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The reason the press writes about funding rather than revenues is not some kind of conspiracy to focus on the wrong things, but simply because reporters know ab

by pg 14y ago

The reason the press writes about funding rather than revenues is not some kind of conspiracy to focus on the wrong things, but simply because reporters know about funding rounds and not about revenues. It's clear that the press would write about revenues if they could, because they write a lot about the revenues of public companies. They're able to do that because public companies have to disclose their revenues. Private companies never publish their revenues. Including 37signals. So if Jason really believes this is a terrible problem and wants to set things on the right course, he should set an example and start publishing 37signals' revenue numbers.

zhoutong 14y ago
The press loves to talk about changes, because news only comes out when something changes. The timeless pieces only exist in opinions section. In startup's context, fund raising is definitely a change, and revenue numbers may be a change (when they are surprising or previously undisclosed). But building a sustainable business, treating customers well or even being profitable should be long-lasting and timeless. It's interesting to keep reading about these issues in Hacker News, but these are not exactly news. It's like business fundamentals ("common sense"). The press never talks about them but it doesn't mean the industry doesn't care or doesn't treat them as important.
mvzink 14y ago
On the other hand, a "sickness in our industry" doesn't have to be the majority behavior. It may seem more common than it actually is since it's easier for the press to talk about the businesses that just care about quick exits, but there are still companies behaving that way. Jason's problem doesn't seem to be with the reporting; it's only coincidental that it's easier for press to report on the businesses he finds fault with.
dlss 14y ago
This is unusually straw-mannish of you pg. From the article: "What matters is: Are you profitable? Are you building something great? Are you taking care of your people? Are you treating your customers well?" All of those questions can be answered without needing access to a companies ledger. Jason answers those questions himself in the article. I think his point was that stories about those questions don't get as much readership per unit of reporter effort, hence they aren't being written. Posting 37signals' revenue numbers would have zero impact on that.
- pg 14y ago
  Anyone who proposes that the discussion should focus on profitability rather than funding rounds is presumably not proposing that we simply talk about it as one bit of information: profitable or not. That would make pretty short articles. It also wouldn't be very interesting; there are hundreds of plumbers and barbers and cafes within a few miles of me who are profitable. And plenty of these plumbers and barbers and cafes probably do great work and treat their employees well. Do you really want to read articles about all of them? I don't. What makes a company newsworthy (unless it's as a case study) is its size, or potential size.
  - rdl 14y ago
    The only way I can see this happening is if dotcom bust 2.0 happens (or major changes in tax code, macro economy, etc), employees totally write off the value of equity, and companies switch to profit sharing payouts. Cash salary is more directly relevant, though, with some guarantee of payout -- quitting a safe $100k/yr job for a $20k/mo job at a startup with $20k in the bank, maybe not. Companies would also pick vendors based on financial stability, for which profit is probably a major factor, although cash in the bank would also be. Or maybe it would happen if investment rules relaxed and private equity (Private Equity or direct investment like second market in non-public companies) happened, as communicating financials to lots of investors would still be relevant.
  - dlss 14y ago
    It sounds like you might not be familiar with the author Jason referred to right before his critique of the current focus on size: Ricardo Semler. In his books he develops a very humanistic look at the role of businesses in our lives. As entrepreneurs, employees, and as customers. I won't be able to do the ideas justice here, but I will try: A business obsessed with revenue and growth is like a person obsessed with how many breaths they have taken, or how much food is in their pantry -- these are means to an end, not ends in themselves. Food is required for life but it's not the purpose of living. Businesses as conceived by Semler and Fried aren't designed to maximize revenue so much as make the world a better place (#include your essay about google being almost a nonprofit). It may be that stories of plumbers, barbers, and cafes wouldn't be interesting to you. I like to hear about people living enjoyable lives, delighting their customers, and making their corner of the universe a better place. It's a lot more psychically healthy than reading about people trying to gain the most while providing the least (the tech crunch articles Jason refers to) So many people seem obsessed with getting a large quantity of money, and only then trying their hand at building a fulfilling life. I have always thought of Semler as running things in reverse: how do we design a seven day weekend that is cash positive? (Semler's book, The Seven Day Weekend, is highly recommended to anyone who wants to hear more)
loceng 14y ago
I would think that creating articles, or blog posts, talking about situations of how they specifically treat customers well, how and why they are building something great, how they take care of their people, etc.. would solve this more than posting revenues. Though that might come across too strongly as stroking your own ego.. Obviously being profitable allows you more benefits to how you treat people, the time you give or allow.
hsuresh 14y ago
