Why Grow? and Other Wisdom from 37Signals 170 Comments

Written by Tim Ferriss Topics: Entrepreneurship

The path to profitability doesn’t need to be complicated. (Photo: El Photopakismo)

I’ve known the guys at 37Signals for a little while.

I first met Jason Fried at SXSW in 2008, and I then got to know David Heinemeier Hansson (DHH) over e-mail and in person last year. On a fundamental level, I think, our philosophies just mesh well.

Comfortably situated in Chicago outside of the “start-up” echo chamber, 37Signals is focused on getting sh*t done instead of chasing the Silicon Valley venture capital death spiral. Financing has it’s place, but it’s a means to an end and shouldn’t be confused with an end.

The end is a profitable business. Now, let’s be clear: there are ways to play the acquisition game (or even financing game) and make millions without ever turning a profit. But don’t let the media fool you–you hear of the few successes because the stories are fun to tell. The thousands of failures that die sad but unspectacular deaths don’t get on the magazine covers.

More than 3,000,000 people worldwide use 37Signals products, including me. I use one of them, Basecamp, for project management, and it rocks in its simplicity. I’m not the only one who thinks so: Basecamp generates millions of dollars in profit every year.

37Signals’ employees–fewer than 20 total–are spread across 8 cities on two continents, and no matter how many rules they break, profit seems to be the end result…

This is part of the reason I was excited to get an advanced copy of Rework, their new book, which I encourage people to think of as an Elements of Style for building profitable businesses in a web-savvy world. Each chapter is 2-5 pages long and delivers their tactics and principles fat-free, without fluff. Just like their business models.

Here are a few excerpts to whet your appetite. Profitability doesn’t need to be elusive. It’s a simple process… if you have the right recipe from the outset.

Why grow?

People ask, “How big is your company?” It’s small talk, but they’re not looking for a small answer. The bigger the number, the more impressive, professional, and powerful you sound. “Wow, nice!” they’ll say if you have a hundred-plus employees. If you’re small, you’ll get an “Oh . . . that’s nice.” The former is meant as a compliment; the latter is said just to be polite.

Why is that? What is it about growth and business? Why is expansion always the goal? What’s the attraction of big besides ego? (You’ll need a better answer than “economies of scale.”) What’s wrong with finding the right size and staying there?

Do we look at Harvard or Oxford and say, “If they’d only expand and branch out and hire thousands more professors and go global and open other campuses all over the world . . . then they’d be great schools.” Of course not. That’s not how we measure the value of these institutions. So why is it the way we measure businesses?

Maybe the right size for your company is five people. Maybe it’s forty. Maybe it’s two hundred. Or maybe it’s just you and a laptop. Don’t make assumptions about how big you should be ahead of time. Grow slow and see what feels right—premature hiring is the death of many companies. And avoid huge growth spurts too—they can cause you to skip right over your appropriate size.

Small is not just a stepping-stone. Small is a great destination in itself.

Have you ever noticed that while small businesses wish they were bigger, big businesses dream about being more agile and flexible? And remember, once you get big, it’s really hard to shrink without firing people, damaging morale, and changing the entire way you do business.

Ramping up doesn’t have to be your goal. And we’re not talking just about the number of employees you have either. It’s also true for expenses, rent, IT infrastructure, furniture, etc. These things don’t just happen to you. You decide whether or not to take them on. And if you do take them on, you’ll be taking on new headaches, too. Lock in lots of expenses and you force yourself into building a complex businesss—one that’s a lot more difficult and stressful to run.

Don’t be insecure about aiming to be a small business. Anyone who runs a business that’s sustainable and profitable, whether it’s big or small, should be proud.

Scratch your own itch

The easiest, most straightforward way to create a great product or service is to make something you want to use. That lets you design what you know—and you’ll figure out immediately whether or not what you’re making is any good.

At 37signals, we build products we need to run our own business. For example, we wanted a way to keep track of whom we talked to, what we said, and when we need to follow up next. So we created Highrise, our contact-management software. There was no need for focus groups, market studies, or middlemen. We had the itch, so we scratched it.

When you build a product or service, you make the call on hundreds of tiny decisions each day. If you’re solving someone else’s problem, you’re constantly stabbing in the dark. When you solve your own problem, the light comes on. You know exactly what the right answer is.

Inventor James Dyson scratched his own itch. While vacuuming his home, he realized his bag vacuum cleaner was constantly losing suction power—dust kept clogging the pores in the bag and blocking the airflow. It wasn’t someone else’s imaginary problem; it was a real one that he experienced firsthand. So he decided to solve the problem and came up with the world’s first cyclonic, bagless vacuum cleaner.

Vic Firth came up with the idea of making a better drumstick while playing timpani for the Boston Symphony Orchestra. The sticks he could buy commercially didn’t measure up to the job, so he began making and selling drumsticks from his basement at home. Then one day he dropped a bunch of sticks on the floor and heard all the different pitches. That’s when he began to match up sticks by moisture content, weight, density, and pitch so they were identical pairs. The result became his product’s tag line: “the perfect pair.” Today, Vic Firth’s factory turns out more than 85,000 drumsticks a day and has a 62 percent share in the drumstick market.

Track coach Bill Bowerman decided that his team needed better, lighter running shoes. So he went out to his workshop and poured rubber into the family waffle iron. That’s how Nike’s famous waffle sole was born.

These people scratched their own itch and exposed a huge market of people who needed exactly what they needed. That’s how you should do it too.

When you build what you need, you can also assess the quality of what you make quickly and directly, instead of by proxy.

Mary Kay Wagner, founder of Mary Kay Cosmetics, knew her skin-care products were great because she used them herself. She got them from a local cosmetologist who sold homemade formulas to patients, relatives, and friends. When the cosmetologist passed away, Wagner bought the formulas from the family. She didn’t need focus groups or studies to know the products were good. She just had to look at her own skin.

Best of all, this “solve your own problem” approach lets you fall in love with what you’re making. You know the problem and the value of its solution intimately. There’s no substitute for that. After all, you’ll (hopefully) be working on this for years to come. Maybe even the rest of your life. It better be something you really care about.

Tone is in your fingers

Guitar gurus say, “Tone is in your fingers.” You can buy the same guitar, effects pedals, and amplifier that Eddie Van Halen uses. But when you play that rig, it’s still going to sound like you.

Likewise, Eddie could plug into a crappy Strat/Pignose setup at a pawn shop, and you’d still be able to recognize that it’s Eddie Van Halen playing. Fancy gear can help, but the truth is your tone comes from you.

It’s tempting for people to obsess over tools instead of what they’re going to do with those tools. You know the type: Designers who use an avalanche of funky typefaces and fancy Photoshop filters but don’t have anything to say. Amateur photographers who want to debate film versus digital endlessly instead of focusing on what actually makes a photograph great.

Many amateur golfers think they need expensive clubs. But it’s the swing that matters, not the club. Give Tiger Woods a set of cheap clubs and he’ll still destroy you.

People use equipment as a crutch. They don’t want to put in the hours on the driving range so they spend a ton in the pro shop. They’re looking for a shortcut. But you just don’t need the best gear in the world to be good. And you definitely don’t need it to get started.

In business, too many people obsess over tools, software tricks, scaling issues, fancy office space, lavish furniture, and other frivolities instead of what really matters. And what really matters is how to actually get customers and make money.

You also see it in people who want to blog, podcast, or shoot videos for their business but get hung up on which tools to use. The content is what matters. You can spend tons on fancy equipment, but if you’ve got nothing to say . . . well, you’ve got nothing to say.

Use whatever you’ve got already or can afford cheaply. Then go. It’s not the gear that matters. It’s playing what you’ve got as well as you can. Your tone is in your fingers.

Say no by default

“If I’d listened to customers, I’d have given them a faster horse.”
—HENRY FORD

It’s so easy to say yes. Yes to another feature, yes to an overly optimistic deadline, yes to a mediocre design. Soon, the stack of things you’ve said yes to grows so tall you can’t even see the things you should really be doing.

Start getting into the habit of saying no—even to many of your best ideas. Use the power of no to get your priorities straight. You rarely regret saying no. But you often wind up regretting saying yes.

People avoid saying no because confrontation makes them uncomfortable. But the alternative is even worse. You drag things out, make things complicated, and work on ideas you don’t believe in.

It’s like a relationship: Breaking one up is hard to do, but staying in it just because you’re too chicken to drop the ax is even worse. Deal with the brief discomfort of confrontation up front and avoid the long-term regret.

Don’t believe that “customer is always right” stuff, either. Let’s say you’re a chef. If enough of your customers say your food is too salty or too hot, you change it. But if a few persnickety patrons tell you to add bananas to your lasagna, you’re going to turn them down, and that’s OK. Making a few vocal customers happy isn’t worth it if it ruins the product for everyone else.

ING Direct has built the fastest-growing bank in America by saying no. When customers ask for a credit card, the answer is no. When they ask for an online brokerage, the answer is no. When they ask if they can open an account with a million dollars in it, the answer is no (the bank has a strict deposit maximum). ING wants to keep things simple. That’s why the bank offers just a few savings accounts, certificates of deposit, and mutual funds—and that’s it.

