EP15: Jason Fried on making money, internet fame, and the new Basecamp

This week we have Jason Fried of 37signals on the program. We discuss how he made thousands of dollars in high school, why he chose DHH as a partner, what it’s like to be “internet famous”, and the thinking behind the new Basecamp, Basecamp Breeze and Basecamp Personal. A quick note about the audio quality of this show: Jason had a bad WiFi connection that caused Skype to drop out at numerous times in the interview. We felt like the content was good, and so we released the show (even though the audio is not up to our standard). In order to serve you the listener, we paid to have a transcript made so you can read the interview.

This week we have Jason Fried of 37signals on the program. We discuss how he made thousands of dollars in high school, why he chose DHH as a partner, what it’s like to be “internet famous”, and the thinking behind the new BasecampBasecamp Breeze and Basecamp Personal.

A quick note about the audio quality of this show: Jason had a bad WiFi connection that caused Skype to drop out at numerous times in the interview. We felt like the content was good, and so we released the show (even though the audio is not up to our standard). In order to serve you the listener, we paid to have a transcript made so you can read the interview. You can see this at: productpeople.tv/jasonfried

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Show notes

Jason Fried

David Heinemeier Hansson

Their new book: Remote

New Basecamp

Basecamp Breeze

Basecamp Personal

Sponsor: Sprint.ly

Transcript

Justin Jackson: [0:01] Hi, I’m Justin.

Kyle Fox: [0:02] And I’m Kyle.

Justin: [0:03] This is Product People. The podcast focused on great products and the people who make them.

Kyle: [0:10] This is a pretty exciting episode because our guest today is Jason Fried of 37signals. Of course, 37signals is the company behind Basecamp and a bunch of other popular products as well as the bestselling book Rework. Jason it’s a pleasure to have you today, thanks for taking your time to talk to us.

Jason Fried: [0:31] Thanks for having me on guys.

Justin: [0:33] Perfect. Well, Jason you guys have been really busy at 37signals. You have built a bunch of new stuff this year but before we get into all that I want to now, have you always been making products? Is this something you have been doing, you know, since you started 37signals or was there stuff you built and sold before that?

Jason: [0:55] When I first got started in computers I was in junior high school, I’m 38 now, so I guess that was, I don’t know, 25 years ago or something that I got a computer. I started messing around with it and one of the things I wanted to do was I wanted to keep track of all the different tapes and CDs that I had.

[1:21] So I eventually got on AOL, before the formal Internet was around, went to the file section, searched in the Mac section for like music organizing tools and I found some stuff and downloaded those things. They were mostly based in FileMaker Pro, which is a data base. I had FileMaker Pro so I could run them and I just didn’t like them. I don’t know what it was, they weren’t attractive, they weren’t easy to use, they were complicated, they were doing far more things than I needed.

[1:59] I just needed this really simple thing. I wanted to look good, and be fast. I ended up just figuring that I could figure out how to make this sort of thing myself. I had File Maker, I started screwing around, started learning how to do it, and I eventually made a product called Audio File, which I started using to catalog my music collection.

[2:21] I basically wrote a little text file, a read me file basically, and in there I said, “Hey, if you like this it’s $20.00. Send me a check, or send me $20.00” and I put my address down. Then I uploaded it to AOL, and see what would happen. I had no idea.

[2:41] Then one day I got a check in the mail, well I got an envelope in the mail from a guy in Germany, and I didn’t know anybody in Germany. I hadn’t heard of anyone from Germany, I had never been there. And so my parents gave me this envelope, this air mail envelope, and I open it, and there was a print out of that read me file and $20.00.

[2:59] That was the start for me of selling software. After that I started taking off, and it didn’t put me through college or anything, but I had a nice amount of spending money, extra spending money in college just from this $20.00 shareware tool that I made. I probably made 10s of thousands of dollars or more selling it over the next few years.

Justin: [3:22] You’re kidding me, actually 10s of thousands of dollars selling this little shareware app?

Jason: [3:27] Yes, 10s of thousands of dollars, $20.00 a pop.

Justin: [3:31] What was it like, did that seem significant to you? I would love to make $10,000.00 now as a high school kid, was that pretty significant?

