
Basecamp Co-Founder David Heinemeier Hansson On: The Founding of Ethical SaaS - mpweiher
https://www.saasmag.com/basecamp-co-founder-david-heinemeier-hansson-on-the-founding-of-ethical-saas/
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cromulent
I happened across the Bezos investment announcement from 2006 yesterday while
cleaning up emails:

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Hey there-

BEZOS INVESTS IN 37SIGNALS Today we have a very special announcement to make:
Bezos Expeditions, a personal investment company of Jeff Bezos, has made a
minority private equity investment in 37signals.

BACKGROUND ON THE DECISION Over the past two and a half years we've
accomplished a lot on our own. We've released 5 products (Basecamp, Backpack,
Campfire, Tadalist, and Writeboard) which over 500,000 people have signed up
for so far, wrote Getting Real which has sold nearly 20,000 copies in less
than six months, changed the web development world by writing and open
sourcing the Ruby on Rails framework, presented at conferences around the
world, and more. We're proud of what we've been able to do without outside
help. But we think we can do even better with the right kind of help. And
we're picky.

Since we launched Basecamp we've been contacted by nearly 30 different VC
firms. We've never been interested in the typical traditional VC deal. With a
few exceptions, all the VCs could offer us was cash and connections. We're
fine on both of those fronts. We don't need their money to run the business
and our little black book is full. We're looking for something else.

What we've been looking for is the wisdom of a very special entrepreneur who's
been through what we're going through. Someone who sees things a little
differently and makes us feel right at home. Someone with a long term outlook,
not a build-to-flip mentality. We found a perfect match in Jeff. Jeff is our
kinda guy.

It will be great learning from Jeff as we build 37signals into one the great
companies of the next 20 years. Daniel Burnham, the great visionary architect
of Chicago, said, "Make no little plans; they have no magic to stir men's
blood and probably will themselves not be realized." We agree. We hope this
boost of ambition, and Jeff's personal vote of confidence, will help us
achieve our big plans.

So here we go.

-Jason Fried, 37signals

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gerry_shaw
I wonder if that decision in 2006 and the experience that followed is what
motivates this point of view.

People make mistakes and can learn from them.

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rantwasp
this is 100% speculation, but guessing this came at a time when Rails was on
the rise and Bezos saw the potential of it. The terms of the deal are super-
favorable to 37signals, so why not?

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mpweiher
"... nothing, it sounds harsh, but nothing important should happen in chat.
Anything that’s really important that requires serious deliberations and major
decisions and major point of information should be in a format where someone
can catch up on their own time."

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throwaway35784
The discussing of ethics is at the very end, summarized by the influence of
investors:

> The investors are optimizing for growth rates because that’s how you get the
> big multiple and that’s how you get the biggest bang for an IPO. I’m not a
> big fan of these methods, because most of the time, the large valuations are
> based on the premise and promise that these companies will dominate the
> market that they’re in, capture a monopoly and then one day, once they have
> eradicated every competitor and become the top dog that dominates everyone,
> they can raise prices because customers will have nowhere to go and that’s
> when they make money. Is that an aspirational place for us to be, that we
> should be cheering on monopolists who are cornering markets and then when we
> have eradicated all competitors, they raise rents? That’s not a very
> appealing prospect to me. I’d much rather see healthy marketplaces where
> there’s lots of different providers.

If you want to be ethical, don't take money from those who care about nothing
but getting more money.

Greed is _not_ good.

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scarface74
Basecamp is not a non profit. Of course they also care about making more
money. If I recall correctly, everyone’s compensation there is based partially
on profit sharing. They are feeding starving children in Africa.

And that’s not meant to be a value judgement. I think a company that has a
business model of getting $x amount money from customers and spending $y where
$x > $y is much better aligned with customers than a company where $y > $x,
they are subsidized by VCs, and the company’s ultimate goal is to be acquired
or pawn their money losing business off onto the public markets.

~~~
throwaway35784
The key is to care about _more than just_ money.

