4 ms·

I think both of them are making decent points. I don't understand the community's desire to have one of them win or "rip apart" the other. Seems just like a wel

by n8agrin 17y ago

I think both of them are making decent points. I don't understand the community's desire to have one of them win or "rip apart" the other. Seems just like a well balanced debate to me. Calacanis seems focused on DHH's interest in having complete control over a smaller business with continuous revenue. He keeps pushing DHH with scenarios where DHH has a huge payday, DHH says he wouldn't do it and Calacanis acts surprised. I totally understand DHH's perspective. I can't imagine not working, that sounds so boring, so DHH has found what he loves to do and is doing it. Why is it surprising that you'd choose valuable, profitable and rewarding work over one big pile of cash?

cookiecaper 17y ago
You're making a false dichotomy; you can sell your business for a lot of money and still have valuable, profitable and rewarding work plus a big pile of cash. How many people acquire businesses just to push their founders out? Most aren't interested in that; they obviously respect or at least fear what the founder(s) were doing, or they wouldn't have bought their company. It's perfectly likely that DHH could keep on at 37signals after an acquisition. However, in the case where the buyer just boarded the place up or pushed out the staff or whatever, who cares? DHH can go start 38signals and keep doing "valuable, profitable and rewarding" work. Good work and good money aren't necessarily mutually exclusive.
- n8agrin 17y ago
  I make no effort to argue that there is a dichotomy of either "continuous rewarding work" or "big pile of cash". I don't even imply that. In fact I think it would be hard to argue that DHH doesn't have a big pile of cash, at least when put into perspective with my bank account. What I do state is that I understand DHH's perspective of wanting continuous rewarding work with total control of his business over a single pay day and subsequent buyout, even if that buyout is for a value greater than the business' current profits. In other words, his business is literally priceless in his mind because it gives his life meaning, something a pile of cash and no control over his creative work (which he clearly seems to believe is the best idea he's had and may ever have, in his life) does not. I think we're looking at the hypothetical scenario from two different perspectives. Your's is arguably more realistic, in that you're right, if 37signals was bought out it's unlikely that DHH would be out of a job. And even if he was he could go on to create "38signals". My hypothetical scenario is based more on the idea of "sell to go sit on a beach for the rest of your life". That's to say, you would sell the business for a big pay day explicitly so you would not have to work anymore.
  - cookiecaper 17y ago
    If that's the case it's quite sad. I hope that no one stakes the meaningfulness of his life on his business. It's silly to make this particular business so central. As stated, he can sell it off and just start another shop that does the same thing. There is a lot of great work available for rich people -- they can start any business they want, they can become philanthropists and spend all day giving their money away. If DHH sold 37s in a good deal, he'd have a lot more options for not only himself, but the future of his companies and all of their employees, and almost no meaningful restrictions not directly related to the properties associated with 37s. It's really hard to convince people that that's a bad deal, because frankly it's not. Sell 37s and make something new; it can even do the same stuff, just has to be named differently. I'm really not seeing how this would be a loss if it was done right.
    - n8agrin 17y ago
      I don't understand why you interpret my statements as absolutes. For example I said: "In other words, his business is literally priceless in his mind because it gives his life meaning..." I did not say "...it is the only thing in DHH's life that gives his life meaning..." I seriously doubt that 37signals is so central to DHH's existence (or any member of 37signals) that removing it from their life would prevent them from moving on. I just responded to Calacanis with a similar point, but essentially I believe you are looking at business as a method to maximize _money_. My point is that perhaps when we talk about maximizing _profit_, profit can be defined as more than money.
- dhh 17y ago
