David Heinemeier Hansson (DHH), Co-founder of 37signals

Summary

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Podcast Summary — David Senra with David Heinemeier Hansson (DHH), Co-founder of 37signals

Host: Patrick O'Shaughnessy for Scicomm Media
Date: July 26, 2026
Podcast: Conversations with the Greatest Living Founders

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Episode Overview

This rich, candid interview features David Heinemeier Hansson (DHH)—entrepreneur, programmer, and co-founder of Basecamp/37signals—on his core philosophies: building “less software,” the virtue of constraints, the importance of independence, and the joy of making “for yourself.” The conversation spans product design, AI’s impact, the purpose of capitalism, organizational culture, and DHH’s personal values—notably, his desire for autonomy, creative control, and making beautiful, useful things.

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Key Discussion Points & Insights

The Power of Constraints and Brevity

• Distillation & Ruthless Editing
  • DHH emphasizes the art of saying more with less, reflected in both his writing (e.g., "Rework") and software design.

    “It was really that process, cutting it from 50,000 words to 25,000 words… that really made it all happen. So I want to retain that ability to distill.”
    — DHH [00:02]

• Less Software, Not More
  • 37signals’ founding philosophy: championing “less software” over feature bloat.

    “Our initial spiel, our tagline was less software… one of the reasons why [Basecamp] is really good is it’s just less. There are fewer features, there’s less to learn, there’s less to teach, there’s just less.”
    — DHH [02:58]

  • He warns that abundance of resources (time, people, AI) tends to lead to overbuilt, complex products.

    “If you have unlimited time, unlimited money and unlimited people, you’re going to build a blob… I don’t trust myself, I don’t trust us… that if I can do everything I want at very little cost, I wouldn’t.”
    — DHH [06:46]

• The Virtue of Constraints
  • Early Basecamp was developed with “10 hours per week”—time constraints led to focus and innovation.
  • DHH links resource scarcity to better, more meaningful creation—citing Star Wars, Terminator as examples where constraints fostered timeless perfection (vs. later, bloated sequels).

    “You can look at so many of the greats and go, what they produced when they had nothing was truly spectacular.”
    — DHH [10:20]

Simplicity, Finished Products, and Customer Respect

• Finished Software and User Loyalty
  • DHH admires physical products that “just work” (like his favorite printer), and tries to bring that ethos to software—offering long-term stability for users even as new versions release.

    “Once upon a time, they had a problem... They signed up for Basecamp and they went, yep, that’s it. That’s just the job. And now they just use it… They don’t want things to move around all the time.”
    — DHH [15:36]

  • 37signals continues to support legacy versions of Basecamp, respecting users who want reliability over novelty.
• Balancing Progress and Stability
  • The trade-off: keeping legacy products for existing fans while innovating to attract new users—a rare practice in SaaS.
  • Embracing the “finished product” ideal, DHH envies those who can declare completion. He commits to keeping his software available “until the end of the Internet.”

    “We should keep it around. And this is one of the promises we’ve made… we’re going to keep it until the end of the Internet.”
    — DHH [20:05]

Introversion, Deep Work, and Remote Culture

• Lone Creation and Deep Focus
  • DHH and Patrick bond over their introversion, love for solitude, and disdain for open offices.

    “At the end of that week [company retreat]... I would fucking quit and live as a hermit in the forest rather than work within 365 days a year in an office.”
    — DHH [22:56]

  • DHH credits remote, asynchronous work and long stretches of uninterrupted time as critical to his creative output.
• Remote Work Advocacy
  • 37signals “was remote before remote was cool” (book Remote, 2013).

    “Paul Graham has this builder vs. manager mode... For a builder, if you get interrupted just a handful of times in a single day, that day is a waste...”
    — DHH [25:41]

Learning from Greats and Embracing AI

• Tobi Lütke’s Influence
  • Shopify CEO Tobi Lütke catalyzed DHH’s adoption of AI, helping him see beyond initial skepticism.

    “He had an eye that was just looking further ahead than I was and he was going, yeah, but it’s not going to be like this forever… If you don’t like it now, just imagine two more years of this.”
    — DHH [31:21]

  • DHH highlights the importance of “playing” with new tools hands-on, not just reading about them.
• Builder’s Mindset and Changing Beliefs
  • DHH lauds founders who “actually think for themselves”—offering uncorrelated opinions and updating their thinking with new information.

    “You’ll have an idea, an opinion, you’re very vocal about it, but then if you get new information, you’ll immediately be as vocal as changing your mind.”
    — O'Shaughnessy [31:14]

Linux, Hacker Culture, and Product Craft

• Switching to Linux
  • DHH moved from Mac to Linux, enchanted by the culture of extreme customization and hacker artistry (via r/unixporn, “ricing” setups).

    “This one Polish kid who goes by the handle of VAXfree had built the tool that 3/4 of everyone on this unixporn subreddit was using… The crack kid from Poland can beat [Apple]. Absolutely amazing.”
    — DHH [44:31]

• Creation for Oneself, Then for the World
  • DHH’s Omakase/Amachi project: a chef’s-choice Linux, borrowing from Japanese omakase, crafted for his aesthetics and workflow—then shared with others.

    “If it’s so good for me, it should be good for other people, I should share it… You have to give it to them in a form that’s beautiful and approachable and quirky and a little bit weird…”
    — DHH [53:43]

• Product Philosophy
  • True innovation feels strange at first—great products are rarely built by consensus or user polls.

    “All the best ideas that actually turn out to have an impact… sound stupid at first, they’re not intuitive, because that’s where all the value has been locked up…”
    — DHH [53:43]

Out-Teaching as a Marketing Strategy

• Legacy of Kathy Sierra and Education-Based Marketing
  • Inspired by Kathy Sierra’s maxim, “Out-teach the competition,” DHH and 37signals built their following by offering deep, practical insight—making money on only a small fraction of the value created.

    “We could out teach them. We could have better insights, and we could share them, and people could resonate with that and then reciprocate by buying our products.”
    — DHH [64:08]

  • Human reciprocity is a timeless driver; those helped by authentic content will seek ways to give back. Still, DHH notes social algorithms have eroded this exchange, shifting his focus to podcasts and newsletters for more reliable reach.

Independence, Control, and “Transcending Capitalism”

• Freedom Ladder: No Investors → No Customers
  • The ultimate creative freedom for DHH is making for himself, beyond even customer feedback, moving up from financial to creative independence.

    “No investors is one level of freedom. How about no customers is even higher? …I’m sharing something with you and I don’t owe you anything.”
    — DHH [71:23]

  • For open source, collaboration is welcomed if it’s respectful and constructive; transactional users must “pay” for the feedback privilege.

    “You looked at this for five minutes, I spent 4,000 hours. And you have some knee jerk reaction and you want to tell me how to do it... You can go fuck yourself.”
    — DHH [71:23]

• Retirement from Capitalism
  • DHH sees his eventual “retirement” not from work, but from commercial obligation—continuing to build and share, but not for money.

Celebrating Capitalism That Works

• Material Success as Proof & Motivation

  • DHH is unapologetic about enjoying the material rewards of entrepreneurship (cars, beautiful workspaces), seeing it as validation for “making somebody else’s life better.”

    “It is your moral obligation to buy a Ferrari if you do really well, or Lamborghini or Pagani or whatever floats your boat. But you should be sending this forward. This is how we get to have nice things.”
    — DHH [76:47] “We built 37 signals in a kind of weird way for a software company... We built it on 40 hours a week; we built it on having a life next to work... That is a counter narrative... and I want to validate that that is a reasonable thing to pick, even if you also want a nice Ferrari.”
    — DHH [79:17]

  • He stresses “how you make your money matters,” echoing Branson’s “Business is just an idea that makes somebody’s life better.”

• Efficiency and Cost Obsession

  • Inspired by Andrew Carnegie: “profits and prices are cyclical… costs, however, could be strictly controlled… any savings... are permanent.”

    “It turns out I love expense reports. I love finding little lines that you can put a marker around and then go hout until it disappears… just this aesthetic appreciation of an efficient business, like an efficient engine.”
    — DHH [83:16]

Culture, Crisis, and Leadership

• Navigating Woke Company Culture

  • DHH recounts the disruptive internal politics at 37signals c.2021, a time when he and Jason made a decisive stand: ban political discussion at work, offer generous exits to dissenters, and surgically restore company culture—even at the cost of a third of the team.

    “We put out a memo saying, it’s over. And we also knew it was going to be contentious. So after it proved to be contentious, we doubled down…”
    — DHH [92:59]

  • Marc Andreessen’s support—practical, historical, and emotional—proved pivotal:

    “He gave me a syllabus for understanding the history of wokeness…it made a lot more sense and it gave more of a purpose to the rejection of it. We weren’t just making a rejection for our little corner of the world. We were chipping in in the great civilizational battle…”
    — DHH [92:59]

• The Role of Business Leaders & Transcending Differences

  • DHH (a self-acknowledged VC critic) credits Marc Andreessen, and Tobi Lütke, with critical support in times of need, highlighting that unity matters more than ideological “squabbles” when facing existential threats.

Notable Quotes & Moments

| Timestamp | Speaker | Quote | |-----------|---------|-------| | 00:02 | DHH | “I have a deep appreciation for our former ability to be that succinct…” | | 02:58 | DHH | “Less software. There are fewer features, there’s less to learn, there’s less to teach, there’s just less.” | | 06:46 | DHH | “If you have unlimited time, unlimited money and unlimited people, you’re going to build a blob.”| | 10:20 | DHH | “What they produced when they had nothing was truly spectacular.” | | 15:36 | DHH | “[My printer] just does a function… I think about that and my relationship to the printer every single time we move things around in Basecamp.” | | 22:56 | DHH | “I would fucking quit and live as a hermit in the forest rather than work…in an office.” | | 31:21 | DHH | “[Tobi Lütke] had an eye that was just looking further ahead than I was…” | | 44:31 | DHH | “The crack kid from Poland can beat [Apple]. Absolutely amazing.” | | 64:08 | DHH | “We could out teach them… people could resonate with that and then reciprocate by buying our products.” | | 71:23 | DHH | “You looked at this for five minutes, I spent 4,000 hours. And you have some knee jerk reaction and you want to tell me how to do it... You can go fuck yourself.” | | 76:47 | DHH | “It is your moral obligation to buy a Ferrari if you do really well, or Lamborghini or Pagani… Send some of that money to the craftsmen of Italy…” | | 92:59 | DHH | “We put out a memo saying, it’s over. …We were chipping in in the great civilizational battle of where this country was going to go, of whether the White Walkers beyond the wall was gonna win.” |

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Timestamps for Important Segments

• [00:02–13:08] — Brevity, constraints, and the roots of “less software”
• [15:36–24:39] — Finished products, user loyalty, introversion, remote work
• [29:26–37:38] — The influence of founders like Tobi Lütke, embracing AI, hands-on learning
• [38:51–53:35] — Linux, hacker/DIY culture, building Omakase/Amachi for personal joy
• [53:35–66:44] — Out-teaching the competition, reciprocity and changing social media landscape
• [71:23–75:38] — Creative freedom, “retiring from capitalism”, healthy boundaries with feedback
• [76:00–86:16] — Celebrating capitalism’s rewards, business as “making a life better,” cost obsession
• [86:24–92:27] — Jeff Bezos’s early confidence and lasting impact on DHH/37signals
• [92:54–101:11] — The 2021 “culture war” at 37signals, Marc Andreessen’s help, refocusing

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Closing Thoughts

DHH remains a standard-bearer for independent entrepreneurship, a minimalist approach to software, and the celebration of genuine creation—always wary of bloat, always seeking control, always looking to make things deeply personal before sharing them with the world. The conversation, brimming with memorable stories and honest opinions, delivers valuable lessons for founders, builders, and anyone seeking to create great things on their own terms.