Don’t be a jerk about saying no, though. Just be honest. If you’re not willing to yield to a customer request, be polite and explain why. People are surprisingly understanding when you take the time to explain your point of view. You may even win them over to your way of thinking. If not, recommend a competitor if you think there’s a better solution out there. It’s better to have people be happy using someone else’s product than disgruntled using yours.

Your goal is to make sure your product stays right for you. You’re the one who has to believe in it most. That way, you can say, “I think you’ll love it because I love it.”

###

Odds and Ends:

Rework – the first mainstream book by 37Signals
Tim Ferriss on Twitter – Follow my misadventures, experiments, cool findings, and mischief in real-time. It’s fun to watch me stumble.

Posted on March 8th, 2010

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170 Responses to “Why Grow? and Other Wisdom from 37Signals”

Brendan Wenzel
March 8th, 2010
3:48 am

Tim, this is one of the best blog posts that I’ve ever read. Absolutely love your take on business sizes. Slow and steady growth has been proven to be a successful business model and your examples here explain exactly ehy that is.

You are a great mentor and I really do appreciate you sharing your thoughts with us here. This will be a must read for a long time.
Brad McEntire
March 8th, 2010
3:59 am

I’m in the theatre and the notion to “scratch your own itch” came up for me just the other day (weird how things converge like this). A friend, not in the arts, asked what kind of theatre I did. I answered that I created the same kind of theatre I wanted to experience.

I totally look forward to getting ahold of REWORK. I’m noticing again and again, lessons from entrepreneurship/ marketing/ lifestyle design often parallel wonderfully with work in the arts…

Good post, Tim. Thanks.
Wilson Usman
March 8th, 2010
4:13 am

I think that the best business ever created to this day, prove that point. I was just listening to an interview that Andrew Warner had with Gurbaksh Chahal and it’s amazing how he build his company technically from his bedroom. He use what he had which wasn’t much and used it. I mean he didn’t even go to college or finish high school.

We should always be scratching our own itch for sure, most companies have been build from our own issues anyways right? I don’t remember where I heard this, if you write down ten problems you run into a day one of them can be turned into a business it was something…anyway Tim great post I can’t wait for Rework tomorrow will start reading as soon as I am done with linchpin.
Bob Smith
March 8th, 2010
4:33 am

Thanks for the preview.
Brandon Bishop
March 8th, 2010
6:08 am

Tim, I absolutely agree with your stance on business size. I went from factory worker/college student to fitness entrepenuer. I followed my passion(and inspiration from your book) and haven’t regretted it once!

I run a profitable personal training and diet coaching company and I love being service based, interacting with clients, etc, but it’s getting hard to extract myself for long vacations(mini-retirements). Any advice?
Ricardo
March 8th, 2010
6:38 am

Great Post. Thanks Tim
Arlen Busenitz
March 8th, 2010
7:20 am

Great reminder about scratching your own itch. If we create a product that we need and would buy, it empowers us to convince others to buy.
Josh Grenon
March 8th, 2010
7:22 am

Great post, Tim!

I am currently learning Ruby on Rails, the programming language that 37signals uses, and it is awesome.
Jay Horowitz
March 8th, 2010
7:23 am

Excellent advice. Reminded me a lot of Paul Graham’s writing and approach, which is of course a compliment!
Joseph Restivo
March 8th, 2010
7:24 am

Tim,

It’s great to see some cheerleaders in the small business guy’s corner. My two partners and I have successfully kept a Clothing and Apparel business based out of Long Island, NY small (in the number of employees) for over a year now. We’ve receive countless requests of aid from friends, family and outsiders but at our core we truly believe we are self-sustaining in and of ourselves.

Two bits of advice I can provide to start up entrepreneurs would be:

a) Take *calculated* risks. Learn to assess the situation, find the path to the best possible outcome, and pursue it. Too often in the infancy of our company we stalled on critical decisions because of fear. Trust BOTH your instincts and research, with an emphasis on research.

b) “Don’t buy upgrades; ride up grades.” – Eddy Merckx… If you are a cyclist you’ve heard it before. It’s the principal that the human body/condition is greater than any piece of equipment available. Learn to fine tune you’re body and mind and not rely solely on technology. In my business I try to keep key items “physical.” My relationships are for the most part, face to face, my to-do lists are ALWAYS written on paper and I always get outside every day, no matter the weather (a form of meditation for me). I’m part of the generation of technology (and I even worked for a major technology consulting firm) so if I can perform some non-technology based exercises, anyone can.

Again, this was a great post and I truly appreciate the insight you’re providing to everyone here. I will be sure to download this novel onto my Nook in the near future. Hey, I can’t get rid of ALL my technology. :)

Ciao,
Joseph Restivo
Joe Chapuis
March 8th, 2010
7:44 am

*Any* success I’ve had in the different areas of my life can be traced back to this simple forumla:

“Create / be the _____ you’d want to _________.”

Develop the product you’d want to use.
Be the friend / father / coach you’d want to have.
Write the book you’d want to read.
etc….

Just another way of saying “scratch your own itch.”

Thanks,
-joe
ami
March 8th, 2010
7:51 am

Tone is in your fingers. That’s one that has my name written all over it – in a bad way. I’m the gal who buys the running gear and clothes before I can even run a mile. I love the pretty accessories, sometimes more than the activity itself – and sometimes the accessories help me get started on an otherwise challenging task.

Funny thing is, once I start developing habits and some competence, the accessories become less important. My mental gears shift, and I start engaging in the activity for the pleasure of doing it. Now, if I could just figure out a way to motivate without buying a basket-ful of trinkets, I’d save a bunch of money.

Rework sounds like a great resource.
Francisco
March 8th, 2010
8:25 am

Tim, is that why you invested on Twitter? Because they have 140 employees and are not yet profitable?

Anyway thanks, you and 37s are a constant inspiration.

Tim Ferriss
March 8th, 2010
4:59 pm

Hahaha… touche! No, this is a good question. Like I said, there are exceptions to this rule, but they are few and far between. I believe Twitter could be one of them, hence my investment. It’s a real inside-baseball game, and the people who are good at it — repeatedly — are very, very smart. Alas, this doesn’t mean that aiming for lack of profits is a good idea. Nor does it necessarily mean that raising a lot of money is a good idea (Webvan, anyone?).

Good question,

Tim

Wayne
March 8th, 2010
8:33 am

Tim you should be a preacher! What a convicting message.

An excellent reminder not to play the “keep up with the Jones” game in business. I’ll admit, I’m a little embarrassed when a clients ask where my office is located and I say, I work out of my house. I would feel much more important if I could say we have offices in New York, Seattle, and blah, blah, blah…

“Use whatever you’ve got already or can afford cheaply. Then go. It’s not the gear that matters. It’s playing what you’ve got as well as you can. Your tone is in your fingers.”

Tim, I would rather spend hours each week reading reviews of the latest productivity tools, than do meaningful work. Plus, I’d be much cooler if I could brag about all the new tools and toys I have to help keep me productive.

Looking forward to reading Rework. Keep preaching!

Wayne
Jason Alba (al – buh)» Blog Archive » Want to be an entrepreneur?
March 8th, 2010
8:34 am

[...] this post by Tim Ferriss, called Why Grow? and other wisdom from 37Signals. Here are some of my favorite [...]
Daily Fuel – Monday, March 8th « Live Relentless
March 8th, 2010
8:45 am

[...] advice provided by Time Ferriss and 37 Signals on cutting the fat when it comes to thriving in the business [...]
Nancy
March 8th, 2010
8:45 am

Thanks for the review/recommendation of 37 Signals. Our (very) small, virtual company has been looking for simple, affordable software to keep us organized and give us the ability to share our information, and this may be just what we need. 37 Signal’s philosophy is current, cool, and so relevant.
Dana Gundlach
March 8th, 2010
8:51 am

Great Post! “Scratch your own itch” not “starting from scratch”. Much easier jump off point! Expanding from your existing knowledge base can be scaled much faster and less expensive cause you already know some key shortcuts.
Dennis Baker
March 8th, 2010
9:21 am

It’s really about the journey isn’t is – Get in the Zone and stay there…
Mukul Verma
March 8th, 2010
9:40 am

Smaller and higher profits can make you more money then you need, just dont let ego stop you.

Every business I had that has succeeded, has solved a simple problem that I had, so that is sooo true.

Cheers,
Mukul
Jack
March 8th, 2010
9:44 am

I agree it’s very important to produce a product or service that you stand behind and that you want to use yourself. People can see right through you and the lackluster product promotion.
Peter Mann
March 8th, 2010
9:49 am

Great post! We live in an exciting time where anyone with ambition and some smarts can change the game. Combine some creativity with the free to low cost technology that is available and you can build a low cost business that is as good or better than what is out there. Revenues are great but it really comes down to profitability and cash flow.
Scott Dinsmore
March 8th, 2010
9:49 am

Could not agree more with the size does not matter rule (nothing personal there of course…). The investment fund (Cumbre Capital Partners) I have been running for the past couple years has two people in it. One of them is me. When people ask how big we plan to grow I tell them “two people is about right”. One of the reasons we picked the business is because it’s incredibly scalable. We can be 200x our size in terms of assets under management and still only have two people. There is great inherent leverage in investing in businesses as opposed to shipping a product. I almost make our personelle growth plans a point to make with others because it amuses me to see their reactions.

