like that i'm curious who kind of inspired you so who are people that you kinda liked something in their blueprint either how they ran their company or how they had you know this these side quests outside of their their work that that was cool that you know maybe made you wanna do the races and and and you know dedicating and that said is there anything that you've looked up to that you've you've stolen it a little bit from their blueprints completely in fact my entire early career was just finding people who i really liked and looked up to and said i'm just gonna copy the motions like i don't even know if i fully understand it but if i just move my hands in the same way and dance the same dance maybe i'm gonna get a little bit of that magic one of the ones that i think maybe jason side is as well is ricardo sem who wrote a book called maverick i think it was published in the nineties oh it's the brazilian guy yes i i've seen that book title can you tell us about like i i know a couple of people what's the story amazing book amazing story so ricardo sem i think inherit or takes over at this huge industrial brazilian company that makes pumps for i think oil tanker or something like the last company you would imagine being innovative on work practices and so forth and he just approaches that company with and irr to how things were done that would make both jason or eye blush and we try to be relatively radical i think and what we try to prescribe but he really gave us i can certainly gave me permission to think very different ways about how to do things he has one of the examples i remember is like how to look at employees and the value that they bring over a much longer period of time and it gives the example of this one guy he has that on almost every week sits at his desk with a newspaper open and does nothing he's just there and you're like why would you pay a guy to sit at his desk and reach a newspaper well it just so happens to be that occasionally some of these pumps fail in really spectacular ways in far flung places and he's the guy having that capacity to get some oil tanker out of some predicament immediately one of those will pay for sell re seven times over now i love that anecdote because it's one i've struggled to implement at thirty seven signals which is the best kind right i've been practicing this for literally two decades of divorcing the sense of i don't know protestant work ethic of like why are you not moving your hand forty hours a week with that's not the value this individual brings to the corporation so i love that he has a million suggestions on how to run a company we took a fair bit of inspiration for both getting real and for rework not quite the form he tells more of a story a narrative which is great huge fan of him another one is kent beck so kent is the author of extreme programming one of the theoretical software methodologies back in the nineties when everyone was stuck on rational or the waterfall method or big upfront designs like large manuals before you ride a piece of code was one of the absolute pioneers on a completely different way of working the agile way of working now that word has stop meaning almost anything because today just means software development no one is gonna tell you they're not agile except for the really edgy people who've now started to turn to which ads i wish is fun to watch but the main agile got mainstream it wasn't in ninety nine or or early two thousands and i saw back on stage in two thousand and one at a danish conference have complete other command of the room as he delivered his sermon on software methodology and i was just in awe by the way his linkedin his linkedin his hilarious his bios says of the handful full of people who have shaped how we build software kent is the raised middle finger and he's giving a it looks like it looks like he's giving a university graduation speech and he's wearing a tie eyed oxford button down shirt amazing i love kent and everything he's contributed to suffer development both in terms of his methodology but also in terms of his craft my favorite book on the nitty gritty of programming is a small book he wrote in the nineties called small talk best practices it's a quite short book and it is the most influential book on how i write software that i've ever read now it's funny because i've mentioned this book many times over my career and at one point i think it was not available yet as an ebook you could only find the print versions and managed to create so much demand that i think at one point it went for forty five hundred dollars for edition now it is available online you could just buy the pdf it still totally holds up in this day and age from a language most people are not programming in small talk is incredible and kent wrote not just that like a craftsman book about craftsmanship but then also reshaped how all of software methodologies done and then finally let's i'd a mats who created ruby back in the nineties and opened my eyes to rearranging the priority list when i got into programming most programming languages were sold on like well i'm the fastest i'm the most correct i have to least memory usage i'm the most like see i'm the most safe all those adjectives and i'm like yeah that makes sense i i should pick the fastest the least amount of errors and then matt's comes in and says like no no ruby is designed to make the programmer feel good like what wait what did you just say it's about programmer or happiness what hippie dip portion bullshit is this how are we gonna get create or correct programs that makes us lots of money if we're focused on programmer or happiness i was a real bind blown explosion and it was also the inflection point of my professional career as a programmer i've been using a bunch of other things before