6 ms·

David Heinemeier Hansson's Speech about Making Money at SS2008

74 points by vlad 19y ago

dcurtis 19y ago
Wow, this typed version destroyed the power of his talk. Please wait until you can see the video (on justin.tv?); his presence is huge. It has been the best talk by far.
- deleted 19y ago
  [deleted]
- vlad 19y ago
  These are just my notes I chose to share as the speech came to an end. I apologize if I offended you in any way.
  - dcurtis 19y ago
    Oh, I'm not offended in any way. Sorry if it came off that way. I just think the power of his speech was lost in translation. The notes are really good, actually.
    - deleted 19y ago
      [deleted]
- tptacek 19y ago
  Don't be a dick. Those notes were awesome. None of my partners are going to sit through a DHH talk; I was able to cut-paste from this to start a conversation.
  - Xichekolas 19y ago
    He wasn't being a dick. I was also sitting there and I can attest that it's not near as powerful to read out of context as it was to see it. A lot of that comes from the fact that he came on right after Greg McAdoo (Sequoia Partner) and just unloaded a totally contrasting view, and the delivery was excellent. Reading it in bullet point form just doesn't convey that (although the notes were great otherwise). Everyone had great things to say, and Greg McAdoo really impressed me as well, but in the context of the whole day, DHH was pretty refreshing.
    - deleted 19y ago
      [deleted]
  - jamiequint 19y ago
    so its not worth watching for 25 minutes, but you're going to have a dialog based on the transcript? (Which doesn't really fully capture what he was talking about) That makes no sense.
    - tptacek 19y ago
      Hey, you know what? I'm not particularly interested in having a conversation about DHH's company. His company runs fine without my input. I'm also not particularly interested in faithfully replicating all of DHH's ideas. That's why my eyes aren't glued to the screen every time he talks. I'm glad he has an audience. I like him. But I've got a pipeline to help manage. So really, and I'm asking you, Jamie, who gives a shit? My point was, don't snipe at some guy who took the time to write up notes from the talk because his hero worship wasn't total enough to prevent him from doing me a favor. I'm sorry he folded up your favorite player's rookie card and stuck it in his BMX spokes --- that must drive you nuts --- but that writeup gave me a useful idea. I'm going to make a judgement call that says that watching some Flash video of DHH talking isn't going to be worth the billable 25 minutes.
      - jamiequint 19y ago
        Enough with the straw men.
      - seasick 19y ago
        But DHH is hhot...
    - deleted 19y ago
      [deleted]
    - vlad 19y ago
      In tptacek's defense, he has a right to share a news yc submission with his coworkers without waiting for a justin.tv video (great guys) to come out first. Or he could share the notes and send the video link when it comes (did come) out later. My notes weren't a transcript but they didn't contradict what DHH said and the message is the same as it was during the presentation. :)
- deleted 19y ago
  [deleted]
1gor 19y ago
The credo of a tycoon of old (think JPMorgan or Vanderbilt) was to build an empire. His own empire, in his lifetime. Tycoons of today have build their own empires (Microsoft, Google, Apple, Oracle etc.), same principle, same philosophy. When and why did it happen that flippers took over this market's mindshare? A young entrepreneur today dreams of selling out to Yahoo/Google/Microsoft as soon as possible. Quite often even before his business is profitable. Hey, if you have a growing business that is profitable, you should keep it for yourself. Many people with money I know (so-called 'professional investors') dream of having such a business in their possession. Such business is not listed, so you cannot buy it on the market. What you can buy on the market (what is listed) normally grows slower and is over-researched and over-valued. But of course, if you focus on building the cash flow for yourself, and keeping the option of striking it very big at some time in the future for yourself, then the whole industry of undervalued option-buyers (VCs, angels etc.) will be left without work. So the propaganda is put to work... When is my next funding round?.. A round of what? When is your next client subscribing to your app - that should be the question. DHH thrives on being controversial, but the point he makes here is simply a well forgotten truth about entrepreneurship. Building your business slow and taking full credit for it for yourself used to be the norm before the flipper ethics kicked-in.
- dissenter 19y ago
  Times change, and America is much more corporate than it used to be. When a market becomes saturated innovative people will look elsewhere to make their mark. I don't want to spend my life managing a business. I want to make some money and do something else. I have no doubt that I would make a fitting CEO. But the hours are long and the work is unappealing. There aren't any CEOs I want to be like. Apple's CEO, maybe, but what price does he pay to do what he does? I really get the feeling that anyone ('anyone') could be a CEO these days. I feel like the CEO is a reward that keeps everyone else on the corporate pyramid. Maybe I'm wrong. I could be. But I haven't seen the argument that debunks that idea. (And I have seen a lot of instances of CEOs who didn't deserve what they received.) The money is a silly motivation. What am I going to do with $6 billion that I couldn't do with $6 million? Spend conspicuously? Raise a family of layabouts? I would much rather become financially independent and begin doing the work I want to, when and where I want to. I like to make things, and I like to talk to creative people. I like to do small things really, really well. And I don't like to spend my time dealing with red tape. I feel like I have an obligation to society, but that I don't have to fulfill it by spending my time managing a large corporation. There a lots of other less flashy positions desperate for someone to do a really great job. I want to do something small perfectly, not something huge good enough. Does that make sense?
