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DHH Commissions his own Supercar - the Pagani Zonda HH

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Re: DHH Commissions his own Supercar - the Pagani Zonda HH

#71

Post by garply »

pg wrote: post #57
garply wrote: post #16

After listening to DHH speak at Startup School a few years ago I came to the conclusion that for an entrepreneur a "lifestyle business" is a much more probable path to getting rich than the grow-fast-and-flip approach demanded by VCs and angel investors. In retrospect, it seems pretty obvious, but previously I had really only been exposed to entrepreneurship through PG's blog. I had never heard of 37 Signals before.…

Investors want the companies they fund to grow fast, but they don't want to "flip" them. They'd much prefer that they grew into large, independent companies, like Google and Facebook. When companies get sold at earlier stages, it's more often because the founders wanted to than the investors. I would never claim that starting a startup (= a company designed to grow very fast) was the only way to get rich. Anyone can…

I hesitated when writing "grow-fast-and-flip", but went ahead because ultimately owners of large funded companies tend to sell a large percentage of their company to the general public via an IPO. But you're right, characterizing an IPO as a "flip" is a stretch.

The component of your writing I'm referring to is in How to Make Wealth: "If you wanted to get rich, how would you do it? I think your best bet would be to start or join a startup." Your other writings had really resonated with me, and you had described Viaweb's hackers as really risk-averse, so I assumed that I was among the "you" comprising your target demographic. But, having been exposed to other methods of getting rich, I no longer believe my best bet is to start a startup. I would also guess that it is not the best bet of the majority of your readers. It is possible that I am underestimating the prowess of your readerbase, or that you are not writing to the majority of your readers.

I'm happy that you provided an alternative viewpoint at Startup School - I'd love to hear you address the possibility of getting rich via a 37 Signals model on your blog. I know you've mentioned why you don't invest in software companies in order to obtain dividends (despite the fact that people do invest in things like restaurants and banks in order to obtain dividends, and, as an investor, I think I'd rather own shares in a profitable software company than in a profitable restaurant). Maybe you could tie it all together into a blog post at some point. The topic appears here frequently.

Re: DHH Commissions his own Supercar - the Pagani Zonda HH

#72

Post by mgummelt »

pg wrote: post #57
garply wrote: post #16

After listening to DHH speak at Startup School a few years ago I came to the conclusion that for an entrepreneur a "lifestyle business" is a much more probable path to getting rich than the grow-fast-and-flip approach demanded by VCs and angel investors. In retrospect, it seems pretty obvious, but previously I had really only been exposed to entrepreneurship through PG's blog. I had never heard of 37 Signals before.…

Investors want the companies they fund to grow fast, but they don't want to "flip" them. They'd much prefer that they grew into large, independent companies, like Google and Facebook. When companies get sold at earlier stages, it's more often because the founders wanted to than the investors. I would never claim that starting a startup (= a company designed to grow very fast) was the only way to get rich. Anyone can…

For YC, is E(IPO) > E(quick acquisition). The latter obviously being more likely, but less valuable. How do you have enough data to know?

Re: DHH Commissions his own Supercar - the Pagani Zonda HH

#73

Post by jamiequint »

garply wrote: post #16

After listening to DHH speak at Startup School a few years ago I came to the conclusion that for an entrepreneur a "lifestyle business" is a much more probable path to getting rich than the grow-fast-and-flip approach demanded by VCs and angel investors. In retrospect, it seems pretty obvious, but previously I had really only been exposed to entrepreneurship through PG's blog. I had never heard of 37 Signals before.…

Keep in mind that to become as rich as the partners at 37Signals you have to be just as much of an outlier as the people who found your average high growth startup and have a successful exit. The average SaaS business makes nowhere close to 8 figures a year. Venture backed startups certainly have higher variance, but I wouldn't agree that its black-and-white that starting a SaaS small business is a more reliable way to become wealthy enough to never have to work again.

Re: DHH Commissions his own Supercar - the Pagani Zonda HH

#74

Post by jedc »

petercooper wrote: post #45
quizbiz wrote: post #43

Earlier quoted context omitted.

Is there anyway of knowing how many subscription clients 37Signals has?

