Jeff Bezos

`2:38:39`

— How do you protect the small team. Basecamp has successfully stayed small. Has been the dragon, and you had to fight off. That like basically you make a lot of money. There's a temptation to grow. So how do you not grow? — Don't take venture capital. — Okay, that's step one. — That is point number one. — First of all, — Point number two everybody takes venture capital. So you already went. — I mean that's been the answer for the longest time. Because the problem isn't just venture capital, it's other people's money. Once you take other people's money, completely understandably, they want a return and they would prefer to have the largest return possible. 'Cause not them sitting in the code. It's not them getting the daily satisfaction out of building something. Chiseling beautiful code poems out of the editor, right? They don't get that satisfaction. They get the satisfaction maybe of seeing something nice put into the world, that's fair. But they certainly also get a satisfaction of a higher return. And there is this sense certainly in venture capital, stated in venture capital that the whole point of you taking the money

`2:39:41`

is to get to a billion dollars or more. Now the path to that usually does go through running established playbooks and then when it comes to software, the enterprise sales playbook is that playbook. If you're doing B2B software SaaS, you will try to find product market fit. And the second you have it, you will abandon your small and medium sized accounts to chase the big whales with a huge sales force and by then you're a thousand people and life sucks. — That said, I mean people are just curious about this. I've gotten a chance to get to know Jeff Bezos. He invested in Basecamp, not controlling? — He bought secondaries. So this was the funny thing is that when investing have these two dual meanings. Normally when people think about investing, they think you're putting in growth capital because you want the business to hire more people to do more R&Ds so they can grow bigger. Bezos didn't do that actually. He bought a ownership stake directly from Jason and I,

`2:40:44`

and 100% of the proceeds of that purchase went into my and Jason's bank account, personal bank account. Not a single cent went into the account of the company 'cause we didn't need the money to grow. What we needed or what we certainly enjoyed was to some extent maybe the vote of confidence, but more so the security of taking a little bit off the table is that we dare turn down the big bucks from venture capitals. It was essentially a vaccine against wanting to take a larger check from people who then wanted to take the company to something enormous that we didn't want to go with it. So Jeff gave Jason and I just enough money that we were comfortable turning all these people down in a way where if it had turned belly up like six months later, we wouldn't have been kicking ourselves and going, we had something here that was worth millions and now we have nothing and I have to worry about rent and groceries again. — It is a vote of confidence.

`2:41:45`

I wonder from, I'd love to hear Jeff's side of the story of like why, 'cause he doesn't need like the money. So it's really, I think it probably is just believing in people and wanting to have cool stuff be created in the world and make money off of it, but not like. — 100% the motivation for Jeff wasn't a return, because he actually has a team. He's private office that runs these investments who did the calculus on the investment pitch we gave him, which was so ridiculous that Jason and I were laughing our asses off when we were writing down our metrics. I was like, no one's gonna pay this. No one is gonna give us this multiple of this amount of revenue. And that's fine. I mean we took the call essentially out of kind of an awe that Jeff Bezos even wanted to look at us and like, do you know what? We don't want venture capital. We don't need other people's money, but like let's just give him a bullshit number that no sane person would actually say yes to. And then I mean, we can each go our own way.

`2:42:48`

And his investment team said like, "Jeff, no way. This makes no economic sense at all. They're asking for way too much money with way too little revenue." And Jeff just went like, "I don't care. I wanna invest in this guy." Because to him at the time it was chump change, right? Like Jason and I each got a few million dollars. I mean whatever the currency swing between the yen and the dollar that day probably moved 10 x that for his net worth than our investment did. Jeff seemed genuinely interested in being around interesting people, interesting companies, helping someone go to distance. And I actually look back on that relationship with some degree of regret, because I took that vote of confidence for granted in ways that I'm a little bit ashamed of over the years I've been more critical about some of the things that Amazon had done that I feel now is sort of justified. So that's just sort of part of that processing of it. But on the economic sense, he gave us that confidence.