kyro 19y ago
I don't think his speech was that great. Loud and arrogant doesn't make for a great speech. He kept stressing the ease of settling for the middle and just asking people to pay for your services. He used the analogy of us paying for cars but I think there's one huge difference. There is a huge barrier of entry into the car business which ultimately results in us having to pay what we pay, but I'm the web world, your product can be copied on the fly, look begged and be free, and that's why people want to horde the masses, something he criticized, so they can offer a free service and yet monetize using advertisements. It happened with his product, the launch of huddlechat, but that as you know was taken down.
- tptacek 19y ago
  "His product" is Basecamp, not Campfire; a tiny fraction of their revenue comes from Campfire. Most people would take good odds of running a multi-million dollar business over infinitessimally small odds of flipping and retiring. And he's obviously right about the odds: what percentage of YC companies have flipped?
  - davidw 19y ago
    Ok, but the point that the economics of information goods are often quite different from physical products is a valid one. That said, the idea that you should look for markets that aren't winner take all, where you could have a sustainable, mid-sized business, is a good one.
    - tptacek 19y ago
      There is a difference between an entrepreneur and a speculator.
- gnaritas 19y ago
  It's not a zero sum game, you can make money selling stuff that also given away for free elsewhere. Putting out a free version of Basecamp won't kill Basecamp, the market is big enough for everyone to live. As far as most businesses are concerned, $25 a month is free, it's pocket change. If your app solves one of their problems for that price, they'll pay it gladly rather than deal with hosting or maintaining their own free version, or using someone else's free version because most real business folk don't trust free.
zkinion 19y ago
Yes, it was a very nice presentation. There's too many kool-aid drinkers in the web 2.0 world these days, and its a true breath of fresh air to see somebody with some real business fundamentals talking. I hope his talk makes more people wake up and realize that by trying to build a solid business over time, you have a much much MUCH greater chance at success than people flipping dodgy startups. I don't think his message was controversial at all. Instead, its a shot of common sense in a world of disinformation.
wallflower 19y ago
I liked his comment about scalability. When you have paid subscribers, you like scaling issues. Scaling issues (server capacity being utilized) means your business is doing well. With your subscription fees producing a healthy profit, you can buy another server (a kick-ass one).
anewaccountname 19y ago
>Try solving your own problems. Your own company is not unique, there are probably two hundred others who have the same problems. But if someone solves the same problem as you, whine about it and have a quasi book-burning ordeal where you get it permanently removed from the internet. (Campfire)
iamelgringo 19y ago
Really, as soon as Justin TV gets the video online, people should see it. DHH's presentation really was the best of the bunch in my opinion, followed by San Altman's. He really made a lot of sense. There is so much talk and buzz about getting funded that it was really refreshing to hear some one talk about just plain starting a business. The profit margins in the software business are very, very high. If you can offer a decent product and get people to pay for it, you can make a rather nice living for yourself without having to play the funding game.
- attack 19y ago
  HUGE if's.
rantfoil 19y ago
Thanks for these notes. Very detailed and captured the meaning perfectly. But you just had to be there to see the frenetic energy with which he boils on stage.
chaostheory 19y ago
video courtesy of justin.tv: http://www.justin.tv/hackertv/97862/DHH_Talk__Startup_School_2008 http://www.justin.tv/hackertv/97862/DHH_Talk__Startup_School...
- vlad 19y ago
  Great! Turns out this speech was in fact recorded successfully and completely by Justin.tv, but apparently some others like Arrington's were not due to technical difficulties (like I remembered last year.) I was actually very nervous because I made a decision to publish these notes to the public asap, but I was missing out on the first part of Paul Buchheit's speech to do so. Why was I nervous, when surely there would be perfect, uninterrupted video recordings , with full and clear audio after the event? Well...
axod 19y ago
For new technology, it seems to me to be a land-grab. Grab the users who want X, then either figure out how to make money off them (As google did), or sell to someone who sees the value of your audience share. So... is it: 1. Find a problem - something's broken 2. Find a solution - make what people want 3. Price it 4. Get users Or 3. Get users 4. Work out how to monetize them I think either can work, and both have disadvantages. Charging up front sort of goes against what PG said in his talk (Great talk I thought) - about being nice and helpful and giving users stuff they need. Waiting until you have the userbase before you start monetizing means you don't have cashflow, and may need funding.
edw519 19y ago
Great presentation! I'm already building a startup predicated upon the subscription model and I'm already familiar 37 Signals, DHH, and Getting Real. I just needed this talk to give my a little extra kick in the butt. New business plan in the works today.
mhidalgo 19y ago
It all goes back to the mentality of loving what you do...if that results in you being the next google so be it. The problem is people set their minds on being the next big thing instead of worrying about what they are doing in the present. DHH is speaking to living in the present and not compromising your ideals.
attack 19y ago
Well, anecdote != data:)