Also, TC (and others) have a huge following from startup community. For early stage companies, funding and hiring have big impact, perhaps next only to customer acquisition (and that is usually not shared). So i wonder if they are only serving their big target segment well by reporting on these.
larrys 14y ago
" So if Jason really believes this is a terrible problem and wants to set things on the right course" Well you know that's not going to happen especially since he made this statement below: "We have 35 employees at 37signals. We could have hundreds of employees if we wanted to--our revenues and profits support that--but I think we’d be worse off." So he isn't simply saying that he feels he could expand his business and have "hundreds of employees". He is saying that his "revenues and profits" would support "hundreds of employees". Think for a second how much profit you need to support "hundreds of employees". I'll give him the benefit of the doubt that he was misquoted on that. If not, he's simply full of shit. This is BS to challenge Donald Trump.
- tptacek 14y ago
  First, 37signals has a large (for our field) in-house customer support team, so the mean fully loaded head count cost of a 37s employee is lower than the number you're thinking. Second, I think you are underestimating just how profitable 37signals probably is. They have scaled a few tight products with high recurring revenue to a very large number of customers with a tiny team. I've worked at companies with hundreds of employees and knew their revenue numbers and the model 37signals is executing puts those numbers well within reach.
  - larrys 14y ago
    Ok point taken re fully loaded. "just how profitable 37signals probably is" As an aside to this discussion: If they are actually that profitable it's a good idea to fly below the radar and resist making statements about how wildly profitable they are. Doing that might entice competitors to enter the same market and regardless of whether they succeed or not that could kill the goose. Sometimes of course things are out in the open and it can't be avoided (lines at the restaurant or with public companies, or Oracle posting their 24x7 software support rates where a guy out of his house can do the math). Sometimes you want the publicity for one reason or another. But despite the openness of the internet there are still things that you want to keep to yourself lest everybody and their uncle decides to move into your neighborhood.
hackinthebochs 14y ago
It's interesting how you always seem to chime in at all the appropriate times. Get some work done, you!
nameuserc 14y ago
This is a fair point. Journalists are just using available public information. 37Signals' numbers are not public. "Talk is cheap" as they say. I don't disagree with what he is saying in the quotes - that people focus too much on raising money as "business success". This is without question. But then again I still do not understand the value of 37Signals (compared to any other software company with aggressive marketing), at least not from the press they get. How are they being any more transparent? All I know from recent reports is employees supposedly work 4 days a week and they have some sort of brainstorming sessions to come up with new ideas. What does the 37Signals software do? Specifically, not just some marketing buzzword. What does it do that I can't otherwise do without it? Are there some YouTube videos showing the software in action? How do I know it's not just a Ruby on Rails consulting business for a few steady clients (who have an inseparable attachment to Rails), as opposed to a "unique" software company with amazing products? How do I know they're not just selling a Rails framework? So I have to install Ruby, Rails and a gazilion of their custom scripts to use their "product"?
- jschulenklopper 14y ago
  > What does the 37Signals software do? I guess you've not looked at http://37signals.com http://37signals.com before posting this? > So I have to install Ruby, Rails and a gazilion of their custom scripts to use their "product"? No. You need a browser though, because it is web-based.
  - nameuserc 14y ago
    Forget what I say. It's just me. "5,000 companies sign up every week." But "keep all project discussions, emails, and stuff in one place" just doesn't draw me in. I don't have a problem with "keeping all project stuff in one place". 37Signals appears to be aimed at solving a "problem" I do not have. I have looked at their website several times. It just never grabs me. And I'm not inclined to give them my email address to try out their amazing "solution".
    - sleepyhead 14y ago
jakejake 14y ago
It certainly is true that reporters can't write about numbers that they don't have. But I also think that a startup going for broke is more exciting to read about - both when they succeed as well as when they crash. A race car is more exciting to watch than a tractor. It's surprising that 37 signals isn't labeled a "lifestyle" company, which is practically like leprosy when it comes to funding and media attention.
dkrich 14y ago
I think this is one of those cases that's akin to the famous quote by Supreme Court Justice Potter Stewart when he said "I can't define pornography, but I know it when I see it." I think a lot of people are sick of the crap written on TechCrunch for reasons that are hard to define. Mostly they have turned the innovative process into a form of TMZ, which glamorizes a field that is meant to build things to make lives better. Very few articles have anything to do with companies building these types of innovations, and profits have nothing to do with it. A response might be, well Scientific American writes those stories. Yes, and that's precisely why Scientific American is a respected publication oft-cited by Steve Jobs. Too many stories on TechCrunch are titled something like "[Insert clever startup name] raises [insert some absurd amount of money] to become the [Facebook, Twitter, Foursquare, Birchbox] for [Work, Finding a cab, Healthfood]. These stories are ridiculous and cover mostly crap ideas that don't solve any real problems.

