Podcast Summary: Making It with Jon Davids

Episode 223 – “Here's Why You Should Never Sell Your Business” | Guest: Jason Fried, 37signals
Release Date: October 24, 2025
Host: Jon Davids
Guest: Jason Fried (Co-founder, 37signals & Basecamp)

Episode Overview

In this episode, Jon Davids sits down with Jason Fried, the renowned co-founder of 37signals and creator of Basecamp, for a candid conversation about the realities of building, holding, and potentially selling a successful company. Jason offers hard-won advice against selling your “hit” business and dives into the psychology, economics, and risks behind holding versus selling, drawing on his 25 years of experience at 37signals. The conversation serves as an eye-opener for founders contemplating exit strategies, emphasizing why the allure of the next big thing is often overrated.

Key Discussion Points & Insights

1. The Hit-Driven Nature of Business Portfolios

[00:09–02:00]

• Holding Companies’ Dirty Secret: Jason points out that, much like in conglomerates or venture portfolios, the bulk of revenue and profits come from only a few standout companies. The rest are experiments or "bets" that rarely contribute in a meaningful way.

  • “70, 80% of the revenue and profits usually come from one or two or three companies. ...The rest are really just bets.” – Jason Fried [00:09]

• Industry Parallels: Jon and Jason compare this to other sectors:

  • Luxury brands (LVMH model): A couple of brands dominate while others fill out the portfolio.
  • VC funds: One or two big winners offsetting the rest.
  • Music albums: “You buy an album, there's like two, three good songs out of 12...” – Jason Fried [00:42]
  • NBA teams: Not all are winners; it's always a bell curve.

• Core Lesson: Whether in business, music, or sports, a few standout performers drive most outcomes.

2. Why You Should Ride Your “Hit” as Long as Possible

[02:28–03:54]

• Rarity of Big Successes: Jason reflects on the unique opportunity of having a lasting business hit, specifically Basecamp, and the pitfalls of selling in pursuit of repeating that success.
  • “If somehow you've struck gold or lightning is struck... ride that man. ...This does not strike twice.” – Jason Fried [02:31]
• Serial Entrepreneurship—A Caution: Despite meeting many wealthy founders who sold after a big hit, Jason notes most regret losing their “one hit wonder.” The second act is rarely as successful.
  • “Once you let that go, it's very, very hard to do it twice. You almost never see someone really do it twice in a big way.” – Jason Fried [03:09]
• Stick with Success: Instead of assuming success is easily replicable, nurture and improve your winner for as long as possible.

3. The Relentless Interest from Acquirers

[03:54–05:07]

• Frequent Inquiries: Despite being in business for decades, Jason still receives multiple weekly inquiries from VCs and private equity firms wanting to acquire 37signals.

  • “I get probably two emails a week still ...VCs in private equity. And oftentimes it's sort of the same ones that check in frequently.” – Jason Fried [04:02]

• Long-Term Visibility: Longevity breeds cyclical interest—often from the same firms over years, but with new associates reaching out.

• Self-Funding Philosophy: With the exception of selling founder shares to Jeff Bezos in 2006/2007, 37signals has remained independent and self-funded.

  • “That's the only money that we've ever taken in. ...The company's always been self funded, but after that point, just no interest in taking money.” – Jason Fried [04:34]

4. The (Inevitable) Endgame: What Comes After the Run?

[05:19–06:32]

• Sale is Likely—But Not Yet: Jason is realistic that he and his co-founder David won’t run 37signals forever. Eventually, a major change or sale is the most probable outcome.
  • “Companies either, like, get bought, get sold, they die. They don't last forever.” – Jason Fried [05:45]
  • Software companies with lifespans of 35–55 years are extremely rare.
• No IPO Ambition: Jason rules out taking the company public.
• For Now—Still Fired Up: Despite thoughts of the endgame, Jason and David remain passionate about running 37signals.

Notable Quotes and Memorable Moments

• On the Portfolio “Bell Curve”:
  “You're never going to have a league full of incredible teams. ...Some things are going to float to the top and some things aren't. It's just how it is.”
  – Jason Fried [02:07]

• On Serial Entrepreneurs’ Regret:
  “I've met so many people at this point in my career now who've had big hits, sold those businesses and wish they hadn't. Even though they're wealthy...they can never quite get back to the way the thing they had before.”
  – Jason Fried [03:01]

• On not selling more of the company to Jeff Bezos:
  “I wouldn't sell him more. I'd like to buy his shares back, frankly. But we've tried and he's not interested. He knows he's got a good, good deal here.”
  – Jason Fried [05:11]

• On Aging as a Founder:
  “I have gray hairs, dude. ...My beard is gray.”
  – Jason Fried [05:41]

Timestamps

• [00:09] – The “hit” nature of conglomerates and investment funds
• [00:42] – Music industry and sports analogies for business
• [02:31] – Why you should keep building your hit business
• [03:54] – Flood of acquisition offers and 37signals’ self-funded philosophy
• [05:19] – Reflections on longevity, succession, and endgame for founders

Summary Takeaway

Jason Fried argues passionately that entrepreneurs should not be too eager to sell their successful businesses. The first hit is almost never repeatable, and most who sell ultimately wish they had ridden the wave longer. Instead, keep nurturing your “hit”—because lightning rarely strikes twice.

This summary covers the key content and learning moments from Episode 223, making it an essential guide for ambitious founders exploring the nuances of building—and keeping—their next big business.