Been using Basecamp and Highrise for years and love them for their simplicity and price point.

Thanks Tim,
Scott
Mike Willner
March 8th, 2010
10:08 am

No doubt small is beautiful. And small doesn’t have to be small either. Today, you can outsource almost everything and grow your business without growing your headcount. I much prefer being a client to vendors and consultants than a boss. The fewer the employees, the fewer the headaches and the more time you have to spend on doing what you love rather than admin, policies and procedures.
Nadja Specht
March 8th, 2010
10:12 am

So true, so true! This article really hits home for me since people constantly ask me how many employees I have. My answer being “It’s just me” always leads to the reaction that you describe. And even when I explain to them that I am using a network of partners (via outsourcing – that’s right, I am a good 4HWW follower :0) ), I often get a blank stare.
In my mind the real question people should ask is ‘how profitable are you?’. This truly allows you to gage the health and overall success of a company. But than this is most likely something most of us don’t like to share.
Aitor Calero García
March 8th, 2010
10:13 am

Thanks for the preview Tim! When I first read Getting Real it was a shock. I work as project manager, and this book helped my to realize how many mistakes we made in our projects. It is difficult to apply these ideas in a large organization but it’s really worth trying!.

I for sure will go for this new book!
Madtown_Jeremy
March 8th, 2010
10:17 am

I sat for a seminar Jason Fried gave at a Web 2.0 conference last year in NYC and it was unreal. He had such energy, such passion and most of all you could tell that everything 37Signals was doing made everyone else look and feel like they were swimming upstream, whereas Jason & Team were just getting out and walking. Very very inspiring individual if you ever get the chance to hear him speak.

I’ve always believed in the idea of ‘go and make the thing you want’, and you hear it a million times over in the creative community. Ask most bands what inspires them to make their music and they’ll say “well, we made what we wanted to listen to”. Filmmakers routinely say the same thing.

The only problem is that sometimes it goes against the idea of “sell what people want to buy, not what you want to sell them”. You can’t always predict a market based on what it is that you personally want, and to test it and watch it fail can be a pretty emotional thing.
Chris Hughes
March 8th, 2010
10:23 am

Slow and steady definitely wins the race. Just like the turtle and the hare!

I love what @Joe has to say about this -> “Create / be the _____ you’d want to _________.”

It allows for us to build our business around a life we love and not get stuck hating our work!

I just became aware of 37signals when I was talking with some teams that are over in Manila that I’ve been working on. I’ll need to read up a little more on them and pick up that book now! Thanks Tim
Leonard Irwin
March 8th, 2010
10:30 am

Tim

Thanks for these words. I used this sytem to create a ebook and audio program. It centers around using acting techniques for the job interview. I am not a techy person. Just used what felt right to fix a problem I was having in job interviews. Nerves and poor performance. So I invented a system that lets me (re other people) sound great and look confident in less than 10 minutes.

The laws of 37 Signals does not suprise me why they are so successful as a company. Size does not matter in the new economy. Brains and hutzpa do.
Cheers
Matthew Needham
March 8th, 2010
10:36 am

Until today I’d never heard of Basecamp. So two mentions in one day has to be more than coincidence. Seems like there are some great tips for bootstrapping productivity and development.

This looks a great read and I’ve preordered it. Thanks for sharing.
Dan Johnston
March 8th, 2010
10:41 am

Can’t wait to pick this book up. The size issue is something I’m constantly debating with myself. There is an ego element behind a large company, but what really is the point of it all? Thanks Tim.
Mike Fiorillo
March 8th, 2010
10:48 am

Great post… I’m a big fan of 37Signals myself, have used Basecamp and it’s fantastic. A great book about avoiding the urge to grow beyond your needs is “Small is Beautiful” by E.F. Schumacher, a british economist.
- http://en.wikipedia.org/wiki/Small_Is_Beautiful
Jennifer Crews
March 8th, 2010
10:48 am

The topic of this post is great advice because, after a couple of years, growth without profitability becomes bankruptcy.

The way around the “looking small” challenge is to be deliberate. To your point about 37signals, they have a good business reason for operating at a certain size. If you are small but can clearly articulate why, you will always be impressive because you are in charge of your business.

As a business advisor, I meet and work with many owners who aren’t sure why they are taking a specific course of action, and my work with them usually starts with being strategic and deliberate. If you are hiring employees or procuring office space without having a clear business objective in mind, but just because you feel like you should, then you might want to make sure that you aren’t being status-conscious when you need to be results-focused.

Great post and I enjoyed all of the comments to this point as well.
Holly
March 8th, 2010
10:56 am

Great post – Thank you for all of your insight to help us all out! Trust me…I need the additional help! I am re-reading your book for the 3rd time and can’t believe what I missed the first time around…

Thanks!

Holly
Scott Showers
March 8th, 2010
10:59 am

Tim,

Small can be wonderful. This adage is understood by many small business owners that have started and grown sustainable small business models.

Many of the small business owners I work with share one thing in common and that is single minded focus. They don’t let anything get in the way of growing their business. They do it by focusing intensely on their customers.

I firmly believe that it will be the small business owner that brings our economy out of the doldrums because there is passion and drive that can’t be matched.

Many small business owners vs. few large employers is also a lower risk (economically) proposition for all of us at the end of the day ( IMHO).
Daniel
March 8th, 2010
11:15 am

“Use whatever you’ve got already or can afford cheaply. Then go.”

Whoever made this statement is a genius who knows his stuff. :)
Klaus Tol
March 8th, 2010
11:20 am

Hi Tim,

i love your videos, but I even more love reading your stories.

Thanks for a great message!

Inspiring as always.

Klaus Tol
Stephen Nash
March 8th, 2010
11:32 am

Thanks to you (and the 37Signals team) for giving us some solid content here in the form of excerpts. This is all really useful and challenges my own thinking in some areas. Again, glad I visited your blog Tim.

Stephen Nash.
The G Manifesto
March 8th, 2010
11:41 am

“And remember, once you get big, it’s really hard to shrink without firing people, damaging morale, and changing the entire way you do business.”

Excellent point. Small and fluid is often better.

- MPM
Stephen Wise
March 8th, 2010
11:43 am

I’ve heard that Tumblr is run by 4 people. That’s an awesome sweet spot to be at, and I know they are making BANK right now!
Luci
March 8th, 2010
11:45 am

Your “teasers” are always so meaty, Tim! “Why grow”, “scratch your own itch” and “the tone is in your fingers” are the guiding principles I’ve been using for more than 20 years to have a successful solo-preneur business. Just pre-ordered the book, ‘cuz I’m sure there will be tons more good content that I can apply to make it even better!!!

Thanks for all you do to make us successful…no matter how we define it. You’re one terrific cyber mentor ^_^
Voranc
March 8th, 2010
11:51 am

Guys from 37signals are awesome. I just ordered their book Rework and can’t wait to get it.
Annie
March 8th, 2010
12:10 pm

Love 37Signal’s wisdom here. “Grow or die”, the idea from Ainsworth-Land has become a cornerstone in organizational transformation and in mass culture that lots of businesses worship it as the guiding principle. We saw the
execs obsessed with quarterly results because it is how their performance is
evaluated.

I have never thrilled by the sheer growth in terms of size or turnover. Why
did we have to publish more books this year than last year only in pursuit
of growth? Can we still appreciate some 3rd-generation ramen shop in the
countryside of Japan, who insists only selling to a limited amount of
customers every day? Do we really want to teach those charming little shops
how to grow and become Starbucks?

In the biological and physical sense, I agree we either grow or die. But
growth for entrepreneurs comes in many forms besides profit or
infrastructure. We become more aware of what our values, strengths, dreams
and desires along the way when building a business. We grow in the level of
our awareness. We try to find better ways to serve our customers and grow
our ability to be compassionate with other human beings and the environment.
The owner of the ramen shop grows every moment when he devotes his
un-divided attention to make the best bullion.

Without growth from a deeper level, the growth in the ‘visible’ level only
brings temporary satisfaction and leaves us die little by little inside.
Kyle Libra
March 8th, 2010
12:25 pm

This got me thinking. I’d really like to see an occasional round up of interest articles you’ve read lately. Stuff within the general themes covered on this blog.
kalooni
March 8th, 2010
12:43 pm

What has astonished me a lot with Basecamp is that they did not engaged yet a translation process … I would love to get Basecamp for my company but my clients are french, and I need it in French … If they hear me I would pe happy to help in the translation process …
Tim Chaves
March 8th, 2010
12:48 pm

Sage advice. Couldn’t agree more that funding is too often viewed as an end, rather than a means to an end.