  Most acquisitions fail. Most founders end up leaving the bigger company once their golden handcuffs are off. There's a reason for that. The company they loved working at changed to be undesirable once consumed by the incumbent. A huge part of what I love about working at 37signals is freedom. Freedom to say what I want and swear when I will. Freedom to pick any course I see fit. Freedom to try crazy things. Invariably, those freedoms would be curbed if we were owned by some big company. If the whole goal is to just sell the thing I already have and love to start exactly the same thing again, then it doesn't make any sense to me. Why not just earn my way to prosperity rather than depending on a single golden benefactor to anoint me wealth? Jason and I are already at the point where we don't have to work, we choose to work. The joy I derive from working at 37signals much surpass the expected joy of being able to afford a private jet or any other 10-digit luxury.
  - gcheong 17y ago
    "Most acquisitions fail. Most founders end up leaving the bigger company once their golden handcuffs are off." I don't know about that. It's not necessarily a sign of failure when the founders leave, and it may actually be a good thing in the long run. You want the founders around long enough to ensure that the business you bought gets integrated into your operations and company culture, and once that is done the founders should be free to leave if they choose. It may be a less desirable situation for the founders, but that may be due more to them being founder types (plus suddenly having a lot of cash ) rather than employee types. The other approach is to buy the company but have the founders run it as they did before with little interference from the acquiring company (e.g. Berkshire Hathaway).
    - ahoyhere 17y ago
      If your goal as a founder with an acquired business was to keep working at your baby, and being as happy with it as you were before, and you end up leaving, one can only assume that your goals were no longer being fulfilled -- ergo, failure. That's why if I ever sell my business, I won't be part of the package. I never want to work for anyone else, ever again.
jasonmcalacanis 17y ago
Good perspective N8. Note: as an interviewer trying to get information to my audience by asking probing questions--but not necessarily endorsing a position. I can totally see the value and virtue in owning a sustainable business that throws off a LOT of cash and that you love. What I was trying to do with this line of questioning was to see if DHH's position on selling was based on a) a religious point of view (if you will) or b) just having a really big number to get him to walk away from a company he obviously loves. Also, wanted to see if maybe he was afraid of being really wealthy--which is a hangup many folks have when offered large sums of money. in fact, many times entrepreneurs are offered sums of money that are disproportionate to the amount of time they have put in (think Bebo, and frankly, Weblogs Inc.). when that happens it is a very, very hard thing for some folks to understand... at least intelligent, considered people.
- jfornear 17y ago
  I also thought DHH was bluffing potential buyers the entire time he was turning down your hypothetical offers. I laughed when you actually accused him of that. I still don't understand why they wouldn't take 10x their revenues or whatever. DHH really does seem afraid of being ridiculously wealthy. He could get there if he wanted. He has the name, reputation, contacts, skills, etc. 37signals is like some indie band that swears they are in music for the "right reasons" and will never sell out, but in the end, they always do. I thought the work ethic vs. work smart topic is worth digging into in the future. I'm convinced that working 10,000 hours on something without being smart about it will get you nowhere.
  - dhh 17y ago
    How are you making shit like "afraid of being ridiculously wealthy" up? I have no qualms with money -- neither earning it or spending it. I believe that 37signals has legs to run for another 20 years. So selling for 10x todays revs seems like a poor, short-sighted investment to me. I'd rather earn my way to "ridiculously wealthy" from profits than from some rich benefactor bestowing the wealth on me. To me that matters. I understand if others don't care, but I can afford to care. In short, I think we'll get there. I think selling our company now would be a bad financial decision as well as a bad personal decision. Building something from nothing and taking it to the moon has tremendous appeal. Letting some incumbent snatch up my rocket ship before it's even reached the stratosphere, just so I can build another one again with more bells and whistles doesn't make sense to me.
ahoyhere 17y ago
37Signals clearly brings in many millions a year in revenue, I don't get how that is too small for people.