`2:43:48`

He gave us the economic confidence, but then he also gave us the confidence of a CEO running perhaps at the time the most important internet business in the US. Showing up to our calls, which we would have with him like once a year and basically just going like, yeah, you guys are doing awesome stuff. You should just keep doing awesome stuff. I read your book, it's awesome. You launched this thing, it's awesome. You should just do more of that. I don't actually know how to run your business. You guys know it. — So the book goes out. I'm just so, from a fan perspective, I'm curious about how Jeff Bezos was able to see, 'cause to me, you and Jason, like especially humans in the space of tech. And the fact that Jeff was able to see that, right? How hard is it to see that? — He certainly saw it very early. And I think this is something that Jeff does better than almost anyone else. He spots that opportunity so far in advance of anyone else even opened their eyes to it, or certain he is willing to bet on it far early and far harder than anyone else is. And he's just right time and again. I mean, we were not the only investment that he made.

`2:44:49`

And certainly Amazon had a extremely long-term vision. So far longer than I have ever had the gumption to keep. Like I think of myself as a long-term thinker. I am playing a child's game compared to the game that Jeff is playing. Like when I looked at Amazon's economics around the dot- com boom and bust, they looked ridiculous. Like they were losing so much money. They were so hated by the market they were... no one believed that it was gonna turn into what it is, but Jeff did. In a way that that level of conviction I really aspire to. And I think that's one of the main things I've taken away from that relationship is that you can just believe in yourself to that degree against those odds. That's ridiculous. He did that at so many times our level that it's pathetic if I'm doubting myself. — Yeah, I think Amazon is one of those companies. I mean, it's come under a bunch of criticism over the years.

`2:45:51`

This is something about humans that don't appreciate so much that we take for granted the positive that a thing brings real quick and then we just start criticizing the thing. It's the Wi-Fi and the airplanes. — [DHH] That's exactly it. — But I think Amazon, there could be a case made that Amazon is one of the greatest companies in the last a hundred years — For sure, I think it's an easy case to make. What I also think is that the price you pay to be one of the greatest companies in the last a hundred years is a lot of detractors, a lot of pushback, a lot of criticism that this is actually order restored in the universe. One of my favorite teachers in all the time I've been on the internet is Kathy Sierra. I don't know if you know her work, but she was actually Vern a few short years before the cruel internet ran her off. But she wrote a blog called Creating Passionate Users and she carved into my brain this notion of balance in the universe.

`2:46:51`

If you are creating something of value that a lot of people love, you must create an equal and opposite force of haters. You cannot have people who love what you do without also having people who hate what you do. The only escape from that is mediocrity. If you are so boring and so uninteresting that no one gives a damn whether you exist or not, yeah, you don't get the haters, but you also don't get the impact of people who really enjoy your work. And I think Amazon is that just at the massive scale, right? They brought so much value and change to technology to commerce that they must simply have a black hole size of haters, otherwise the universe is simply gonna tip over. — Let me ask you about small teams. So you mentioned Jason a bunch of times, Jason Fried, you have been partners for a long, long time. Perhaps it's fair to say he's more on the sort of the design business side and you're like the tech, the engineering wizard. How have you guys over all these years

`2:47:52`

creating so many amazing products, not murder each other? It's a great story of like partnership. What can you say about collaboration? What can you say that about Jason that you love that you've learned from? Why does this work? — So first I'll say we have tried to murder each other several times over the years, but far less, I think in the last decade. In the early days, our product discussions were so fierce that when we were having them in the office and there were other employees around, some of them were legitimately worried that the company was about to fall apart. Because the volume coming out of the room would be so high and sound so acrimonious, that they were legitimately worried the whole thing was gonna fall apart. But you know what's funny is that it never felt like that in the moment. It always felt like just a peak vigorous search for something better.