I’m much more impressed by those who have built profitable businesses from scratch than I am with companies that have raised x amount of dollars.
Paul Russell
March 8th, 2010
12:50 pm

Wonderful post. Nice succinct examples and no one can argue with the success 37folders is having.
Petr
March 8th, 2010
1:09 pm

Tim,

I love this post. Best post ever!
Avin Kline
March 8th, 2010
1:13 pm

Can’t wait for the book to come out!
Jamie H
March 8th, 2010
1:39 pm

I was just about to give up on you. One month no posts then the last one which was good but not worth the month wait. This post made up for the hiatus and then some. I guess you also have been busy on the book so all is forgiven.
Ethan
March 8th, 2010
1:40 pm

In the late ’90s, my answer would have been “we need to grow so that we can establish critical mass and be acquired”.

I was a part of a great, well-envisioned, high-quality services startup then. We went from 7 to 15 to about 35 employees in two years, and leveled off there comfortably (and profitably). Then we grew for the sake of growing. And we were acquired in 1999. The guys who had the most equity did pretty well, and the rest of us were left with a company that was just not as engaging as it used to be.

We stuck with it for a while and eventually all went our own way. I have been slogging it out in a market leader, taking orders, for several years now waiting for the right opportunity to come to run my own set of plays again. This time, my thinking will be very aligned with this post. Nice work.
David Damron
March 8th, 2010
1:57 pm

Can’t wait to check out the book. I have followed 37signals for a while. May have to jump into BaseCamp too.

David Damron
LifeExcursion & The Minimalist Path
Maria Brilaki
March 8th, 2010
1:58 pm

Posts like that act like a kick in the butt. It seems it’s in the human nature sometimes not to want to advance efficiently towards your goal but instead, do things that you think as cool (e.g., using fabulous tool A or B etc etc).

Maybe this could be explained through the Maslow pyramid (http://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs). If your basic needs are covered and you have food to eat, water to drink, a shelter etc, then the needs of belonging to a group and of self-esteem (Yeah, you are so cool for doing all this really complicated stuff to grow your business!) are the ones that should be satisfied. So thinking about it this way, ti makes total sense that people tend to procrastinate doing non-value adding but cool and sexy activities in the sake of “growing their business”!

Cheers!
James
March 8th, 2010
2:24 pm

Tim, this is as usual great and interesting post. but I have to disagree with you. I think that most 37signals products are just overpriced basic versions of better products. I’ve used some of them, and people that accept a way of adding mails to your system via sending them in BCC just aren’t aware of better and more advanced products.

I know that 37signals are very hip and trendy, but I think that simplicity should not come at expense of smart. I want to see products that are not just simple to use, but have simple solutions for complicated problems. and this is not the case with 37signals apps. I wish them the best but I really think they are much much better in marketing than in programming and solving problems.
Annie
March 8th, 2010
2:45 pm

Love 37Signal’s wisdom here. “Grow or die”, the idea from Ainsworth-Land has become a cornerstone in organizational transformation and in mass culture that lots of businesses worship it as the guiding principle. We saw the execs obsessed with quarterly results because it is how their performance is evaluated.

I have never thrilled by the sheer growth in terms of size or turnover. Why did we have to publish more books this year than last year only in pursuit of growth? Can we still appreciate some 3rd-generation ramen shop in the countryside of Japan, who insists only selling to a limited amount of customers every day? Do we really want to teach those charming little shops how to grow and become Starbucks?

In the biological and physical sense, I agree we either grow or die. But growth for entrepreneurs comes in many forms besides profit or infrastructure. We become more aware of what our values, strengths, dreams and desires along the way when building a business. We grow in the level of our awareness. We try to find better ways to serve our customers and grow our ability to be compassionate with other human beings and the environment.The owner of the ramen shop grows every moment when he devotes his undivided attention to make the best bullion.

Without growth from a deeper level, the growth in the ‘visible’ level only brings temporary satisfaction and leaves us die little by little inside.

When it comes to aggregate, there are different ways to grow as well. Comparing between Korea grew to modernity (through the dominance of very few chaebols) and the way Taiwan grew to modernity (with ubiquity of tiny business everywhere). Both countries have devised successful ways to grow, in a way that appealed more to their cultural sensitivities. One is not “better” than the other, even though Korea has larger companies than Taiwan (with few exceptions).
David
March 8th, 2010
2:48 pm

Hi Tim

Since you speak German: have a look at the book “Kopf schlägt Kapital” (‘brains beat capital’) by Prof. Dr. Günter Faltin http://tinyurl.com/ygb6ayo

I consider it a very good additional read to your book because it focuses on what in your book is referred to as the pasrt of muse creation. The result is basically the same: if you have a so called ‘concept-creative business’ running you can have even more than one businesses at a time and be a serial entrepreneur because you work with components (outsourcing) instead oif building up everything by yourself.

As much as I love your book for planting the seed of coming up with ‘my own thing’, Prof. Faltin’s book makes it even more tangible how to do it.

Worth looking into. I actually think you guys should connect :) I made it to arrange a personal meeting with him on 19 March and am looking very much forward to find out more. This will also be a good chance to get a high class mentor :)

Best,
David
PPC4
March 8th, 2010
3:52 pm

Tim-

I read their first book online…Just awesome. I can’t wait for this one. Great content as always, man!

Paul

PS: I know you dig wine so I thought you might like to try Las Rocas “Garnacha” for an inexpensive wine that tastes niiiice. (I’m not affiliated with them in any way except in probably funding a large portion of their operation through consumption.)
Michelle Nardine R.D.
March 8th, 2010
3:52 pm

I’m really excited to grab their new book, its been on my wishlist forever I feel like. thanks tim
Alex Hobcraft
March 8th, 2010
4:03 pm

Great article. I am a guitarist. I just opened my own music school and came across this subject/question again and again- what do I really need to get started? Customers! I had it in my head that I needed more than I really did.

It’s also interesting that you bring in the guitar comparison in this article because while I was reading the first part of this article I noticed a parallel with guitar playing. Many guitarists feel that “faster is better”. But players who work hard to play faster “say nothing”. And often a few well placed notes can speak volumes.

Having said that I can play fast… but I had to learn how to play fast before I saw the value in playing “slowly”. Irony’s great. It’s about the right tools at the right time really.
Anna
March 8th, 2010
4:22 pm

I love Jason Fried’s philosophy and his work ethics/view did remind me of you, Tim when I read the interview with him in the November Inc. Another one of his golden thoughts he mentioned there was “We keep our products simple. I’d rather have people grow out of our products, as long as more people are growing into them.” Love them and looking forward to the book!
PS the picture usage of the Kyoto shrine made me smile – one of the most fascinating places I have been to.
Toshi O.
March 8th, 2010
4:32 pm

if only Harvard would expand, then I would surely get in; or not.
Anna
March 8th, 2010
4:38 pm

This is the link to the article in Inc I mentioned above http://www.inc.com/magazine/20091101/the-way-i-work-jason-fried-of-37signals.html
Michael Higgs
March 8th, 2010
5:00 pm

Wonderful post Tim. I was curious to see if you might cover Rework on your blog.

Check out Jason Fried discussing, “Why you Can’t Work at Work”

http://bigthink.com/ideas/18522

My copy of Rework is on it’s way.
D.A. Gutierrez
March 8th, 2010
5:52 pm

Fantastic post, Tim. Coincidental how things like this tend to come in pairs. I just read an article earlier today that had the same “ring” to it. Highly suggested if you have time:
“Your idea sucks, now go do it anyway”
http://blog.asmartbear.com/your-idea-sucks-now-go-do-it-anyway.html
Michael
March 8th, 2010
5:57 pm

Great message Tim.

Similar to my battles with weight loss – I always thought if I tried this fad diet or that fancy exercise equipment then I would attain the body I want. But it’s the mindset – and not the tools – that ultimately produce the desired end result.

I’m adding rework to my reading list too:)

Cheers!
nick
March 8th, 2010
5:59 pm

Ordered – I hope Amazon Japan gets it soon.

In the last month 4 people have asked me to build a backend to their website. Hello elance!
PendaGoddess
March 8th, 2010
6:13 pm

Excellent blog post. Excellent comments, especially enjoyed Annie’s. Thanks to all. What is it Arthur Ashe said: Something like, ’start from where you’re at, work with what you got, do the best with whatever’s available’..
Also, K-I-S-S philosophy has worked best for me; it’s nice to know other people use it too.
David Parsons
March 8th, 2010
9:37 pm

Thank you for the great post. As always, great work. You have inspired me to change my life around in more than one way, thanks.
Gabriel Shepherd
March 8th, 2010
9:37 pm

Love 37Signals !!! Were a ruby on rails web development firm and use basecamp religiously…

Are you gonna speak again at RailsConf???
Huey
March 8th, 2010
10:23 pm

Awesome post. Going to buy ‘Getting Real’ and ‘Rework’.

“Scratch your own itch’-Probably the best muse creation advice ever.
Mike
March 8th, 2010
10:44 pm

Great timing for this post, because I’m starting a new company and naturally I’m starting with the end lifestyle in mind. Much of my work will be outsourced, maintaining a small, virtual workforce is a main driver.

The 37s products will work well down the line, I look forward to their integration.