by pg 14y ago

zhoutong 14y ago

The press loves to talk about changes, because news only comes out when something changes. The timeless pieces only exist in opinions section. In startup's context, fund raising is definitely a change, and revenue numbers may be a change (when they are surprising or previously undisclosed). But building a sustainable business, treating customers well or even being profitable should be long-lasting and timeless. It's interesting to keep reading about these issues in Hacker News, but these are not exactly news. It's like business fundamentals ("common sense"). The press never talks about them but it doesn't mean the industry doesn't care or doesn't treat them as important.

mvzink 14y ago

On the other hand, a "sickness in our industry" doesn't have to be the majority behavior. It may seem more common than it actually is since it's easier for the press to talk about the businesses that just care about quick exits, but there are still companies behaving that way. Jason's problem doesn't seem to be with the reporting; it's only coincidental that it's easier for press to report on the businesses he finds fault with.

dlss 14y ago

This is unusually straw-mannish of you pg. From the article: "What matters is: Are you profitable? Are you building something great? Are you taking care of your people? Are you treating your customers well?" All of those questions can be answered without needing access to a companies ledger. Jason answers those questions himself in the article. I think his point was that stories about those questions don't get as much readership per unit of reporter effort, hence they aren't being written. Posting 37signals' revenue numbers would have zero impact on that.

pg 14y ago
Anyone who proposes that the discussion should focus on profitability rather than funding rounds is presumably not proposing that we simply talk about it as one bit of information: profitable or not. That would make pretty short articles. It also wouldn't be very interesting; there are hundreds of plumbers and barbers and cafes within a few miles of me who are profitable. And plenty of these plumbers and barbers and cafes probably do great work and treat their employees well. Do you really want to read articles about all of them? I don't. What makes a company newsworthy (unless it's as a case study) is its size, or potential size.
- rdl 14y ago
  The only way I can see this happening is if dotcom bust 2.0 happens (or major changes in tax code, macro economy, etc), employees totally write off the value of equity, and companies switch to profit sharing payouts. Cash salary is more directly relevant, though, with some guarantee of payout -- quitting a safe $100k/yr job for a $20k/mo job at a startup with $20k in the bank, maybe not. Companies would also pick vendors based on financial stability, for which profit is probably a major factor, although cash in the bank would also be. Or maybe it would happen if investment rules relaxed and private equity (Private Equity or direct investment like second market in non-public companies) happened, as communicating financials to lots of investors would still be relevant.
- dlss 14y ago
  It sounds like you might not be familiar with the author Jason referred to right before his critique of the current focus on size: Ricardo Semler. In his books he develops a very humanistic look at the role of businesses in our lives. As entrepreneurs, employees, and as customers. I won't be able to do the ideas justice here, but I will try: A business obsessed with revenue and growth is like a person obsessed with how many breaths they have taken, or how much food is in their pantry -- these are means to an end, not ends in themselves. Food is required for life but it's not the purpose of living. Businesses as conceived by Semler and Fried aren't designed to maximize revenue so much as make the world a better place (#include your essay about google being almost a nonprofit). It may be that stories of plumbers, barbers, and cafes wouldn't be interesting to you. I like to hear about people living enjoyable lives, delighting their customers, and making their corner of the universe a better place. It's a lot more psychically healthy than reading about people trying to gain the most while providing the least (the tech crunch articles Jason refers to) So many people seem obsessed with getting a large quantity of money, and only then trying their hand at building a fulfilling life. I have always thought of Semler as running things in reverse: how do we design a seven day weekend that is cash positive? (Semler's book, The Seven Day Weekend, is highly recommended to anyone who wants to hear more)

loceng 14y ago

I would think that creating articles, or blog posts, talking about situations of how they specifically treat customers well, how and why they are building something great, how they take care of their people, etc.. would solve this more than posting revenues. Though that might come across too strongly as stroking your own ego.. Obviously being profitable allows you more benefits to how you treat people, the time you give or allow.

hsuresh 14y ago

Also, TC (and others) have a huge following from startup community. For early stage companies, funding and hiring have big impact, perhaps next only to customer acquisition (and that is usually not shared). So i wonder if they are only serving their big target segment well by reporting on these.

