Lenny's Podcast: Product | Career | Growth

Jason Fried challenges your thinking on fundraising, goals, growth, and more

December 17, 2023

AI Summary

5 min read

Jason Fried, co-founder and CEO of 37signals (makers of Basecamp and HEY), describes a 24-year bootstrapped software business with 100,000+ paying customers, 75 employees, and consistent double-digit million-dollar annual profits. Without investors, boards, or growth mandates, the company prioritizes profitability, simplicity, and enjoyable work over scale, offering an alternative to VC-backed paths that demand unicorn outcomes.

Bootstrapping for sustainability
Fried argues most software businesses do not need VC funding, as they require minimal upfront capital beyond laptops. Bootstrapping forces practice in making money—the core skill for success—while VC paths eliminate mid-sized outcomes, pushing toward massive scale or failure. 37signals stays lean with one codebase, one or two price points (e.g., Basecamp maxes at $299/month for unlimited users), no salespeople, and no enterprise customization, avoiding the bloat of competitors like Asana (1,600 employees) or Slack (2,500). This yields healthy margins for experimentation without fear of losses.

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What you'll learn

1 `* (00:49) **Intro and 37signals Overview**`
2 `* (05:03) **Bootstrapping vs. VC Funding**`
3 `* (09:58) **Small Teams and Efficiency**`
4 `* (13:39) **Defining Success and No Goals**`
5 `* (33:20) **Shape Up: Development Framework**`
6 `* (43:54) **Gut-Driven Decisions and Culture**`
7 `* (46:42) **Hiring for Instinct and Operations**`

+ Full timestamped outline available in the app

Show Notes

Jason Fried is the co-founder and CEO of 37signals, the maker of Basecamp and HEY. 37signals is a very different kind of company. With fewer than 80 employees, they have over 100,000 customers, generate tens of millions of dollars in profit each year, and have no investors, board, or any plans to ever raise money or sell the company. In our conversation, we explore a path many tech founders never consider—bootstrapping. We discuss:

• Why he and his team prioritize profit above all else

• The unexpected challenges with raising venture capital

• The “Shape Up” framework for building products

• Why, and how, to foster a gut-driven culture

• Jason’s thoughts on why work should not feel like war

• Advice for starting a bootstrapped business

• The philosophy behind Once, 37signals’s new line of software products

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Find the full transcript at: https://www.lennysnewsletter.com/p/jason-fried-challenges-your-thinking

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Where to find Jason Fried:

• X: https://twitter.com/jasonfried

• LinkedIn: https://www.linkedin.com/in/jason-fried/

• Email: [email protected]

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Where to find Lenny:

• Newsletter: https://www.lennysnewsletter.com

• X: https://twitter.com/lennysan

• LinkedIn: https://www.linkedin.com/in/lennyrachitsky/