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Transcript

[David Heinemeier Hansson]

I have a mild skepticism about my own ability to just talk at length about most topics that I care about, because I remember getting real from 2006, the brevity. We were so brief. All the chapters been getting real. Most of them are half a page. Some of them are three paragraphs. And I actually have a deep appreciation for our former ability to be that succinct. And it wasn't like we were trying to. It was just, here's the distillation of this idea down to these three paragraphs, and that's it. Now, what's funny about that is when we wrote the later books, we didn't have that straight from the gut brevity. In fact, when we wrote Rework, the initial manuscript that we submitted was, I think, 50,000 words. That was what the publisher got to see, right? And they were very excited. Great. This fits. This is like just the size of the book. And then Jason and I went through it and cut it in half, and it was down to 25,000 words. And the publisher freaked out. They're like, we can't publish a business book that looks like this, that looks like a pamphlet. So we had to pad it with spacing and margins and illustrations to get to it. But it was really that process, cutting it from 50,000 words to 25,000 words and taking some essays from two pages down to four paragraphs, that really made it all happen. So I want to retain that ability to distill. And sometimes just being able mechanically to talk for 20 minutes about a topic is not always the best thing.

[Patrick O'Shaughnessy]

I would say the brevity. Obviously, we talked about this at dinner last night. I woke up like, my abs are sore because I was laughing so much.

[David Heinemeier Hansson]

Right?

[Patrick O'Shaughnessy]

But I told you this yesterday. It's like, I've been reading your writing for, like, 15 years. So, yeah, you're writing. I think brevity is the right, you know, thing to. To optimize for there. Getting across your point in as few succinct way as possible, but not the start of conversation. The best conversation that you've ever had in your life. You're not like, oh, yeah, I talked to this guy for five minutes. It's great. It's like, I talked to this guy for five hours.

[David Heinemeier Hansson]

That's spot on.

[Patrick O'Shaughnessy]

And so this is why it's so important, why I wanted you on the show, like, immediately. And we've been working, trying to figure this out for a few months together. It's like, dude, I remember watching, like, Startup School in Y comb. You probably did in like 2008. And there's like lines from that because you were unfiltered. And I think that's like an hour long of just like this is what's in my mind right now. And here's how I think about things that I still think of 15 years later.

[David Heinemeier Hansson]

Let me ask you a question.

[Patrick O'Shaughnessy]

The brevity you've built, you know, so many different products, I lost count of how many of them have made millions, multi millions in profits. Tens of millions, maybe hundreds of millions in profits. Do you apply that like this, like Ruthless Edit? Like Rick Rubin's idea of like this, Ruthless Edit. It started out with 10. I'm going to cut down. I think I need five. No, I'm going to cut all the way down to three and then be so judicious about what I add back. Like how do you think about that when you're building products?

[David Heinemeier Hansson]

It's even more on our minds now than it used to be. And it was always on our mind. Our initial spiel, our tagline was less software. When we launched basecamp back in 2004, it was often contrasted with Microsoft Project and other kind of enterprise Y heavy tools. And our pitch was always ways it's really good. But one of the reasons why it's really good is it's just less. There are fewer features, there's less to learn, there's less to teach, there's just less. And we focus on making the few things it does do do very well. Now in this new age where using agents and AI has made it so much easier to implement things, it becomes that much harder to stick to those principles because we used to be granted these constraints simply by the fact that it took a long time to build things. And especially in the early days of Basecamp, for example, we built the entire first version on me having 10 hours per week, not per day per week to build it. That is an enormous constraint on how you could do anything because you can waste 10 hours really quickly just chasing things around or focusing on the non essentials if we want to get that product out. And we got it out in 380 hours. And the reason I remember this was at the time I was a contractor for 37signals. Jason had hired me at $15 an hour when I was in Copenhagen, Denmark and he was in Chicago. And by the way, I got paid in Apple Gear. That was the other laugh. He's like, don't even send me the money. I will just come to Chicago and you'll give me an ipod and a MacBook. And whatever. Anyway, that's how I got started. And therefore I know exactly how much time we put into the first version. And the first version was awesome because of that, because it had such constraints. Now, if you have 380 hours together with your 10 agents, you can build a monstrosity like that of something that does a million things for a million people. And therefore, that bloat just comes naturally in a way it didn't before. And therefore our task as software builders becomes so much more about distilling. It's so much more about killing our darlings, killing features that we think are good but are just too much. And I saw this especially with the new version of Basecamp, Basecamp 5, this is the first version we've been building with AI acceleration. And suddenly we had designers who were able to take features all the way to completion. And we're at the cusp of shipping it when we kind of go reviewing and go like, I'm not sure this actually fits. Like, this is expanding the balloon here. If we keep expanding that balloon, it's going to pop in a way where we lose the central selling point of Basecamp, which is it's just so easy to use. And it's funny because sometimes you can have that as a high minded intellectual guidepost. Oh, we want something to be simple and use. Everyone says that. By the way, anyone who builds software built anything is like, oh yeah, our stuff is very easy to use. It doesn't matter if it comes from your mouse, it's not credible, but if it comes from the customer, it's very credible. And when we do customer surveys, it is the number one reason why people continue to pick Basecamp is it's simply simpler to use than the competition. And therefore it's a joy to get others onto the platform with them because it doesn't require training sessions and whatever. That's gotten so much harder to do, even for us. Because I actually really like this notion of embracing constraints because I don't trust myself, I don't trust us, I don't trust Jason, I don't trust my own sensibilities, that if I can do everything I want at very little cost, that I wouldn't.

[Patrick O'Shaughnessy]

Wait, wait, say more about not trusting yourself.

[David Heinemeier Hansson]

That the constraints on I don't have enough time, I don't have enough money, I don't have a big enough crew is what forces that selection process. If you have unlimited time, unlimited money and unlimited people, you're going to build a blob. This is actually the reason why when we got started, I was never worried about Microsoft. When we got started, everyone was like, Microsoft's just going to make Basecamp a feature of project or teams or whatever.

[Patrick O'Shaughnessy]

For context. In the early 2000s, when you started Basecamp, everybody's like, well, with the pitch, when you, you know, it's like, why are you going to write the software program? Microsoft's just going to do it because they were just the dominant player. It sounds crazy today, but.

[David Heinemeier Hansson]

Yeah, it does.

[Patrick O'Shaughnessy]

Yeah.

[David Heinemeier Hansson]

But our response was always, Microsoft's going to produce the kind of software that takes 50,000 people to make because that's the size of their organization. So they can only produce that kind of software. I'm not worried about that. I'm worried and still am, about a team of two, about a team of four, because they will produce software that's competitive with ours because it comes out of the same constraints, and therefore our threat doesn't come from the behemoth. Now, is that true today when a much smaller team can act as a much larger company? I'm not quite sure. But I do know that I don't trust that if I was running Microsoft in 2004, that I wouldn't also have made the sprawling mess that is the Office. Or the joke today is I think they have four versions of Outlook. They have Outlook new, they have Outlook new parentheses old. They have outlook new parentheses 2026. Right. Like, how do you end up with such a mess? By having unlimited resources. It's a little bit like that resource curse, right? If you just have wealth springing out of the ground, well, you kind of don't need to bother with anything else, do you? You don't need to develop your economy, you don't need to develop your society. You can just sit back, relax, and let the money flow. It's not a blessing, it's a curse. So I don't trust ourselves to be able to channel that by default. So this is why I'm quite skeptical about all this new AI acceleration we're having is even us. I think it's quite likely that we could use it wrong to build too much software to get too far away from less software, learnable software that still has to fit in the mind of a human.

[Patrick O'Shaughnessy]

Okay, I think that's a great point. I do think the complexity is because of the resources and the lack of constraints with success. So I study a lot of the music industry because they're just crazy characters, and I love crazy characters. And I heard something Rick Rubin said about the first time he ever met Jamie Iovine. Now, I've had both of them on the show, and I've become friends with Jimmy. And Jimmy is a decade older than Rick, so he did basically everything before Rick, a decade before Rick did. And Rick tells the story the first time he met Jim Ivy. And he was like, Rick was probably like 19 or something. Goes in, plays music for Jimmy and Jimmy. He said. Jimmy's response to it was so surprising. He goes, man, I wish I could still make something that simple. And Rick's like, I'm sure you can. You have. So even if he didn't make more money, the problem is you're iterating more and you're, like, spending more time on it. I just listened to a podcast four years ago on the partnership between Ben Franklin and George Washington, because it was July 4th, and I'm listening to it, I'm like, fuck. One, this is good. Two, it's good because it's simple. It's because of what I left out of it. I think I'd fuck it up today.

[David Heinemeier Hansson]

Yes. And I think I had that analysis quite early because I saw it in things like movies. The first Star wars movie is just incredible. When you think about the technology they had in the mid-70s to produce a space odyssey as timeless as that, that still looks incredible. You put it on a big screen today, no one's going like, oh, the effects look stupid. No, they're going to look. The effects look incredible. And then you look at what George Lucas did when he had 100 times the budget. He had all the computers in the world and all the staff in the world to produce whatever Jar Jar Binks was in the 2000s. And it was awful. And that's exactly where that distrust of my own ability to handle increased capacity come from. Because you can look at so many of the greats and go, what they produced when they had nothing was truly spectacular. Another one I love is James Cameron. The first Terminator movie is one of my favorite movies of all time. It was made on an absolute shoestring budget and it still beats Avatar by a thousand times. Now, there are also people who like Avatar, and I'm sure James Cameron does. That's great. I don't. I like Terminator, and I like it because it's low budget in a way that doesn't feel low budget. It's constrained. Therefore, you have to tell a tight story with a real focus on just that action flow. And it's incredible. And it was exactly the same thing, as I was saying earlier, where I read chapters we wrote for getting real back in 2006. And I think, damn it, I wish they came out that brief by default today. I have to work a lot harder now to be that succinct. I still want to. And it's also, as we talked about, there's other formats where it's great to be able to pontificate at length, but in writing, having that brevity and in software, having that ability to distill and say, no, no, no, no, no is an incredibly rare gift, and it can be spoiled so quickly by an influx of money. This was one of the reasons why I was always so skeptical about venture capital when it came to software, because I saw time and again people raise an enormous amount of money, hire hundreds of people and produce crap software. And I thought, if we're able to produce basecamp. And by the way, by, I think, 2007, we had four major projects or products. We were launching one a year while we were also running Basecamp while we were seven people at the company. So my. My brain couldn't even comprehend, what do you do with 100 people? How do you even apply them towards software to make it good? And the answer was, in many cases, well, you don't. You apply them towards software and crap comes out. Because there is not that funnel. There's not this narrow part that forces you to go like, well, I can't have it all. So now I have to figure out, out of the hundred things customers are asking for, I can do three. Damn, they better count.

[Patrick O'Shaughnessy]

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[David Heinemeier Hansson]

My gosh. The brother HL2340WD. I think that's the model number of my beloved printer. And the reason why it's so beloved is it was the first printer I ever bought that I just plugged in and it worked. There was no fucking firmware. There was no nothing. There was just a functionality. I just need black and white prints often because for whatever reason it needs a wet signature. So I can't doc design or whatever. So I print something out, I sign it, I scan it. That's the job. I am not interested in anything else this printer could conceivably do. I just want that to happen and I want it to happen consistently exactly the same way ten years from now. This is a solved problem for me and I love the printer even though I'm not a mega fan of Brother. It's not because it is some amazing piece of technology that is built in just this beautiful way. No, it just does a function. And I think about that and my relationship to the printer every single time we move things around in basecamp Because I know we have a huge contingency of Basecamp customers who treat Basecamp like the printer. Once upon a time, they had a problem. Things were falling through the cracks. They weren't organizing well. They'd started the project on email and turned into a message. And they looked around, maybe they got a recommendation from a friend, they signed up for Basecamp and they went, yep, that's it. That's just the job. And now they just use it. And they don't want things to move around all the time. They don't want all the new features that we're so excited about, because it solves the one job that they have, and that's enough. Now, you gotta weigh that when you're making products with the fact that you also gotta sell to new people. And if you're trying to sell a product that looks like it's 15 years old to new people, that's a little difficult. But we've done it in multiple ways. How have you solved the problem? We've tried all the options, but the one option I still really like was we rewrote the whole thing three times. So there was the first version came out in 2004, which people are still

[Patrick O'Shaughnessy]

paying you from the months.

