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This week Basecamp cofounders push back on the notion that new ideas "would never work in the real world."
A podcast by 37signals about the better way to work and run your business. Hosted by Kimberly Rhodes, the Rework podcast features the co-founders of 37signals (the makers of Basecamp and Hey), Jason Fried and David Heinemeier Hansson sharing their unique perspective on business and entrepreneurship.
Shaun: [00:00:00] All right, fantastic. We're rolling. Let's get some… make sure these waveforms are showing up.
David: [00:00:07] Some wave forms.
Jason: [00:00:07] Wave forms.
David: [00:00:09] Wave, wave, wave.
Jason: [00:00:10] Wave, wa-wave, wave wave wave wa-wa-wa-wave.
David: [00:00:12] Am I too low? Yeah, I’m a little too low.
Shaun: [00:00:14] This is the worst DJ set I've ever heard.
David: [00:00:16] One, two, oh, geez.
[00:00:18] Broken By Design by Clipart plays.
Shaun: [00:00:20] Welcome to Rework, a podcast by Basecamp about the better way to work and run your business. I'm your host, Shaun Hildner.
[00:00:26] We're continuing our Rework book club this week with a look at the essay entitled “Ignore the Real World”. This one goes into that common trope that new ideas are bound to fail, or that these things may work for a company like Basecamp, but would never work for company X.
[00:00:42] And, as always, I'm joined by Basecamp co-founders and the authors of Rework. David Heinemeier Hansson, welcome.
David: [00:00:49] Thank you.
Shaun: [00:00:49] And Jason Fried, welcome.
Jason: [00:00:52] Hey, Shaun.
Shaun: [00:00:51] You know, I've noticed a lot of these essays start with something along the lines of, “You always hear someone has said X,Y,Z.” And in this case, the quote you use is, “That idea would never work in the real world.” Is this still something that that you find pretty prevalent?
Jason: [00:01:08] Yeah, that's the standard rebuttal. It still is. Or, there's a variation of it, which is like, well, that would never work for us, or that would never work at our company. And so “that would never work in the real world” is kind of a catch-all for all those variations on that rebuttal.
[00:01:27] But yeah, we still hear that. I think what's interesting is that one of the things we heard up until a year-ish ago is that remote work would never work here or there, or everywhere. Feel like a Dr. Seuss kind of thing there. But what's nice is that that myth was busted, obviously, during difficult circumstances, but everyone was forced to basically work remotely. And it works.
[00:01:53] Now, it's hard in some ways, and some people didn't do it quite right. And there's other challenges that come up. And there's isolation, there’s all that stuff. But at least the real world, in that case, was forced to reckon with a situation where the real world had to give for a second, and people had to try something new. And it worked.
[00:02:12] So I think anytime you can bust a myth, or sort of force someone to try something they believe is impossible, is a good time, is a good moment. And that's what we just had happen over the past year or so.
David: [00:02:21] I think the other thing with the real world is that it's such a catch-all for unquestioned assumptions. Like what is it about the real world that wouldn't work? Right? Sometimes people even have a hard time articulating what it is specifically about their company, or how they perceive the world that they think is incompatible with this idea. So if you take the catch-all away and force someone to actually articulate why it is that something wouldn't work, why it is that they are so different from someone else, why it is that our example should be dismissed.
[00:03:03] Because one of the things about these books, and Rework, in particular, is it's describing what we've actually done. It's not a bunch of theory of what could perhaps possibly work in some foreign galaxy somewhere, right? No, Rework, in particular, is summarizing, the first what's that going to be, 12 years of the company, and the things we actually did and how they worked. So that's kind of the postulate that we put out, that these were things that were tried in a real company, that makes real money, that has real employees and real customers. The fundamentals aren't that different. We are just like everyone else in the core setup of a business.