as tools looking at like what's the most efficient and i don't know i get the fastest and then suddenly i discover ruby and realize that writing it can be this intensely satisfying experience just getting it beautiful we talked a little bit about those aesthetics earlier and why i didn't like ai auto completion for so long was because it interfered with that mass of the ruby poem and i've now spent well over twenty years she's absolutely loving the ruby program my language because some guy in japan rearrange the priorities of what was permissible to care about as a software developer we have this thing david i'm now gonna call it the m m lean sean do you wanna show them that the m m lean we if we you you you had us both we're whatever we sit like this if we're just like you've got us to fall down if you're listening on spotify you gotta go on youtube and hear this part but if you you've gotten us to fall down your slippery slope what do you do with the money once you've already made it this is a question sean and i ask our successful guest all the time and the reason we ask it is because if you are successful if you do have a little bit of money information on how to spend or invest your money it's actually really hard to come by and i know this because instead of hampton which is my community founders people ask this question all the time people have made ten or fifty million dollars how do you spend it how do you invest it and so it helps solve this problem and answer this question i actually interviewed eighty plus founders guys like scott gallo alex for mo brian johnson people who are worth fifty a hundred even billions of dollars and we got them to reveal everything so their net worth how much they pay themselves their monthly expenses their portfolio things like that and we turn these eighty interviews into one document and i don't think you can find this type of information literally anywhere on the internet and it's completely free so if you wanna see behind the net worth of people who are worth billions of dollars and their portfolios or expenses everything you go to join hampton dot com slash reveal again join hampton dot com slash reveal check it out you you made a comment about longevity which is pretty cool you you talked about you know all these people tried all these tactics it didn't work but you know we didn't we weren't too trendy and and now we're sitting here and we we still have lasted and you built this amazing company that has made i don't know how much hundreds of millions billions in in cumulative revenue is there anything that you do on a day to day basis within your company where you are making decisions to last five or ten years out or have being you know like longevity decisions versus short term decisions like do you actively think about that on a regular basis or maybe i could even ask you the other way around whichever is easier what decisions would you make differently if you were just trying to like you know get in and get out good question i think on the longevity front the number one objective both jason and i is to ensure the thirty seven signals is still a place we want to work not just want to work but like to work is our favorite place to work i see and talk to a lot of entrepreneurs or are in a hurry because they managed to build a company that don't like and they would love to get out of it and i find that tremendously sad not because they can't achieve other objectives in their life like maybe they have a tremendous exit and then they grit their teeth for the two to five year exit period and they're on hold up and earn out and then they go on living merry good lives great lovely i i'm glad for you that's not what i want i want to arrive at a station in life where i don't have to do things i don't wanna do if they're not in service of a meaningful burden i have chosen to carry and work is full of individuals even at the highest levels the ceos the founders we're stuck in these loops that they actually kinda hate and the only reason they're doing it is because of some beg gru obligation to investors or outcomes or whatever else have you and jason and i from the get go just set the objectives like we're not gonna fall into that we're not gonna be instrumental about how we built this business because we're seeking the after we're committing to the now and the now has lasted for twenty seven years and in my case for twenty five years i joined up at two thousand and one so that seemed to actually counterintuitive intuitively work for longevity but do you still do you still go through quarters or months of an where you're like we're right in the middle of this this is frustrating to me i don't wanna be doing this but we have to do it or or does that not even exist in your world no it's never been there i'm not saying i've never i've never been stressed certain have stressed points not bad many i mean i can literally remember almost all of them but it's not because i'm grinding towards some outcome it's usually those moments of stress because external forces have conspired against us for a hot moment and we gotta figure out way out and that that's it's surprising like even when you went to launch hey you're not like you know we have a we said we wanna launch on this day we it would let's get all our ducks in a row and make sure this launch is good and if it doesn't feel good i feel like like it it's shocking yet no amazing i think that that's an important point because a we were fortunate enough to have early enough success that many many years ago we reached escape velocity on if this thing imp i'm not gonna be out on the street that to me that baseline i mean i grew up in denmark working class were i did have occasionally like it's near the end of vermont there's no more money okay look great i guess we're