I don't think so, and I don't think they should share that information, but they've given some "clues" (potentially false) over the years with references to things like "over 1 million users." (Though "user" is a vague term considering how their system works.) In response to a similar question in 2006, Jason Fried said: We’re a private company so we don’t disclose this information. A few years ago, someone tried to a…

I was the one who did that analysis. I updated it at the end of 2008 here: http://blog.jedchristiansen.com/2008/12/04/estimating-37sign...

My model was largely based on a few key numbers they had published and a general freemium business model. Since then, they've dramatically reduced the prominence of their "free" option and also stopped posting any details of their business, so I haven't been able to realistically update my analysis.

That said, I think that by focusing much more on their paid plans, and by branching out into even more business lines has made 37signals more and more profitable. (See their recent string of new hires.) I wouldn't be surprised if they were exceeding $10million a year in profit, which would be ~$5million a year to DHH. Enough to safely afford a dream car like this. :)

Re: DHH Commissions his own Supercar - the Pagani Zonda HH

#75

Post by wazoox »

ludistan wrote: post #70
brown9-2 wrote: post #30

Earlier quoted context omitted.

The article also has this.. Heinemeier Hansson is based in Chicago, but since the Zonda was never homologated to U.S. specifications, reports indicate that the owner bought a vacation home in Italy just so he could drive the thing. Now that's dedication.

DHH is actually born in Copenhagen, Denmark, so I don't think he would need a vacation home in Italy just so he could drive his new car. But they do have bigger restrictions on the roads in Denmark...

Bigger than what? in 2008 I found that overall danes drive very fast and apparently radar and cops are few :)

Re: DHH Commissions his own Supercar - the Pagani Zonda HH

#77

Post by gjm11 »

pg wrote: post #57
garply wrote: post #16

After listening to DHH speak at Startup School a few years ago I came to the conclusion that for an entrepreneur a "lifestyle business" is a much more probable path to getting rich than the grow-fast-and-flip approach demanded by VCs and angel investors. In retrospect, it seems pretty obvious, but previously I had really only been exposed to entrepreneurship through PG's blog. I had never heard of 37 Signals before.…

Investors want the companies they fund to grow fast, but they don't want to "flip" them. They'd much prefer that they grew into large, independent companies, like Google and Facebook. When companies get sold at earlier stages, it's more often because the founders wanted to than the investors. I would never claim that starting a startup (= a company designed to grow very fast) was the only way to get rich. Anyone can…

Buying lottery tickets is the extreme end of the spectrum. It's not for everyone. It's not for 99% of people probably. But if you're Andrew Whittaker or Geraldine Williams or Harold and Helen Lerner[1], it turns out that you can do better than the guys patiently working at startups.

[1] http://en.wikipedia.org/wiki/Lottery_jackpot_records

Re: DHH Commissions his own Supercar - the Pagani Zonda HH

#79

Post by tjogin »

petercooper wrote: post #78
baxter wrote: post #76

Earlier quoted context omitted.

Looks like the website is a tumblr. Not Rails?

I'd suspect Pagani or a PR agency are running it, not him.

Even if it is him, I don't think DHH would create a Rails based blog just for the purpose of posting pics of his pet project. DHH is a pragmatic guy, and Tumblr is an excellent tool.

Re: DHH Commissions his own Supercar - the Pagani Zonda HH

#80

Post by byrneseyeview »

gjm11 wrote: post #77
pg wrote: post #57

Earlier quoted context omitted.

Investors want the companies they fund to grow fast, but they don't want to "flip" them. They'd much prefer that they grew into large, independent companies, like Google and Facebook. When companies get sold at earlier stages, it's more often because the founders wanted to than the investors. I would never claim that starting a startup (= a company designed to grow very fast) was the only way to get rich. Anyone can…

Buying lottery tickets is the extreme end of the spectrum. It's not for everyone. It's not for 99% of people probably. But if you're Andrew Whittaker or Geraldine Williams or Harold and Helen Lerner[1], it turns out that you can do better than the guys patiently working at startups. [1] http://en.wikipedia.org/wiki/Lottery_jackpot_records

The expected value of working on a startup is positive. The social value is also positive. And I don't think anyone would argue that, on the margin, you can't do something extra to raise your odds of winning disproportionate to the extra contribution.

So lotto tickets appear to be a terrible counterpoint.

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