Jason: [3:41] Oh yeah. I’ve always had jobs too, so I’ve been working since I was 13 at grocery stores and shoe stores and gas stations and all this stuff. I had part time jobs anyway. I would have had spending money, but it was great to have extra money coming in, to have a significant amount, and for it to be sort of this passive money in that I didn’t feel like I was working for it. I had already done the work, making software.

Justin: [4:11] Yeah.

Jason: [4:12] The money just kept coming in, unlike my part time jobs where I had to go after school and work for four hours or something every day. That was a real nice thing. It was great. It was killer. I bought a bunch of stuff I wanted like a stereo or whatever, just a bunch of garbage probably.

[laughter]

Jason: [4:33] But I bought stuff because I’m like, “Hey, I’ve got some money to buys stuff.” Then in college it came in handy because I didn’t work during college so I needed some money to spend. That was handy. Yeah, it was great. It was a revelation.

[4:43] The thing I realized early on is people are happy to pay for things that are good. Don’t be afraid to charge for your services. Don’t be afraid to charge for what you produce. If those people who don’t want to pay for it want to complain about it, that’s fine. They don’t have to buy it.

[5:01] There are plenty of people out there who appreciate something good and are happy to cough up some cash for it, because they think it’s worth their time and it makes their life better.

Justin: [5:11] Yeah. What did your folks think about that when this is going on and you’re in high school? Are you from an entrepreneurial family?

Jason: [5:20] Sort of. My grandfather started a grocery store chain way back when, so he was working on his own. My dad worked for someone else for a while, but then he was working on his own, so a little bit of that.

[5:37] I had always kind of felt like I’d be an entrepreneur at some level. My dad always encouraged me to be that way. The making money thing from this software thing on this thing called AOL, my parents didn’t get it.

Justin: [5:47] Yeah.

Jason: [5:48] And I kind of was surprised too, but they just kept seeing checks coming in the mail for me. Whenever I’d get home from school or something there’d be a pile of envelopes for me.

Justin: [laughs] [5:58]

Jason: [5:59] They liked it at a certain point, obviously.

Justin: [6:04] That’s hilarious. If I all of a sudden had $10,000 in envelopes, my parents would have some questions for me.

Jason: [laughs] [6:10] Well, of course, this is spread out over 10 years, but, yeah. They’re like, “What’s going on?” I showed them. “I made this thing, and people are paying for it.” They understood that part of it. They didn’t understand what the thing was, but they got, yeah, people pay for things they want to buy. “OK, people are paying for it. Good for you.”

Justin: [6:28] That’s great!

Kyle: [6:30] How old did you say you were when you first did this?

Jason: [6:34] You know, I can’t exactly remember but I feel like I was, I started doing the computer stuff in junior high and then I feel it was probably sometime in high school when I actually released the product.

[crosstalk]

Kyle: [6:50] OK

Jason: [6:51] …audio file product. I think, it’s been so long I don’t remember the exact years. But I started before I went to college and I kept it going through college and I sort of stopped after that.

Kyle: [7:02] Got you! That’s got to be quite a revelation for a late adolescent kid. I know around that time is sort of when I got a part time job after school and this whole idea of, hey! I’m going to, I guess this is just how the world works. You kind of trade your hours for dollars sort of thing. [laughs] Meanwhile you were seeing the opposite side of the spectrum. You build this thing one time and collect mad checks.

[7:27] So what was that like as, I imagine not many of your friends were doing something like that. They were kind of like doing the old thing.

Jason: [7:36] Well, you know, I always had tried to sell other things too. I got a reseller’s license when I was, I think, 14 or 15. I went with my dad downtown somewhere. I don’t remember all the details either. It was a long time ago.

[7:53] We got this license that allowed me to buy things from distributors at cost, and then I could resell them to my friends for like double because it was still cheaper than it would have been to get stuff from the store. If it wasn’t double it was like I’d make 50 percent.

[8:10] I had friends who were buying cordless phones from me and radar detectors for the car and stuff. At the store it was like $200, and I paid like $110 and sold it for like $160 or something, so I made $50.