74 points by vlad 19y ago

Wow, this typed version destroyed the power of his talk. Please wait until you can see the video (on justin.tv?); his presence is huge. It has been the best talk by far.

deleted 19y ago
[deleted]
vlad 19y ago
These are just my notes I chose to share as the speech came to an end. I apologize if I offended you in any way.
- dcurtis 19y ago
  Oh, I'm not offended in any way. Sorry if it came off that way. I just think the power of his speech was lost in translation. The notes are really good, actually.
  - deleted 19y ago
    [deleted]
tptacek 19y ago
Don't be a dick. Those notes were awesome. None of my partners are going to sit through a DHH talk; I was able to cut-paste from this to start a conversation.
- Xichekolas 19y ago
  He wasn't being a dick. I was also sitting there and I can attest that it's not near as powerful to read out of context as it was to see it. A lot of that comes from the fact that he came on right after Greg McAdoo (Sequoia Partner) and just unloaded a totally contrasting view, and the delivery was excellent. Reading it in bullet point form just doesn't convey that (although the notes were great otherwise). Everyone had great things to say, and Greg McAdoo really impressed me as well, but in the context of the whole day, DHH was pretty refreshing.
  - deleted 19y ago
    [deleted]
- jamiequint 19y ago
  so its not worth watching for 25 minutes, but you're going to have a dialog based on the transcript? (Which doesn't really fully capture what he was talking about) That makes no sense.
  - tptacek 19y ago
    Hey, you know what? I'm not particularly interested in having a conversation about DHH's company. His company runs fine without my input. I'm also not particularly interested in faithfully replicating all of DHH's ideas. That's why my eyes aren't glued to the screen every time he talks. I'm glad he has an audience. I like him. But I've got a pipeline to help manage. So really, and I'm asking you, Jamie, who gives a shit? My point was, don't snipe at some guy who took the time to write up notes from the talk because his hero worship wasn't total enough to prevent him from doing me a favor. I'm sorry he folded up your favorite player's rookie card and stuck it in his BMX spokes --- that must drive you nuts --- but that writeup gave me a useful idea. I'm going to make a judgement call that says that watching some Flash video of DHH talking isn't going to be worth the billable 25 minutes.
    - jamiequint 19y ago
      Enough with the straw men.
    - seasick 19y ago
      But DHH is hhot...
  - deleted 19y ago
    [deleted]
  - vlad 19y ago
    In tptacek's defense, he has a right to share a news yc submission with his coworkers without waiting for a justin.tv video (great guys) to come out first. Or he could share the notes and send the video link when it comes (did come) out later. My notes weren't a transcript but they didn't contradict what DHH said and the message is the same as it was during the presentation. :)
deleted 19y ago
[deleted]

