37signals Earns Millions Each Year. Its CEO’s Model? His Cleaning Lady

He seems to forget that he's not in the same business as startups are; he's viewing startups through a small business lens.

see the sickness in our industry

He's not in "our" industry. He runs a small business that makes good money, and it happens to use technology. Not the same thing.

Are you profitable? Are you building something great?

These are not always relevant questions for a startup, depending on what phase of its life it's in. You certainly try to build something great—or better yet, solve a problem!—but you may very well have to change (yes, I mean "pivot"). See Inside the Tornado for info about having to not worry about treating customers well at some stages.

I'm not sure I'd call any of 37 Signals' services all that great, however, if by "great" we mean innovative. There's nothing special about them except that they were there early and they're simple. But that's not what I'd call innovation, and I don't think it makes them great. I think his cocky attitude has a lot to do with the constant feedback loop in the town he lives in. In SV, I don't see many founders praised for judging other people's work; usually, they're too busy trying to build something truly great, even if it's yet another photo-sharing site. Hell, Flickr was just another photo-sharing site, but I think of that as far, far greater than something like Basecamp.

> Actually, my cleaning lady, for example, she’s great.

There's something a bit... I don't know quite how to put it. Let's just say that I bet she'd willingly trade places with him, cash out, and go enjoy herself instead of cleaning up after other people day in and day out. (Edit to change the wording just a bit)

> The other interesting thing about restaurants is you could have a dozen Italian restaurants in the city and they can all be successful. It’s not like in the tech world, where everyone wants to beat each other up, and there’s one winner.

That's because the economics of a highly local business are very different from one that can have customers all over the world.

Also: restaurants fail all the time - it's a stressful business to be in, and not generally the sort of relaxed, easy-going picture he makes it sound like. You can bet that most restaurants do not have the option of doing 4 days a week, unless they have big margins the other days, which means they probably have something very special about them.

I admire and respect those guys, but there's something too glib about some of their communications that turns my cynic sense on.

Edit: furthermore... live and let live, no? I'm more interested in a 37 signals style business myself, but let the people in Silicon Valley do their thing even if it doesn't float your boat. It'll all work out. As one example, I think the world is better off with PG running Y Combinator instead of having slogged on with Viaweb.

> at board level, it's healthy to have a range of opinions

This is very true... perhaps its one reason why Groupon is struggling so much. Without knowing the board dynamics, its impossible to say, but if I was in their position, I'd want people on the board criticizing every move. So long as it wasn't a majority of the board that is...

When my Dad decided to start his own business his goal was to work for himself and make enough money to live comfortably. He's achieved that, he could push and try stretch it to the next level and make even more money and become more successful but he realised he's happy with the money he's got and not having to deal with anything extra.

When anyone starts a business you can shoot for living a nice comfortable life (and lets be honest if you're running a business making millions per year, you've nailed it), or you can push and push to become the business. Both have chance of failure, both require devotion. I'd take the same route as 37signals. Having enough money to live comfortably and enjoy life sound much better than the constant grind to get to the next boss level.

> There's something a bit... I don't know quite how to put it. Let's just say that I bet she'd willingly trade places with him, cash out, and go enjoy herself instead of cleaning up other people's crap day in and day out.

My mother isn't a cleaner (she's a nurse) but I talked with her before about whether or not if she had the chance she would quit her job and sit on the beach all day doing whatever she wanted and she said that no, she would never be able to stop working because it has been a part of her entire life and if she was going to quit her job and do anything she would open a book shop (I think it was a book shop).

I think for a lot of people work is a part of who they are and it's not as simple as just taking money and spending life on a beach, I'm sure the cleaner would love financial freedom but I would suspect she would keep working. For a lot of people they don't have things they enjoy that have some sort of output (for most of HN that's programming, or design) so working is all they have to feel like they have value in the world.

Maybe his cleaner has financial freedom already (saving, inheritance etc) and chooses to work.