[David Heinemeier Hansson]

Yes, yes, that's exactly the point. So we rewrote it three times, but we kept the old versions. Normally, what always happens in and software is a new version comes out and everyone just has to get it. They're forced to upgrade to it.

[Patrick O'Shaughnessy]

Yes.

[David Heinemeier Hansson]

And you actually feel like I've lost control here. I bought a thing that did the job, and now you're making me learn things. The new version of Basecamp 5 is certainly better. It's a vastly superior product. I'm just not in the market for a better product. I'm in the market for the product I already bought. I don't want something different. I want the shitty thing I already have, because I know all the ways it is broken if it is, and I've made peace with that. So for Basecamp, we kept those old versions. The version we launched in 2004, we stopped selling in 2010, 16 years ago. We still have customers on it as an individual business that's still making millions of dollars in profit. In profit. Because there's basically no expense to it, Right. There's no additional development. There's a little bit of maintenance. You just gotta keep sure it's secure and bring it forward and so forth. But it's basically pure product. Because also those people who've been using a product that's been discontinued for 16. They don't bother us very much. They're not like, oh, this thing. How do I use that? No, they know how it works. That's why they keep with it. And the magical thing for me is in that cohort 2004, 2010, there's a ton of people who love Basecamp. I get this all the time. Oh, we use Basecamp. I love it. And I'll take. Oh, did you try the new features? Like, oh, no, no, no. We used the old version. I'm like, how old? Oh, yeah, the original. We signed them like 2008. And like, wait, what? You haven't seen any of our good ideas in the last 16 years and you're still over the moon about what we sell. I think that's incredible. Now it has trade offs, right? Like, there are software products that just get stuck with their initial cohort and then they just age with that cohort. And I think that's fine. But it also just cut you off from new customers. So I want to have both things. And we do to some extent. We have three major versions of Basecamp. That initial version, then we did a basecamp two that lived from 2010 to 2015, or 12 to 15, I think only three years. And then we have the current version of chassis, as we like to call it, that we've evolved twice, but it's still the one where we bring people forward. So I've seen. What's that word you just said? Chassis. Chassis. That's what we call it. Like, you know how car makers.

[Patrick O'Shaughnessy]

Oh, chassis. Okay. Yeah, okay.

[David Heinemeier Hansson]

Yeah, I guess. Sassy. Sassy. It's a sassy chassis that it's the original code base and therefore we're bringing customers along with it. And it totally has those trade offs. We just had it. We just launched Basecamp 5. I think it's an incredible version of Basecamp, the best one we've ever made. And a substantial amount of the feedback was, why did you fuck with my printer yesterday? The button was here on the right. I just want to push that. And now you moved it somewhere else. And I go like, I totally get it. I totally get it. And I actually wish we had more of a capacity in software to accept finished products. This is one of my great envies of people who make physical products. By the time you ship, I don't know, a knife, it's done. There's no firmware upgrades, there's no patches. You may, I know, sharpen it over time. You may fix it if it breaks, but otherwise that is a finished scope. Same thing with movies, same thing with music. You ship that album, it's done right. I think there's something really beautiful about that. And people intuitively just understand that. That's how it is with physical products or cultural products. With software, they don't get it. With software, if you don't upgrade, especially a SaaS software in like three months, you're like, is this dead? Is this out of business? No, fuck. It's just good as it is. Can we leave it for a second? Can you appreciate just what you have? That would be great. And we have a fair amount of that software because we've been in business for over 25 years and we've created a bunch of things. And I've always thought, you know what? Not everything that we've ever made is something we're going to want to continue to evolve forever. Fine. But we should keep it around. And this is one of the promises we've made to the customers we have. We're going to keep it until the end of the Internet. That's our moniker for this. Either that or as long as you're in business, whatever comes first. And therefore we allow someone who bought High Rise, for example, we made a CRM tool, a customer relations tool that made millions of dollars. Our second biggest hit after Basecamp, that we ran for many years. And then at point we were just done with that. Neither Jason or I ended up using it because we don't actually interact with that many people that we need to keep track of things. It had this core user base. We're super happy with it, and we're still running it for them. It's still a multimillion dollar business and I'm super happy. But it's frozen, it's done, it's finished software.

[Patrick O'Shaughnessy]

It's funny that you made a CRM, because I think you've said before that you don't like people.

[David Heinemeier Hansson]

That is one of the reasons why we haven't made version two, that I don't. I mean, I like people actually in the abstract. It's funny, I've heard someone say that. I don't like people in groups. I like them individually. I'm sort of the opposite. I like people in the abstract. Individually, I have more of a problem with it. So I don't interact with that many people on a daily basis.

[Patrick O'Shaughnessy]

How much of your time you spend alone?

[David Heinemeier Hansson]

Oh, the vast majority. The vast majority. And in fact, it's funny because at 37signals, we work remotely. We have about 60 people and twice A year, we all meet up and spend a week together. And it's really great. You get to see people, and I cherish that because you need that human connection. You need to sit right in front of someone to reestablish trust batteries and charge things up and realize it's not just all avatars and text, it's actually real people. But at the end of that week, I'm always like, as much as I love these people, as much as I love this company, I would fucking quit and live as a hermit in the forest rather than work within 365 days a year in an office. I'm just not built that way. I am not built to be in an office and work with someone all the time. And in fact, when I look back upon my career, it only took off when I closed my door and not see anyone for long stretches of uninterrupted time. I mean, when I got started working in technology, I worked in open offices. And you know what? My productivity and my creativity was a bit of a flatline. I just got exhausted.

[Patrick O'Shaughnessy]

Hold on.

[David Heinemeier Hansson]

But having folks around, let's go back to this.

[Patrick O'Shaughnessy]

Let's say Hypothetically, you're up 16 hours a day. How many of those 16 hours are you alone?

[David Heinemeier Hansson]

Oh, man. At least half of it. And the other half is spent with family. Like, the amount of hours per week that I spend with sort of strangers and longer interactions is small.

[Patrick O'Shaughnessy]

Is that increasing with age or were you always like this?

[David Heinemeier Hansson]

I was always like this. I was always an introvert. I always appreciated my own company and I always appreciated just the lack of interruption, the lack of noise, and the lack of stimuli.

[Patrick O'Shaughnessy]

Really, I feel the same way. Everybody, they watch my podcast, they're like, you're not an introvert. I'm like, no, no. Like, I would spend half. Things have changed now because this new show's been fucking crazy. But before, you know, I ran a solo history podcast with no employees. Spend half my waking hours alone in a room with books. Like, you see books everywhere. Like, books are everywhere. And there's a great line by Kanye that sounds like something that you just said. He goes, so much personality. What do you want from me? I can be by myself and enjoy the company, and it's just like, I just enjoy this better than most of my interactions with. Especially if you don't control the environment. Like an open office.

[David Heinemeier Hansson]

Yes, I have a really deep seated hatred of the open office. I worked in quite a few and I ended up just with a burning desire to see it all just go up in smoke and a commitment, in fact, to make sure I was successful enough that I never had to return.

[Patrick O'Shaughnessy]

Remote work is everywhere now. They don't understand. You guys published a book called remote in 2013 if I'm correct.

[David Heinemeier Hansson]

Yes, that's right.

[Patrick O'Shaughnessy]

Yeah.

[David Heinemeier Hansson]

Well, before anyone did it. Now what's funny is, I mean I've seen the full cycle, right? So during COVID everyone goes like, actually remote works amazing and we get just as much done. And then as soon as that was over, we were like, oh, I guess we still have that 10 year lease. We better get people back into the office. Now that's a bit of a cynical view. I totally get that there are individuals who thrive when they're around others. And actually I think the common form of leaders and entrepreneurs is actually people who do like to be around others lot who do like to be interrupted. That's the mode they exist in. That's not my mode I'm in. Paul Graham has this builder versus manager mode and or schedule. And the schedule is all about if you're a builder and you get interrupted just a handful of times in a single day, that day is a waste because you will never get into the flow. You will never get into this long stretch of uninterrupted time. And therefore you will not feel in the not just mood but moment to solve the deep problems you got to deal with. And that to me, that was really the breakthrough for my career. Certainly on programming that I just, I can't use a 45 minute chunk of time, an hour and a half even. I don't know that's not going to turn out to something. If I have four hours. Okay, now we're talking. I can actually attack a problem and feel I can get all the way into it. And part of that is I hate repeating myself. This is one of the reasons when in the early days of 37 sales we did these workshops called Building a Basecamp. Eight hours. We just go through everything that we learned building software products and let's share. So we build all this up. I could stomach three and by the third time I was saying exactly the same thing. According to a script. I was like, I'm going to blow my brains out. That does not have any stimuli for me. I can't do it. So therefore I needed to not repeat myself. I needed to get into that novelty of it. And the ability to have these long stretches of uninterrupted time to do that, that's where I find it. Right like that open space. The funny thing too is it's not just people I can't have around to work. I can't even have a mess. This is why I posted some pictures of my office here in Malibu on Instagram.

[Patrick O'Shaughnessy]

It still goes viral every few months.

[David Heinemeier Hansson]

It does. It actually just got picked up into sort of some content mill that keeps putting it out because it creates so much engagement. But one of the key moments or points of feedback I would get on that is that's not a real office because there's not a mess. It doesn't look like the desk is used. And I'm like, dude, you don't understand. If I have shit all over my desk, I'm not creating work because my mind will just go to the shit. And it's a bit of like that Marie Kondo where you go through simplifying your home and throwing out all this stuff, and it actually creates free mental space. It does for me. And therefore I need this pure cocoon. It's actually a form of procrastination, and I need to run out of obvious things to procrastinate on before I'll start the real work. This is also one of the reasons why I got so into building software tools. Ruby on Rails, everything else. Many of these tools are functions of procrastination. I have a thing I need to do. For whatever reason, I can't get started on it, but I can do all this other stuff around. Oh, we need this wrench. I should just build the wrench. Like, yeah, yeah, let's wait with the table for a bit. I mean, I really need the table. But first I'm going to design a wrench from scratch so that I can put that damn table together. And that can be a very productive form of procrastination. But it's also just a reality of how I'm able to produce work. And I've just come to terms with that, at peace with that. Very early on in my career, realizing I cannot work for eight hours a day sitting next to other humans.

[Patrick O'Shaughnessy]

So this reminds me of what I want to get to. So you're close friends with Toby Luque? We've had amazing people so far on the show. I've enjoyed every single conversation. But that conversation with Toby is the one that I don't think more than a week goes by without me thinking of it. It's probably when people are like, oh, what should I start with? I'm like, just go there. I was on the phone with a founder who was asking for advice. I was like, man, I need more context of what's going on, I go, but basically on what you said, I go, just go watch this Toby Luke episode, then call me and we can talk. He texts me. He's like, within three minutes, Toby's already dropping gems. And the reason Toby's interesting to me and I want to get to your relationship with him and then his influence, your adaptation of adoption of AI is because one, he's like your favorite founder's favorite founder. And so there's a lot of other founders that I admire. And like my friend Kareem, who's the founder of Ramp, which is like my biggest partner Kareem. He's very similar to you, very similar to a lot of great entrepreneurs. He's like divinely discontent. He like makes something everybody say, this is great. He's like, it could be better. And he's just never satisfied. Therefore, he doesn't like a lot of other founders, doesn't like a lot of other products. And. But he speaks very highly of Toby and likes the way he thinks. And then when you realize about Toby is like, everybody says, oh, like, you know, I'm an independent thinker. But Toby actually thinks through every single thing for himself. So therefore he has all these ideas and beliefs that are not correlated with one another. When I ask him a question, I have no idea.

[David Heinemeier Hansson]

That's the hallmark of a great debating partner. You don't know what they're going to say.

[Patrick O'Shaughnessy]

Exactly. And that's why the conversation was like, incredible. I was like, oh, this is phenomenal. Now, if I didn't have to catch a flight, we would have. We were talking before and after. It was like, man, I have to have this conversation again. So you said earlier, what I also admire about you, and I've been following you for a long time, is like, you'll have an idea, an opinion, you're very vocal about it, but then if you get new information, you'll immediately be as vocal as changing your mind.

