David H. Hansson from Basecamp: Starting Up in the ‘Real World’

David Heinemeier Hansson is one of the creators of Basecamp. It is a web-based application designed to help people share and coordinate the ongoing work they have to do on their projects. At Technology Voice we use it primarily to keep track of to-do lists and schedules, but also for other things such as shared document editing. Last year, David gave a talk at Future of Web Apps which is being held again in London in October, and we thought we would share some of our notes from his session.

Doing a startup in the real world

Something you often run into is this notion of the real world.  The real world is a pessimistic place, no good idea is going to change anything, and often is a phrase that is put to you in a negative way: “It wouldn’t really work in the real world”, “people are not going to pay/sign up/care for that”. The real world is full of only people, not individuals, not different kinds of groups. People don’t all think the same way, but that is how it is presented.  

The problem with the real world is that it is presented as if it has a monopoly on reality. Arguments aren’t fleshed out because of pre-existing assumptions that X won’t work in the real world. The real world can trigger all your worst fears – I’m going to fail, it’s going to fail, etc. The real world is a nasty term, and there are serious consequences for taking it at face value. Lots of people have been discouraged from trying things out because of the real world.

The first thing you have to do as an entrepreneur is ignore anything anyone claims as the real world unless properly evidenced. Even then double-check it for yourself. Living your life based on nothing more than what other people’s opinion is of what constitutes reality is insane. Don’t let the ‘real world’ govern your ability to succeed.

The formation of Basecamp

David had a real task and a real project called Basecamp which launched in 2004. It wasn’t supposed to work in the real world. There were only three people working on it in their spare time. David was the sole programmer.  There were all sorts of objections along the way as to why it couldn’t work:

  • Too simple.
  • Basecamp hardly does anything – message board, to-do list, calendar – what’s complicated about that?
  • Anybody could do it in their spare time.
  • People are already using Outlook.
  • Couldn’t work, too simple.

But guess what?

Simple things work

People like simple things simply because most people have simple problems. There is an endless list of simple devices solving simple problems which were utterly discounted by those purveying the conventional ideas of what works in the so-called real world.

For example (and there are so many of them), the first review on Slashdot by Cmdr Taco regarding the iPod said: “No wireless. Less space than a nomad. Lame!” The  Flip camera was never a critical darling. Video recording – been around for ages. Innovative – all these big guys have it narrowed down. Quality – beaten on most counts. Yet, despite all real world rationalisations, someone puts a crappy video camera with one USB connection and it sells millions.

Too simple? Strong indicator it is going to work

Conventional thinking says you need a business plan to prepare for the future. Fact – nobody knows the future. Things go up, things go down, things you didn’t think would work! Companies too big to fail disappear from view. If a business plan had been a necessary prerequisite, Basecamp would never have been done. Plans rarely ever work: ask any general.  

If it involves writing it down, your business plan is probably too complex. That time is better spent doing rather than writing about it.

The power of no

The number one attribute to being able to make progress is the power to say no. No, not going to do this feature. No, not going to target this customer. “Basecamp within my firewall?” No, totally different business for that.  

Listen to your customers.  But sometimes you listen and say no. Doesn’t mean you have to say yes. If you will say yes automatically, why bother listening in the first place.

The ability to say no is the most treasured power an entrepreneur has at their disposal and they should use it often. David could not remember a no that he really regrets, but can name plenty of things he has said yes to that he regrets.

Trust your people

It is not about the talent. It is about the environment. “Hiring rock stars is a reckless way to run your business!” It is total nonsense. A much better and saner approach is to have a rock star environment. Let people be who they want to be.

Forget about company policies and all the arbitrary bureaucratic impediments to letting people express themselves as fully as possible. Most company policies are based on mistrust and fear. Assume employees are not crooks, liars or cheats (as per normal corporate policies). Of course, the downside to this sort of thinking can lead to crazy policies like “trusting people”. Well, I never. At Basecamp, all staff get a credit card linked to the company account. One rule: spend it wisely.  

The secret to a having a workplace filled with trust is to hire reasonable people in the first place.  

Easy

Easy isn’t easy to do – it’s pretty damn hard to do simple. It is more about you and your style and what you are trying to accomplish.

It’s easy to create something simple. How did we get an easy-to-use web application?  We chose to have a really simple domain because we wanted simple tools for simple needs.

Don’t be a startup: be a business

David despises the categorisation of startups as a separate business entity almost as much as he loathes the obstructive conceptualisations of conventional real-world thinking.  

People have being starting things since the beginning of time, and calling it a startup doesn’t pull you away from the fact you are creating a business.  

A great idea has to be worth enough to someone that they are willing to pay you for it. A great idea is not enough.  A great way to access the validity of your own business ideas is to ask yourself: “Would I want to pay for this?”, “Would I reach for my credit card?” The baseline thinking has to be that these ideas are going to come together as a business and you have to focus on it being a business from the get go.

Execute and persevere

Focus on execution and perserverance. Mediocre ideas with fantastic execution can be an awesome success. This is because ideas are almost worthless when it comes to creating a new business. But almost worthless is not the same as completely worthless. Have faith and patience in the ideas that you do come up with. Invest yourself! Invest your time and don’t listen to statements about the real world – you’ll be just fine.

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