At the fifth annual Startup Grind Conference in Redwood City, Jason Fried, co-founder and CEO of Basecamp, offered attendees an alternative to the standard gospel of Silicon Valley entrepreneurship.
For one thing, Fried has never taken – and has never been interested in taking – venture capital. He and his co-founder bootstrapped Basecamp from the beginning, and the Chicago-based company has been profitable for years. The sole exception has been outside money from Amazon’s CEO, Jeff Bezos, but Fried stressed that Bezos has never been involved in the company’s governance or operations. “Once in awhile I contact him if I have a big hairy question,” Fried said, “but he’s not involved day to day or month to month.”
Basecamp doesn’t have a board of directors. The company is still structured as an LLC. During the summer, employees work only four days a week. Fried encourages staff members to take month-long sabbaticals, and the company pays for them to engage in outside activities like guitar lessons.
And the Silicon Valley expectation that startup founders work 80 hours per week?
“You can get an awful lot done in 40 hours — you just need uninterrupted stretches of time.”
“Forty hours is enough time to do great work,” Fried said. “Maybe in the very early days you need to work more, but not that much more.” In fact, according to Fried, working insane hours is actually non-productive. He believes people spend too much time in meetings, answering emails, and chit-chatting via chat rooms. This focus on constant communication without any real agenda is a waste of time, Fried argued. “You can get an awful lot done in 40 hours — you just need uninterrupted stretches of time.”
Nor, according to Fried, do companies need to scale instantly using multi-million-dollar marketing budgets. Basecamp has marketed itself almost entirely via blogging and content; the company has never had a formal marketing team. “It’s always been about teaching and sharing,” Fried said. “It just seems like a more authentic way to get our message out.”
Fried has been an entrepreneur since finishing college, but he is dubious about the current hype around entrepreneurship. “Right now I think a lot of people want to play at being an entrepreneur,” he said in an interview following his talk on the conference’s main stage. “It means going down a road that others have defined – raising a lot of money, puffing up your ego, and trying to become a big figure in the industry. There are a lot of wannabes in that world.”
Fried went on to say that he sees a lot of people building companies who have no interest in long-term sustainability. “Their goal is to sell out to others and make money,” said Fried. “ It sets up a terrible cycle of not treating people well – it’s disingenuous, and it’s unfair to employees, to customers, to anyone who doesn’t know the company will be gone in two years.” Basecamp’s CEO wants his company’s growth to be organic and sustainable – as he put it, “slow and stable, like a tree.”
“You don’t have to buy into the unicorn myth,” Fried told onstage interviewer Derek Andersen, founder of Startup Grind. “Most businesses in the world are like ours – they grow slowly by building value for their customers. Basecamp has been profitable every quarter since it started 16 years ago,” he said. “ I don’t want to grow fast by taking money from venture capitalists – every dollar has strings attached.”
So how much is Basecamp actually worth?
Fried said he honestly doesn’t know and, more importantly, he doesn’t care. “A valuation is what other people think you’re worth,” said Fried. “I’ve only ever been interested in what our company is worth to us.”