[David Heinemeier Hansson]

Correct.

[Patrick O'Shaughnessy]

And you mentioned that Toby really influenced your thinking about using AI. Can you go into that?

[David Heinemeier Hansson]

Yes. So I was as excited, I think, in the abstract as anyone. By the advent of AI, we get to see ChatGPT and all of that early three plus year ago enthusiasm for the general distribution of AI. Incredible. We can make computers do that. Wow, I love it. But I had a far greater skepticism of how soon and how much it's actually going to have a material impact on how I write code, for example, and that was informed by what was present at the time. At the early stages of this AI revolution, we were Getting autocomplete. You were sitting in visual code or studio or whatever and you were trying to write something. And the AI would be like this pestilent coworker who's like, let me drive, let me write it for you. I'm like, can I just think for a second? Everything we just talked about, like, that isolation. I want to be able to sit and I want to be able to think and not get constantly interrupted. It was that on steroids. It was the open office on steroids. It was everyone walking by like, hey, can I write on your keyboard? No, you can't. Get your grumpy fingers off. I want to type this shit myself. So I didn't like that at all. And I therefore locked in on thinking, this is what AI is going to be. And Toby clearly saw much further ahead. His eyes were much further up. It's funny, now I'm racing with Toby and one of the things we talk about all the time is, where are your eyes? The difference between a great razor and a mediocre razor is very often, where do they look? If you're looking at the turn in where you're supposed to turn, not at the apex, you're not going to hit it. It's like the old adage, you go where you look. So this is why don't look at the tree, you'll steer right into it. And training your eyes to look ahead, further ahead than what you think is actually quite difficult in racing and I think it's quite difficult in business and life in. He had an eye that was just looking further ahead than I was and he was going, yeah, but it's not going to be like this forever. Intuitively had this understanding of the evolution and I'm still not entirely sure, like, what did he see? Like, why didn't I see it? And I'm actually a little frustrated on my own behalf that I did not have the same conviction as Toby did as early as he did towards seeing. Yeah, yeah, you don't like it right now, but just imagine two more years of this. And he wrote a memo to the company internally, I think in 23 or early 24, way before agents doing the work on their own going, I've seen it. This is the big switch. This is what we've been waiting for. This is why I'm here as a CEO, to identify those kind of discontinuations in the trend line. And we need to be a very different company to be able to position ourselves for that and take advantage of that. And now I get a First row seat to the fruits of that. Being on the board of Shopify, I see just how far ahead they are in these. Half the time when I'm getting the presentation on the Shopify board of internal systems that Tobi has is like, this is better than anything commercial. Like, how do you have these incredible tools? They have a tool, for example, called Scout, that analyzes the customer feedback that they get. Just that their product managers are very well informed about. What are people asking for that? Just sucking out from all these channels where they can ask it anything. Oh, what do people think about this feature? Or this feature? And then they get an answ. And I go like, damn it, I want to buy this. Can you please commercialize this? And you're like, no, just kind of build it for ourselves. Or river, the current system that they have for employing agents to do work and open PRs and everything, like, everyone is working towards that. Shopify is already there. And the reason they're already there is that Toby saw it just so much earlier than the rest of us. Now, there were other people who saw it, but most of them already worked in AI. Toby was running this enormous company at the time. And it's actually quite difficult, I think, at least it looked difficult to me, to be able to be as focused as he is on that main business. I mean, Shopify has a million things going on. And then also having your gaze that high up, looking that far forward towards the next apex, what's coming and then acting on it. And it was his incessant, oh, look at this, look at this, look at this. That got me from, yeah, I like AI, but it's sort of abstract, too. Okay, fine, I'll install Pie. I'll install this, I'll install that. I'll give it a try. And then realizing, oh, actually, yes, this is going to change everything. And that nudge, having someone just constantly nerd snipe you. As in, like, hey, I know a little bit more, or not even a little bit, a lot of bit more about this specific thing. And I'm like, that can't stand. I cannot be the person in this relationship who's not up to date on this shit. So Toby nerd sniped me into just leveling up and diving deeper and setting things up and giving it an extra try. And so much of the ability to move your opinion comes from not these abstract ideas, but from touching things, from actually setting up Open Claw or whatever and getting some experience with it and then having this instinctual feeling of where things are going to go that you're not going to get from just reading someone else do it. You can read a write up of anyone else using something else, but it's kind of like trying to learn how to drive a race car by reading a book about it. You could pick up some pointers, but until you get behind the wheel, it's not going to internalize. It's not going to be something you can actually perform. So I credit Tobi heavily with that, just being a guiding star. And what's so incredible too is he's not running a startup. Well, he is. He would probably say that he is in some sense like abstractly, right, like day one kind of thinking. But. But it's a company of 7,000 people. Most companies, even technology companies that get to that stage and has that level of both history. Shopify has been around for 20 years, is that large. 15% of world GDP on e commerce is occupied with the problems they have at hand. So to be able to be further ahead than I felt like I should have been, running a much smaller company was a great way to almost shame me into getting up to speed. So thanks Toby.

[Patrick O'Shaughnessy]

The best businesses I've studied all figured out the same thing early. Your team is only as good as the information they're working from. And today that team includes people and agents. But most generic agents only have limited information and don't know the most important aspects of your business, like your actual customer conversations, your sales history, what worked last quarter and what didn't. This is what HubSpot fixes. It connects AI to your real customer data. So when you ask AI to write an email, it knows this customer asked about pricing three weeks ago. It knows what campaign brought them in, and it knows that customer already contacted support twice this month. And that changes everything for a startup. When you're hiring, new team members can see how you actually sell. When you're fundraising, your data is clean and ready. And when you're scaling, you're building on something designed to grow with you, not rebuilding from scratch. It's the same platform that more than 300 startups who have grown to over a billion dollars in valuation grew their businesses on. And now HubSpot for startups offers this service at up to a 90% discount exclusively for eligible startups. Visit HubSpot.com startups to learn more. That is HubSpot.com startups. Have you had a chance to nerd snipe him back since then?

[David Heinemeier Hansson]

Yes, on Linux. So I switched To Linux about 2 and a half years ago and first I Had this soft on ramp as most people switched to Linux. I used Ubuntu. That's the most popular Linux distribution. That's fine. I mean, actually it's great in many ways because Linux has all these different distributions. They have Ubuntu and Fedora and Red Hat and whatever, but it's all the Linux kernel. Like the magic of Linux is the Linux kernel and then the ecosystem of all these tools that are around it. And whether you package them in this one way or package them in this other way is not the make or break of it. So just getting into Linux for me was a huge thing. I'd been on the Mac for well over 20 years. I was completely a Mac head. As in thinking, this is a Mac is computer. Like, I don't want to use another computer. Windows certainly is not for me. I don't know. Linux is for people who like pocket protectors and just the kind of nerd that I can relate to, I can respect. But it was not a me thing. Then finally Apple pissed me off enough that I thought, I cannot in good conscience continue to spend money on their products if I have such deep disagreements with how they run the company. So fine, I'm going to try something else. And as I said, I gave Windows two weeks and I realized, man, shit, I can't do it. I'm going to come crawling back to the Mac if there's not something else. But thankfully there was Linux. So I discovered Linux. Spent like five minutes realizing, okay, maybe I can't do this. After two weeks I'm like, okay, fine, I can. I'm committing to it. I'm going to burn the boats off with the Mac computers. Committing to Linux and then of course just getting completely sucked in. Oh my God, I can do everything on this thing.

[Patrick O'Shaughnessy]

But didn't you said you discovered like a subreddit or something like that?

[David Heinemeier Hansson]

Yes.

[Patrick O'Shaughnessy]

That really was like the turning point in this. Correct, yes.

[David Heinemeier Hansson]

One of the reasons I loved Apple as a company and their stewardship of the industry was the design was their taste. They make beautiful products mostly. They certainly make still beautiful hardware. And for a very long time they were also the leading bar for software quality. Just sweating the details and making sure everything was aesthetically pleasing. Which to me is an incredible part of why I like computers in the first place. I like all the little subtlety. I like just the right font, just the right border curvature. I like things to look nice and behave nice. And Apple for the longest time was the undisputed leader in that. Especially when you compared it to Windows, which was the epitome of having no taste of having no sensibility about how things should look and having no cohesive vision for what a computer should be. It was all these disjointed parts and then I find Linux and I look, man, this is like even a temo version of Windows. It looks like a cheap copy of something Redmond would have made. And that was already crap. Why would I want that? Well, on Reddit there's this amazing subreddit called R unixporn and it's basically a showcase of for these nerds who spend in many cases hundreds of hours personalizing their Linux distribution and setup to the point that it doesn't look like anything else you've ever seen. To the point where it looks like it was made for a movie, like a hacker movie where you see like all the Matrix characters scrolling down the screen and just looks cool. Now sometimes it just looks cool and it doesn't actually work that great. But when I discovered that I went and if these nerds individually able to make Linux look this cool, if I just take it back 20%, not as over the top as what they're trying to do and bake it all into Linux, we can make something that's competitive with the Mac.

[Patrick O'Shaughnessy]

Pollan, you said something interesting. I'm gonna interrupt you real quick. That they were like kids. You told me this story about some like 22 year old Polish kid that like smoked Apple.

[David Heinemeier Hansson]

Yes. So this is one of the other things I love about this ecosystem. Everyone goes by a handle. It's like the early days of when I got into computers. The reason I actually got into computers was for video games. And I didn't have enough money to buy the video games, so I got into pirated video games, which meant I got into the wares scene. It's with a Z at the end. Everyone had a handle because it was kind of like illegal. You were trading copyrighted goods. My handle, by the way, Webster, I don't know why that was or whatever it was. Webster and everyone else in that scene had a handle. And I hadn't really thought about handles in a long time. The demo scene at the time had the same thing. But then I discovered this Unix porn and this subculture of people who work on this and they all had handles. And this one Polish kid who goes by the handle of VAX free had built the tool that 3/4 of everyone on this Unix porn subreddit was using to build their. The rice. That's what it's called. The Rice they rice out the Linux distribution. It's called Hyperland. And it's just this one. I mean, I call him a kid. He's, I don't know, 22, but when he first made the first version, I think he was 19, 18. One kid out of Poland comes up with this window manager, which in its essence is not a new concept. There have been these window tiling window managers on Linux for a long time where you basically, you don't move windows around with your mouse, they tile. So you open a new window and they reposition and all the windows are already available, but they all look again like they were made by people who did the Temo version of Windows. Like just not aesthetically pleasing. Maybe highly functional, maybe fast and maybe productive for some people. But I need the aesthetics to live. I need it to be beautiful.

[Patrick O'Shaughnessy]

And Apple never did this the way.