I’ll be waiting for your next post :)

Cheers
Craig Thomas
March 9th, 2010
1:22 am

Awesome post. That book may be exactly what I was looking for – thanks for that.
Josh Moore
March 9th, 2010
2:39 am

Wow! Thanks for posting this Tim. I have needed reinforcement both for myself and my clients along this line for a long time!

One thing that is interesting to note in my experience is that so many entrepreneurs focus on growth at the expense of paying themselves. The opportunity cost associated with this seems to make a lot of ventures not worthwhile if they are not making revenue.

Most businesses will not get huge, so learning techniques such as Direct Response Marketing, learning how to build your presence in the local area, etc. are far more important for generating revenue than trying to build a global scale business.

Excellent work from the team at 37 Signals too! I’ll be keen to see what the rest of the book turns out like :)
Björn Carlsson
March 9th, 2010
4:09 am

[insert praise to tim]
Awesome post for all business owners, I will probably order the book, the earplugs you recomended didnt work out for me but the fivefingerfeet did, so I still like you ;)
soultravelers3
March 9th, 2010
4:33 am

So many gems here! I particularly loved these two truisms as they have served me well time & again:

“The easiest, most straightforward way to create a great product or service is to make something you want to use.”

and

“It’s not the gear that matters. It’s playing what you’ve got as well as you can. Your tone is in your fingers.”
thestartuparena.com
March 9th, 2010
5:01 am

Why Grow? and Other Wisdom from 37Signals…

This is part of the reason I was excited to get an advanced copy of Rework, their new book, which I encourage people to think of as an Elements of Style for building profitable businesses in a web-savvy world. Each chapter is 2-5 pages long and deliver…
Rich
March 9th, 2010
5:10 am

“Tone is in your fingers.”

I have never heard this before… and I’m a guitarist.

This is fantastic, I love it. I’ve always thought that the produce of a person is a reflection/representation of them in some way.

The tone is in your fingers.
Patrick McCrann
March 9th, 2010
6:08 am

Great post Tim, and some great comments too. I really like how 37S just cuts to the point. So much of what we do in the regular workplace involves too much extra work that isn’t about getting stuff actually done. I like how they advocate launching early, finding the friction, and improving on the fly. In my experience, this has been not only a low-cost model, but a great way to build quality relationships with customers. Can’t wait to read it!
Ravi Janardhan
March 9th, 2010
6:55 am

Thanks Tim, it’s surely the best post I ever read online!

There is nothing more sensible than ‘use whatever you’ve already got, or can afford cheeply. Then go’ After having seen 2 years of rough time in business, that is what I’m doing. It’s so cool, and the only sound way to be healthy and highly profitable!

‘Scratch your own itch’ is terrific, there won’t be any dearth of business ideas hence!
Hugh
March 9th, 2010
8:10 am

I agree with all three of those excerpts above, especially scratching your own itch. As a consumer, it’s so annoying to encounter a business who doesn’t know their product or service. I’m just starting out, but the muses I have in mind will be developed to fill gaps in my own life. I am my market. I couldn’t imagine doing it any other way.

Thanks for the review. I’m heading over to 37S to check it out. The book sounds great!
Alex Karasyov
March 9th, 2010
10:07 am

Growing doesn’t always have to do with size. You can grow in your product types, in the types of services you offer. The type of audience you product has. Blogging is a very good example of that.
virtualDavis
March 9th, 2010
10:29 am

Bravo, Tim, great post! I’m going to pass this along. Gently, since these might be tough-love reminders to some…

Here’s my 30-second reductio:

#1. “Small is not just a stepping-stone. Small is a great destination in itself.”

#2. “When you build what you need, you can also assess the quality of what you make quickly and directly, instead of by proxy.”

#3. “It’s not the gear that matters. It’s playing what you’ve got as well as you can.”

I’m especially keen on #1 which (ideally) enables portability, freedom and balance. Thanks for sharing your thoughts.
Kai Thomas
March 9th, 2010
10:49 am

It is posts like this one that motivate me the most. It almost seems as if the guys at 37signals, and yourself are portraying the old K.I.S.S. Law. Keep It Simple Stupid. I am here to tell you that law works rather well in many areas in my life, including business.
Thanks for the often great content Tim!
Craig
March 9th, 2010
11:10 am

“Growth for the sake of growth is the ideology of the cancer cell.” – Edward Abbey
Jörg Oyen
March 9th, 2010
11:47 am

Danke Tim – das mit der Guitarre passt. Will take a deep breath now and continue preparing the slot for tomorrow – setting up the brain picture world – thx again for your insperation.

Jörg
baahar
March 9th, 2010
12:29 pm

Love this = “… to add bananas to your lasagne” :)

I really enjoyed watching Heinemeier’s talk he gave at the start-up conference and found it really encouraging … I have to admit that I’m developing a service right now because of it.

The book seems to be just as valuable. Will put it on my want-list.
Benjamin Arie
March 9th, 2010
12:39 pm

Tim -

I’ll make you a deal. You keep saying “No” to your customers for the next five years, and I’ll say “Yes!” and find ways to deliver the value promised. In 2015, we’ll compare results. The company owner with the most self-described “Thrilled” customers buys the other a beer. Deal?
Brad Nemcik
March 9th, 2010
1:16 pm

Brings to mind the effectiveness over efficiency argument in your book. I would much rather be a part of an effective organization with 20 employees than an efficient company with 1000 employees. Sometimes we all need to be reminded that we are in business to make money. There are plenty of charity organizations out there if I want to give away time.
MountainSniper31
March 9th, 2010
1:16 pm

Agreed that growth for growth’s sake is not the goal, unless you are running a public company and are driven by the brutal metrics of Wall Street. The goal should be profitability and ease of management; to create a self sufficient cash cow.

“How big is your company?” may be a traditional query, but the emphasis should be on revenue and profitability matched with ease of management, not the number of employees (employees = headaches). If an owner can do $20M in revenue and 30% net margin with six employees, and can run without him/her, THAT is impressive.

Regarding the use of Harvard and Oxford as examples of “why grow?”, they are as guilty as any of engaging in company-like behavior. They have each grown massively in the search of prestige, influence, grants and endowment (rather than commercial sector profits) and have expanded way beyond their original intent and size. They are tied to a physical location associated with their brand (Cambridge, MA and Oxford, Eng), but they HAVE added thousands of employees each over the years, now offer hundreds of degree programs, executive education, certifications, joint-programs with other schools in different parts of the globe, maintain research groups, conduct seminars, etc. The list is endless. Harvard could have run perpetually as a theology school with a few hundred students and several buildings. Instead they have hundreds of buildings, thousands of students and billions in endowment.
AJP
March 9th, 2010
1:27 pm

So, if people are obsessed with tools instead of focusing on providing quality contents then it is too bad for them.

but isn’t it like saying you can just use bloggers blog instead of self hosted site.

There are few types of people: one who can buy a domain name and hosting package, another will be a person who does not have money to invest in domain name and hosting package and last but not least a person who want to test and measure first and later decide to move on..

It is very difficult for me to say no at sometimes to my offline clients especially when I am in service sector.

I hope in future, you will be posting a topic on Cost Effective Offline-Marketing for small companies and start-up.
Paul Montwill
March 9th, 2010
1:36 pm

“If I’d listened to customers, I’d have given them a faster horse.” – I like it! 37signals know when to say NO to clients’ expectations to please them longterm. And I am also under impression when it comes to Basecamp – simple, nice to use and with a lot of new but not overloaded features.
Ian Anderson
March 9th, 2010
2:22 pm

REF: Why Grow?

Agree wholeheartedly; years ago I enjoyed being a good craftsman and as a good craftsmen I was offered too much work which lead to hiring staff. I immediately lost the ‘quality edge’ that made so many want to hire me!

Discerning people WILL pay a premium to receive a quality service (thats why a Bentley cost more than a Mini!), if you present it in the right way that outlines the benefits etc.

You would never walk into a restaurant or a used car lot and ask for the cheapest think on offer would you? No, so why do it regarding other services you buy in life.

Small (and expensive) is a valid option……but only if you are REALLY good!
Stay well man,
Ian
Kingshuk Mukherjee
March 9th, 2010
4:06 pm

Great post!

One small point of contention though about the “saying no” bit. I agree that saying no is very smart but specifically in this context. Many overly cautious people say no all the time, and miss out on the greatest opportunities. You know the ones, no to social events, no to traveling, no to anything that has the potential to be outside of their realm of control.

I think what it comes down to is whether or not saying no will enrich or detract from your business, your life, your goals. If your saying no from a mindset of fear and “what ifs,” you probably should be saying yes. :)

Have a great day!

King
Colleen K. Peltomaa
March 9th, 2010
5:31 pm

I don’t think of myself as an entrepreneur, however I took up a service career (trauma therapist) using a technology that is scratching my itch, compared with other technologies I experienced.
Steve C.
March 9th, 2010
8:57 pm

I have the same friends who think bigger is better. They take on any customer that walks through their doors and work 80+ hours a week to satisfy all of them. I choose to do one thing great and work with a select group of customers. I never take any work home!
Tanvir
March 9th, 2010
10:18 pm

Hey Tim,

Great post mate and just what I needed. I came up with a software idea that I’d love to use myself and believe that others would too. However I didnt know squat about programming so after reading 4HWW (thanks for the idea!) I decided to outsource the work to various providers. It took a leap of faith from me at first but is working very well (for this and another start-up i have too). Anyways, this post was an awesome reminder/motivator to keep going even though im small time.

