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

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

#201

Post by larrys »

tptacek wrote: post #195
larrys wrote: post #143

Earlier quoted context omitted.

" So if Jason really believes this is a terrible problem and wants to set things on the right course" Well you know that's not going to happen especially since he made this statement below: "We have 35 employees at 37signals. We could have hundreds of employees if we wanted to--our revenues and profits support that--but I think we’d be worse off." So he isn't simply saying that he feels he could expand his business a…

First, 37signals has a large (for our field) in-house customer support team, so the mean fully loaded head count cost of a 37s employee is lower than the number you're thinking. Second, I think you are underestimating just how profitable 37signals probably is. They have scaled a few tight products with high recurring revenue to a very large number of customers with a tiny team. I've worked at companies with hundreds…

Ok point taken re fully loaded.

"just how profitable 37signals probably is"

As an aside to this discussion: If they are actually that profitable it's a good idea to fly below the radar and resist making statements about how wildly profitable they are. Doing that might entice competitors to enter the same market and regardless of whether they succeed or not that could kill the goose.

Sometimes of course things are out in the open and it can't be avoided (lines at the restaurant or with public companies, or Oracle posting their 24x7 software support rates where a guy out of his house can do the math). Sometimes you want the publicity for one reason or another. But despite the openness of the internet there are still things that you want to keep to yourself lest everybody and their uncle decides to move into your neighborhood.

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

#202

Post by larrys »

yen223 wrote: post #157
larrys wrote: post #144

Earlier quoted context omitted.

"All he says is that her business model is a good business model, and he's inspired by it." He says: "She’s been doing it some twenty-odd years, and that’s just an incredible success story. To me that’s far more interesting" I have absolutely no idea why he feels that someone who has cleaned homes for 20 years is an incredible success story. It's almost as patronizing as it is naive. What would be at least somewhat i…

His point was that it is a sustainable business, which is not something that can be said of most Silicon Valley startups (in his opinion).

"it is a sustainable business"

If you set your sites low enough you can have a sustainable business. You can mow lawns or you can paint houses. That's being self employed with essentially what amounts to a job. That would be appropriate to talk about in a post about why it's better to do that rather than work for a large company.

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

#203

Post by larrys »

anamax wrote: post #161
larrys wrote: post #144

Earlier quoted context omitted.

"All he says is that her business model is a good business model, and he's inspired by it." He says: "She’s been doing it some twenty-odd years, and that’s just an incredible success story. To me that’s far more interesting" I have absolutely no idea why he feels that someone who has cleaned homes for 20 years is an incredible success story. It's almost as patronizing as it is naive. What would be at least somewhat i…

> I have absolutely no idea why he feels that someone who has cleaned homes for 20 years is an incredible success story. It's almost as patronizing as it is naive. Project much? > What would be at least somewhat interesting is if she figured out a way to get paid 2x the hourly rate and/or get houses cleaned in 1/2 the time. How do you know that she hasn't? He says that she's happy. He doesn't know much about how it m…

"Project much?"

Guilty as charged.

"How do you know that she hasn't?"

Well then that's a pox on his house for not bringing up that very important point in a discussion related to how much he admires her when discussing business.

"You think that you do and you think that she's doing it wrong...."

My issue isn't at all with the cleaning lady. It's with the specific example of using the cleaning lady to make this point:

"She’s been doing it some twenty-odd years, and that’s just an incredible success story. To me that’s far more interesting than a tech company"

I don't even think he really means that actually. I fail to see what makes that "far more interesting than a tech company".

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

#204

Post by Confusion »

Acne_Researcher wrote: post #35

This guy could have built the next Salesforce / google. but he eschewed hiring a sales team. He didn't want that, but still. Failing to achieve your true potential is not something to be bragging about all over the web.

You could have built the next Salesforce, but unfortunately you wasted your time complaining on the internet about how extraordinarily succesful people have not 'lived up to their full potential'.

Everyone has infinite potential.

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

#205

Post by mikepmalai »

salemh wrote: post #170
mikepmalai wrote: post #127

Earlier quoted context omitted.

I'd put money on most cleaners not having hobbies =) (Sorry couldn't help myself...I come from a family of very blue collar folks and it's a running joke that your hobby is sleep) My main point is it's hard to break years of routine/habit. If someone has done the same thing for 20 years, I don't expect them to suddenly change. Even when change would bring greater happiness over the long-term, I'm not betting against…

You are probably on to something with the lack of "retirement" (US, business and academia). Also, the change may lead to less happiness, from breaking such a long-term "routine" (I would say "life").

It seems like with enough time we become institutionalized to a certain way of life and will reshape our happiness to fit perfectly to that world.