[00:03:46] So, given the fact that we've proven, to at least have tried some of these things, and they've worked various levels of success. That's where this real world comes from. It's a defensive posture. It's a way of saying, “Oh, that sounds difficult,” without actually having to risk anything, right? Because if you say, “That sounds difficult, I'm not going to try, that's probably too hard.” You end up sounding like, I don't know, a coward. Unambitious. It's much easier to say, “Oh, no, that wouldn't work in the real world. You're actually the one who's delusional.” And that's why it's such an important point to take down. Because, literally every essay that comes after that could have that rebuttal.
Shaun: [00:04:31] Sure. Sure. What is it about new ideas that, I guess, they're expected to fail? Is this a risk avoidance thing? Is it there’s, I don't know, too much money behind the current status quo?
David: [00:04:46] Change is hard. And what we propose is not subtle change. There's a lot of changes in Rework that are very dramatic for how most people run their business. So to even contemplate a handful of these ideas is really daunting. And it's much easier to simply rationalize the things you're already doing that wouldn't require you to change anything and say these people are just nuts. That's why they're talking about this. It's not because it's something that's relevant to me.
[00:05:19] Because if you allow that these ideas might be relevant to you, you'd have to think about like, why are we doing these things? If meetings truly are toxic, why do we have so many of them? Those are kind of hard questions, particularly inside organizations, where change isn't just about changing your mind.
[00:05:38] That's the other big thing of Rework and why Rework is difficult. And perhaps in some ways, why Rework appeals, particularly, to people starting out, is they don't have to convince another 50 people that this is a better idea.
Shaun: [00:05:52] It's interesting to think about the pandemic forcing something like this new idea of remote work on to more traditional organizations. And it sucks that it took something like that. Do you think an organization like Basecamp was better off from already adopting things like remote work? Were we better off when everyone had to go home anyway?
Jason: [00:06:14] Well, I think it was easier for us to adapt. It wasn't, I guess, it wasn't much of an adaptation. We were used to it. However, it was harder, because I think I maybe mentioned this in the last podcast that this last year was more like pandemic work rather than remote work. It wasn't remote work in the traditional sense, where you can literally… like, a lot of people go to a coffee shop and work. You couldn't do that. Or go to a co-working space, you couldn't do that. Or a library, you couldn't do that, because public spaces were closed. So people were forced to work at home. And they may not have had the space. And maybe if they had kids, their kids were also home when normally they might be at school. Maybe both parents had to be home. It was just, the whole thing was tricky, really tricky.
[00:06:56] And so, I think that put some pressure. And of course, people were then also locked down like not only they had to work from home, in some cases, you couldn't even leave the house. We had people working for us from all over the world. And there's different rules in different countries and different lockdown situations. So all that was really tricky, too.
[00:07:14] I think that what made it easier for us was simply that we were resilient in this way and we knew how to work remotely. All of our tooling, Basecamp is built for remote work. Basecamp, the product itself, which is what we run our whole business on. So we're already used to that, compared to, if you're an organization that was fundamentally focused on meetings, and in-person conversations, then being thrown into… First of all, searching for a software tool that worked. A lot of people pick something that doesn't work, and they have to look for something else again. It's a pretty hectic, it's pretty hectic for a lot of companies.
[00:07:48] We got to sidestep that, but we also still had our own challenges and difficulties. And the fact that we didn't get to see each other at all was hard, as it was for everybody. So we had a head start, but it still wasn't easy.
David: [00:08:00] I think in some ways, actually the fact that we already had the mechanics down, how do you work together? How do we make decisions? How do we do all of that? That was the easy part. And in some ways, I think perhaps we were caught at times a little off guard that that wasn't the end of it. There's so much more than just figuring out, “Oh, which software should we use? How should we use it? How can we work together productively? How can we do that huge transition from synchronous to asynchronous work?” That's one of the key stumbling blocks for a lot of organizations trying to go to remote work. We had all that figured out.
[00:08:39] But then all of these social issues of simply being cooped up for so long that the new situations with kids at home, you think, hey, we should be able to just run as fast as we were, we were already set up for work. Lots of people were already working for home, we shouldn't skip a beat. And I think we weathered that pretty good in the beginning of the pandemic, where we immediately went out and said, we can't have the expectations that we had previously. We're gonna push out, we pushed out a major product launch. We were supposed to launch HEY in, I think, April. And we said, “You know what, no, let's wait.”