[David Heinemeier Hansson]

And Apple never did this. Apple has been stuck, as has Windows, largely, although they're sort of trying to ape some of these things. In the original Xerox pattern. Like here, Windows, you have a mouse, you drag a window around. And a lot of the interaction with the operating system is the mouse. And the mouse is an incredible tool for learnability. Anyone who has just a rough conception of like how I move this thing around, they can use almost any app because everything is sort of explained. But if you're interested in productivity, it's a terrible tool. This is why all the cracked programmers, they're all about their keyboards, right? And they're all about hotkeys and short keys. And they require a lot of investment to learn. But if you learn it, you can fly. It's just like putting on a goddamn wingsuit and you go 200 miles an hour and there's cliffs all around. And it's not explained how everything works. You have to learn, you have to internalize it. And I was like, I've been using a computer for, I don't know, 40 years. I've always used a keyboard, yes. But I've not been driving my computer through the keyboard. I've always had that little mouse. And here is an operating system, Linux plus Hyperlink, where I can drive it all through the keybo and it can a be super fast and to use because everything's just a keyboard command, it can look amazing. And the core engine to make that work, that tiling window manager, Hyperland, is made by this crack kit from Poland that goes by a handle and has an anime avatar. I love it. I mean, it's just such a throwback to what computers Used to be when they were more about fun and this artsy expression. The funny thing about the original wear scene, the pirated software scene was it was kind of overlapping with the demo scene. And the demo scene was all about how do we use these wildly underpowered, by today's standards, computers to make incredible computer graphics. So they put out these demos and these two scenes would meet the demo scene would produce the intros to the cracked games so that you'd see this really cool video before the game loaded up that basically this game was cracked by evilhead24. Right. And I just thought, wow, it looks so cool. This is a resurgence of that. The computers can be fun in that way and they can be a bit whimsy and they could be made by pseudo anonymous individuals and the combined sum of it can be better than the top five most valuable company in the world. A trillion dollar organization that has four, 40 years of history caring about this and unlimited resources, unlimited people, and still the crack kid from Poland can beat him. Absolutely amazing. So then once all those pieces started falling together, I was not just sold, I was. I flipped. As you said. I used to have a perception of Linux, that this is server tool. I use it all the servers we've ever run. But running it on the desktop, that sounds like something for people who like to update the firmware on their printer. Not fucking me, man. I don't want to update the firmware on my printer. I just want the things to work. And I realized, you know what? That's not all Linux could be. Linux just has all the Lego pieces. Someone could put those pieces together for you and you could get the Millennium Falcon or the Taj Mahal or something incredible that looks great and is ready to play with. And I went like, well, okay, if no one else is going to do that, I will. I'll take half of UNIX porn, I'll take Baxtery's cracked Hyperland and I'll slap it on top of Arch Linux and we're going to make Amachi. And that's what I've spent like a shocking number of hours over the last year building.

[Patrick O'Shaughnessy]

Thousands.

[David Heinemeier Hansson]

Thousands, yes, that's probably fair at this point, that it became an obsession. And it became an obsession in the same way we were talking about where it's not because I had a grand roadmap. Oh, I need to do this. I just picked up the thing and went, Here's 75 things that are wrong. This thing is slightly misaligned. This is not right. The colors are not correct. It's not all integrated, the themes aren't coherent and so on. And then I fixed five of them, put it back down like, oh, that's better, it's more pleasurable to you. Picked it up again, fixed another five things, picked it up, picked it up, picked it up. Until I finally had something that felt like, this is good. And not only is it good, it's goddamn better than whatever else is available commercially, certain than what Apple has to do. And again, better is this. It's better for me. But what I always realized is that every single piece of product that I've built started there. I got to make something that's better for me. And if I can get beyond that point, that I would rather use this than that. I know I'm not alone. I know I'm not that special. I know that there's going to be tens of thousands, maybe hundreds of thousands, potentially even millions of other programmers or just computer users who like computers, who are going to be like me, who's going to appreciate the same aesthetics, who's going to appreciate having an operating system they actually own that can migrate, especially now with agents that can make bespoken their own, but they just don't want to put in 2000 hours of up front to get access to that kingdom. So if I give it all to them in a prepackaged omakase ready to use Chef Choice edition, then they can get invited to it. And I did exactly the same thing with Ruby back in the day. There's great parallels between these things. When I first picked up Ruby back In the early 2000s, it was an obscure programming language out of Japan that only a handful of people in the west were using. And it didn't have a killer app. It looked really good and people using it for small things here and there. And then I went, this is incredible. This guy has the right vision for what a programming language should be. If I take it and apply it to the thing, I want to build web applications, I want to build BASIC M and then I built the tooling around it. I can get other people to realize the magic of what's here. And it's exactly the same thing with Amache. Linux is incredible. It's one of the seven wonders of the software world. It is the largest open source code base in the world, is like 40 million lines of code. Like literally millions of man hours have been poured into that collective process in a way that was not always obvious it was going to work. We talked about Microsoft a bit. The famous quote from Steve Ballmer back in the early 2000s was that Linux was a cancer, that it was going to eat everything. It was going to be very disruptive and very negative for the software industry. And it turned out exactly the opposite. Today Linux runs on billions of devices. Basically, anything embedded is Linux. Anything server is the Linux. The one final thing it hasn't cracked is the desktop. And I just go, why? Why shouldn't it? We can just make it so good that at least technically minded people will realize that this is just a better option. And they'll pick it. Of course they'll pick it. Because if I show them something that's better, of course you'll realize. I mean, that's a pretty naive instinct to it, but that's my driving principle. If I make something better, people are going to realize it's better and they're going to use it.

[Patrick O'Shaughnessy]

Okay, but this is actually really important because last night I kept going back. You know, basically I have these conversations. Selfishly, I just like, there's shit in this person's head that is valuable to me. I can pick out. You might give me 50 ideas, I might grab two and use them in my life. And my life is a better as a result of that. And so I'm intensely interested in that. So last night I kept asking a question. I wasn't getting the right answer. I was just trying to figure out what actually drives you. Right. You mentioned earlier, you know, I thought this was absolutely ridiculous where people forever would describe you and Jason and the business you build as like a lifestyle business. It's like, I don't know, the guy started out making $15 an hour, now he's a $15 million car. What kind of lifestyle is that to you? You live in a one bedroom apartment and have to kiss his VC's ass so that you can make payroll next month. Like which lifestyle do you want? I don't know what you're talking about here. I thought that that critique was pretty weak if you actually analyze what's going on. But what I realized, like, it's not money, obviously. You grew up without money. I grew up without money. Once you get money, you realize, yes, it's valuable, but it's like the return on it diminishes really, really rapidly. Right. So you're definitely not driven by money. I was like, okay, well this guy's just like introverted and just loves making things. You're definitely driven by making things. Yes, but then you have this other element that maybe, in my opinion. Tell me if I'm wrong. You have this like Fierce desire or almost need for control and independence and freedom.

[David Heinemeier Hansson]

Right? Yes.

[Patrick O'Shaughnessy]

And so we started talking about Amachi, am I saying correctly? Last night? And then you realize to the point where you're like, yeah, if anything happened with Basecamp, I wouldn't start another business because I wouldn't want customers. So, like, me and Rob, my partner Rob, he was over here this morning. We were laughing about what you said last night. So I want to get to that where you're just like, yeah, it's like you have, like, fuck you, money, and you have financial independence. But then there's another thing that you transcend. You don't even have any customers, and your whole thing is just, like, the love of making something for yourself.

[David Heinemeier Hansson]

Yes.

[Patrick O'Shaughnessy]

And then putting it out to the world, making something great. And the reason I bring this up is because. Explain why you named it omachi.

[David Heinemeier Hansson]

So amachi is three words to put together. It's omakase, which is chef's choice in Japanese. And it's usually applied to restaurants. Like, you go to a sushi restaurant, and they just start serving you great food because they know better. They've been making this goddamn sushi for a very long time. And the chef who gets to be the one who picks it has probably been making it for decades. What do you know? You don't know shit. You don't know what's good. You don't know what order it should come in. You should just sit down and hand over your sovereignty for this meal to this person who's more competent than you, and then open your trap and eat it, and it'll be delicious. Like, this is actually the best way to experience all sorts of things, that there are people in this world who have spent more time than you getting really good at figuring out what quality is, and they hand you that quality so you can just enjoy it. What I found is a lot of people have a very difficult time articulating what they want, but they can appreciate quality instantly. They can just know, oh, this is good. Yummy. This is some great sushi. Right. They don't know what to ask for, how to season it, or whatever. Funny anecdotes. One of the things that always tripped me up when I came to the US Originally, that will crack Jason up, is the notion of the construction kit burger. So my mind was blown when I came to the US From Denmark, and I would order a burger, and I would just be handed the parts like, here's the bun. Here's some lettuce. Here's some pickles. Here's the meat. And I'm like, what is this, a construction kit? Am I supposed to put it together myself? You can't even assemble my food for me. And I'm like, there's something deeply American about this. Like, no, I know best. No, you don't know shit. You are ignorant as fuck. Let a chef prepare the food for you, God damn it. Why would you want to get your hands dirty like this? So I had that reaction right from the get go that I love delegating my limited sovereignty when I don't know something or I don't know more than the other person about a given thing, right? I want the best people in the world to prepare the services and products and food that I then get to enjoy. Because it's like leveling up, cheating almost, right? And I thought, you know what? I really like that principle and I will also apply it in reverse on my own accord, that if I know something about programming about using Ruby or about using Linux, I can pour all of that competency into a package that you just have to sit and enjoy. So that's what a mokase is then. The other part is arch. We talked about that. That's the Linux distribution run by a gang of volunteers for the past 20 plus years. It doesn't have an organization, it doesn't have a lot of fundraising, it doesn't have a commercial structure around it. It's just a bunch of nerds who share the burden of distributing Linux. Amazing. And then the last bit is hyperlink. So that's Beltomachi. And it turns into being this sort of constellation where I take there's a trillion tools in Linux lan. There's a million ways you can configure your system. You can have all these themes and apply them. I will pick them for you. I will not give you a construction kit burger. I will give you an omakase sushi meal. And you may do substitutions. You may realize I don't like that. Fine, fine, fine. But you're going to start from a base that works. You're going to install this system, by the way, in four minutes. This was one of the things I got obsessed with really early on. I would get a new Mac computer. I actually just got a new one for some testing I needed to do. And I would set it up. And I think the Last one took 42 minutes to set up because it needed a software update and needed some things. I'm like, this is unreasonable. These computers are about a trillion times faster than what put us on the Fucking moon. And you're telling me it takes 42 minutes for a new computer to be ready to use? This is preposterous. So I just got obsessed with this. How quickly can we install a system that's fully ready to go and use? And we got it down to about two minutes. You insert that USB key with Amachi on it, you fill out, well, this is my username and my password. And then two minutes later, you're ready to rock. All of it is there, right? And I just thought, so many of these things we just take for granted. Oh, yeah. Getting a new computer is just hours of work. Setting it up and getting it ready for real work. Like, no, it's not. Someone could just do that for you. And collectively, we could save trillions of man hours every year. This is part of why I love actually sharing these things, because I get this indignation about world productivity. When we're subjecting humans everywhere, millions of them, maybe even billions of them, to shitty tools, shitty setup processes, we're robbing the world of progress. You could have taken that trillion hours that people have spent 42 minutes setting up a new computer and apply them towards productive outcomes. And I don't know, we'd have flying cars by now. And I just feel like, you know what? If I can assist in that process somewhat and take some of that drudgery out of the world gears, I've done my little part. I've added a little bit of oil so that everything glides a little more seamlessly. And especially if we do it in a way that's aesthetically pleasing, I've actually contributed to the light and lightness in the world. We should all be surrounded by beautiful things, including beautiful computers that just work out of the box and are ready to use. So that became sort of that dual mission. A. I wanted the very best computer for me. Suddenly I had found all these building blocks where everything I was ever annoyed about with how the computer work, I realized I could change it all the code was there. Everything could be rewritten and reconfigured so I couldn't get exactly what I wanted. And that just became an obsession. I have this affliction where when I see something that's not quite right and I have the power to fix it, I can. Nothing else matters until it's perfect. I will polish that thing until every single quarter millimeter is perfectly round and just. I cannot do anything else. And in fact, it's not always great. I will say, as a person who has other obligations in life than Rising Linux. There were moments of that journey where I essentially just went on a hermit trip and just went, I will learn everything there is about this. It's just that I can make the perfect computer. And it becomes a bit of an obsession. And thankfully it doesn't last because at some point the ball literally is a perfect sphere and it's beautiful and it has just the right texture and light and color. And then I go, okay, now I've made this beautiful thing and I enjoy it more than anything else. This is the best computer I've ever used in my life. So if it's so good for me, it should be good for other people, I should share it. And so I did with Amache. And what's funny was I actually made a version before Maci called Amakube, where I took that Ubuntu thing we talked about, like that thing everyone who starts on Linux uses. And I tweaked it a little bit and made it look more, a little bit like a Windows or a Mac. It felt familiar and the misconception that I had, and I think a lot of people in the Linux world have had, if we just make it as close to Windows or Mac as possible, then they'll come. But no, they won't. Why would you want again the Timo version of Mac or of Windows? I don't need a cheaper version. Then you have to appeal to these high minded ideas. Well, free software, as in speech, nuzzles and beer. Yeah, okay, there's 0.001% of the population gives a fuck about that. Most people just want the best thing and your job is to give them that if you want to win them over. So I just went like, no, let's make something that's radically different. Like this computer will not work like anything you've used before. In fact, you won't even be able to operate it right out of the box because it's all keyboard driven and you'll have your little mouse and you're like, there's nothing on the screen. Where's the icons to click on? And I will go like, no, here, let me show you a cheat sheet. You got to learn these 15 key bindings before you can do anything on this computer. Here's your syllabus. Sit down and study, boy. And by the time you have learned the first lesson, you are ready to use this computer. And we've already forked the timeline, right? I've already said like every other computer in the world is very focused on like, oh, let's make this as approachable and as learnable as possible and go like, no, fuck that. That option is covered, it's great. But let's get something else, let's build something else. And then it took off. And I found that that's very often true about products. You enter some domain and you think like, oh, I can just. If I. Who's the best? Can I just copy them? And then I'll do a slight tweak. That's not gonna work. That's not gonna unseed anything. Right. All the best ideas that actually turn out to have an impact on something, they sound stupid at first, they're not intuitive, because that's where all the value has been locked up. It's been locked up in this misconception about what people actually want. Because most people don't know what they want. You actually have to give it to them in a form that's beautiful and approachable and quirky and a little bit weird and maybe a little bit off putting at first. I find that in all sorts of different domains. Some of my favorite car designs, when it first premiered, the McLaren 720s, it has these sunken in headlights that when I first saw it, I thought, this is the ugliest car I've ever seen at this level. Now it's one of my favorite car designs at all. So I think you gotta be able to work in that space where you have a high tolerance for people telling you what you're building is stupid, what you're building is ugly. What you're building is never going to work in the real world. When I get that feedback, I'm no mon to something now. You can't just get that feedback. There's also got to be a few people who like what you're doing. But Kathy Sierra, who is one of my all time greatest writers on what animates users and good products.