eating at the grandparents for the next couple of days because that's just what it is i think if you grow up under those circumstances i mean and i have actually no qualms about that most of all of that was great and i treasure having being brought up that way but it did leave me with for some period of time this sense that like i i would like to be at a place where i don't have to worry about the end of the month whatever that means and we just reached out quite early because in part that we were not just putting it all in we took money out from day one almost not quite year two at the very latest we were pulling out profits and then we had bezos buying second from jason i that just set a baseline they're like alright now we're pretty set and then the next couple years were very nice and therefore we ended up really early at a stage where i all i i felt like we were in over overtime we were in overtime and like two thousand and eight where i'm like it's whole gravy i've already done to touch touchdown i've already secured the the base here so if this stops tomorrow i would look back upon the whole thing with immense gratitude what a privilege to be able to work on these incredibly satisfying products that customers really like to have kicked off ruby rails to have been there at the birth of saas to have seen everything wow that is not something everyone can say and i got to do it so now i'm just in i'm in fluffy land if this ends tomorrow i can be at peace with the whole thing and i think actually having that instrumental here will use the word instrumental detachment from the outcomes of the business allowed us to be better business people allowed us to have less ego attachment to specific outcomes that we did not have any power to influence anyway the vast majority of anxiety that rick entrepreneurs and builders all the time are above forces outside of their control the best you can do is do the best you can do i don't have another two hundred percent in me i know i found the steady state where i get maximum productivity out of myself and it's not by sleeping two hours a night for three weeks straight i know exactly where that road ends neo and it's not a place where i wanna be i am going to be exhausted stupid and full mistakes so we're gonna build the setup up in such a way that if hay was gonna flu okay still plenty of margin the base camp was a bunch of other legacy products that's paying the bills and way more than that so we get to have fun we get to have fun we get to chase our ideas we get to be ludicrous ambitious in our definition of it which is let's go head to head with gmail a great product that's free to ask someone to buy an email system that we just came up with i mean that is a ludicrous mission if i've ever heard one and it worked hey is now what are we on year five millions of dollars it's been a great success quite a stressful birth not because of anything we did up to launch but what apple did after to launch but that's one of those scenarios i talked about were outside forces will apply stress to you and in fact you should not shy away from that i look back upon that experience with apple with again tremendous gratitude i'm so happy apple chose to be such a greedy debt about it because otherwise well you have you have to give context the context i think that you you complain that they were taking a they had a thirty percent take from the app store is that right yeah they we launched hey on z premise that we'd always had base camp in the app store which was this is a companion app to a web product we're not selling anything here in this app store and apple in the meantime since we had launched space camp had changed his mind he wanted more of more so we were met with this shake down demand that unless we used in app purchasing and therefore gave them thirty percent of our revenues they would destroy our business and when you first hear that and you go like wait we've been building this for multiple years now invested millions and millions of dollars and it could all disappear if apple just decides that we shouldn't get to live well that sucks sorry so so with what what actually they said you have a button in your app that best takes detection to the web where you could pay for it great we did you're saying we didn't oh you oh you just had it anywhere you you sign up all the web there's a companion app and so wait we have to give context so hey dot com or hey is a gmail competitor so presumably every would you will need your customer to have hey at the bottom of the iphone so they can click and read their mail correct you're not gonna be competitive with an email service if you don't have an iphone app because as it just so happens to be most of the people who spend or money on mobile software and subscription there on the iphone therefore this was the admission to market we did not have a viable business for this and we thought hey we know apple wants to take thirty percent if you're selling something through the app so let's just not do that let's just do the sale entirely on our own properties is that we don't rely on apple for any marketing anything else with there they could have a legitimate claim that they own some of our business and once people have signed up on hay dot com for their new amazing email address they will go to the app store and download the companion app and they will log in with the credentials they already have and that kicked off this completely nonsensical battle with apple were at the bottom of it they were just like no i just want thirty percent of your business so what are you gonna do about it and they of course assumed that we like virtually every other software company that they've tried this shake down track below would just go like well cost of doing business but because our circumstances