Why we are all getting the wrong advice from Basecamp?
Like everyone, I was a fan of Jason Fried and DHH's writings. I still like their style of writing. It is very lucid, jargon-less, nod-worthy style of writing. Their attack on VCs and VC funded businesses are legendary and refreshingly new.
When Elon Musk says working 80 hours a week is needed to change the world, Jason Fried's appeal of working 4-days a week in summer is good enough to make money; you cannot ignore it.
But nowadays, I think, the guys at Basecamp don't talk about their privilege or their core strength. In my opinion, all they have been arguing so far is the frills.
Advice on how to work is secondary, but what to work on is the most important one. DHH and Jason loudly talk about how to work; they critique about open offices, a culture of death by meetings, working in a calm company, remote work is the best way to work, blah, blah.
They can experiment all this in their work because they got something fundamental right. Basecamp is a project management tool, with huge market size. It is company-size or industry agnostic. It has got an excellent product-market fit.
Most people struggle on "what to work", because of which their "how to work" gets affected. But what DHH and Jason talk about is the toxicity of VC funded companies like Uber and Facebook. The most delicate thing here is that they may be right in their opinions about VC companies.
But many people I know romanticise Basecamp's way of work as the best thing they have discovered but ignore their core strength. For all the noise about bootstrapped businesses that Basecamp makes, do you know which celebrity CEO owns a share of Basecamp? Are you aware that both DHH and Jason de-risked themselves with that money?
(If I had made an impression that I hate Basecamp, let me clarify, I don't. I still use Basecamp passively at work. I love DHH for his excellent book recommendations, his take on parenting, candid opinions on everything and his Twitter fights. I love Jason's writing style, and I even listened to the recent podcast with Shane Parrish. They used to sound like warriors for me some years ago but not anymore.)
Jeff Bezos owns a small share of the company. In DHH's words itself:
Especially in the early years, before our bombastic views on venture capital, the IPO rat-race, and other ills of funding were known. We had, I think, close to 50 different VCs get in contact.
Ironically, part of what did give us the confidence to turn down that whole world was a small sale of equity to Jeff Bezos. That gave our personal bank accounts just enough ballast that the big numbers touted by VCs and acquisition hunters lost their lure.
In a country like India, where there is cut-throat competition and extreme inequality, the inspiration to be bootstrapped or work only for 4-days a week in summer might not be right at all.
Yes, VC investment or any investors with their money will have an undue advantage over the makers or the entrepreneurs. The idea of shunning the investment is wrong. Instead, we need to have mental frameworks on evaluating the right investor for your company or assessing the value promised vs value provided by them.
Bootstrapping a business is not sexy. It has a lot of hidden costs that can take a toll on the entrepreneurs and their family. As Charlie Munger says, "Avoid intense ideology because it cabbages up one’s mind.". Making business decisions or building a company with such an ideology, may be wrong.
Thanks for reading.