[Patrick O'Shaughnessy]

I'm going to interrupt you because this is the power of ideas. This is why I'm addicted to podcasting. Because I didn't know who the hell Kathy Sierra was until I learned about her through your and Jason's writing. Then I go consume her and you're like, the best way to market is to out teach your competition.

[David Heinemeier Hansson]

Bam. That's all I do. Bam.

[Patrick O'Shaughnessy]

That's literally what I do.

[David Heinemeier Hansson]

Bam. This is.

[Patrick O'Shaughnessy]

That idea helped build both like the first podcast, which then helped in turn build this podcast. It was super valuable to me.

[David Heinemeier Hansson]

It built all of 37 signals.

[Patrick O'Shaughnessy]

If you could buy that idea.

[David Heinemeier Hansson]

Yes.

[Patrick O'Shaughnessy]

In my life, literally, it's worth tens of Millions of dollars to me.

[David Heinemeier Hansson]

Yes. And it's all down to Kathy Sierra and her writings on the Internet in the mid 2000s. So outspent versus out teach. Just to linger at that, because I think it applies to all of this, as you said, applies to podcasting. It applied to Basecamp. We talked to every fucking thing. It applies to everything. Because when we launched Basecamp, we didn't have any money. We had a tiny team, and Microsoft had all the money and all the whatever. They could swallow us up. What we then had to fight back with was not more banner ads. Right. And we're not going to outspend them on a marketing campaign that was never going to happen. But we could out teach them. We could have better insights, and we could share them, and people could resonate with that and then reciprocate by buying our products. At least some percentage of them, even if it's a small percentage, that has been our operating strategy for literally two decades. And it's exactly the same thing.

[Patrick O'Shaughnessy]

I know. If you can. It's also better for the world.

[David Heinemeier Hansson]

Yes.

[Patrick O'Shaughnessy]

Because you guys are putting so much work. You're capturing a tiny percent of the

[David Heinemeier Hansson]

value that you've created.

[Patrick O'Shaughnessy]

You put out so much more value now. Even a tiny percent of a huge number gives you a $15 million car, which you won't have to keep hitting on.

[David Heinemeier Hansson]

Right.

[Patrick O'Shaughnessy]

But, like. But, like, the world is big. The Internet is very big. But I told Jason this, who now I've become friends with and just, like, love spending time with. We just had lunch together, and I went to go look at construction project he's doing right now, and I was like, dude, I was by myself. Like, I didn't have any employees for 10 years. You make project management software. My project's in my fucking head. All I could do is buy your books, which I did. But I was like, I'm so glad I just.

[David Heinemeier Hansson]

As soon as you had. You did.

[Patrick O'Shaughnessy]

Hey. I was like, oh, now I can give you money.

[David Heinemeier Hansson]

Right.

[Patrick O'Shaughnessy]

You're hitting on something that's really important. Why? What Kathy says is, Is.

[David Heinemeier Hansson]

Is valuable.

[Patrick O'Shaughnessy]

And this is something that Charlie Munger would talk about. Who's my hero is just like, if I can only learn from one person, to be Charlie Munger. And he's like, there's a deep desire in human nature that is ever present and never changing. And it's the desire to reciprocate.

[David Heinemeier Hansson]

Yes.

[Patrick O'Shaughnessy]

I feel you have done something for me by writing those books, by going on those podcasts, by talking at surf school. And as soon as you give me an opening to reciprocate, I will do. So I'm really tight with the Spotify team, right?

[David Heinemeier Hansson]

Yes.

[Patrick O'Shaughnessy]

Daniel, Gustav, all the top people there, Alex, everybody else, Roman. And, you know, we. I fucking fly to Europe. I've been there four times in like 14 months just to talk podcasting, because I'm obsessed with this. And the crazy thing is these common conversations is there's like, you know, a weird thing that we see in podcasting is they have like, private feeds and you can do like, you know, this content's free. If you want to buy another podcast, it's X amount of dollars per month. Like, most people never even listen to the content. They're just looking for an excuse because your podcast gave them so much value. That will always work. It worked Today, it worked 100 years ago, and it will work 100 years from now.

[David Heinemeier Hansson]

I choose to believe that. I don't actually know if it's true, but I think it is how we build a business. Up until this point. I will say that I'm starting to see some cracks in that reciprocal exchange.

[Patrick O'Shaughnessy]

Tell me about that.

[David Heinemeier Hansson]

It's not because the human part of the link is broken. It's because the algorithms have changed things. So for Jason and I, for the longest time, what we did was exactly that. We're just going to out teach. We're going to put out so many observations, lessons, experiences, software, open source, whatever, into the world, and we're just going to hope that a small percentage of that trickles back. And it used to work, especially on Twitter, where you'd build up a following and if someone followed you, they'd see all the stuff you're sharing. This is Gary Vee's jab, jab, left hook. And you do all the jabbing, you do all the here's free stuff, here's free insights, here's free observations, here's free software. And an occasion you'd go like. And now we have a new version of Basecamp. Check it out. Right? What's broken now on the social platforms is that that my followers don't see anything I post unless it goes medium viral, because everyone is now in the algorithmic feed. So I follow someone. It's just like this little drop in the signal and it kind of breaks that reciprocal exchange, at least on those social platforms. This is one of the reasons why I love podcasting. There you have subscribers who actually get things straight into their feed. It's not that cool with me. And I love newsletters. I have newsletters as well. And a bunch of my long form writing goes into that because then I'm assured that at least it shows up in the inbox. But both of those outlets are minority outlets compared to the behemoth that is social media. And I've seen some of it break down a little bit. I don't know what that means. I'm going to continue regardless of whether it works as well as it did in the past, it does in the future. And I'm still going to bet on the fact that someone who does get exposed to the ideas we have or the free software that we give away is going to be feel some connection to what we have. And then if there is an opportunity, maybe not even for themselves, but they spot it in others. Like as you said, hey, I'm one person, I don't need Basecamp. But you hear of someone who's complaining about setting up projects on complicated ClickUp or not working email and you go like, you should check out Basecamp.

[Patrick O'Shaughnessy]

We're starting to use it for the podcast because. Because we're vastly increasing the amount of of episodes we're doing and the amount of people I have to talk, like stuffing the top of my funnel for interesting people I talk to. And me and Rob, who we had dinner with last night, like, we go back and forth and we're going over text message. And then the other day I was like, bro, what happened? Like, I think we're like losing the thing here. He's like, we should use base camp.

[David Heinemeier Hansson]

You're the classical example.

[Patrick O'Shaughnessy]

This is the point though. You guys have provided so much value to our lives. We're not like, oh, maybe use base camp or maybe go look around. It's like, I don't even give shit. These are my guys. I'm just going to use their thing. Deal is how the best founders turn the world into their talent pool. I've been studying how history's greatest founders operate for a decade, and one thing they all have in common is they understand that recruiting and hiring the very best talent is your most important priority. A players recognize other A players, which is why top Companies like RAMP, Shopify, 11Labs, Uber, and DoorDash all use Deal. Many of the top founders I know have personally invested in Deal after using their product, and what they discovered is that Deal is the best company in the world at building infrastructure for global hiring. Deel will help your business hire, pay and manage any worker anywhere in the world. So you can retain the best talent anywhere and spend the rest of your time focusing on what you do. Best delivering value to your customers. The founder of eleven Labs has a great description of the value DEAL can give your company. He said, we built eleven Labs to break down language and communication barriers with deal, enabling us to hire and support exceptional talent anywhere. We can accelerate our innovation and bring more voices, stories and ideas to every corner of the world. Deal is trusted by over 40,000 businesses. Learn how they can help your business today by going to deal.comsenra. that is deal.comsenra. i want to go back to a fundamental understanding of you though, because I love this transcendence of like, you deeply desire independence and freedom and control. And so that's why you're anti investors and you don't have a board of directors. It's just you and Jason making all the decisions, right? But then you introduce this other level of transcendence last night. It's like, oh, no investors, it's one level of freedom. How about no customers is even higher? So your point is like, I'm gonna put 2,000, 4,000 hours of my time into this. I'm going to craft it, I'm going to make sure everything is perfect, and then I'm going to give it to you. But then you said something last night where you're just like, well, what if they have feedback for you? What was your response to that?

[David Heinemeier Hansson]

I love feedback. If it's well grounded in solid observations, that can give me new insights. But a lot of feedback you get on the Internet does not fall into that category. It's just like, you looked at this for five minutes, I spent 4,000 hours. And you have some knee jerk reaction and you want to tell me how to do it. You want to tell me what I should do and what I shouldn't do? Well, you can go fuck yourself, right? And I actually get that indignation just stemming up. I've been working on it, but just this sense of like, this is not a reciprocal exchange. I gave you something of tremendous value. Now you can choose to ignore it or say it's not right for you. That's completely fair, right? Like, that's a good exchange. Like, okay, thanks for the gift, but no thanks. But if you take my gift of 4,000 hours and you go like, well, I'll give you five minutes and then I'll just dump shit on you. What? You didn't pay me anything. Like, that's a privilege you have to pay for. If you want to tell me ill considered feedback on anything I make, you got to pay me. And you can do that with Basecamp. And you can tell me, and then you're a customer and then your customer, and then I know we have a different relationship now I will actually say thank you. Even though I think maybe knee jerk reaction too on my part that this is not the most well considered piece of advice. I will take it in because we've had an exchange and there's a reciprocal nature there, but I actually appreciate more to transcend above that. And I don't have that obligation with you. I am sharing something with you and I don't owe you anything. I mean, you technically don't owe me anything either if you don't accept the gift, but if you take the gift, you actually do owe me something. It you do owe me just a modicum of respect to look at this more than five minutes before you just dump your shitty ideas onto me. Or even worse, it's not so much about the ideas, it's when people try to tell me what to do. And this is the go straight back.

[Patrick O'Shaughnessy]

This is what I hit on last night.

[David Heinemeier Hansson]

That's. That's nerve, right?

[Patrick O'Shaughnessy]

Yes.