Oddly, first time I saw the world this way was after watching Shawshank Redemption as a kid and seeing Brooks killing himself after he was freed. From that point on, a lot of the seemingly irrational decisions people make made a lot more sense to me.

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

#206

Post by larrys »

davidw wrote: post #175
anamax wrote: post #161

Earlier quoted context omitted.

> I have absolutely no idea why he feels that someone who has cleaned homes for 20 years is an incredible success story. It's almost as patronizing as it is naive. Project much? > What would be at least somewhat interesting is if she figured out a way to get paid 2x the hourly rate and/or get houses cleaned in 1/2 the time. How do you know that she hasn't? He says that she's happy. He doesn't know much about how it m…

I don't really think we can get anywhere with speculation: he might see her happy because people are pretty good at putting on a mask in professional situations. Or maybe she just really is happy. However, in the aggregate, I'd be willing to bet on most cleaning people preferring the income, and freedom that 37 signals have. With that kind of money, you have a lot of options that someone making cleaning wages just do…

"Or maybe she just really is happy."

Not speaking about this person (who neither of us know) but strictly about people in general by using an example of cows in a field.

A cow in a field can stand there all day and just graze on grass. Our cat can sit there all day and just do nothing. Could you do that? All day, every day?

People with brains are more complex. In general if she is happy doing cleaning work we can presume she doesn't have the same brain or needs, of, say someone with higher intelligence. People are different in what their needs are.

"he might see her happy because people are pretty good at putting on a mask in professional situations."

True.

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

#207

Post by _urga »

gfodor wrote: post #189
_urga wrote: post #186

Earlier quoted context omitted.

"And plenty of these plumbers and barbers and cafes probably do great work and treat their employees well. Do you really want to read articles about all of them? I don't. What makes a company newsworthy (unless it's as a case study) is its size, or potential size." The real world is a better movie. Real people, real work, real life make for interesting stories. I would much rather read about healthy business, regardl…

So I guess you spend your afternoons reading blue chip 10-k's? Didn't think so.

Just Sunday afternoons. Haven't for awhile. Keen to get back into it. All the best with the work at Etsy.

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

#208

Post by jmathai »

18pfsmt wrote: post #184
quesera wrote: post #140

Earlier quoted context omitted.

IPO has been verbed for at least 15 years in Silicon Valley. Probably longer. Your statement is both pedantic and incorrect.

I simply disagree that because some people decided to misuse a term, it is now appropriate. I think the use of IPO as a verb was done to sound sophisticated (and legitimate) and exciting, without understanding what SOX compliance involves. It seems to me that the only reason one would say "IPO" as a verb rather than "go public" would be to demonstrate some familiarity with jargon and gain some credibility among amate…

I agree with you in principle but pragmatically disagree. For better or worse the cultural usage of words and terms define what's appropriate.

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

#209

Post by saraid216 »

emmett wrote: post #156
saraid216 wrote: post #114

Earlier quoted context omitted.

You realize that there exist more than two business models in the whole of the world, right? Where do you get this strange taxonomy of "products" versus "services" anyways?

You're being needlessly pedantic. It's pretty obvious that by "service" he means a business where you are paid per hour you work: all freelancers, consultants, and all other businesses where the owner is a critical daily employee. Yes, that's not a typical word for the distinction, but you know what he means.

> You're being needlessly pedantic.

Um, no. I was being exactly as pedantic as he was.

The difference was that my word choice was actually correct.

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

#210

Post by nameuserc »

sleepyhead wrote: post #194
nameuserc wrote: post #187

Earlier quoted context omitted.

Forget what I say. It's just me. "5,000 companies sign up every week." But "keep all project discussions, emails, and stuff in one place" just doesn't draw me in. I don't have a problem with "keeping all project stuff in one place". 37Signals appears to be aimed at solving a "problem" I do not have. I have looked at their website several times. It just never grabs me. And I'm not inclined to give them my email addres…

So they sell something you don't need. Why do you have a problem with that?

Assuming what you say were true (i.e., that I "have a problem" with 37Signals), do you "have a problem" with me "having a problem" with that?

Do you also sell something people do not need? And does it make you uncomfortable when people who do not need it mentions that to an audience via HN, the same way 37Signals keeps working to make mention of itself, or have others do so, in publications with large audiences.

If I have no need for a service someone is selling and I never hear about that service, then I have no reason (maybe even no ability) to to state what I think about that service. But if in the course of reading the "news" I am continually reminded of the service's existence, I may be inclined to comment. That is the risk you take with PR and advertising, or internet-based hype in general.

So it seems that 37Signals sells the use of their forum software (constructed from Ruby on Rails, i.e., free software), hosted on 37Signals' computers. I am getting a clearer picture now.

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