larrys 14y ago

" So if Jason really believes this is a terrible problem and wants to set things on the right course" Well you know that's not going to happen especially since he made this statement below: "We have 35 employees at 37signals. We could have hundreds of employees if we wanted to--our revenues and profits support that--but I think we’d be worse off." So he isn't simply saying that he feels he could expand his business and have "hundreds of employees". He is saying that his "revenues and profits" would support "hundreds of employees". Think for a second how much profit you need to support "hundreds of employees". I'll give him the benefit of the doubt that he was misquoted on that. If not, he's simply full of shit. This is BS to challenge Donald Trump.

tptacek 14y ago
First, 37signals has a large (for our field) in-house customer support team, so the mean fully loaded head count cost of a 37s employee is lower than the number you're thinking. Second, I think you are underestimating just how profitable 37signals probably is. They have scaled a few tight products with high recurring revenue to a very large number of customers with a tiny team. I've worked at companies with hundreds of employees and knew their revenue numbers and the model 37signals is executing puts those numbers well within reach.
- larrys 14y ago
  Ok point taken re fully loaded. "just how profitable 37signals probably is" As an aside to this discussion: If they are actually that profitable it's a good idea to fly below the radar and resist making statements about how wildly profitable they are. Doing that might entice competitors to enter the same market and regardless of whether they succeed or not that could kill the goose. Sometimes of course things are out in the open and it can't be avoided (lines at the restaurant or with public companies, or Oracle posting their 24x7 software support rates where a guy out of his house can do the math). Sometimes you want the publicity for one reason or another. But despite the openness of the internet there are still things that you want to keep to yourself lest everybody and their uncle decides to move into your neighborhood.

hackinthebochs 14y ago

It's interesting how you always seem to chime in at all the appropriate times. Get some work done, you!

nameuserc 14y ago

This is a fair point. Journalists are just using available public information. 37Signals' numbers are not public. "Talk is cheap" as they say. I don't disagree with what he is saying in the quotes - that people focus too much on raising money as "business success". This is without question. But then again I still do not understand the value of 37Signals (compared to any other software company with aggressive marketing), at least not from the press they get. How are they being any more transparent? All I know from recent reports is employees supposedly work 4 days a week and they have some sort of brainstorming sessions to come up with new ideas. What does the 37Signals software do? Specifically, not just some marketing buzzword. What does it do that I can't otherwise do without it? Are there some YouTube videos showing the software in action? How do I know it's not just a Ruby on Rails consulting business for a few steady clients (who have an inseparable attachment to Rails), as opposed to a "unique" software company with amazing products? How do I know they're not just selling a Rails framework? So I have to install Ruby, Rails and a gazilion of their custom scripts to use their "product"?

jschulenklopper 14y ago
> What does the 37Signals software do? I guess you've not looked at http://37signals.com http://37signals.com before posting this? > So I have to install Ruby, Rails and a gazilion of their custom scripts to use their "product"? No. You need a browser though, because it is web-based.
- nameuserc 14y ago
  Forget what I say. It's just me. "5,000 companies sign up every week." But "keep all project discussions, emails, and stuff in one place" just doesn't draw me in. I don't have a problem with "keeping all project stuff in one place". 37Signals appears to be aimed at solving a "problem" I do not have. I have looked at their website several times. It just never grabs me. And I'm not inclined to give them my email address to try out their amazing "solution".
  - sleepyhead 14y ago

jakejake 14y ago

It certainly is true that reporters can't write about numbers that they don't have. But I also think that a startup going for broke is more exciting to read about - both when they succeed as well as when they crash. A race car is more exciting to watch than a tractor. It's surprising that 37 signals isn't labeled a "lifestyle" company, which is practically like leprosy when it comes to funding and media attention.

dkrich 14y ago

I think this is one of those cases that's akin to the famous quote by Supreme Court Justice Potter Stewart when he said "I can't define pornography, but I know it when I see it." I think a lot of people are sick of the crap written on TechCrunch for reasons that are hard to define. Mostly they have turned the innovative process into a form of TMZ, which glamorizes a field that is meant to build things to make lives better. Very few articles have anything to do with companies building these types of innovations, and profits have nothing to do with it. A response might be, well Scientific American writes those stories. Yes, and that's precisely why Scientific American is a respected publication oft-cited by Steve Jobs. Too many stories on TechCrunch are titled something like "[Insert clever startup name] raises [insert some absurd amount of money] to become the [Facebook, Twitter, Foursquare, Birchbox] for [Work, Finding a cab, Healthfood]. These stories are ridiculous and cover mostly crap ideas that don't solve any real problems.