[8:22] I’ve always been into the buying and selling and business side of things. The thing that was cool about software was that I felt like the majority of the effort was up front, and the payments came afterward, which I kind of liked compared to doing a reseller thing where you have to go buy inventory and sell it and then you have to go buy more inventory. You’re always working hard for the same amount of money instead of putting in a lot of that creativity up front and then reaping the rewards down the road.

Kyle: [8:55] Right, yeah, it totally makes sense. If we were to fast forward a little bit to the start of 37Signals, you guys started off as a design agency. Correct?

Jason: [9:08] That’s right.

Kyle: [9:09] So that would be a little bit different, I guess, than selling a product where you do all this upfront work and then collect on it sort of over the life of the product. So you started as a design agency but eventually transitioned into your first product, Basecamp.

[9:24] Do you want to talk about what that was like, going from agency to creating a product? What prompted you guys to build Basecamp? Was the idea of changing into a product company something you guys had from the start, or was it sort of like “Let’s build this and see what happens?”

Jason: [9:42] Basecamp came from our own need. We were a consulting firm and doing website design for people. We just got busier and busier doing that work. We needed a better way to manage these projects we were doing for clients.

[9:56] We were basically delivering things via email, which is fine. It works, but it just didn’t feel that, I don’t know, profession is the word I used. I don’t like that word today, but back then I was like, “This doesn’t feel professional” or something.

[10:12] There was no permanent record of things. It was just in in-boxes spread out all over the place. I’m like, “There’s got to be a better way to do this sort of thing.” So we looked around at some tools that existed in the market, but they weren’t really solving the problems.

It’s very similar to me way back in the day looking for music cataloging tools. I couldn’t find something that did what I needed it to do. All these things were doing other things that I didn’t need, so we decided to build our own project management tool [inaudible 00: [10:26] 10:42] .

[10:45] As we were building it we were using it. We were using it with our clients, and they were saying things like, “Hey, I need this sort of thing too. What is this? I’ve got projects. I need to manage my projects. Where I can I buy this thing?”

We said, “Well, we’re building this thing. You’re helping us figure it out as we go.” So [inaudible 00: [11:03] 11:05] goes off and goes, “Hey, maybe this is a product.” We finished it up, used it some more, and then polished it up to turn it into a product and then put some prices on it and threw it back out there. We made a website and talked about it on our blog and released it in February 2004 with a goal that if it could make $5000 a month after the first year.

[11:34] We figured it would take a year for it to make $5000 a month, but we’d be happy because that’s about $60,000 a year which is like a nice client project. We’d be doing our client work, and we’d have this “free money” this free $60,000 coming in every year.

[11:43] It turned out that we hit that number in like five, six, seven, eight weeks, something like that. I don’t remember the exact time. It didn’t take a year. It took like a month or two months, and it was doing more than $5000 a month. So we knew we were onto something.

[12:03] It just turned out that a year later it was doing more money than our consulting business was, so we stopped doing the consulting stuff and started doing product development, not developing products but just focused on Basecamp. The rest is sort of history for that.

Kyle: [12:11] Right, yeah. Cool.

Justin: [12:13] So, Jason, maybe we can talk a little bit about…because along that time you met this guy named David Heinemeier Hansson. Maybe actually you can give Kyle and I some advice, because him and I are new partners on this podcast.

[12:33] It’s similar. We met each other online, and now we’ve got a little bit of revenue. I think in some ways Kyle and I are at the point where we’re saying, “Do we want to actually partner up for real and make this official?” How did you go through that process with David?

Jason: [12:52] Well, I originally hired David. He was in school at the time and I hired him to give me 10 hours a week. Actually, let me step back because that’s actually not accurate. Actually there’s something before that.

[13:00] I hired him to do a project for me. I’d been working on a program in PHP and I made a thing called Single File which is a book collection database. I made it and I was kind of getting stuck and so I asked some people for some help and David was one of the people who heard about that I needed help.

[13:31] He wrote me an email and started helping me back and forth. This is just free, like advice. And then like, I really like this guy, his advice and how clear he is and whatever. So I hired him to do that project for me, to finish that tool.