`2:48:53`

And that we were able to stomach that level of adversity on the merits of an idea because it was about the idea. It wasn't about the person and it never really got personal. Not even never really, it didn't get personal. It wasn't like, Jason, you're an asshole. It was like, Jason, you're an idiot. And you're an idiot because you're looking at this problem the wrong way. And let me tell you the right way to do it. — As a small tangent, let me say this. Some people have said, oh, probably return to this, that you're sometimes can have flights of temper on the internet and so on. I never take it that way because it is the same kind of ilk. Maybe I haven't seen the right kind of traces of temper, but usually it's about the idea and it's just excited, passionate human. — That's exactly what I like to think of it as. It doesn't always come across as that. And I can see why spectators in particular sometimes

`2:49:54`

would see something that looks like I'm going after the man rather than the ball. And I do think I've tried to get better at that. But in my relationship with Jason, I think it's worked so well because we have our own distinct areas of competence where we fully trust each other. Jason trusts me to make the correct technical decisions. I trust him to make the correct design and product direction decisions, and then we can overlap and share on the business, on marketing, on writing, on other aspects of it. So that's one thing is that if you're starting a business with someone where you do exactly the same as they do and you're constantly contesting who's the more competent person, I think that's far more difficult and far more volatile. So if you're starting a business and you're both programmers and you both work on the same kind of programming, ah, good luck. I think that's hard. I tried to pick an easier path working with a designer where I knew that at least half of the time

`2:50:55`

I could just delegate to his experience and competence and say like, do you know what? I may have an opinion, I have an opinion all the time on design. But I don't have to win the argument because I trust you. Now occasionally we would have overlaps on business or direction where we'd both feel like we had a strong stake in the game and we both had a claim to competence in that area. But then for whatever reason, we also both had a long-term vision were I would go, do you know what? I think we're wrong here. But as I learned from Jeff Bezos, by the way, I'm gonna disagree and commit. That was one of those early lessons he gave us that was absolutely crucial and perhaps even instrumental in ensuring that Jason and I have been working together for a quarter of a century. Disagree and commit is one of the old time Jeff Bezos greats. — I'm just surprised that Yoko Ono hasn't come along. You know what I mean? Like there's so many Yokos in this world. — It might have happened. If not in part because we don't sit on each other's lap

`2:51:56`

all the time. Most of our careers, we haven't even lived in the same city. Like I lived in Chicago for a couple of years while we were getting going after I'd moved to the US in 2005. But then I moved to Malibu and then I lived in Spain and then I lived in Copenhagen. And Jason and I from the foundation of our relationship learned how to work together in a remarkably efficient way where we didn't have to actually talk that much. On any given week, I'd be surprised if Jason and I spent more than two hours of direct exchange and communication. — Yeah, sometimes it's the basic human frictions that you just accumulate. — Yes, I think you rub up against another person, that person well better be your spouse if it's too much for too long. — Yeah, but even there. — Even there. — COVID has really test the relationship. It's fascinating to watch. — It has, and I do think that having some separation, which is kind of counterintuitive because I think a lot of people think the more collaboration you can have, the better.

`2:52:56`

The more ideas that can bounce back and forth, the better. And both Jason and I, for whatever reason, came to the conclusion early on in careers. Absolutely not, that's complete baloney. This is why we were huge proponents of remote work. This is why I enjoy working in my home office where I can close the door and not see another human for like six hours at the time. I don't wanna bounce ideas off you all the time. I wanna bounce ideas off you occasionally and then I wanna go off and implement those ideas. There's way too much bouncing going on and not enough scoring, not enough dunking. And I think this is one of the great traps of executive rule. Once a founder elevates themselves all the way up to an executive where what they're doing is just telling other people what to do, that's the realm they live in 24/7. They just live in the idea realm. Oh, I can just tell more people more things what to do and we can just see it happen. If you actually have to be part of implementing that, you slow your horse. You think like, do you know what? I had a good idea last week. I'm gonna save the rest of my good ideas