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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

#151

Post by tptacek »

rdl wrote: post #150
tptacek wrote: post #125

Earlier quoted context omitted.

Do you really believe any of this comment? You're a pretty smart guy. I don't believe you think anyone reads this article and thinks Fried is saying Groupon runs that way, or that Fried is in any way endorsing how Groupon is run. I know this is a message board and we're all committing message board thinking, but snap out of it for just a second. We're talking about a real person --- a person who by the way is posting…

Not based on the article at all -- just the general argument of "someone holding a board seat at a company is more of an endorsement than merely owning stock". There are people I respect who have board seats at really dysfunctional big tech companies, too, so maybe the argument doesn't work. He's a great CEO (at least in the context of 37 Signals), and has a set of values which are internally consistent, and sits on…

He does not sit on the board of Groupon and hasn't for a long time.

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

#152

Post by pg »

dlss wrote: post #138
pg wrote: post #130

Earlier quoted context omitted.

The reason the press writes about funding rather than revenues is not some kind of conspiracy to focus on the wrong things, but simply because reporters know about funding rounds and not about revenues. It's clear that the press would write about revenues if they could, because they write a lot about the revenues of public companies. They're able to do that because public companies have to disclose their revenues. Pr…

This is unusually straw-mannish of you pg. From the article: "What matters is: Are you profitable? Are you building something great? Are you taking care of your people? Are you treating your customers well?" All of those questions can be answered without needing access to a companies ledger. Jason answers those questions himself in the article. I think his point was that stories about those questions don't get as muc…

Anyone who proposes that the discussion should focus on profitability rather than funding rounds is presumably not proposing that we simply talk about it as one bit of information: profitable or not. That would make pretty short articles. It also wouldn't be very interesting; there are hundreds of plumbers and barbers and cafes within a few miles of me who are profitable.

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.

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

#153

Post by rdl »

tptacek wrote: post #151
rdl wrote: post #150

Earlier quoted context omitted.

Not based on the article at all -- just the general argument of "someone holding a board seat at a company is more of an endorsement than merely owning stock". There are people I respect who have board seats at really dysfunctional big tech companies, too, so maybe the argument doesn't work. He's a great CEO (at least in the context of 37 Signals), and has a set of values which are internally consistent, and sits on…

He does not sit on the board of Groupon and hasn't for a long time.

Right -- so this whole thread is essentially people trying to troll him, which I didn't understand until reading the rest of the context and postings on other 37S articles. (and Groupon early days was fine). I assumed it was brought up because it was relevant to now.

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

#154

Post by rdl »

pg wrote: post #152
dlss wrote: post #138

Earlier quoted context omitted.

This is unusually straw-mannish of you pg. From the article: "What matters is: Are you profitable? Are you building something great? Are you taking care of your people? Are you treating your customers well?" All of those questions can be answered without needing access to a companies ledger. Jason answers those questions himself in the article. I think his point was that stories about those questions don't get as muc…

Anyone who proposes that the discussion should focus on profitability rather than funding rounds is presumably not proposing that we simply talk about it as one bit of information: profitable or not. That would make pretty short articles. It also wouldn't be very interesting; there are hundreds of plumbers and barbers and cafes within a few miles of me who are profitable. And plenty of these plumbers and barbers and…

The only way I can see this happening is if dotcom bust 2.0 happens (or major changes in tax code, macro economy, etc), employees totally write off the value of equity, and companies switch to profit sharing payouts. Cash salary is more directly relevant, though, with some guarantee of payout -- quitting a safe $100k/yr job for a $20k/mo job at a startup with $20k in the bank, maybe not.

Companies would also pick vendors based on financial stability, for which profit is probably a major factor, although cash in the bank would also be.

Or maybe it would happen if investment rules relaxed and private equity (Private Equity or direct investment like second market in non-public companies) happened, as communicating financials to lots of investors would still be relevant.

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

#155

Post by emmett »

rhizome wrote: post #126
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?

Go easy on him, it's only the second week of the semester.

This comment is needlessly mean and dismissive and doesn't belong on HN.

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

#156

Post by emmett »

saraid216 wrote: post #114
davidw wrote: post #109

Earlier quoted context omitted.

Unless Google has legions of Oompa Loompas hiding in its server rooms running around retrieving data as queries come in, it's a product that provides a service: it does not scale linearly with the number of people working on it. Put another way: each additional cleaning lady client consumes more of her time, and pays her more money in a fairly linear way. Google search users do not fit that pattern, and, more importa…

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.

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

#157

Post by yen223 »

larrys wrote: post #144
saraid216 wrote: post #85

Earlier quoted context omitted.

> 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. See, the typical problem with claims like Fried made is that they're idealizing lives they don't know much about. But Fried didn't walk into that trap. He doesn't remark on her home life. He doesn't…

"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).

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

#159

Post by dlss »

pg wrote: post #152
dlss wrote: post #138

Earlier quoted context omitted.

This is unusually straw-mannish of you pg. From the article: "What matters is: Are you profitable? Are you building something great? Are you taking care of your people? Are you treating your customers well?" All of those questions can be answered without needing access to a companies ledger. Jason answers those questions himself in the article. I think his point was that stories about those questions don't get as muc…

Anyone who proposes that the discussion should focus on profitability rather than funding rounds is presumably not proposing that we simply talk about it as one bit of information: profitable or not. That would make pretty short articles. It also wouldn't be very interesting; there are hundreds of plumbers and barbers and cafes within a few miles of me who are profitable. And plenty of these plumbers and barbers and…

It sounds like you might not be familiar with the author Jason referred to right before his critique of the current focus on size: Ricardo Semler.

In his books he develops a very humanistic look at the role of businesses in our lives. As entrepreneurs, employees, and as customers. I won't be able to do the ideas justice here, but I will try:

A business obsessed with revenue and growth is like a person obsessed with how many breaths they have taken, or how much food is in their pantry -- these are means to an end, not ends in themselves. Food is required for life but it's not the purpose of living. Businesses as conceived by Semler and Fried aren't designed to maximize revenue so much as make the world a better place (#include your essay about google being almost a nonprofit).

It may be that stories of plumbers, barbers, and cafes wouldn't be interesting to you. I like to hear about people living enjoyable lives, delighting their customers, and making their corner of the universe a better place. It's a lot more psychically healthy than reading about people trying to gain the most while providing the least (the tech crunch articles Jason refers to)

So many people seem obsessed with getting a large quantity of money, and only then trying their hand at building a fulfilling life. I have always thought of Semler as running things in reverse: how do we design a seven day weekend that is cash positive?

(Semler's book, The Seven Day Weekend, is highly recommended to anyone who wants to hear more)

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

#160

Post by its_so_on »

pg wrote: post #152
dlss wrote: post #138

Earlier quoted context omitted.

This is unusually straw-mannish of you pg. From the article: "What matters is: Are you profitable? Are you building something great? Are you taking care of your people? Are you treating your customers well?" All of those questions can be answered without needing access to a companies ledger. Jason answers those questions himself in the article. I think his point was that stories about those questions don't get as muc…

Anyone who proposes that the discussion should focus on profitability rather than funding rounds is presumably not proposing that we simply talk about it as one bit of information: profitable or not. That would make pretty short articles. It also wouldn't be very interesting; there are hundreds of plumbers and barbers and cafes within a few miles of me who are profitable. And plenty of these plumbers and barbers and…

pg, if you think potential size is interesting, why are you so against the biggest ideas?
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