Justin: [13:44] OK.

Jason: [13:45] It worked out really well. That was the first project we did together. Then this other project came up at 37signals, which was an Internet project for a client of ours, called Summit Credit Union. We were doing the redesign, then we said, hey, maybe we can add some awesome functionality to it.

[14:08] I said, “Hey David, would you be the programmer on this, we will do the design, you the programming and we will sell this thing.” He said sure, he was a student, he was looking for money. We worked together on that project, which was a great project, we worked on some other projects like that.

[14:25] He was getting out of school, we were talking and so I hired him as a contractor to do Basecamp, then hired him as an employee and then from the employee he eventually became a partner in the business. It was a series of tasks basically, but they weren’t really tasks.

[14:41] Looking back it looks like they were tasks but they were really just experiences working together at a different capacity along the way and realizing that we got along well, we would be good partners in the business. The key was that he was introducing a skill or he was bringing a skill to the table that I didn’t have.

[15:03] So he was a programmer. I was a designer. He wasn’t a designer. I wasn’t a programmer. So we complemented each other well which I think is important for partners. So it happened over a series of years, gaining trust working together, and that’s how it all came together eventually.

Justin: [15:23] Was there any part of you that was still nervous when you made that jump to saying I’m actually going to give you part of this company that we built? Was there any sort of hesitation, or by that point had you built enough trust to say “I trust this guy. We can go ahead on this.”

Jason: [15:43] Well, there was hesitation just because it’s a big step to do the…I’ve had a couple of partners before at 37 Signals and, at this point, I was back on my own again at 37 Signals, so it’s a couple of things. One didn’t work out really and the other guy just left a few years later.

[16:05] They were all good amicable separations but I’m back to my own again. Do I want to go back in this whole partner thing again? Do I want down that road again? So there was that, of course. But I could tell that David was a special, unique guy and that had we not partnered up he would have gone off to do his own thing. So I kind of saw it as a bigger risk not to get him more involved. I also thought that he would contribute a lot more as an owner and everything.

[16:49] While there was that initial sort of, do I really want to go down this partner thing road again, there was also the, yes, this makes sense, I’m going to take a risk, I’m going to bet on this guy and believe in him, and I’ll make a bet and see what happens. It was good obviously.

Justin: [17:02] Yeah. It paid off.

Jason: [17:04] Yep.

Justin: [17:04] Well, maybe one last question in kind of just the background story. When you guys started doing Basecamp and started blogging, you were kind of the underdogs. No one really knew who you were and your biggest competitor was Microsoft in the project management space. But now, especially in the tech community, a lot of people know who you are.

[17:34] How does it feel to have all of this attention now? What’s it like? Has it changed from when you first started and does it make it harder? Does it make it easier? Do you like the attention? What’s that like?

Jason: [17:50] I don’t really think about it. I know that we have the ability to get attention by saying things or announcing things, but it doesn’t affect our decisions day to day. People do care about what we are doing, some people love it, some people hate it. The point is if we have something to say, people will listen. So, that’s good, that’s a huge advantage.

[18:23] But day to day, I don’t think about it. Personally I’m more of a private guy, I don’t like to seek attention and I would rather be at home, I’m kind of an introverted person. It’s one of the reasons why I don’t like conferences and stuff. I don’t really want the attention, I just want to do great work and build cool stuff and that is what I was doing.

[18:50] One of the things is of course when more people know about you their expectations are different. In many ways it’s very hard to meet those expectations on a consistent basis when they have their own expectations that are sort of impossible to meet.

[19:16] When you’re releasing your product it’s very easy to go is that all? Is that all they could do? Is that it? You know that sort of thing which you wouldn’t get that normally if you were brand new. So there is a little bit of that stuff, but for the most part it’s great. I mean it’s great to have the ability to not have to pay for attention because we’ve earned it over the years. That’s definitely helpful.

Interviewer: [19:40] Well this segue ways into something that Kyle was asking me about. What was, with the Basecamp relaunch, right Kyle?

Kyle: [19:53] I think it’s been close to a year since you guys relaunched Basecamp correct? I think you launched in the start of March 2012.

Jason: [20:01] That’s right.