are as they are and this we've been discussing now for quite a while jason and i just went like no that we're not doing that i would rather burn down the millions dollars to build over two years than to pay the gangster to shake down so i think that took apple why i know it took apple by surprise because we then entered into a two week long very public ski over these turns and ended up in this place where apple let us be and essentially rewrote the rules to fit the exemption around us in our email product but not before causing a tremendous amount of stress in that to you oh that's but you won you won right i mean you got you got the outcome you wanted largely right we got what we launched what we thought we were do right we thought we would do that you could launch a free app in the app store if you did no sales activity on that app and then you did all your own business right like jason and ira like we're not looking for a hand out here from apple we're not looking for apple to give us a bunch of customers we will find our own customers thank you very much but we want those customers to be able to use the computer in their pocket that they pay at a thousand dollars to buy to use the system with us like right how should apple have a say in whether your personal pocket computer should be able to be used with hey that just seemed preposterous and very much the wrong end of where i want technology to go because if we just rewind a bit this entire business my entire career is premise on two main things the internet open source and what those two share is that there's no one to ask for permission if i use a piece of open source software according to its license i can do whatever the hell i want if i publish a website on the internet and it's not exactly cs am stuff illegal things selling drugs i get to do it i don't have to ask anyone for permission a little bit more permission these days but especially in the early there's no permission so no permission tech no permission platform this is what likes so this whole idea that now computing was gonna be gate kept by two companies apple google was just completely incompatible with what i wanted to see in the world so therefore we had like we had all the margin to be able to do it this was a new product yes we'd invested millions of dollars but we still had the other thing so we went to the math for the principles of it for our own integrity for our own got them ind nation over just how wrong this was and how much of a betrayal it felt like because i've been a mac super fan freaking twenty years jason and i i don't know if you talk about this but jason and i did an ad for apple you can still find it on youtube i think in two thousand and three or something where we are all about like the apple's amazing and when these beautiful computers to do all our stuff and it was on the apple website for quite a while so it's not like i came in with a grudge here i came in with like i there was a mistake this was how the whole thing started oh that turned out as well as it could have but it didn't inspire me to explore new terrain and if i hadn't if i hadn't had that experience would i build my own linux distribution that is now used by tens of thousands of people would i have discovered this wonderful new world of the linux operating system of hyperlink of arch of mechanical keyboards and all these other computer stuff that exist outside of the walled apple garden no i would not i would what device are you taking this call on what are you want right now i noticed this called from my framework desktop running ama and my delicious mechanical low profile keyboard and it all just works beautiful there a piece of apple into your question i still have an apple thirty two inch monitor i bought three of those when they came out for different locations and they still work great in fact they worked better than great wonderful monitor and they worked well with linux so there's still a little bit of apple you you you told that story with the velocity of or like the the the anger of a shakespeare actor you know like the way that your voice goes up and down and there is definitely some fierce viking blood being awake awards here your ancestors will be so proud i love this i hope this is amazing david thanks for coming on man we we appreciate you doing this ever should follow on twitter the blog go use all your stuff you guys are awesome like me and sam said we've been inspired by you and jason for a very long time of you do things your own way and i think that's the highest compliment that we can give you said you were quoting someone you said i hate wisdom and i can i could say that's a beautiful quote but that it's not the truth how we feel about your wisdom so thank you so much thank you that's it that's a pod i feel like i could rule to world to know i could be what i want to from at all in it like a day's off on a less travel never looking back if you made it this far then you're gonna love what i'm about to tell you so there's this amazing entrepreneur entrepreneurs name neil patel he's been on m mfa he's one of our favorite guests and he has a podcast that's called marketing school and it's brought to you by the hubspot podcast network marketing school brings you daily actionable digital marketing lessons learned from years and years of being in the trenches they have over a hundred million downloads in over twenty five hundred episodes marketing school gives you bite sized marketing wisdom that you can implement immediately whether you have a new website or you already have to establish business you're gonna learn about the latest seo content marketing social media email marketing conversion optimization and general online marketing strategies that work today you can get marketing school wherever get your podcast