Be well and i’ll send you a link once its done.

Best,
Tanvir
David M
March 9th, 2010
11:12 pm

Totally agree Tim. Reminds me of a quote by Jack Trout – “Businesses don’t have a desperate need to grow, businesses have a desperate desire to grow.”

Businesses looking for ego trips often make the mistake of diversifying and diluting their specialist focus – turning them into more of an undifferentiated generalist.
Jonny
March 10th, 2010
3:04 am

Thanks for the heads on on what seems to be a great upcoming book. 37Signals had not been on my radar until now but I will check them out in light of this review. Cheers Tim.
Danny
March 10th, 2010
3:52 am

Tim You beast.
Another (timely) flash of insight. My business which I opened three months ago is going to shit. I know what I’m passionate about which is… dah the itch I love to scratch… but I just shat myself for two long thinking that others couldn’t possibly be interested in that! So I broadened my market appeal…made it just bland enough so that no one would be attracted to it. It seemed so easy to make the “risky” decisions when I read about them. The reality provded otherwise. Thankyou Tim. I’m going going for a scratch! You’ll hear about it the itch soon!
Jeff Nabers
March 10th, 2010
4:49 am

Great stuff!

Here’s my two cents on a costly mistake I’ve chronically made:

The “scratch your own itch” thing often comes naturally to entrepreneurs. But what also comes naturally is to fall in love with a business that provides a product/service that the business owner wants and likes… unconditionally.

To “scratch your own itch” AND build a profitable company requires that the business owner is willing to ditch (or evolve) the product/service if the market tells him they don’t like it by not buying it.

Tim, your focus on performance metrics is well aimed. Scratching your own itch should be well confined to an experiment that has a predetermined evaluation point that results in continuing or killing the idea, based on that evaluation.

Waiting too long to kill ideas that the market didn’t buy into has cost me years of my life, so I thought I’d share this in hopes that somebody out there could avoid having to learn it through personal experience.

Again, great post; it makes your month of blog silence well worth it :-)

– Jeff
Jeff Nabers
March 10th, 2010
4:53 am

Oh, also, I’m going to try the project management software from 37Signals now. Good timing on this post.

We just used another PM software which took our hours of hard work and automatically irreversibly deleted the data at the end of the trial period!

So we were already on the hunt for some PM software run by non-idiots.

Thanks!
Jon
March 10th, 2010
6:04 am

To quote ‘In business, too many people obsess over tools, software tricks, scaling issues, fancy office space, lavish furniture, and other frivolities instead of what really matters’ Also applies to buying aspirational books from successful people rather than going our and ploughing your own furrow.
Roy Jones
March 10th, 2010
7:19 am

37 signals is now on my radar and I’ll be checking out their stuff, thanks for the heads-up!
Joshua Black
March 10th, 2010
7:57 am

Tim,

As usual, thank you for the sage advice. I think that should be the mantra of this new crop of post lay-off small business owners that are willing to go at it alone. Big didn’t really work all that well now did it? Growth for the sake of growth at ANY cost got a lot of people fired, inflated a lot of home prices and almost bankrupted the entire World.

If we all just focus on being the best SMALL business that we can be, creating a lot of profit, but not at the expense of the founding ideals of the business, then everyone will be better off.

It’s time that people stick to their knitting and focus on what they do best, helping others do what they do best in the process. I forgot about that quote from Ford as well. That’s another critical part of the entrepreneur, to be able to see what’s not there and to show others that it will make their lives much better, instead of just asking them flat out.

-Joshua Black
The Underdog Millionaire
Elevic Pernis
March 10th, 2010
8:53 am

Tim, these are pretty good advice. I know that we need to grow, but I have to re-read that grow section to make sure I really understand it.
Robbert
March 10th, 2010
9:02 am

Hi Tim,

Thanks for the book you have written about this ideal life style and thank you for this blog about all kinds of interesting topics! I have read a few chapters of the Getting Real book by 37 Signals and I must say it is great to know these things even before starting up a business myself, which I might one day.

Greetings from Groningen!

Cheers! Robbert
DynastyDC
March 10th, 2010
2:35 pm

Essentially, it’s important to not look at only one variable (# number of employees) in a business to validate its success. For this reason, identifying the variables which get customers, develops customer loyalty, equates to a solid business model.

Make the variables work in your favor. I say, obsess over tools in moderation to leverage support, as long as it gets you where you need to be.

I wish you all much success!
Yukie
March 11th, 2010
4:03 am

Hi Tim,

You are on the Acknowledgment list!!. Wow…
It is hard to believe this book, as well as ‘Getting Real’ were the by-product.
I will take a mental note not to use “Four-letter-words” and see how those words affect my thought in the next couple days.

Thank you again for your inspiration and I adore your guts for revealing a ‘Back then a bit chubby’ photo :)

Yukie (I love peanut butter sandwiches too)
AHA
March 11th, 2010
4:58 am

Timmy!

For the next issue of Interesting Times, we are doing a theme that you might find flattering :)

Check out sneak preview here.

Maybe we should do an interview with the object of worship, yes? :)
AHA
March 11th, 2010
5:48 am

Oh btw, there’s going to be a lot more in the magazine. Including articles on tango and multivariate testing :)
Ali R. Khan
March 11th, 2010
1:15 pm

I’m going to post this Line to my Facebook Status, FAn pages and on twitter Too… Great Article Tim. “And what really matters is how to actually get customers and make money.”
Tatyana Gann
March 11th, 2010
4:17 pm

Dear Tim

I think what you said about creating a product with what we use and know more about it is brilliant! I always believed that we must share what we know and it becomes natural to us that way we do not have to stress ourselves.

In regards to Tune in your fingers you said it right. Tools, widget, fancy stuff are never going to replace the human touch. Real work is always going to be in fashion. That is all. Tools come and go. People want real relationships and see people skills and talents.

Tatyana Gann
kyleschen
March 11th, 2010
7:19 pm

just got me even more excited to read their book sitting by my side right now
PPC4
March 11th, 2010
8:12 pm

Tim and All-

I got the book today and am about 3/4 of the way through it. It’s awesome. It’s direct. It’s an easy read. It could supplant about 9/10 of business school imho. Seriously, I love it. It should be required reading for business “starters” and anyone with a big dream.

PPC4
Reijo
March 12th, 2010
6:27 am

Insightful post and some great comments. About asking customers, I think it is invaluable to ask customers about their obstacles, attitudes and desires. Understanding thoroughly customer point of view allows one to design a product/Service that has breakthrough potential. So, there is value asking customers and using focus groups or other means but primarily to find out what is precise problem and urgency of need, rather than asking what good look likes.
Ken Siew
March 12th, 2010
8:23 am

Very true words of wisdom. It’s not always about getting big, in fact sometimes you’d face a huge problem if you grow too fast and your infrastructure is not ready.

Scratching your own itch is a very interesting idea. The #1 rule in marketing is to solve someone else’s problems by having a genuine relationship with them. Here it makes marketing even more effective by solving your own problems (assuming your prospects/customers have the same problems). Choosing a niche market that you’re already in is a wonderful strategy.

“Give Tiger Woods a set of cheap clubs and he’ll still destroy you.” I love this! It reminds me of what Gary Vaynerchuk said in his book “Crush It”, that you have to follow your own DNA to be successful. Don’t get hung up on which tool is the best medium, use the one that fits you.

Of course, it’s always good to experiment new mediums when you have the time and be ready to do something uncomfortable (Tim’s fav) such as shooting a video for the first time.

Well, I’m going to say NO to things that do not produce results (learning without doing/dozens of ideas that are good to have but not important for my blog), and focus on what truly matters (producing great/premium content and building genuine relationships with people).

Thanks for the great post 37 signals!
Sam Holomua Chillingworth
March 12th, 2010
11:02 am

Tim, first, I agree with the idea of being mindful of the “why” aspect of growth and expansion. Second, as you continue to build your business and begin to look for exit strategies do you think its better to slim down employee overhead or maintain your numbers to illustrate the “size of your muscle”?
Marty Vornkahl
March 12th, 2010
1:53 pm

As always, excellent article! I am learning SO much from you! My life has changed enormously since reading 4HWW. Thanks!
A Guide to Surviving Layoffs and the Current Economy - dbd Studio LLC
March 12th, 2010
9:08 pm

[...] the equipment you do or don’t have. See the ‘Tone is in Your Fingers” section of this blog post by Tim Ferriss. It’s not the gear that matters, it’s playing what you’ve got as [...]
Aaron
March 12th, 2010
10:19 pm

Genius marketing tactic: write a hit business book, and double sales of their products withinh 6 months! Something a million dollar marketing plan couldn’t buy.