Kyle: [20:05] I’ve worked in the past at places where we’ve decided to rebuild the product from scratch. It ends up being good but it’s also in some ways never really as good as you imagined or it takes a little bit longer. Some people tend to say you should never rebuild your product. Which I don’t personally think, but there’s a pretty strong following for that line of thinking.

[20:32] I’d be curious to know, now that you guys are a year into it, looking back on it what originally prompted you guys to take on this huge risk of rebuilding a successful product and how did it go? Did it take longer than you might have thought or have you been overall happy with how this went?

Jason: [20:54] It was a pretty [inaudible 00:20:56] mostly between me and David initially. The new Basecamp was my idea. I want to build a new Basecamp, let’s start over, let’s solve similar problems but new ways. I started working on this. And this typically happened [inaudible 00:21:13] I’ll have some idea and I’ll just start mocking it up and screwing around and whatever.

[21:17] And then I’ll show Dave and get his feedback on it. Because David has really insightful take on things and he also reacts quickly which is good and bad. But really good when you’re showing him because good to see quick reactions on things.

[21:38] Anyway, I go off on my own and work with another designer or something and do something and then I show David. Actually David wasn’t convinced because he’s always thought, like you mentioned, and it’s sort of said in the industry that total rewrites are usually a huge mistake. They usually don’t turn out as well as they should. It’s a ton of time spent for very little return. It’s like the curse of software development.

[22:07] He was naturally opposed to that, which I totally understood, too. I was talking to him like, “Let’s not get stuck not doing something because we’re not supposed to. Let’s try something and see if we can do something that we’re not supposed to. Let’s not stop doing it because we’re not supposed to. Let’s start doing it because we’re not supposed to and see what happens.”

[22:32] We went back to the drawing board to look over some stuff. He had some really good feedback on a few things. I went back, changed the design around, messed around, went to him again. We started seeing where it was going and then got really excited about it.

[22:46] The idea behind it was not to recreate Basecamp that we already had. That’s what happens with a lot of rewrites. A team would rewrite a product. What will come out of it is the exact same product with a new code base. That’s not worth the time.

[23:02] We were going to approach the same problems, which was communication and collaboration, and sharing information and keeping it all on one place online and that kind of stuff.

Kyle: [23:11] Right.

Jason: [23:12] Priorities. That’s why it made sense.

Kyle: [23:18] Yeah, and I think that’s a perfect example of when it does make sense to possibly do a rewrite. When a lot of people say to not do a rewrite or it’s a mistake is, I think because, in a lot of cases, when a company decides to do a rewrite the decision is technology based, like let’s migrate from this old technology stack to a newer technology stack because of these technology reasons.

[23:45] In you guys’ case it sounds like you learned a lot and gained a lot of insight from running Basecamp, the first version, and it probably gave you some different ways to approach the problems. It’s kind of like a problem solving reason to approach a rebuild rather than technology.

Jason: [24:09] Yeah, we have gotten to use a lot of new technology. One of the reasons why we couldn’t improve…one of the reasons we talked about was could we take these ideas that we come up with and sort of fix Basecamp the classic, the original Basecamp. Could we change it in these ways?

It just turns out that when you have a product that’s been around for years, there is so much [inaudible 00: [24:27] 24:31] built up, technology wise and also customer expectation. If you go off and change it drastically it really ends up being very difficult.

[24:40] So we decided to keep the old Basecamp which we renamed classic around forever. As long as people are using it, it’s going to stick around. A lot of people still use it. But we’re going to focus our efforts on the new Basecamp, new tech, new ideas, the whole thing, and run both versions.

[24:56] When you’re a new customer you only get the new one. Anyone who is on the old one can stay on the old one, or they can move if they want. It took about a year to do. We wanted to take a little bit less time. We thought it might take six months originally or something. We made a lot of plans and we went and changed a lot of things and did some stuff and worked for months on something and threw it out and things like that.

[25:22] We went back and forth. But I’m extremely happy with how it came out. Aside from the original decision to make Basecamp, it’s the best decision as a company we’ve ever made to redo it. I think it gives us a lot of opportunity to do some really interesting things moving forward as well.