1gor 19y ago

The credo of a tycoon of old (think JPMorgan or Vanderbilt) was to build an empire. His own empire, in his lifetime. Tycoons of today have build their own empires (Microsoft, Google, Apple, Oracle etc.), same principle, same philosophy. When and why did it happen that flippers took over this market's mindshare? A young entrepreneur today dreams of selling out to Yahoo/Google/Microsoft as soon as possible. Quite often even before his business is profitable. Hey, if you have a growing business that is profitable, you should keep it for yourself. Many people with money I know (so-called 'professional investors') dream of having such a business in their possession. Such business is not listed, so you cannot buy it on the market. What you can buy on the market (what is listed) normally grows slower and is over-researched and over-valued. But of course, if you focus on building the cash flow for yourself, and keeping the option of striking it very big at some time in the future for yourself, then the whole industry of undervalued option-buyers (VCs, angels etc.) will be left without work. So the propaganda is put to work... When is my next funding round?.. A round of what? When is your next client subscribing to your app - that should be the question. DHH thrives on being controversial, but the point he makes here is simply a well forgotten truth about entrepreneurship. Building your business slow and taking full credit for it for yourself used to be the norm before the flipper ethics kicked-in.

dissenter 19y ago
Times change, and America is much more corporate than it used to be. When a market becomes saturated innovative people will look elsewhere to make their mark. I don't want to spend my life managing a business. I want to make some money and do something else. I have no doubt that I would make a fitting CEO. But the hours are long and the work is unappealing. There aren't any CEOs I want to be like. Apple's CEO, maybe, but what price does he pay to do what he does? I really get the feeling that anyone ('anyone') could be a CEO these days. I feel like the CEO is a reward that keeps everyone else on the corporate pyramid. Maybe I'm wrong. I could be. But I haven't seen the argument that debunks that idea. (And I have seen a lot of instances of CEOs who didn't deserve what they received.) The money is a silly motivation. What am I going to do with $6 billion that I couldn't do with $6 million? Spend conspicuously? Raise a family of layabouts? I would much rather become financially independent and begin doing the work I want to, when and where I want to. I like to make things, and I like to talk to creative people. I like to do small things really, really well. And I don't like to spend my time dealing with red tape. I feel like I have an obligation to society, but that I don't have to fulfill it by spending my time managing a large corporation. There a lots of other less flashy positions desperate for someone to do a really great job. I want to do something small perfectly, not something huge good enough. Does that make sense?

kyro 19y ago

I don't think his speech was that great. Loud and arrogant doesn't make for a great speech. He kept stressing the ease of settling for the middle and just asking people to pay for your services. He used the analogy of us paying for cars but I think there's one huge difference. There is a huge barrier of entry into the car business which ultimately results in us having to pay what we pay, but I'm the web world, your product can be copied on the fly, look begged and be free, and that's why people want to horde the masses, something he criticized, so they can offer a free service and yet monetize using advertisements. It happened with his product, the launch of huddlechat, but that as you know was taken down.

