The power of small teams

`0:10:18`

You have, I think you said, 70 something employees? Yep. You have similar numbers of customers, about 100,000 to 150,000, and you make a lot of profit and they generally don't. How is this possible? We run a very different kind of business. We are focused on efficiency, we're not focused on growth. They're focused on growth. So typically, when you have a lot of people, you think you can do more things at once, and you probably can. You do more things at once, and have different offerings to different people, and different tiers, and salespeople, and all the things that build up an organization. We don't have any salespeople. We don't have 15 different versions of Basecamp. We're not after enterprise, so we don't have the enormous support costs and enormous support

`0:11:05`

infrastructure required to service customers like that, and customize this and customize that to keep a whale happy who's paying you $300,000 a year. We don't have any of those things. We have one price, basically. Well, we have two prices on Basecamp, one price on HEY. Actually, two prices on HEY. Two, basically. But one code base, one product we offer everybody. Let's take Basecamp for example. Nobody can pay us more than 300 bucks. I don't care how big your company is, the most you can pay us is $299, you get unlimited users. What that allows us to do is to just build one product, do a really nice job, keep it tight, and simple, and clear, and not have the complexity that comes with trying to service and satisfy so many different kinds of companies at different price levels with different price

`0:11:53`

points and different expectations. That's why these companies tend to get bigger and bigger and bigger. They also, frankly, build products just differently. We build products with two people at a time. So every feature we work on in Basecamp, or HEY, or whatever we're building is two people, one programmer, one designer, and they have a maximum of six weeks to deliver the feature that they're working on. Most of them are usually a couple of weeks, but they have a maximum of six weeks. So we don't get stuck in these big huge projects, with meetings with 18 people, and slow decision-making, and indecision, and complexity, and all the things that come with trying to do too many things for too many people. Now, all that said, we could still make the mistake of hiring hundreds of people because we could afford to do so. But to spend money because you have it on things you don't need is something that Silicon

`0:12:43`

Valley's gotten quite good at, but we're quite bad at intentionally. I don't want to spend money on things we don't need. So we think that constraints, simplicity, small teams actually are where it's at, and keep us honest, and allow us to do great work for our customer base that we know, small businesses, very tight companies like ours, and satisfy them versus trying to go after the big companies, and have to have salespeople, and have long sales cycles, and whatnot. Honestly, if you gave me 1,000 people, I wouldn't know what to do with them. We would fall apart. If you gave me 500 people, I wouldn't know what to do with them. We would fall apart. We would be a worse off company with 500 people. I'd be completely lost. So, that's the other thing. I don't even understand how they run, and the amount of layers they must need, and the

`0:13:28`

amount of complexity organizationally that they must have to... The latticework they have to build up to support all that weight, is just remarkable and it's foreign to us. Okay. I definitely want to talk about how you operate in your way of working, 'cause it's really interesting and there's a lot companies can take away. But, I want to follow on this thread of small teams. I have a few quotes that you've shared that I love. Oh, no. Oh, no. No, good. No, it's good. Hey, if I said it, I said it. Let's go. No, they're awesome. They're great. Around this idea of staying small, one is, "Small is not just a stepping stone, small is a great destination itself. Also, if you think you're too small to be effective, you've never been in bed with a mosquito." Now that's not my quote. That's someone else's, to be clear. Okay. Okay, you popularized it. It's a great quote though. Okay.