[25:38] We’re really thrilled with it, customers are loving it, the numbers that we care about are all up. It put us back up on the map which was good for us too because we built this thing eight years ago and that’s long time ago. So it’s good to show that we can do something like this.

Justin: [25:59] In the last few minutes we have here I want to talk about Basecamp Breeze and Basecamp Personal. Because you recently got rid of a bunch of products that were low cost or for consumers like Draft, Backpack, Ta-da, and Writeboard. I was a little bit surprised when you guys came out with these two personal products. I think they’re both, you just pay once and you can use it forever.

Jason: [26:31] Right.

Kyle: [26:32] What was the thinking behind that? Why launch these products aimed at consumers?

Jason: [26:37] Well, they’re not really aimed at consumers necessarily. Let’s kind of throw that word just for a second. The idea behind these two products was we were actually setting up some mailing lists. I was realizing how complicated it is to set up a mailing list. It’s kind of ridiculous how hard it is.

[26:57] Google lists, or Google groups, and Yahoo groups and stuff. You can do it, it’s just they’re really complicated for just simple things, which is I just want an email address I can send an email to and have everyone get it. Anyone who responds to that email it goes to everyone else too. That’s all I wanted.

[27:11] A lot of people actually use Basecamp this way. A lot of people use Basecamp as a mailing list where they’ll post messages and it gets sent out to everybody and the whole thing. So we just said what if we totally strip this out and built a real simple mailing list tool as sort of an experiment in single pay software. Everything else we’ve ever really done has been subscription based.

Could we make something that was so damn simple and [inaudible 00: [27:37] 27:40] and just see what happens. We did that and that’s what Basecamp Breeze. The idea maybe is that perhaps people cross over to Basecamp when they hear about Basecamp Breeze. They’ll check it out, they’ll get on a list, they’ll find it out, they’ll follow a URL and they’ll find out hey, there’s this other Basecamp thing. It’s a little bit of a marketing experiment and a pricing experiment.

That’s kind of [inaudible 00: [28:02] 28:02] all about. Basecamp Personal on the other hand is a direct response to customers asking us if they can use Basecamp for personal projects or projects for their volunteer group or church group or something. Because they want to use Basecamp for that, but the pricing model just doesn’t work. It’s too expensive.

[28:22] And the subscription model isn’t a good model for a home renovation project, which might take six months, or a month, who knows, and it can get really expensive to keep going.

[28:33] We had this idea that we could basically sell individual Basecamp projects for 25 bucks each, and you can use them as long as you want. You only have to pay 25 bucks. There’s some limitations, like there’s only a gig of space, and you can only invite five people. There’s no calendar, and some other stuff.

[28:56] It’s pointed currently, at people who already use “Basecamp.” Already know “Basecamp.” They don’t have to be sold on it, they love it already at work, but they want to use it for other stuff. It’s just 25 bucks, one time, per project.

[29:07] That was a fun experiment. That’s an example of selling the same product, in a different way. We didn’t have to change the code base really. We just pulled some stuff out. It’s the same exact code base, Basecamp Personal, and Basecamp are the same thing. It’s just a different pricing model, and there’s some different walls up in different places.

[29:26] So far, Basecamp Personal has been really successfully sold, close to a 1000 projects. That’s like $25,000 in less than a month, just putting this thing out there, barely making any noise about it. Pretty soon we’re going to open it up to everyone in the world. Right now it’s only available to Basecamp customers. We’re going to let anyone create their own Basecamp project soon, but for now it’s just focus on existing customers.

Justin: [29:52] I’d love to check-up on you in a year, and see if there was a marketing benefit from that. If there was a crossover from Breeze and Personal. That would be interesting.

Jason: [30:04] Yeah, I’m curious. I don’t know, we don’t know. It’s just a guess. It’s way too early to say anyway, but yeah, maybe in a year we’ll know more.

Kyle: [30:13] All right. We’re just about out of time here. I thought maybe we would end with one last quick question.

Jason: [30:20] , what sort of advice would you offer for a solo product creator? Based on your experience, should they may be set out to build a full SaaS app like Basecamp? Do you think there’s a market for smaller products like Breeze? Like a one off, one price, a little bit smaller scope. Where would be a good place for somebody to start?

