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I'd take DHH's opinion more seriously if he had any actual experience with VC or startups. 37 Signals is not a startup -- they crow about that fact themselves.

by sabat 17y ago

I'd take DHH's opinion more seriously if he had any actual experience with VC or startups. 37 Signals is not a startup -- they crow about that fact themselves. 37 Signals is a small business. David's points all presume that he fully understands what Joel is planning; he clearly cannot, since Joel hasn't laid out a detailed business plan.

mrduncan 17y ago
37signals has taken an investment from Bezos Expeditions. As Jason Fried explains in the blog post, it was certainly not the standard VC deal though - http://37signals.com/svn/archives2/bezos_expeditions_invests_in_37signals.php http://37signals.com/svn/archives2/bezos_expeditions_invests...
pavs 17y ago
> 37 Signals is a small business. Are they really a small business? I have the impression that they have a large user base - and IMO a better set of products than Stack Overflow.
- jsolson 17y ago
  Small business in the sense of few employees and little in the way of capital assets. Just because you're making money hand over fist doesn't mean you're implicitly a "big business".
  - pavs 17y ago
    I guess I am trying to find out whats HN's definition of small business. Not sure why I am getting downmodded.
    - marilyn 17y ago
      I too am wondering the HM definitions. Big/small business versus startup. What is the definition of startup? I don't understand why businesses that go for VC funds have the monopoly on the term "startup".
      - arockwell 17y ago
        The definition I've seen given by PG is anything that scales up. In other words, a business that sells a product that can be used by many users. A small business is usually something that offers a service (a restraunt, a barber shop, or a consulting firm). Funding has nothing to do with it.
    - lambda 17y ago
      I would say any business with fewer than 50 employees is a small business. According to Wikipedia, 37signals has 16. There are technical definitions in various countries of "small business", based in some cases on number of employees and in some case on revenues or other economic metrics. Any way you slice it, 37signals is a small business.
- 100k 17y ago
  The point is that 37signals explicitly claims not to be a startup. Their line is that they're a profitable 10 year old company. I once asked DHH in a Q&A his opinion on working on a startup outside of Silicon Valley. He corrected me.
  - KWD 17y ago
    That's not to say they were not once a startup. Every 'startup' should have the objective of becoming a sustainable business. Eventually the startup tag will go away, but that's not to say they were not once there. Microsoft was once a startup. Apple was once a startup. It makes me laugh here on HN where some guys weekend project can be considered a startup when it really has no potential to ever be a business.
- dpcan 17y ago
  "Better set of products than stack overflow" This doesn't make any sense. That's like saying the Yankees have a better team than the Saints. Apples and oranges. I don't use any 37s products, I have email. However, I find StackOverflow invaluable. I will spend 20 minutes searching the web for answers, and when all hope is lost, I can ask a question on Stack, wake up in the morning and someone will have generously shared their knowledge, providing a perfect solution. It is simply incredible.
_delirium 17y ago
Considering that they're successful taking that route, though, they do have some first-hand experience to back up their claim that you can be successful without going the VC/startup route.
tptacek 17y ago
Your point about DHH having no experience with VC is somewhat valid (they don't think Bezos counts), but your point about "small business" versus "startup" is completely devoid of meaning. You don't need to take VC to be a startup, and you don't need to exit inside of 5 years to be a startup either. An uncharitable summary of your argument: 37signals has been too successful to know what they're talking about.
- statictype 17y ago
  >An uncharitable summary of your argument: 37signals has been too successful to know what they're talking about. That's not a completely unreasonable argument to make. The fact that they were able to achieve success without having to take in investor money, in some ways disqualifies them from giving advice on when its ok to take investments.
  - fnid2 17y ago
    Were they successful without taking investors money? I mean, they took investors money, so how do we know? We don't know how much Bezos gave them, it could have been millions. I don't know. Maybe someone knows, but to say they were able to achieve success without having to take investor money isn't entirely accurate, because they did.
    - tptacek 17y ago
      DHH explicitly said they didn't receive operational cash from Bezos in his interview with Steve Blank's class. They took the money to get tight with Bezos and to trade some equity for risk mitigation.
      - fnid2 17y ago
        I don't find this argument compelling. It doesn't matter why you take the money. It matters that you took the money and keep saying it doesn't matter. If it doesn't matter, why did they take it? For the benefits and they did benefit from it, so they can't keep saying they haven't taken investors money and be credible.
lyudmil 17y ago
There is a talk by DHH where he shared stories about his jobs prior to 37Signals. These jobs were at VC funded, dot-com companies (something involving games) and he claims to have learned some lessons there. He talks about this in the beginning of the Q&A session here: http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2334 http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2334

by sabat 17y ago

mrduncan 17y ago

37signals has taken an investment from Bezos Expeditions. As Jason Fried explains in the blog post, it was certainly not the standard VC deal though - http://37signals.com/svn/archives2/bezos_expeditions_invests_in_37signals.php http://37signals.com/svn/archives2/bezos_expeditions_invests...

