It Doesn’t Have to Be Crazy at Work

Can having no goals, no roadmap and tons of vacation actually work?

When was the last time you heard about a 24-year-old profitable tech company, that pays the top of the market but has less than 40 employees?

Everything is unique about Basecamp. They:

• Don’t believe in having a roadmap

• The have no goals (!!!)

• Pay silicon-valley salaries for ALL employees

• Were 100% remote even before Covid

• Refuse to charge more money from big customers

And they still survive.

In their great book, Jason Fried and David Hansson (CEO and CTO) cover how they run the company, and why it works.

Business Model

We are always profitable

Profit means time to think, and space to explore. It means being in control of your destiny and schedule. Without profit, something is always on fire. When companies talk about burn rates, two things are burning: money and people. One you’re burning up, one you’re burning out.

I loved that last quote. In the last decade, the VC-backed world has become crazy (see WeWork’s fall story for a good example). Achieving profitability first, and growing later, makes for a much healthier company in the longer term.

Per-user pricing is terrible

For example, sell to a small company with 7 people at $10/user and you’ll get a customer worth $70/month. But land a company with 120 employees at $ 10/user and you score a contract worth $ 1,200/month. Then think what a 12,000-employee account would do.

Huge company accounts are so attractive—and addicting. We’ve rejected the per-seat business model from day one. It’s not because we don’t like money, but because we like our freedom more! With money comes influence, if not outright power.

So we take the opposite approach. Buy Basecamp today and it’s just $ 99/ month, flat and fixed. It doesn’t matter if you have 5 employees, 50, 500, or 5,000—it’s still just $ 99/ month total. You can’t pay us more than that.

The argument is unique, but completely unconvincing. It’s good your bigger customers have more influence. In that imagined scenario, the big company will be you $120K a year! Instead, you’ll have to get 1200 small companies to pay 99$ each. The small companies each have unique needs and workflows, and it’s much harder to sell to tons of small businesses vs a few big ones.

For a time, I think that approach can work. But in the end, I think the bigger competitors will win. In the bottom line - Monday kicks Basecamp’s ass, with unethical examples such as this:

Employees wellbeing

Salary

Once every year we review market rates and issue raises automatically. Our target is to pay everyone at the company in the top 10 percent of the market regardless of their role. So whether you work in customer support or ops or programming or design, you’ll be paid in the top 10 percent for that position.

Our market rates are based on San Francisco numbers despite the fact that we don’t have a single employee there. San Francisco is simply the highest-paying city in the world for our industry. So no matter where you choose to live, we pay the same top-market salaries. After all, where you live has nothing to do with the quality of your work, and it’s the quality of your work that we’re paying you for.

It’s tempting to be excited about the everyone-gets-silicon-valley-rates, but I wonder if it is sustainable. The reason for the salaries in Silicon Valley is the tough competition and crazy prices. If you want people in the most expensive place, you should make sure it’s worth it for them. Paying everyone else at those same rates sounds not sustainable.

Work Benefits

Consider the free dinner for employees who stay late. How is staying late a benefit? Or those free lunches that often just end up cutting into break time and keeping workers on campus versus down the street.

There’s an uncanny correlation between the companies with these kinds of benefits and the companies that can’t stop talking about the need to push work to the max. Dinners, lunches, game rooms, late nights—these mainly exist at companies that work 60-plus hours a week, not 40. Sounds more like bribes than benefits, doesn’t it?

We offer:

• Fully paid vacations, up to $5,000 per person or family.

• Three-day weekends all summer. May through September we only work 32-hour weeks.

• 30-day-paid sabbaticals every three years.

• $1,000 per year continuing-education stipend.

• $ 2,000 per year charity match.

• A local monthly CSA (community-supported agriculture) share.

• One monthly massage at an actual spa, not the office.

• $100 monthly fitness allowance.

This one hit a nerve. Terrific policy.

No Fakecations

Unlimited vacation is a stressful benefit because it’s not truly unlimited. Can someone really take five months off? No. Three? No. Two? One? Maybe? Is it weeks or months? Who’s to know for sure? Ambiguity breeds anxiety. We learned this the hard way. At one point we tried offering unlimited vacation, but we eventually noticed that people actually ended up taking less time off than they otherwise should have! That was exactly the opposite of what we intended. Nobody wants to be seen as a slacker. Or overstay a seemingly generous policy. So they all err on the safe side, which ends up being not very much at all. They take their cues from whoever is taking the least vacation on the team already.

