Sending signals: Jason Fried on the Midwest business ethic and those “ugly” websites

Had there been more thought leaders like Jason Fried on the scene in the late ’90s when the NASDAQ was reaching dizzying heights on the strength of a dot-com craze that made pouring one’s life savings into Beanie Babies look prudent, the country might have been saved a huge migraine headache.

But then Fried, the president of Web-based app developer 37signals and the best-selling author of Rework and Getting Real: The smarter, faster, easier way to build a successful web application, has not exactly bought into the still-too-prevalent ethos that says making money fast is ultimately more important than building great products and great companies.

While Getting Real is “packed with keep-it-simple insights [and] contrarian points of view” and Rework essentially throws away the playbook when it comes to many traditional business practices, Fried’s core advice for succeeding in business is refreshingly familiar – at least to many of the business community’s graybeards. In short, he says, you should grow good, solid companies by dedicating yourself to their success and resisting the temptation to rush.

“When you’re building a company, every mediocre person you hire, every mediocre decision you make layers on top of the other one, and the faster you grow, the more mediocre decisions you’re going to make; it’s impossible not to,” said Fried, who took part in a Capital Entrepreneurs Week Q&A at the Majestic Theatre last Monday at the invitation of Accelerate Madison. “We put everything we do out there, so there’s really no secrets other than we built our company slowly and carefully, finding the right person each time we needed someone, layering the next person on top of another great person, building a really solid core and a really solid foundation.”

A Chicago-based company, 37signals is best known for its Web-based collaboration tools, including Basecamp, Highrise, Campfire, and Backpack.

Its first commercial app, Basecamp, was launched in 2004, and has since been used by hundreds of thousands of companies to help them manage projects. Fried co-founded 37signals in 1999, making him something of an elder statesman in the hyper-fast tech world, where making a big splash and becoming an instant millionaire is too often the one and only end game.

“The companies that I’ve run into that I’ve been really impressed with happen to be companies that have been around eight or nine or 10 years,” said Fried. “So if you’re starting a company now, I know it’s very tempting to rush, and one of the reasons companies rush is because they’re already thinking about how to get out, how to exit. They’re rushing out the door before they’ve even started, and that to me is another problem. When your end goal is to stop doing this company from the beginning, that’s a problem because you end up growing more rapidly so you can sell for more money, and that hurts the company. So our goal is just to build a great product and work with people we love to work with, and you don’t know what that’s going to lead to.”

While looking to sell too early may be the cardinal sin, thinking you can establish a brand overnight is just as shortsighted, says Fried. Success is not just a matter of having a great product and a marketing budget to support it.

“When we launched Basecamp in 2004, we’d been blogging since ’99 about stuff about the design industry and what it’s like to be a Web design firm and that sort of thing,” said Fried. “By the time we launched Basecamp, we had around 2,000 people reading our blog, but that was enough to get started, because those people read our blogs and liked what we had to say. …

“So what I would say is begin to build an audience before you launch your product. And here’s the beauty of an audience. An audience is different than fans. People talk about building fans or having fans of a company. Well, if you have fans, you still have to go out and reach those fans. If you have an audience, you have people coming back to you every day. …

“So before you launch your product, start talking about what it is you care about, who you are, why you’re building this thing, what the problems are that you’ve seen out there in the world and start to slowly build that audience. Maybe it’s a few hundred people, maybe it’s thousands of people, but those people are going to be people that spread the word. The only other alternative really is to go spend a bunch of money on marketing and advertising, and you know that’s really tough, because no one cares. No one really cares about you. You’re brand-new, you don’t have the brand yet.”

Of course, sticking to a go-slow approach might be easier if you’re doing business in the heart of the country instead of on the coasts, where the rush to riches is often more of an emphasis. The perception of the Midwest as more grounded and traditional is not just a cliche, says Fried.

“I find in the Midwest, the mentality is a little bit different,” said Fried. “I think people are more interested in building sustainable, long-term companies that can give them and their employees a great lifestyle, a long-term lifestyle to do whatever they want, have a great life, build great products. …”

But while the Midwest may seem relatively staid in comparison to Silicon Valley, high-tech industries still move at light speed, and Fried cautions that the corruption of sound business principles lurks around every corner.

“I feel the Midwest is getting tainted a little bit by the frothy environment that’s going on right now on the coasts,” said Fried. “But like any frothy environment, that will die and a lot of people will get hurt, and hopefully people who built solid companies – solid, fundamental, basic companies that make more money than they spend and treat their people well – they’ll be able to weather any storm that comes.”

More from Jason Fried

On customer feedback: “You don’t want to talk to active users about your product. You want to talk to people who just signed up or just canceled. You want to talk to people at those two moments, because that’s when somebody made a decision, and what’s behind that decision is what you want to find out. Why is it they made that decision? Nobody just buys a product. They have something happen to them, or they ran into a situation where they needed this project to do a job, and you want to find out why they bought it in the first place. And you want to talk to people who just recently left, find out why they left, and that’s where most of the insight’s going to be. It’s not going to be insight from people who have been using your product for five years, because they’re used to it, they know it, they’re happy with it.”

On creating great products: “My feeling is that if you want to build something great, you have to use it. You have to build it for yourself. Now, a lot of people can’t do that because they’re consultants and they build things for other people, but if you have an opportunity to build something for yourself, I think you can do a much better job. The main reason why is because you can judge quality directly, instead of judging it by proxy. When you build something for someone else, yes, you can show them, you can watch them, they can talk to you, but people suck at communication. We don’t communicate well.”

On simplicity: “Clarity to me is the most important word right now. It’s not about simplicity, because simplicity doesn’t really mean anything, because it’s perceived in so many different ways. Some people think simplicity means minimalism, or fewer things on the page, or it means fewer steps in the process or whatever, but really simplicity isn’t an answer. Clarity is an answer. ‘Is that clear?’ is a much better question to ask than ‘is that simple?’ because the answer to ‘is that simple’ could be yes, but it might not make any sense. … So we’re constantly asking ourselves when we’re designing something, ‘Is this clear?’”

On good software design: “It’s very rare that you’ll run into a situation where [a lot of] people can agree on [what is good] software, and the reason is, I think, that software doesn’t have these natural forces pushing back on it. It doesn’t have mass, it doesn’t have an edge, it doesn’t have shape, it doesn’t have shadows. It’s this amorphous thing that can grow forever and ever and ever, and there’s nothing naturally pushing back at it. And that’s the curse of the software developer and the software designer, and we are all cursed by it here, because we don’t have these natural things pushing back at us, and what happens over time is that software gets too big and too bloated because it’s way too easy to say yes to everything.”

On good Web design: “I think what’s interesting is the most successful sites on the Web all look like s***, so what’s that all about? Why is that? Craig’s List, eBay, Amazon, Yahoo!, Wikipedia, Google. This is the problem. You can’t say the design is not very good, because in fact it is quite good. The businesses are built upon the products, and the products are doing well, they’re working, so it is good design. So why is it that designers think that they’re ugly? And I think that’s a problem with the design community at large right now, is people are not paying enough attention to what’s successful. They’re obsessed more with visual style and fads and trends and what’s going on. I think there’s a lot to learn from these, quote, ugly sites. So you look at them and say, ‘Who would design a site like Amazon’s? Amazon is a mess.’ But it’s not. It’s incredibly effective.”

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