pavs 17y ago

> 37 Signals is a small business. Are they really a small business? I have the impression that they have a large user base - and IMO a better set of products than Stack Overflow.

jsolson 17y ago
Small business in the sense of few employees and little in the way of capital assets. Just because you're making money hand over fist doesn't mean you're implicitly a "big business".
- pavs 17y ago
  I guess I am trying to find out whats HN's definition of small business. Not sure why I am getting downmodded.
  - marilyn 17y ago
    I too am wondering the HM definitions. Big/small business versus startup. What is the definition of startup? I don't understand why businesses that go for VC funds have the monopoly on the term "startup".
    - arockwell 17y ago
      The definition I've seen given by PG is anything that scales up. In other words, a business that sells a product that can be used by many users. A small business is usually something that offers a service (a restraunt, a barber shop, or a consulting firm). Funding has nothing to do with it.
  - lambda 17y ago
    I would say any business with fewer than 50 employees is a small business. According to Wikipedia, 37signals has 16. There are technical definitions in various countries of "small business", based in some cases on number of employees and in some case on revenues or other economic metrics. Any way you slice it, 37signals is a small business.
100k 17y ago
The point is that 37signals explicitly claims not to be a startup. Their line is that they're a profitable 10 year old company. I once asked DHH in a Q&A his opinion on working on a startup outside of Silicon Valley. He corrected me.
- KWD 17y ago
  That's not to say they were not once a startup. Every 'startup' should have the objective of becoming a sustainable business. Eventually the startup tag will go away, but that's not to say they were not once there. Microsoft was once a startup. Apple was once a startup. It makes me laugh here on HN where some guys weekend project can be considered a startup when it really has no potential to ever be a business.
dpcan 17y ago
"Better set of products than stack overflow" This doesn't make any sense. That's like saying the Yankees have a better team than the Saints. Apples and oranges. I don't use any 37s products, I have email. However, I find StackOverflow invaluable. I will spend 20 minutes searching the web for answers, and when all hope is lost, I can ask a question on Stack, wake up in the morning and someone will have generously shared their knowledge, providing a perfect solution. It is simply incredible.

_delirium 17y ago

Considering that they're successful taking that route, though, they do have some first-hand experience to back up their claim that you can be successful without going the VC/startup route.

tptacek 17y ago

Your point about DHH having no experience with VC is somewhat valid (they don't think Bezos counts), but your point about "small business" versus "startup" is completely devoid of meaning. You don't need to take VC to be a startup, and you don't need to exit inside of 5 years to be a startup either. An uncharitable summary of your argument: 37signals has been too successful to know what they're talking about.

statictype 17y ago
>An uncharitable summary of your argument: 37signals has been too successful to know what they're talking about. That's not a completely unreasonable argument to make. The fact that they were able to achieve success without having to take in investor money, in some ways disqualifies them from giving advice on when its ok to take investments.
- fnid2 17y ago
  Were they successful without taking investors money? I mean, they took investors money, so how do we know? We don't know how much Bezos gave them, it could have been millions. I don't know. Maybe someone knows, but to say they were able to achieve success without having to take investor money isn't entirely accurate, because they did.
  - tptacek 17y ago
    DHH explicitly said they didn't receive operational cash from Bezos in his interview with Steve Blank's class. They took the money to get tight with Bezos and to trade some equity for risk mitigation.
    - fnid2 17y ago
      I don't find this argument compelling. It doesn't matter why you take the money. It matters that you took the money and keep saying it doesn't matter. If it doesn't matter, why did they take it? For the benefits and they did benefit from it, so they can't keep saying they haven't taken investors money and be credible.

lyudmil 17y ago

There is a talk by DHH where he shared stories about his jobs prior to 37Signals. These jobs were at VC funded, dot-com companies (something involving games) and he claims to have learned some lessons there. He talks about this in the beginning of the Q&A session here: http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2334 http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2334