[00:09:16] And then at some point, we kind of fell into a rhythm that we thought was good enough. And then we pushed forward. And I think figuring out exactly where that point was, and where it was for different people was also a complication. We all use the same tools. We all engage with the work in a similar way, but from very different circumstances. Someone who was in pandemic lockdown as a single person had a very different experience of that than being in lockdown with the whole family.
[00:09:44] So I think that was extra challenging, in part because we had all the other stuff figured out.
Shaun: [00:09:51] Yeah, it was more unexpected.
David: [00:09:53] Yes, yes. I mean, if you have to do the big shift, right, like you were used to, as Jason said, meeting in person, you knew the entire world is changing.
Shaun: [00:10:02] Yeah.
David: [00:10:03] Right? We show up to work in Basecamp, and the entire world didn't change. We're still doing the same things. So some of these trickier aspects of it, particularly socially or isolation-wise, I think perhaps were a little more under the radar for us than they would be for other people who expected that everything was going to change and thus was more on the guard for it. But I mean, really, in the grand scheme of things, clearly, we shouldn't complain about our readiness.
[00:10:32] I mean, in some ways, it felt like we had prepared for 20 years, for this moment. Not just in terms of being remote with in the US, but being remote around the world and having people live sort of different lives and being impacted by the lockdowns in different ways. Like, it wasn't a monocultural experience, which I think gave some resilience. Hey, when things were quite bad in the US, perhaps they weren't as bad in Denmark. And then when they got a little worse in Europe, they perhaps weren't as bad in the US and so on, and so forth. I think there's a real resilience to just a diverse set up.
Shaun: [00:11:09] Yeah, I want to get back to this idea that entrenched organizations may find new ideas are bound to fail. And it reminds me of sort of what we see in Hollywood right now, where every single movie is an adaptation of some previous work. It's a sequel, it's Disney is literally making The Lion King again, three times or whatever. And I think that comes from, and please tell me if I'm barking up the wrong tree here. I think that comes from, it's too expensive to make a movie, the studios invest too much money. And it's too risky to try something new.
[00:11:44] Does this idea, this entrenched idea that new ideas are destined to fail in business, is that related to the idea that to be a successful business, you need a ton of money, and investors now have too much invested and won't take the risks on new ideas.
Jason: [00:12:00] This is, this is not new, obviously, people being afraid to try new things and for businesses to take risks. I think the way we've always tried to think about it is that we're comfortable taking a risk, but not putting ourselves at risk, which are two different ways to look at it. And a studio in your case, with your point, they may decide, well, I'm just making up numbers here, but we can make a remake for 25 million, or 100 million, I don't know, whatever, that's like pretty much going to work. We know this is gonna work. It's worked before. Versus, we could take a risk on a brand new idea for twice as much. And it's five times as much risk, like why do that right now, especially in a moment of change. Streaming, and theaters being closed, now they’re reopening. There’s a whole bunch of uncertainty, so why not just go back to the hits, go back to what you know is gonna work and eliminate, there's already so much risk in the system right now.
Shaun: [00:12:56] Right.
Jason: [00:12:56] So much risk in the system, why add more to it? So I think risk is something that you think about systematically. It's not only your stuff.
[00:13:04] So, for example, this is a little bit of an aside, but people ask me, do you do any angel investing and all this stuff? I go, not really because I have a huge amount of risk already in my own business. I've put some money into some companies that are run by friends more as a support thing, but I'm not an investor. I don't go out and do that. There's enough risk, I've got a lot of risk. My entire financial everything is wrapped up in one company. That's a lot of risk.
[00:13:30] And so if your studio you think about what's the risk that you have that's internal, what's the external risks, what's the societal risk, what's the market risk, all that stuff? And that's why most places, people, companies, whatever, tend to just run for comfort and familiarity.
[00:13:49] And I understand. That's a natural, natural thing. And by the way, yes, some risky original ideas are the ones that hit and change the world and everything, but most of them simply don't. Most of them are extremely risky for a reason, and they don't work. And so you run into a few of those in a row and you become more and more risk averse. I think maybe the studios are running into that right now.