[David Heinemeier Hansson]

The nerve is I have worked very hard in not just my life, but in business to have damn near close to total independence. So no one can tell me what to do, no one can tell me, no, no one can tell me what to work on, no one can tell me what to do. And Jason and I have structured our entire business around that concept of pure independence. We don't have any investors who get to tell us what to do. We don't have a board to tell us what to do. We do have customers and they get some claim some of the time to sell, at least in aggregate, what to do. Because if no one wants to buy the things that we're putting out there, the business is not going to continue. So they get some good influence there. I find that tolerable. That's a tolerable exchange. I put a product into the world, you pay me some money, I will listen to you.

[Patrick O'Shaughnessy]

Fair.

[David Heinemeier Hansson]

But I appreciate the transcendence to the next level. I don't even have a commercial relationship with you anymore. We can still have a great relationship. One of the reasons I enjoy open source software so much is because I get to collaborate with like minded people about making things better. Right? So if I give you the gift of 4000 hours on Amachi and you then tweak a few things and you send a pull request back on GitHub and say like, here's something, I go like, awesome, now we're in business. Now we have a Little club, let's make this amazing together. And that feels so pure. And not because I'm against capitalism at all. I'm a huge fan of capitalism. But I've also realized at some point when I retire, it will actually be a retirement from capitalism. It'll be a retirement from customers. And the economic exchange and 37 signals is quite likely. My last business, I made the money I needed to make to live the life.

[Patrick O'Shaughnessy]

Three times.

[David Heinemeier Hansson]

Yes. That I would enjoy to live for the rest of my time. Right. So at some point, either the business ends just because circumstances end, or Jason or I just get get tired of it. And then I will transcend to the next stage of not having any customers at all and then continue to make things and continue to share things, but without any claim other people have on my time or my attention or where I want to go with it.

[Patrick O'Shaughnessy]

Okay, so this leads us to another thing I want to talk to you about, which is that capitalism actually works.

[David Heinemeier Hansson]

Right.

[Patrick O'Shaughnessy]

And what I like about you is like people in the tech industry act like they don't like money. Money. Right.

[David Heinemeier Hansson]

And my point is like they pretend act like they don't like money. Exactly. They all do.

[Patrick O'Shaughnessy]

Yeah, exactly. And so my point is just like there is how you make money actually matters.

[David Heinemeier Hansson]

Yes.

[Patrick O'Shaughnessy]

But to me, it's like the best definition of business I ever heard actually came from Richard Branson. He says a business is just an idea that makes somebody else's life better. That is why. And there's infinite ways to make somebody else's life better. So therefore there's always gonna be infinite opportunities in the future.

[David Heinemeier Hansson]

Yes.

[Patrick O'Shaughnessy]

If you make a product that other people love and it makes somebody else's life better that they decide to give you their hard earned money in exchange for like that is the system working? What I like about you is again, I think you guys had this counter narrative where it's just like we price independence. We want to do things for decades. We want to build the products for ourselves first and then just find the other like minded people. But you're not shy about, yeah, here's my Pagani. And here's this floating desk in Malibu that now goes viral all the time. And so we talked about this a little bit last night and you said a straight line. He goes, yeah, that's an example that, that capitalism works. It's not just like you're look at

[David Heinemeier Hansson]

the shit that I have.

[Patrick O'Shaughnessy]

That's not what you're doing.

[David Heinemeier Hansson]

I actually think there's some obligation of people who've been able to make Things work to show that it did work, that it is a carrot that you

[Patrick O'Shaughnessy]

put out to others.

[David Heinemeier Hansson]

I think it's completely legitimate to be motivated in part by wanting to have nice things, that you have a dream car that you aspire to. I certainly had that as a kid. I thought, like, oh, look at all these cool cars. I didn't have any concept that I'd ever have an opportunity to. To reach that and afford it. But it was part of a driver. I think that's a good thing. Part of capitalism, we want to better our lot. And some of that is material. And there's no shame in that whatsoever. And not only that, I think there's a second order of capitalism. You have an obligation. If you sell a product or service and you make a lot of money on it, put that money back into the system. Send some of that money to the craftsmen of Italy to create you a beautiful Ferrari. Right? Like, there's someone who has to stitch that seat such that it is just right. There are engineers who are putting together that car such that it exists in the world. We would not have Ferraris to pine for if no one bought them. And who can buy them? The people who've been successful in other parts of their business. So therefore, it is your moral obligation to buy a Ferrari if you do really well, or Lamborghini or Pagani or whatever floats your boat. But you should be sending this forward. This is how we get to have nice things. Not everything can just be boiled down to, like, needs. Men need more than just bread to live. We need beautiful Ferraris even if we don't own them. This is one of the things I love so much about cars, is that they're actually a shared collective enjoyment. The number of times I've driven in a nice car, next to especially kids, because kids have not yet internalized this filter that they're supposed to be cynical about. Wealth and nice things. They go like, whoa. And then you rev the damn thing and they go, yeah, right. There's just an instinctual human attraction to beautiful things that make noise.

[Patrick O'Shaughnessy]

Right?

[David Heinemeier Hansson]

It's just joy. And why would you be ashamed of that? Why would you be reserved about that? Unless you feel like you're guilty about how you made your money. I mean, there are some people in the world who probably should be a little guilty about how they made their money. And maybe they don't buy the Ferraris, but for anyone else who's made legitimately good services and products and had success with them, they should be able to celebrate that now is There a line where you turn over to a bore of a braggart. That's nothing about this. I bought this.

[Patrick O'Shaughnessy]

I bought that.

[David Heinemeier Hansson]

Yes, there is. But you can settle that line. We don't have to be either or. You can both be passionate about the things that you're creating and validate why you've made your money in a reasonable way, because you made something good that other people want to pay for. And then here are the fruits of that labor. And this is capitalism. And it's beautiful. It is absolutely beautiful. It's worth celebrating, it's worth exalting, it's worth making an example for. And in fact, in my personal case, I mean, a lot of this also could just be post rationalization, because I like nice things and I don't want to feel guilty about it. But let's just put that aside for a second and focus on the fact that we built 37 signals in a kind of weird way for a software company. Most of our peers, they raised a bunch of money from VCs, and they did all sorts of other things. We built a software company out of Chicago at a time where there was absolutely nothing fucking going on in Chicago inside of tech. And we built it on 40 hours a week. We built it on having a life next to work. We built it on going for the long term. We built it on taking profits out of the business rather than just chasing higher valuations. And therefore, that is a counter narrative to how you can also build a business. And I want to validate that that is a reasonable thing to pick, even if you also want a nice Ferrari. These things are not in opposition. You mentioned the lifestyle business thing, right? I always love that because people are like, oh, yeah, you're just running a lifestyle business. Yeah, I have a business and a lifestyle. What the fuck do you have, right? You just have a business or why would you not want a lifestyle? And my lifestyle happens to include a fucking yellow Lamborghini. So it's not like I'm giving anything up in terms of the material fruits of capitalism, right? Like, these are actually compatible notions. And therefore, if someone is looking at which way should I go, I'm starting a new business, should I raise a bunch of money? Fine, that's one path. And if you need to invest a bunch of capital in, I don't know, factories or GPUs or whatever, you should probably raise a bunch of money. I don't have anything fundamentally against that. I have something against this notion that this is the only way to go. And I also do Have a little bit against it when it comes to software. I always felt it was just a waste. Why are you raising all this money just to have a bunch of programmers to sit around? Just built it yourself. You don't need as many as you think. That was our model. Tiny team building great software, having good success, not taking any money, then producing profits. I know this is a bit of a foreign term in much of Silicon Valley, that's the money you get to keep when you've taken your revenues and minus your expenses. And when you get to keep that profit, you actually become interested in increasing it and that increases your efficiency. And I think actually this is part of my aesthetic appreciation of capitalism and this is why I care about cost so much, because that appreciation is what makes the entire system more efficient. If I'm hiring three times as many people as I actually need, I'm robbing the world of those people who could have gone to do other productive things rather than spin their wheels at my little business when I could have gone away with a third. Right. And then also the more money I spend on expenses, the less I get to keep for your yellow Lamborghinis. So it's really quite simple.

[Patrick O'Shaughnessy]

You have to think of the Italian Craftsman.

[David Heinemeier Hansson]

Exactly.

[Patrick O'Shaughnessy]

When you're going through your expenses and using ramp, because they're my biggest supporter and the best expense manager software like you're. If you don't do this, if you're not running your business on ramp, think of the poor Italian Craftsman. So this is something that history skates entrepreneurs repeat over and over again. And in fact, we were talking last night. I'm going to pull up the group chat that we're in with Jason because I dropped it in there while we were talking last night. Like, you kept hounding on the fact that you just get off on like clipping expenses and like finding it. And I think it's the same kind of refinement of talking to your product design. And I showed you this quote. You're like, oh, I didn't hear this. Great. And so I'm going to read this. It used to be an every single RAMP ad. It says Carnegie, Andrew Carnegie. Carnegie would repeat his mantra of time and again. He says profits and prices are cyclical, subject to any number of transient forces on the marketplace. Costs, however, could be strictly controlled and any savings achieved in the cost of goods were permanent.

[David Heinemeier Hansson]

Yes, he said that 150, almost 200 years ago. It's remarkable how that goes directly to my kind of thinking on. Because I know how hard it is Actually to increase revenue. Like if you already have a going business and you want to grow massively, it's very difficult, it's very difficult to convince customers to part with their money. I try very hard to do so we as a business try very hard to do. Everyone tries to do that. Right. And it's outside of your control. To a large degree. What I can control is my inputs. I can put out the best damn software product I know how, I can talk about it. I can out share the competition or out teach the competition and therefore create this reciprocal relationship with potential customers. But ultimately, I don't get to choose whether they put in their credit card or not. They do. I do get to choose how much money we spend on servers. I do get to choose whether we squander that revenue on needless cloud services rather than just owning our own hardware. Right. These are things within my control and I love things that are within my control because I have this direct input on it. And I can immediately see the result of me taking an action if I cut off a recurring. I mean, it's funny because at this point I really shouldn't have to worry about, I don't know, a $2,000 month recurring expense on something. But oh my God, the satisfaction I get from striking that line. Replacing it either with something that's free or just slightly lower cost is a key part of the mechanics of the business I just really like because I also just have this aesthetic appreciation of an efficient business, like an efficient engine or an efficient computer that's not wasting cycles on things that doesn't propel it forward. Expenses are exactly that. It's taking out these inefficiencies. And very often what I find is when you take out expenses that shouldn't be there, it's not just about the extra money you get to keep. The whole thing gels better when you have a smaller team with better people with higher competence. It's just more fun to work with a tight crew. I don't know many entrepreneurs who don't look back upon the early days with longing eyes. Right. Like just this lost love. Remember when we were just 10 around the table. Now you get other benefits. And I'm sure, I mean, Toby commands an army of 7,000 and can do very different things now and impact the world in very different things. But in terms of just that tight loop of working on something with a small team, it's incredible, right? And a lot of that comes from how do we make that small team, that small company, as efficient as possible? Because Then we can reach further, then we have more resources to do things and so forth. So I just, I love expense reports. I didn't know this about myself, by the way. This is some of these amazing things you discover as you just do it. Right. If, as I told you last night, if you told my 18 year old self, you're going to love going through expense reports, you're going to love finding little lines that you can put a marker around and then go hout until it disappears. I would have said that sounds like an accountant. That's not me. But it turns out it is and I love it.

[Patrick O'Shaughnessy]

All right, so you mentioned the yellow Lambo a couple times. You bought the yellow Lambo after Bezos bought into a chunk.

[David Heinemeier Hansson]

Yes.

[Patrick O'Shaughnessy]

Very early days. And you basically, by your own admission, admission didn't have much of a business.

[David Heinemeier Hansson]

Yes.

[Patrick O'Shaughnessy]

So he gave you a bunch of money, whatever the millions of dollars, you're like, hey, I got a couple million. I got to give at least 200 grand to these Italian craftsmen.

[David Heinemeier Hansson]

Yes.

[Patrick O'Shaughnessy]

Right. So you buy the yellow Lambo. But more interesting than the yellow Lambo to me is what you said where you said that, that what Bezos did, what Jeff Bezos did for you and Jason was gave you the confidence to go for it. Can you explain that?