Jason: [30:43] It’s hard to say, but what I can tell you is that Basecamp Breeze on its own, would not support anybody. It’s 10 bucks. Let’s just say we even sold 10 thousand Breeze accounts. That’s 100 grand, which is nice obviously, but we haven’t sold 10 thousand. We have to sell a lot more to get even close to that.

[31:10] It would be very hard to make enough money selling one off things like this, that need ongoing support. It’s different when you’re talking about an iPhone app, or something, where you sell once. You’re not supporting the server, and the infrastructure. It’s just the app.

If you want to go down the one price road, to start, I wouldn’t build a Web app that does that, because that requires 24/7 up-time, and that kind of stuff. We’re fortunate that we have that [inaudible 00: [31:27] 31:40] structure already set-up, so we can do that sort of thing, and experiment with that sort of thing. But it’s not going to support someone very long.

[31:49] I would definitely suggest to people if they’re going to build their first product, and maybe they’re just on their own right now, to try something with recurring revenue. Because it will take a lot of the pressure off making sure the bills get paid and that you have some money to spend yourself. You can control the cash flow a lot more, and I just think that’s a better place to start. I think once you have a successful customer base and infrastructure you can really start to experiment with single pressing options and stuff like that.

[32:21] I also wouldn’t try and build something very big either. I think you can build something real simple and you could charge 20-30 bucks a month for it if it’s a solid product. I would also focus on business stuff because businesses are happy to pay for things generally. It doesn’t need to do a lot, it just needs to be useful. And you can build a nice business that way.

[32:42] I would stay away from the consumer business too as a single product person who’s starting out because it’s very hard to get the consumers to pay for things when it comes to software unless it’s like two bucks. Everyone seems to be stuck with the 99 cents or $2 products now so that’s what people are used to. Businesses are used to paying a lot of money for things, 20 bucks a month sounds like a huge discount to them so there’s a lot more opportunity there I think.

Kyle: [33:09] Right. So in summary probably a smaller scope, some kind of recurring product ideally geared towards businesses. That’s kind of a good place to start.

Jason: [33:21] I think so. Real focused, you know, what do you need as a business owner? In fact, we’re working on another product right now that we need as a business, and we’ve been building it for just like about a month really.

[33:34] Well, it’s been floated longer than that, but really seriously for a month. It’s just me and one other guy doing it here. We could technically release that product in a few weeks if we wanted to. It is six to eight weeks worth of work, two guys, could probably have been one person.

[33:53] It’s a tool I think a lot of businesses are going to be interested in paying for. I think it’s certainly possible to do that. You don’t have to think that things are going to take you a year to do. If you’re focused and you do a few things well, then you can be in a good spot.

Justin: [34:05] So we’ll wait for that, and maybe in two weeks there’s going to be another product announcement.

Jason: [34:08] No, not in two weeks. It could be technically, but there’s no chance.

[laughter]

Jason: [34:14] Yeah, we’re working on something that’s going to hopefully be out later this year. I’m just saying that you really could, technically we could get it out there with eight weeks worth of development. It’s certainly possible to do that.

Justin: [34:29] You’re being too conservative. You’ve got to get it out now. [laughs]

Jason: [34:33] Maybe we’ll get it out sooner than later. We’ll see. We’ll see how it goes.

Justin: [34:37] OK. Well, Jason, thanks so much for your time. In the show notes we’re going to put links to all of Jason’s contact information, the 37Signals website, and a link to the landing page for the new book that he and David Heinemeier Hansson are working on. It’s called “Remote.” You guys can check that out in the show notes. Jason, thanks so much for taking the time today to talk to us.

Jason: [35:02] You bet. It was really fun. Thanks for having me on, guys. It’s good to hear from you again, Justin, by the way. We hadn’t talked in a while.

Justin: [35:07] Yeah, yeah. It’s good to hear from you too.

Jason: [35:09] Cool.

Justin: [35:09] Cool.

Kyle: [35:10] See you later.

Jason: [35:11] Bye now.

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