Take note: this outside of the box thinking is what puts these guys on top. Very much along the lines of Tim’s thinking, and the reason this is the only blog I read.
Karen
March 13th, 2010
7:25 pm

Tim,
Thanks a million for this blog, it was just what I needed to read. My business partner and I are designing a product that keeps threatening to become too generic and not targeted at the niche market we had first imagined. We keep saying things like, ” if we just add this to the front…” we would reach a much larger market. Which in the end completely destroys the whole point of our product and gets us in over our heads!

Thanks again
Todd Lay
March 13th, 2010
11:55 pm

Hi Tim,

Really enjoyed the story of 37Signals. I had a client refer me to them a couple of years ago. I’m going to have to get their book now. We have been using http://www.myintervals.com/ in our company for about a year now. It gives us the reports and metrics we never had before to make growth decisions.

Todd Lay
I Just Devoured Rework | Adam McFarland
March 14th, 2010
2:54 pm

[...] The book itself quickly climbed into the Top 10 on Amazon. I had pre-ordered my copy several months before the holidays and was anxiously awaiting it’s arrival. It showed up Wednesday. I didn’t have a chance to pick it up until Friday night. By Saturday afternoon it was done, total reading time only ~1-2 hours. They do an amazing job of getting their point across without any fluff (which aligns with how they build their software). The book is comprised of short 1-3 page essays totaling just under 300 pages, each with original artwork from Mike Rohde. You can read a few of the sample essays to wet your appetite over on Tim Ferriss’ blog. [...]
Tom Bartosiewicz
March 14th, 2010
6:09 pm

Tim – I gotta say – You’re killin me! I am reading your book (30% done)- I’ve done these things all my life and thought I was the only one who regarded work as something that didn’t require most of my time! It irritates me that I’m older than you, been doing it longer, and you’ve gotten so much better than me at me!!

Tom
Matt
March 14th, 2010
8:14 pm

Tim:

True story… A few days ago I was looking at buying a guitar amp in the $2000 – $3000 range. Read this post and yesterday bought an amplifier for $1375 instead. Thanks for the advice!

I’ve been working on starting a muse so that I can spend more time focusing on music when I graduate college this May. Question: Have any more resources or suggestions for finding a niche market?

I am developing an information product (guitar instruction DVD and book) but need a specific niche since the market is flooded with mediocre and generic material. I am confident that using your muse techniques I can create a superior product if i find the right niche. Any suggestions?

Thanks in advance,
Matt
Dr. Nan
March 14th, 2010
9:43 pm

I am making my list, Wilson, of the obstacles that I (or my business) encounters each day. (note Wilson Usman’s post 3 at top) The idea of new profit makes encountering those aching problems almost appealing!
Jeff
March 16th, 2010
8:40 am

I actually pre ordered this book just before you posted about it. Now I am almost done and it is a refreshing look at doing business. Great book, and goes nicely with yours!
Tatyana Gann
March 16th, 2010
9:14 am

Tim

Also congratulations on being on Top New York Times Bestseller list!
You got great points on your blog about saying NO even to big ideas. I agree!
We must listen to our inner self and also know what is important in our life!

Thank you again!

Tatyana
Amy Kauffman
March 16th, 2010
11:17 am

Tim,
You need to know you’ve made a difference in my life.
I’m ashamed it has taken so long to tell you. How could I be so selfish to keep this gratitude to myself? I’ve assumed you know the impact your writing has on people, but if everyone forgets to tell you as I have, then you really don’t know. Here is my meager, but genuine praise.
Thank you for your life, your example, and your writing. You have made a difference in my life and I am forever grateful and changed.
I wish you the drive and determination to keep offering your life and work to others. I’m sure it’s exhausting some days, but know that it’s never in vain. You have influenced my life and thousands of others, even if they forget to tell you. Consider me the spokeswoman for all who have read your work.
Best to you and your future,
Amy Kauffman

Tim Ferriss
March 22nd, 2010
12:23 pm

Amy, thank you so much for your kind comment. I do have hard days, just like everyone else, and this made my day :)

Thanks to you and everyone who puts words into action. I’m just the writer, and you are all the ones who deserve the real praise.

:)

Tim

Jimmy Trevor
March 16th, 2010
8:54 pm

Small companies want to be big, and big companies want to be small….that’s an interesting thought,
Alison
March 17th, 2010
7:03 am

Not to get all touchy-feely,

but we talk all the time in teaching yoga about scratching your own itch. The fact is, some people will totally resonate with what you have to say…and LOTS will not. If you can stand assuredly on your product, message, or class theme, it’s possible to “sell out the class,” but if you are running after solving someone else’s problem, you’ll be guaranteed a face plant.

Thanks Tim! Thanks 37Signals!
Kris
March 17th, 2010
12:21 pm

Great post Tim. Growing for the sake of growing does not fit everyone’s ideal lifestyle. I purposely kept my marketing company small these last 3 years. I kept up profitability by raising the prices to reduce the demand. Funny thing is that initially pre-recession the increased prices raised demand. Also post-recession, I look like a genius for not having huge overhead and a overpaid staff.

While I enjoyed having a smaller company in the past, I think I am craving more of larger company these days, I the travel bug has worn off.

Kris
Peter Minde
March 17th, 2010
5:47 pm

Thanks for posting about this book, the excerpts are cool and I think I need to buy it!
Anon
March 17th, 2010
6:46 pm

My business partner has 37Signals and has been very impressed with it. Additionally, I want to compliment you Tim — for the same reason you complimented 37 Signals — your blogs and Four Hour Work Week Book are also very simple (and very useful). There are not many sites I make time to visit on a regular basis — but fourhourworkweek.com is definitely tops on my list!

Thanks for your inspiration and recommendations, Tim!
Free Pursuits is One Year Old! What Do You Want Next?
March 18th, 2010
12:32 am

[...] by blogging about lifestyle design. To date (as far as I know), there are really just two people (Ferriss and Guillebeau) who earn a full-time living from the lifestyle design [...]
Rich
March 18th, 2010
8:44 am

Tim,

Interesting post. We all have ‘ideas’ which can solve a problem for someone – but if you are not that person how do you know you have solved it? As you say, create a product that solves a problem you have, or provides a service you need – you then understand the offering from a customers point of view.

Cheers

Rich
Ricardo Patrocínio
March 19th, 2010
7:03 am

Excellent post Tim. Keep the good work
hal? y?kama
March 19th, 2010
9:22 am

As always, excellent article! I am learning SO much from you! My life has changed enormously since reading 4HWW. Thanks!
Michelle Ellingsworth
March 19th, 2010
11:05 am

Thanks for the great post!

I recently started an online business and many of my friends think it’s a cute hobby, not a real business. But that’s okay. If they really want to understand I explain it. if not, I just smile and shift the conversation back to them. No need to drag people to my point of view.

For me, small is great.

Michelle
S. Patronio
March 20th, 2010
9:09 pm

I used Basecamp and it worked very well for me, but my clients would not use it– there’s a learning curve they refuse to climb, they would mess up things, and the writeboards are a nightmare to format. So I cancelled my subscription and am looking for a replacement. Google Documents? Perhaps…
Yadgyu
March 21st, 2010
9:32 am

Hey Matt,

Do you know anything about music licensing? If you a decent guitar player, you can license your music for use in TV shows, film, adverts, and web shows.

Click on the link in my name for more info.
BrandScottK
March 21st, 2010
11:39 am

I’m about halfway through REWORK and it really does speak to me and should speak to any individual or business that wants to be forward thinking.
Jurie van Dyk
March 21st, 2010
12:49 pm

Dear Tim,
thanks you for recommending Reworked, I’ve just finished reading the book, and it has made it onto my top 10 list, below 4HWW of course.

I’ve been working on – building an app for longer than a year now and have been getting lost in the detail. This book was exactly what I needed to get focused again. I’ve made more progress on the app this week that I have in the last 3 months. Thanks.

By the way, In 4HWW you mentioned that you have a sport motorcycle because it makes you feel like a cool dude, so what bike does Tim Ferriss ride?

Best Regards

Jurie van Dyk – South Africa -Capetown

Tim Ferriss
March 22nd, 2010
12:09 pm

Hi Jurie,

I used to ride an SV650 until a 90 mph flip at Infineon Raceway. Now I just use my legs or a car :)

Tim

Patrick Hitches
March 21st, 2010
3:02 pm

Tim,

Thank you for the post. Another phenomenal read! Just more insight for me to keep in mind as my business takes turn after turn, idea after idea… Keep em coming!

Patrick
Bendik L
March 21st, 2010
4:14 pm

Hey Tim!

WOW! This post just hit me in the gut! At first I though`t this post wasnt much for me but when I reached the “Tone is in your fingers” section…I saw a picture of myself being stopped by false obstacles. THIS FOR ME HAS BEEN A NIGHTMARE…striving for perfection in tools is awfully dangerous and time consuming!!

I have been a skeptic of 37signals when I saw their software a while back (years ago!), I`m not quite sure why, and I probably havent been objective enough, but I think maybe this article got me on other thought`s now.

One of my biggest fears that have made me procrastinate insanely much and also even stolen so much time that I lost opportunities to license AMAZING products… is: “Looking for the perfect business tools or even THE all in one solution that covers all imaginable needs”.

