Jason Fried, co-founder and CEO of project management tool Basecamp, says he doesn't want to grow his company into a huge, multi-billion dollar corporation. He doesn't want a big exit. Fried wants Basecamp to stick around for a long time and be a small, successful company.
"You don't have to be Apple, or Amazon, you don't have to be a wildly-growing company," Fried told Inc. Editor Jim Ledbetter and the audience at the magazine's 17th annual GrowCo event in Nashville, Tennessee. "You can be a really great company building something useful for your customers and treating them well, treating your employees well, and making a great living," he said. "You don't have to shoot for the stars all the time--its a cruel joke on the entrepreneurial community."
Fried, who is also an author and Inc. columnist, said that he's seen too many successful startups, ones that make $8 million in profit, kill themselves by trying to grow too fast and become a $100-million company. The Chicago-based founder believes it's better to scale back, "grow slow," make the best product you can to serve your customers and lead a group of happy, well-paid and well-treated employees.
"I don't want to chase dollars and profits at the expense of those things that matter to me and my company. Culture is very important to us," he said, explaining he pays for every one of his 42 employees to go on vacation every year. "We wouldn't be able to do these things with 200 employees."
When Fried and his co-founder started 37Signals 15 years ago, he said they had all kinds of products and services, including Basecamp. Eventually, they realized they couldn't do everything well so they decided to change the company's name to Basecamp and only focus on that one product.
"Small companies can do things big companies can't do," he says. "Everyone wants to get big, but the big guys wish they could get a little smaller. I want to be small still," he says.
Here are Fried's top tips for running a small (and successful) company:
Focus on one product.
"You don't just put a product out there," said Fried. You have to maintain the quality of your products and services, he added. Make sure the servers are up and running, for instance. You must stay on top of updates and, of course, respond to customer complaints and issues.
"It's not fair to put a product out there and let it sit on the vine. It's not fair to the customers," he said. After all, "it's because we wanted to do more that we decided to do less," he added.
Avoid investors, if possible.
"I don't like investors," said Fried, who noted that his company has just one investor, and that's Jeff Bezos. "All of our revenues support all of our efforts; customers pay for our business."
His reasoning? "When you take money from the outside, you're on someone else's clock. You need to sell, you need to go IPO," he says. And once you start funding, it becomes an addiction. "People rarely raise just one round [of financing]... It's like crack," he said.
He doesn't want a big exit, he wants to stay in the game and run his company the way he wants. But most importantly, it goes back to being customer focused, he said. "I'm not building things to sell them. I'm building things to keep them and make them better."
Keep it simple.
At Basecamp, "We appreciate the basics," noted Fried. "I want to focus on the basics because people are focusing the other stuff."
This should resonate with businesses large and small. "You need to make something people really want to use," said Fried. "People buy something because they are struggling with something else and need help. Can you relieve that struggle?"
In the end, "You need to get the fundamentals right," he said. "Fun wears off; cool wears off. Useful never wears off."