tptacek 19y ago
"His product" is Basecamp, not Campfire; a tiny fraction of their revenue comes from Campfire. Most people would take good odds of running a multi-million dollar business over infinitessimally small odds of flipping and retiring. And he's obviously right about the odds: what percentage of YC companies have flipped?
- davidw 19y ago
  Ok, but the point that the economics of information goods are often quite different from physical products is a valid one. That said, the idea that you should look for markets that aren't winner take all, where you could have a sustainable, mid-sized business, is a good one.
  - tptacek 19y ago
    There is a difference between an entrepreneur and a speculator.
gnaritas 19y ago
It's not a zero sum game, you can make money selling stuff that also given away for free elsewhere. Putting out a free version of Basecamp won't kill Basecamp, the market is big enough for everyone to live. As far as most businesses are concerned, $25 a month is free, it's pocket change. If your app solves one of their problems for that price, they'll pay it gladly rather than deal with hosting or maintaining their own free version, or using someone else's free version because most real business folk don't trust free.

zkinion 19y ago

Yes, it was a very nice presentation. There's too many kool-aid drinkers in the web 2.0 world these days, and its a true breath of fresh air to see somebody with some real business fundamentals talking. I hope his talk makes more people wake up and realize that by trying to build a solid business over time, you have a much much MUCH greater chance at success than people flipping dodgy startups. I don't think his message was controversial at all. Instead, its a shot of common sense in a world of disinformation.

wallflower 19y ago

I liked his comment about scalability. When you have paid subscribers, you like scaling issues. Scaling issues (server capacity being utilized) means your business is doing well. With your subscription fees producing a healthy profit, you can buy another server (a kick-ass one).

anewaccountname 19y ago

>Try solving your own problems. Your own company is not unique, there are probably two hundred others who have the same problems. But if someone solves the same problem as you, whine about it and have a quasi book-burning ordeal where you get it permanently removed from the internet. (Campfire)

iamelgringo 19y ago

Really, as soon as Justin TV gets the video online, people should see it. DHH's presentation really was the best of the bunch in my opinion, followed by San Altman's. He really made a lot of sense. There is so much talk and buzz about getting funded that it was really refreshing to hear some one talk about just plain starting a business. The profit margins in the software business are very, very high. If you can offer a decent product and get people to pay for it, you can make a rather nice living for yourself without having to play the funding game.

attack 19y ago
HUGE if's.

rantfoil 19y ago

Thanks for these notes. Very detailed and captured the meaning perfectly. But you just had to be there to see the frenetic energy with which he boils on stage.

chaostheory 19y ago

video courtesy of justin.tv: http://www.justin.tv/hackertv/97862/DHH_Talk__Startup_School_2008 http://www.justin.tv/hackertv/97862/DHH_Talk__Startup_School...

vlad 19y ago
Great! Turns out this speech was in fact recorded successfully and completely by Justin.tv, but apparently some others like Arrington's were not due to technical difficulties (like I remembered last year.) I was actually very nervous because I made a decision to publish these notes to the public asap, but I was missing out on the first part of Paul Buchheit's speech to do so. Why was I nervous, when surely there would be perfect, uninterrupted video recordings , with full and clear audio after the event? Well...

axod 19y ago

For new technology, it seems to me to be a land-grab. Grab the users who want X, then either figure out how to make money off them (As google did), or sell to someone who sees the value of your audience share. So... is it: 1. Find a problem - something's broken 2. Find a solution - make what people want 3. Price it 4. Get users Or 3. Get users 4. Work out how to monetize them I think either can work, and both have disadvantages. Charging up front sort of goes against what PG said in his talk (Great talk I thought) - about being nice and helpful and giving users stuff they need. Waiting until you have the userbase before you start monetizing means you don't have cashflow, and may need funding.

edw519 19y ago

Great presentation! I'm already building a startup predicated upon the subscription model and I'm already familiar 37 Signals, DHH, and Getting Real. I just needed this talk to give my a little extra kick in the butt. New business plan in the works today.

mhidalgo 19y ago

It all goes back to the mentality of loving what you do...if that results in you being the next google so be it. The problem is people set their minds on being the next big thing instead of worrying about what they are doing in the present. DHH is speaking to living in the present and not compromising your ideals.

attack 19y ago

Well, anecdote != data:)