So here’s our official policy today:

“Basecamp offers three weeks of paid vacation, a few extra personal days to use at your discretion, and the standard national holidays every year. This is a guideline, so if you need a couple of extra days, no problem. We don’t track your days off, we use the honor system. Just make sure to check with your team before taking any extended absence, so they’re not left in the lurch.”

Truly amazing. The exact balance I want as an employee.

How We Work

Curbing the ambition

What’s our market share? Don’t know, don’t care. It’s irrelevant.

Do we have enough customers paying us enough money to cover our costs and generate a profit? Yes.

Is that number increasing every year? Yes.

That’s good enough for us. Doesn’t matter if we’re 2 percent of the market, 4 percent, or 75 percent. What matters is that we have a healthy business with sound economics that work for us. Costs under control, profitable sales.

Imagine the response when we tell people that we don’t do goals. At all. No customer-count goals, no sales goals, no retention goals, no revenue goals, no specific profitability goals (other than to be profitable). Seriously.

We get how it works—we just don’t care. We don’t mind leaving some money on the table and we don’t need to squeeze every drop out of the lemon. Those final drops usually taste sour, anyway.

I’ll have to experience it to believe it. Working without goals sounds like such an alien concept to me… Everything they say makes sense, but it feels too fluid to me, it probably takes time to adjust your mindset.

Doing Nothing

Yes, it’s perfectly okay to have nothing to do. Or, better yet, nothing worth doing. If you’ve only got three hours of work to do on a given day, then stop. Don’t fill your day with five more just to stay busy or feel productive. Not doing something that isn’t worth doing is a wonderful way to spend your time.

A great work ethic isn’t about working whenever you’re called upon. It’s about doing what you say you’re going to do, putting in a fair day’s work, respecting the work, respecting the customer, respecting coworkers, not wasting time, not creating unnecessary work for other people, and not being a bottleneck. Work ethic is about being a fundamentally good person that others can count on and enjoy working with.

This is so much healthier than what most of us experience in the workplace. It’s all built upon trust.

Dreadlines

At Basecamp, we don’t dread the deadline, we embrace it. Our deadlines remain fixed and fair. They are fundamental to our process—and making progress. If it’s due on November 20, then it’s due on November 20. The date won’t move up and the date won’t move back. What’s variable is the scope of the problem—the work itself. But only on the downside. You can’t fix a deadline and then add more work to it. That’s not fair. Our projects can only get smaller over time, not larger. As we progress, we separate the must-haves from the nice-to-haves and toss out the nonessentials.

This one is not so unique, and I fully embrace that concept. The classic triangle of software is time-cost-quality, with the saying that you have to choose 2. I firmly believe you can have all 3, as long as you compromise on the scope.

Customer relations

No Big Deal or the End of the World?

[On a situation in a hotel where the guest complained about the fact that the air conditioning doesn’t work.]

Jean-Louis Gassée, who used to run Apple France, describes this situation as the choice between two tokens.

When you deal with people who have trouble, you can either choose to take the token that says “It’s no big deal” or the token that says “It’s the end of the world.” Whichever token you pick, they’ll take the other.

The hotel staff in the example above clearly took the “It’s no big deal” token and as a result forced you to take the “It’s the end of the world” token. But they could just as well have made the opposite choice. Imagine the staff answering something like this: “We’re so sorry. That’s clearly unacceptable! I can completely understand how it must be almost impossible to sleep when it’s so hot in your room. If I can’t fix this problem for you tonight, would you like me to refund your stay and help you find a different hotel room nearby? In any case, while we’re figuring out the solution, allow me to send up a bottle of ice water and some ice cream. We’re terribly sorry for this ordeal and we’ll do everything to make it right.” With an answer like that, you’re almost forced to pick the “It’s no big deal” token. Yeah, sure, some water and ice cream would be great!

[and if you will choose the other token, sharing how it’s not a big deal, the guest will choose the ‘it’s the end of the world token’]

Keep that in mind the next time you take a token. Which one are you leaving for the customer?

That story is my favorite from the book. It’s a simple trick, that can do wonders.

My take

Basecamp approach sounds like a solid alternative. It’s neither the crazy world of small startups burning people and cash to survive, nor the hectic world of FAANG companies.

Parts of it are naive, but in general, it outlines a much healthier workplace. For people starting companies or thinking about it, there are valuable ideas here.

This was the first issue of Tech Books! I hope you enjoyed it 🙏

Edit: after posting the article, I was referenced to this article about controversies in Basecamp’s culture: https://www.theverge.com/2021/4/27/22406673/basecamp-political-speech-policy-controversy