[David Heinemeier Hansson]

So in the early days of 37 signals that we'd launched Basecamp, it was taking off quite well and we got a lot of interest and outreach from VCs. We counted 40 some at the time and this was 2005 ish. I still had very vivid memory of the dot com boom and bust. I had seen what happened to some of these VC funded companies and the internal mechanics of that. And I didn't like any of it bit. And I also had all these ideas about efficient businesses and what it takes to run. So we didn't actually want VCs. But going back to this point about trusting yourself, I didn't fully trust myself not to get tempted by a $20 million check, a $50 million check, whatever the number was. At a time where my bank account said, I don't know, $8,000. Funny thing, my bank account did say slightly higher than that. When I came to the U.S. i think I had like, like 50 grand that we had worked up as we started Basecamp. The first thing I did as soon as I landed was Jason took me to an Audi dealership and I bought an Audi S4, my first car, cash. And then there was basically all the money I had in my bank account. So I just blew it. All on the car. And I thought, like, we're going to make it back. But this notion that we had something that was taking off, but this is all fleeting. I had great humility that, like, I'd seen many other businesses, oh, it's popping off and then it's leveling off and then it crashes, right? You can sell. Promise. That is One thing the VCs will buy any day of the week, right? A promise. There's a trajectory, there's traction. This is going places. It may be small now, but if we keep plotting the lines, it's going to go to the moon. I'm going to get in early and you can make some money off that. We didn't want those people on board. Jeff showed up around the same time and we thought it was the same pitch, but it turned out it wasn't, right. He was not interested in regular VC deals. That wasn't why he was doing it. I'm not actually 100% sure why he was doing it. I think he just enjoyed getting involved with companies and people that he has an interest in. Anyway, he reaches out and we basically flippantly tell him no, and then politely his team reaches out again, like, no, actually, Jeff would really like to meet. And you're like, okay, fine. I mean, anyone who's actually built something, this is one of my beefs at times with some quarters of the VC community. Like, you're just a money person, which it's actually weird. Why I consider that to be a derogatory. But I do. If the only thing you do is money, I'm skeptical of you. If you've built things and you've made money, let's talk. But if it's just about the money and the allocation, I don't know, I'd rather talk to some builders, and Jeff is certainly a builder to absolutely build something in a very, very different way than we had built our things, right? Like, he went, let's just raise all the money in the world, and I don't care if we don't make anything for 20 years. There's the polar opposites in a lot of ways of how we build our business. But that was also just interesting. Don't surround yourself with a bunch of people who think just like you, who will say all the same things that you think and will think all the same thoughts that you think. Jeff had very different thoughts and it was very appealing. So, anyway, long story short, we ended up giving him a ridiculous term. She. It was just like flippantly. I mean, almost offensively. Overvalued. Like, there was not a lot here. There was a promise. But we then took that promise, and then we just drew the line to the moon and said, we want to be paid as though we were up here. And this is such a stupid number for the time. He's not going to take it. And then he took it, and it turned out to be an amazing investment for him. I mean, I actually wish I had some of the gumption that Jeff has to see that far into it. Like, we've given him his money back many, many, many times over, and he still owns the plot, and every quarter or so we send him another check. Here's your dividends. And we keep on doing that. But that gave us the confidence to say no to everything else. It gave us the reassurance that if this wasn't going to pan out, we at least didn't have to go look for a job, like, the next Monday. And that was an incredible gift. And Jeff then followed up with that gift, not just with the money, but with the. With the advice. And the advice was usually we'd meet with Jeff once a year in the early years, and we'd have dinner, and Jason and I would share our trials and tribulations. And Jeff would go like. We'd ask Jeff, like, here's the situation. Jeff would go, like, what do you think? And we'd go like, well, I think we should do that. That's a good idea. You should do that. And it sounds so simple. It almost sounds like it doesn't have any value. And it actually had all the value in the world. He could have replied with all, like, you should do this thing, and given us a detailed plan, but just that confidence. Here's fucking Jeff Bezos, king of the goddamn world. World in that sphere, telling us he believes in us. He thinks that our thoughts are valuable and good. And the funny thing is, neither Jason or I, I think, generally has a deficit in self confidence. But, like, it's like, there's self confidence and then there's Jeff telling you, no, you're right. Oh, my God. Rocket boost. Let's strap in, let's go. And then in some ways, I think he turbocharged, sort of just that brashness, that indignation. They're like, hey, here's a different way of building things. And we're not shy about sharing that. We build it in a very different way. And a lot of that came from Jeff, and we owe him a tremendous gratitude. And I actually, when I look back upon the things I regret, I Regret not being a little bit more grateful for that. Like, in the long run, it was a really pivotal moment for not just the business. It could have gone a very different way. We could not have gotten Jeff's offer and six months later some VC would have given us a massive check that sounded super impressive and it would have destroyed the business business. And then we would have sold our independence and we would have been fucking miserable pricks. And that didn't happen. And thanks to Jeff.

[Patrick O'Shaughnessy]

So that's beautiful. I got one more thing I want to talk to you about, which I thought was very interesting because again, I think this speaks to your idea of like, you're pretty fluid in your. You have strong opinions, sometimes weakly held. And even though you have been known as like a, you know, basically a VC critic, what you shared with me last night was that in the most difficult time that of your business, that Marc Andreessen was the single most helpful person to you.

[David Heinemeier Hansson]

Yes.

[Patrick O'Shaughnessy]

Can you talk about what was a difficult time and then what did Mark do for you?

[David Heinemeier Hansson]

So in 2021, we had a huge blow up at the company. This was peak woke insanity era. This was everyone posting proclamations about political ideas on corporate pages that had nothing to do with each other. And it was an era where. Where there was a activist group inside almost every tech company in the world pushing these companies to do all these. Almost extorting them to do all of these things. And we kind of got boiled like a frog a little bit at 37 signals. Jason and I were. We had probably seen good intentions in places where there weren't any and allowed things to kind of roll. I mean, it happened quite quickly. It wasn't like something that had been building for 20 years within, I don't know, from 18, I'd say, was where you started to see the first inklings of. There's an activist core minority who suddenly have all these ideas of what the company should and shouldn't do and what's kosher and not, and what's offensive and not and pushing on things. And we're like, ah, we can manage. And then by 21, it became clear that. That if we didn't do something, this could eat the entire company. The soul of the company, the feel of the company, and we could end up with a business we didn't want to be in. This was our business. And I've had moments during that time where I planned like, yeah, you know what? Maybe it's time to retire. Which is fucking preposterous. I still like what I do. I liked the vast majority of people I worked with. I like the business, I like the technology. Why would I want to retire from that? Oh, it's because there's this miserable contingency that's poisoning everything. So we just went, okay, let's just put a hardcore stop to it. And the stop was Jason and I deciding, we're just going to end it tomorrow. No more discussing politics inside of our work channels. We're not going to settle, I don't know, Palestine question inside the same space where we're discussing features in Basecamp. That is not an appropriate venue for having these things. In fact, incredibly divisive to introduce that kind of political energy into a professional environment. And we did that, and we made some other changes. But it was really that thing about politics that ticked people off because there was this core contingency inside of companies very ideologically wedded to the idea that our business was a vehicle for their political aspirations for all these topics. And then there was the larger context of the Internet and especially Twitter at the time that was very engaged in all of these topics, Right. So it just blew up. We put out a memo saying, it's over. And we also knew it was going to be contentious. So after it proved to be contentious, we doubled down on it and said, do you know what? If you can't see yourself at a company where we're not going to discuss fucking Palestine during work hours with your random co workers, we will pay you up to 6 months salary to go somewhere else. And at the time, the job market in tech was just booming, right? Like, everyone was getting offers left, right and center. So this was an incredibly attractive offer. Here's six months salary, and you can get a new job on Monday. It was almost like a mega bonus for getting the fuck out of there. And it was the best money we've ever spent on anything related to culture, maybe anything at all. Of all the things that I bought, that peace of mind we bought with those payouts was just priceless, because what it did was it didn't just cut out surgically, just that bit of cancer. It cut out a thick ring around it. And what we ended up was a culture that was completely cured of all that insanity in one swoop. Now, the patient had a little bit of a rough going for a while, and it was that rough going where Andresen came in, because we're a small company, 60 people. So at the time, 20 took the offer, 20 left. That's almost a third of the company that decided to leave in that moment. And we got to a point where we were thinking, not that many more have to leave before I'm starting to get worried about whether we can keep the lights on. And it was actually Toby who then put me in contact with Mark and Driessen, because Mark had been exposed to these phenomena done at other of his portfolio companies and just even getting that initial exposure, hey, there are other people struggling with this, by the way. Even though you're getting skewered right now on Twitter and being haunted by the mob, this is happening all over. You're not unique in this way, and that's some reassurance. And by the way, here's a bunch of contacts. Do you need someone to come in to help do programming operations or whatever? I know this, I know this, I know this. And I was just. I was floored by the generosity because I think. Well, I don't think Mark and I haven't always seen eye to eye on these things. Right, exactly. Especially in terms of venture capital. He's been one of the main faces of venture capital for decades, and I've been kind of critical at times. And there was just a realization that all those grievances we might have thought to be so big once upon a time were actually miniscules.

[Patrick O'Shaughnessy]

You.

[David Heinemeier Hansson]

We were fighting the White Walkers on the other side of the wall, and all our internal squabbles were going to be for nothing if those fuckers got inside the wall and destroyed everything, all of it. And that felt like a real threat at the time that could have happened. They could very well have just ripped the whole thing apart. And Mark clearly saw that, that this was a collective, almost existential threat to the entire industry. If these activists were able to take over these institutions in the same way that they have taken over academia, we would be fucked. And not just for a little while, but potentially for decades. That couldn't stand. So clearly, when Jason and I stood up and said, we're not doing it, there were a bunch of people who said, great, that they're going first. So they take a bit of the heat, but also, let's help them. And Mark was incredibly helpful. Not just in terms of these. These contacts and instructions that we ended up not needing, but it was very powerful. When you have literally 40,000 people on Twitter calling you all the worst things in the world, even the strongest individual might go for a second like, holy. Like, the mob is coming for me and there's no one else there. And there are other people there. There were people there. Toby was there. Mark was there. And it was incredibly helpful to give us the fortitude to go like, no, do you know what we're going to stick to with it? We're not going to grovel, we're not going to apologize. We're not going to revert. And then what Marc also did was he gave me a syllabus for understanding the history of wokeness, going all the way back to the 60s and beyond that. This didn't just come as lightning from a blue sky. This had an institutional grounding that was set in motion, particularly in the 60s. The Long March through the institutions, Herbert MACUSA and a lot of the Frankfurt School, and all of these. These groups that had designs on how to reshape society and create the revolution they so dearly wanted, but with a timeline and a roadmap that was demarcated in decades, that it wasn't just like, well, we're going to put something together and then in two years, something's going to happen. No, they were sitting in the fucking 60s fantasizing about how to overthrow everything in the 2000s. Right? Actually incredible in, like, a Dr. Evil sense of it. But when you're on the receiving end of it, it seemed a little less incredible. And it was just difficult not knowing, like, where's this coming from? Why is this happening all of a sudden? Well, it wasn't happening all of a sudden. There was this long history of it. And when you understood that history, it made a lot more sense and it gave more of a purpose to the rejection of it. Right. Like, we weren't just making a rejection for our little corner of the world. We were chipping in in the great civilizational battle of where this country was going to go, of whether the White Walkers beyond the wall was gonna win. And we were like, no, they're not gonna fucking win. Get up on that fucking wall. Take your goddamn spear fired with maximum velocity.

[Patrick O'Shaughnessy]

David, this is awesome. Anytime you're in town, text me and we'll run this back as much as you want. Thanks, man. I hope you enjoyed this episode. Please remember to subscribe wherever you're listening and leave a review. And make sure you listen to my other podcast, founders. For almost a decade, I've obsessively read over 400 biographies of history's greatest entrepreneur, searching for ideas that you can use in your work. Most of the guests you hear on this show first found me through founders.