by n8agrin 17y ago

cookiecaper 17y ago

You're making a false dichotomy; you can sell your business for a lot of money and still have valuable, profitable and rewarding work plus a big pile of cash. How many people acquire businesses just to push their founders out? Most aren't interested in that; they obviously respect or at least fear what the founder(s) were doing, or they wouldn't have bought their company. It's perfectly likely that DHH could keep on at 37signals after an acquisition. However, in the case where the buyer just boarded the place up or pushed out the staff or whatever, who cares? DHH can go start 38signals and keep doing "valuable, profitable and rewarding" work. Good work and good money aren't necessarily mutually exclusive.

n8agrin 17y ago
I make no effort to argue that there is a dichotomy of either "continuous rewarding work" or "big pile of cash". I don't even imply that. In fact I think it would be hard to argue that DHH doesn't have a big pile of cash, at least when put into perspective with my bank account. What I do state is that I understand DHH's perspective of wanting continuous rewarding work with total control of his business over a single pay day and subsequent buyout, even if that buyout is for a value greater than the business' current profits. In other words, his business is literally priceless in his mind because it gives his life meaning, something a pile of cash and no control over his creative work (which he clearly seems to believe is the best idea he's had and may ever have, in his life) does not. I think we're looking at the hypothetical scenario from two different perspectives. Your's is arguably more realistic, in that you're right, if 37signals was bought out it's unlikely that DHH would be out of a job. And even if he was he could go on to create "38signals". My hypothetical scenario is based more on the idea of "sell to go sit on a beach for the rest of your life". That's to say, you would sell the business for a big pay day explicitly so you would not have to work anymore.
- cookiecaper 17y ago
  If that's the case it's quite sad. I hope that no one stakes the meaningfulness of his life on his business. It's silly to make this particular business so central. As stated, he can sell it off and just start another shop that does the same thing. There is a lot of great work available for rich people -- they can start any business they want, they can become philanthropists and spend all day giving their money away. If DHH sold 37s in a good deal, he'd have a lot more options for not only himself, but the future of his companies and all of their employees, and almost no meaningful restrictions not directly related to the properties associated with 37s. It's really hard to convince people that that's a bad deal, because frankly it's not. Sell 37s and make something new; it can even do the same stuff, just has to be named differently. I'm really not seeing how this would be a loss if it was done right.
  - n8agrin 17y ago
    I don't understand why you interpret my statements as absolutes. For example I said: "In other words, his business is literally priceless in his mind because it gives his life meaning..." I did not say "...it is the only thing in DHH's life that gives his life meaning..." I seriously doubt that 37signals is so central to DHH's existence (or any member of 37signals) that removing it from their life would prevent them from moving on. I just responded to Calacanis with a similar point, but essentially I believe you are looking at business as a method to maximize _money_. My point is that perhaps when we talk about maximizing _profit_, profit can be defined as more than money.
dhh 17y ago
Most acquisitions fail. Most founders end up leaving the bigger company once their golden handcuffs are off. There's a reason for that. The company they loved working at changed to be undesirable once consumed by the incumbent. A huge part of what I love about working at 37signals is freedom. Freedom to say what I want and swear when I will. Freedom to pick any course I see fit. Freedom to try crazy things. Invariably, those freedoms would be curbed if we were owned by some big company. If the whole goal is to just sell the thing I already have and love to start exactly the same thing again, then it doesn't make any sense to me. Why not just earn my way to prosperity rather than depending on a single golden benefactor to anoint me wealth? Jason and I are already at the point where we don't have to work, we choose to work. The joy I derive from working at 37signals much surpass the expected joy of being able to afford a private jet or any other 10-digit luxury.
- gcheong 17y ago
  "Most acquisitions fail. Most founders end up leaving the bigger company once their golden handcuffs are off." I don't know about that. It's not necessarily a sign of failure when the founders leave, and it may actually be a good thing in the long run. You want the founders around long enough to ensure that the business you bought gets integrated into your operations and company culture, and once that is done the founders should be free to leave if they choose. It may be a less desirable situation for the founders, but that may be due more to them being founder types (plus suddenly having a lot of cash ) rather than employee types. The other approach is to buy the company but have the founders run it as they did before with little interference from the acquiring company (e.g. Berkshire Hathaway).
  - ahoyhere 17y ago
    If your goal as a founder with an acquired business was to keep working at your baby, and being as happy with it as you were before, and you end up leaving, one can only assume that your goals were no longer being fulfilled -- ergo, failure. That's why if I ever sell my business, I won't be part of the package. I never want to work for anyone else, ever again.

jasonmcalacanis 17y ago

Good perspective N8. Note: as an interviewer trying to get information to my audience by asking probing questions--but not necessarily endorsing a position. I can totally see the value and virtue in owning a sustainable business that throws off a LOT of cash and that you love. What I was trying to do with this line of questioning was to see if DHH's position on selling was based on a) a religious point of view (if you will) or b) just having a really big number to get him to walk away from a company he obviously loves. Also, wanted to see if maybe he was afraid of being really wealthy--which is a hangup many folks have when offered large sums of money. in fact, many times entrepreneurs are offered sums of money that are disproportionate to the amount of time they have put in (think Bebo, and frankly, Weblogs Inc.). when that happens it is a very, very hard thing for some folks to understand... at least intelligent, considered people.

jfornear 17y ago
I also thought DHH was bluffing potential buyers the entire time he was turning down your hypothetical offers. I laughed when you actually accused him of that. I still don't understand why they wouldn't take 10x their revenues or whatever. DHH really does seem afraid of being ridiculously wealthy. He could get there if he wanted. He has the name, reputation, contacts, skills, etc. 37signals is like some indie band that swears they are in music for the "right reasons" and will never sell out, but in the end, they always do. I thought the work ethic vs. work smart topic is worth digging into in the future. I'm convinced that working 10,000 hours on something without being smart about it will get you nowhere.
- dhh 17y ago
  How are you making shit like "afraid of being ridiculously wealthy" up? I have no qualms with money -- neither earning it or spending it. I believe that 37signals has legs to run for another 20 years. So selling for 10x todays revs seems like a poor, short-sighted investment to me. I'd rather earn my way to "ridiculously wealthy" from profits than from some rich benefactor bestowing the wealth on me. To me that matters. I understand if others don't care, but I can afford to care. In short, I think we'll get there. I think selling our company now would be a bad financial decision as well as a bad personal decision. Building something from nothing and taking it to the moon has tremendous appeal. Letting some incumbent snatch up my rocket ship before it's even reached the stratosphere, just so I can build another one again with more bells and whistles doesn't make sense to me.

ahoyhere 17y ago

37Signals clearly brings in many millions a year in revenue, I don't get how that is too small for people.