David: [00:14:10] I think it's also just that all humans are risk averse, as a default, and they have to be forced into risk by circumstances. And right now, if you essentially have, let's say, the movie distribution system pretty locked down that there's a handful of very large companies, who the only ones who essentially have access to this. They don't need risk. This is the fundamental logic of monopoly power. This is what we've been fighting against on something like email. Gmail locked down email long ago in their mind, right? We don't need any risk. Gmail essentially hasn't changed for at least 10 years. Why? Because once you have this dominant position, risk only has downsides, right? Gmail might change something and what are you going to do? They already have 2 billion users the best you can do is essentially, make sure no one leaves, sort of? Like there's not a lot of green fields left to conquer. All they have left really, is to lose.
Shaun: [00:15:10] Yeah.
David: [00:15:10] So you need situations where there are newcomers. They're gonna look at it and say, do you know what? I need to take the risk. If I just do what Gmail does, there's no way I'm ever going to beat Gmail. That's exactly how we looked at HEY. In fact, a driving directive in the design process was we have to be weird. We have to be different. If we're just making the same thing that's already out there, we're going to get squashed. Why would anyone—
Shaun: [00:15:37] Yeah, what's the point?
David: [00:15:38] What’s the point? Both sort of, I think, artistically, what's the point of the remake, which I think is also something you touch on with all these movies. Are people excited about making the, whatever, 40th Marvel movie. Perhaps not in the same way that they would about something that pushes some artistic boundaries. But also in terms of the market, it's simply the better strategy to take risk when you're a newcomer, because that's how you upset the applecart.
[00:16:06] Now, your odds are still long, right? Again, the HEY example. We looked at those odds, and both Jason and I went, do you know what? Most likely, this is not going to work. As in most likely, this is not going to attract major mainstream success. Because the thing of risk is it fails most of the time. Most new businesses, most new ideas fail. But you have to have someone willing to attempt that. Otherwise, we're gonna watch Marvel movies for the next 200 years.
Shaun: [00:16:35] I think we may still be watching Marvel movies for the next 200 years.
David: [00:16:38] Do you know what's funny? I just watched a Marvel movie literally, two days ago. It was the first movie I'd watched in, I don't know, a year and a half, Black Widow.
Shaun: [00:16:49] Yep, yep.
David: [00:16:50] And what was so interesting about that experience was, I felt like, I had to have watched the other 40. The movie kind of didn't really even make sense. It felt like I was just going into a show that had already been running for 40 episodes, and I've just sit down, and like, okay, that's a lot of kicking and punching and exploding. But what's the point here? So anyway, that’s kind of like an easy target [crosstalk 00:17:14].
Shaun: [00:17:15] That's for our second podcast where we review all the Marvel movies.
[00:17:21] To get us a little bit back on track here. This essay finishes by you guys saying that Basecamp, at the time 37signals, fails that real world test in a lot of ways. Let me see, what do you mention here? Remote work, we talked about. No salespeople, no advertising. And then, revealing the secret sauce, writing books like this, those are all things that a more traditional company would say, “Oh, you can't. That won't work in the real world.” We've tried things like advertising. Obviously, remote work is a success, the real world sort of had to come around to us on that. But where are we still failing? Do we still fail these tests?
Jason: [00:17:57] Yeah, I think a couple of the things that are a little bit different, perhaps, is trying to run sane work hours is unusual. The real world is… I mean, actually it's funny, because it depends where you are, culturally, and also what industry. But in the tech industry, let's call that our sphere of real world for a second, we're pretty weird there. Also, the fact that we really don't have meetings. People get together occasionally to talk and a team of two or three riff on things. But a meeting is six or seven people for an hour sitting around the table. We don't we don't do that. That's pretty unusual. And you can run an organization without doing that.
