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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\u2014bootstrapping. We discuss:

\u2022 Why he and his team prioritize profit above all else

\u2022 The unexpected challenges with raising venture capital

\u2022 The \u201cShape Up\u201d framework for building products

\u2022 Why, and how, to foster a gut-driven culture

\u2022 Jason\u2019s thoughts on why work should not feel like war

\u2022 Advice for starting a bootstrapped business

\u2022 The philosophy behind Once, 37signals\u2019s 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:

\u2022 X: https://twitter.com/jasonfried

\u2022 LinkedIn: https://www.linkedin.com/in/jason-fried/

\u2022 Email: jason@hey.com

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Where to find Lenny:

\u2022 Newsletter: https://www.lennysnewsletter.com

\u2022 X: https://twitter.com/lennysan

\u2022 LinkedIn: https://www.linkedin.com/in/lennyrachitsky/

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In this episode, we cover:

(00:00) Jason\u2019s background

(03:49) The success of 37signals

(06:46) When raising money makes sense

(09:58) The power of small teams

(13:55) Defining success and goals

(17:08) Playing \u201cinfinite games\u201d in life

(20:11) Starting a business vs. staying in business

(22:13) Lessons from 25 years in business

(27:28) Venture scale vs. bootstrapping

(30:30) Choosing the right path for your business

(33:19) The \u201cShape Up\u201d framework

(37:59) The drawback of promises

(39:56) Adopting a new way of working

(41:36) The two-week cooldown

(43:53) Trusting intuition and gut

(46:41) Creating a gut-driven culture

(49:44) What Jason looks for in new hires

(56:19) Advice on making changes and adapting

(01:00:06) What Jason has changed his mind about

(01:02:33) Planning in 6-week stretches and figuring it out as you go

(01:06:43) Being proud of the work you do

(01:09:05) Jason\u2019s thoughts on why work should not feel like war

(01:11:31) Advice for starting a bootstrapped business

(01:14:33) You must be at peace with the worst that can happen

(01:15:42) The benefits of bootstrapping

(01:19:11) The value of constraints in business

(01:22:00) Jason\u2019s philosophy: \u201cJust keep making great s**t\u201d

(01:23:19) Once, 37signals\u2019s new line of software products

(01:26:33) The philosophy behind Once

(01:35:47) Closing thoughts

(01:37:23) Lightning round

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Referenced:

\u2022 37 Signals: https://www.smartsheet.com/

\u2022 Basecamp: https://basecamp.com/

\u2022 Finite and Infinite Games: https://www.amazon.com/Finite-Infinite-Games-James-Carse/dp/1476731713/

\u2022 Ingram Micro: https://www.ingrammicro.com/

\u2022 Once: https://once.com/

\u2022 Basecamp\u2019s Shape Up framework: https://basecamp.com/shapeup

\u2022 Hill charts: https://basecamp.com/features/hill-charts

\u2022 Jason Fried\u2019s quote about long-term business planning: https://medium.com/@farkhan569/unless-you-are-a-fortune-teller-long-term-business-planning-is-a-fantasy-jason-fried-quote-a69e8778e9c4

\u2022 Brian Chesky\u2019s new playbook: https://www.lennyspodcast.com/brian-cheskys-new-playbook/

\u2022 Matt Mullenweg on X: https://twitter.com/photomatt

\u2022 Leo Polovets on X: https://twitter.com/lpolovets

\u2022 HEY: https://www.hey.com/

\u2022 Redefining success, money, and belonging | Paul Millerd (The Pathless Path): https://www.lennyspodcast.com/redefining-success-money-and-belonging-paul-millerd-the-pathless-path/

\u2022 It Doesn\u2019t Have to Be Crazy at Work: https://www.amazon.com/Doesnt-Have-Be-Crazy-Work/dp/0062874780

\u2022 Squarespace: https://www.squarespace.com/

\u2022 Stoic negative visualization: https://dailystoic.com/premortem/

\u2022 Linear: https://linear.app/

\u2022 Peter Rahal on LinkedIn: https://www.linkedin.com/in/peter-rahal-037bba43/

\u2022 RXBAR: https://www.rxbar.com/en_US/home.html

\u2022 Jason\u2019s LinkedIn post: https://www.linkedin.com/posts/jason-fried_just-keep-making-great-s**t-keep-your-costs-activity-7130978623523614720-VBGX/?trk=public_profile

\u2022 Several Short Sentences About Writing: https://www.amazon.com/Several-Short-Sentences-About-Writing/dp/0307279413

\u2022 Hell Yeah or No: What\u2019s Worth Doing: https://www.amazon.com/Hell-Yeah-No-whats-worth/dp/1988575117/

\u2022 Home-Made: Contemporary Russian Folk Artifacts: https://www.amazon.com/Home-Made-Contemporary-Russian-Folk-Artifacts/dp/0955006139

\u2022 Oppenheimer: https://www.oppenheimermovie.com/

\u2022 Tom Petty\u2019s \u201cCrawling Back to You\u201d on Spotify: https://open.spotify.com/track/1JenqZNMU6unIwVWmoP3J0

\u2022 Poor Charlie\u2019s Almanack: The Essential Wit and Wisdom of Charles T. Munger: https://press.stripe.com/poor-charlies-almanack

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Production and marketing by https://penname.co/. For inquiries about sponsoring the podcast, email podcast@lennyrachitsky.com.

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Lenny may be an investor in the companies discussed.