DAMN this is hard and embarrasing to admit! But it`s the truth for me as I`m a perfectionist! And I hope I`m not the only one!

I also think that the fear for starting up without the right tools, have something to do with the feeling that you have only one chance to launch this product. And you wanna do it right so badly…. But I see more clearly now that it`s a VERY false statement.

There is no such thing as “The perfect business tool” because the more you search, you will always find new and unnescessary things that you need.

I think many people (including myself) would have a great use for an article with a simple business process diagram explaining the “average muse” with examples of the basic NESCESSARY tools that could be used in the different areas.
A default setup like this could help so many people kickstart easier…and save time.

Anyways, thanks for a good article and absolutely for the eye-opener.

-Bendik L.
I.L.
March 22nd, 2010
9:57 am

Tim, when is your birthday?
Adrienne
March 22nd, 2010
10:56 am

I will definitely be getting myself a copy of rework. Thanks for a great informative post.
Raf
March 23rd, 2010
2:59 pm

Hey Tim,

Really looking forward to Superhuman.

And…….really looking forward to that all-about-steak post you once promised!

Every time I cook a steak I think about that post! ;-

R
Katie Joy
March 23rd, 2010
7:15 pm

Really enjoyed this post Tim, as I do with reading all your work.. Thanks again for being such a fabulous inspiration, role model and mentor. :o)
Yasuo
March 23rd, 2010
11:21 pm

Tim,

It’s so weird that you came up with this blog post. Just recently I had been looking into using Basecamp as my new project management system and had been comparing it against the likes of Zoho.

I remember feeling so tempted to go with Zoho due to its extra functionality compared to Basecamp.

At the end of the day though, I reminded myself that it’s not the amount of features you have that matters, it’s the features that you use.

Basecamp hits the nail on the head by not overly cluttering their software with additional features that in the end usually end up overwhelming and detracting the attention of the user from the functions that really really matter.

A fine example of 80/20, something that I learned from you that has since helped me turn my life around.

Yet another great post, look forward to more in the future.

Cheers,
Yasuo L
DynastyDC
March 24th, 2010
12:21 am

Hey Tim,

My understanding, FTC new guidelines also includes Facebook, Twitter and social review sites. As a precaution, I referenced your disclosure page on my blog, with one minor adjustment.

Take a look:

http://blogdynastydc.com/disclosure-–-the-full-monty/

It covers the whole enchilada, hope it helps.
Chris @ Pearl
March 24th, 2010
2:25 am

Great stuff. We’re trying to strike the balance of funding AND staying small (enough).

A tip for all you software developers out there – get your clients to post their feature requests onto a Uservoice account (uservoice.com). Not only does it put some structure around the feeback process, but it shows people that they are part of a bigger picture, which is often very educational for them.
Jon Keefe
March 24th, 2010
2:43 am

Tim,
Great post. I am Jon Keefe, CEO of a digital agency in Manchester in the UK and we came across Basecamp 2 years ago, adopted it and it changed our business. And then as you say we scratched our own itch. Basecamp did almost everything in project management that we wanted and more (there’s stuff in Basecamp we don’t really use) but when it came to getting productivity data Basecamp couldn’t deliver. Now that’s not a criticism of Basecamp as 37signals just didn’t see this a core functionality, which is fine. So we developed a bcToolkit so we could use the Basecamp API to get the reports that we wanted. Now our bcToolkit delivers productivity reports such as time used vs time estimated on projects through a simple dashboard. Cheers Jon
Nathan
March 24th, 2010
12:51 pm

Thanks man.

“The Tone is in your fingers”….

This makes me think about some friends who – although being 10, 15, or even 40 lbs overweight – have paid $100’s extra for a lighter-framed bike. Instead of dropping the love handles they’ll drop several more bills, and still not perform any better when they hit the road.

Personalizing this, I see that there are many things I’ve tried to do or become that were basically excuses for my lack of desire and/or talent. Rather than simply trying to give myself a crutch to do something I’m not really into, I should have spent more time on the more natural areas of enjoyment and giftedness.
Ken Siew
March 24th, 2010
5:59 pm

I totally love the book REWORK! I think it’s dramatically changed my viewpoint of business. A must-read for anybody who wants to start a business. You might not agree with all of them, but you’ll get a lot out of it. It makes you think hard about whether what you’re doing is working, or if you’re just following what everyone else says.
Link Roundup on TBE – What I’m Reading 3/25/10
March 25th, 2010
6:37 am

[...] far, an excellent read. He certainly is a unique chap. Part of this blog post talks about the incessant push that companies make to grow grow grow. Tim questions this mindset – why must companies always be growing revenue, adding people, [...]
Chris
March 25th, 2010
1:42 pm

Thanks a lot for your Videos.. I really love the Random Show..
by the way.. I first heart of Kevin Rose through your Blog.. big fan of his work now too : )
Dan
March 28th, 2010
3:22 am

Hi Tim,

great post. I played with Basecamp but did not adopt it in the end. To me, it felt like just another inbox. It would be interesting to hear how you use Basecamp, since I know you are not a fan of duplicating and complicating things unnecessarily.

Cheers, Dan
Christoph Dollis
March 29th, 2010
1:43 pm

That quote from Henry Ford is priceless.

For the record, I’m not a huge Henry Ford fan. He had some views I consider disturbing. However, he was one amazing business man.

From “Think and Grow Rich” apparently Andrew Carnegie had recognized his business acumen when Ford was on the way up, greasy shirts and all. Carnegie was another kick-butt business guy who built libraries in even my corner of the world, that he probably never even visited himself. Like Tim, he was a believer in education.

Oh, and if I had to buy an American made car now? Ford, definitely.

They didn’t take the bailout money and instead focussed on growing their business by pleasing the customer.

Are they the best cars in the world? Maybe not, but the modern Ford company wasn’t so clueless they bankrupted themselves… I think they were the only North American car company whose market share grew last year.

Without being bailed out by the taxpayers, too.
Mike Bowerman
March 30th, 2010
8:46 pm

Your observation about the irrelevance of a business’ size is something Warren Buffett talks about (for instance in The Essays of Warren Buffet: Lessons for Investors and Managers). He observes that even Fortune 500 executives are victims of this mentality with most of them knowing where they sit on Fortune’s ranking by size, but not by profitability, though profitability is clearly a better metric of success for companies at such a mature stage of growth.
Gavin
April 1st, 2010
7:17 am

Great post. Small is the new big – for sure. For those with fast growing businesses who can’t avoid getting big, I recommend reading the Starbucks book called ‘Pour Your Heart Into It’. It has a lot of good ideas about how to grow while keeping your employees happy and having a vision for long lasting success.
Mathew Anderson
April 5th, 2010
2:44 pm

2nd time I am reading about 37Signals this week, first was from http://www.seobook.com/managing-business-opportunity-overload
hmmm..
anyway quite like the idea of keeping things small and beautiful, who want’s to manage people anyway ?
Why would ING say no to a 1Million account ?
David Simon
April 6th, 2010
7:57 am

YES! I love it.
I believe the business model of 37signals is the model of the future. It’s clean, elegant, and intelligently simple.

Thank you Tim for introducing me to 37signals’ “Getting Real”
Jon Keefe
April 8th, 2010
1:04 am

Tim, great post. I was at SXSW recently when Jason talked us through some of the concepts of REWORK. Here are three more of the thoughts he put across.
1/. Stategic “planning” is out and Strategic “guessing” is in – This gets across the idea that plans almost never come off and they sound so set in stone and are often expensive and time consuming. Guessing is about gut feel, heart over head, which actually more often than not works, is cheaper and quicker to implement.
2/. Think about bi-products – This particularly struck home with me because we have a small business that is based around a bi-product of Bascamp. Its a SaaS business using the Basecamp API and adds extra productivity to Basecamp. Its called bcToolkit. 37Signals seem to like it. It’s on their website
3/. Innovative is OK but useful is better – This sums up the 37signals mindset for me. If you just take Basecamp, it is not unique or rocket science but very useful and therefore will always be used. Simple.
Thanks Jon
Eric Timmer
April 10th, 2010
9:23 pm

Have to agree with you Tim, the 37Signals guys are top notch! Love their simple formula for making money:
1. Good Product
2. Price
3. Profit

I picked up the audio version of their book and it is excellent!!
Jamie Favreau
April 11th, 2010
11:49 pm

This is a very insightful post and I totally agree. Some business should stay small and everyone needs to learn how to say, “No.” Too often that gets lost and when you say, “No” it opens a different door and probably a healthier one. You have to know your limits because with out knowing them you are liable to be taken advantage of. Which is never good and it is never good to spread yourself everywhere.
Noelle Cottom
April 13th, 2010
11:18 am

I really like the Scratch Your Own Itch section. I think so many people try to come up with products that they wouldn’t even necessarily use. If you find a need for a product, then you should take that need and work on developing a product you would use. Like it said in the article, if you are trying to solve someone else’s problem with a product, you are basically stabbing in the dark. But if you see a problem with a product and are working on your own solution or idea, you know exactly what needs to be done to make the product better.