[00:18:34] I'd say those are two of the things. Now, we don't have an office at all. So it's not just remote work, but we don't actually have an office, period. Other companies don't have offices, too. So it's not totally original, but it's pretty unusual. I would say that that's another place. Advertising, marketing, we've dabbled, experimented, done some neat stuff. But it's not really part of the strategy that drives sales or customers our way, it's always been word of mouth and organic growth. And we'd like to change that. I mean, we'd really like to figure out how to how to get marketing right and advertising right. We just have never really had anyone really focused on that for an extensive period of time, and tried a whole bunch of things. And we haven't really had a clear strategy around—So that's something I am very curious about and I'd love to get there. Also, the four day work weeks in the summer is pretty unusual. And that wouldn't work in a lot of places, people would say, and I can understand that. I don't know.
[00:19:31] David, do you have any other ones?
David: [00:19:33] Yeah, I think in technology, we continuously do weird stuff that's not supposed to work and cut against the grain of how most companies do things. I mean, Ruby on Rails from its inception.
[00:19:45] In fact, when we were writing It Won’t Work in the Real World, most of the internal images I had pop up on my mind. They were from Ruby on Rails. People telling me, you can't use this exotic programming language out of Japan that I've never heard of because it doesn’t already have a big base, it's never going to work, the enterprise will not allow it because blah, blah, blah, blah, blah.
[00:20:09] The flip side of “it won't work in the real world” is also that it's an extremely attractive motivator. Nothing makes me more fired up to prove that something absolutely will work in the quote-unquote “real world” than having people tell me that it won't. For Ruby on Rails, that was a huge driver that, I mean, obviously, I'd worked with that technology. We'd built apps, I’d built apps before and of course, this is going to work. This opposition is based, in large part, out of fear and ignorance. And you can conquer fear and ignorance by showing results by proving it, right?
[00:20:48] That's the thing with, we've talked a lot about remote, is that prior to this pandemic year, some people could, in their head, suspend disbelief about the fact that there were a bunch of companies, including ours that had done remote work for 20 years and said, “Yeah, but they're different. They're odd. They're weird. It doesn't apply to us.” Everyone is suddenly forced to do it. Now there is indisputable proof that not only does it work, it works very well. It has its drawbacks, and it has its compromises, but it clearly works very well.
[00:21:21] We can't go back in the box, right? And we can't regress from that and go back to pretending that a whiteboard or a water cooler is an essential component of making work work. That argument is over.
[00:21:37] And we've gone through that process with tech, with some of our design approaches where the initial reaction is that's never gonna work. And then you're like, well, I proved that it did. So that's part of the progress of this. And this is also what's interesting about Rework, and looking back upon it, is that when we put out some of these arguments, they are dismissible in the sense that someone can go like, well, that's an anecdote. That's a n equals one out of your experiment here. So part of the interest and part of the mission here is, let's get some more people to try this. Because you know what, it is also possible that some of the ideas out of the whatever, 88, we have in the book, and every single line, maybe not all of them do work in the quote-unquote “real world.” As in, they wouldn't work for most people most of the time. That's part of the science of this, right? We have an hypothesis, we've tested it once under these control conditions, can we expand the experiment and get more people to essentially validate it? Because that's also how, ultimately, the large scale change happens. We've just run this enormous worldwide experiment on remote work, validated that it works. And now we live in a completely different universe afterwards.
Shaun: [00:22:51] We can check that one off the list.
David: [00:22:52] Yes.
Shaun: [00:22:53] Fantastic. Well, I think that's a pretty good place to wrap it up.
[00:22:59] Next week, we're going to be talking about the next essay, which is entitled, “Learning From Mistakes is Overrated.” So, I will see you both next week.
David: [00:23:07] Of course, that sounds good.
Jason: [00:23:09] Oh gosh. Thanks Shaun. I’ll see you.
Shaun: [00:23:10] I’ll talk to you both.
[00:23:10] Broken By Design by Clipart plays.
Shaun: [00:23:19] Rework is a production of Basecamp. Our theme music is by Clipart. You can find all of our past episodes at rework.fm. We are on Twitter at @reworkpodcast. If you'd like to follow along with our little book club, next week, we'll be discussing the chapter titled, “Learning From Mistakes is Overrated.”