A radical Reworking of business

front coverI know I refer quite a bit to items I hear on Leo Laport’s Net@Night podcast.  However episode 142 of the show with Sarah Lane guesting for Amber Macarthur was all about business.

They interviewed Jason Fried and David Hansson who created Ruby on Rails and co-authored Getting Real, amongst a range of notable achievements.

In their new book Reworking they attempt to debunk many business clichés, based on ten years of experience of running 37 Signals an internet based business.

They looked back over their first ten years of starting and growing their business to see what lessons they had learned, and how they could present the best of those ideas as succinctly as possible.

I tend to agree with them when they say that so many business books don’t really need to be more than 50 or 60 pages long, as their authors aren’t really saying very much. To generate enough content for 150 or 200 pages takes many years of experience.

Get more sleep
The first idea covered in the interview, Get More Sleep, may sound obvious, but working extreme hours has become something of a obsession especially with workaholics, and especially in the United States. But as they point out, the practical result is that you just end up with people being tired the whole time, and sooner or later it usually leads to burnout. Also, you can’t make up for the loss with an occasional one nights good sleep. You have to be consistent about your sleep. I like their quote, ‘you have to sleep in order to do good work.’

Ignore your competition
The second is about not copying, or even bothering to find out what your competitors are doing.

As they rightly point out, running a business takes a lot of time and you have to prioritise what you are going to spend that time on. Given that fact, they feel you are better off  spending it on your customers and your own products, rather than what other people are doing.

You can’t pay complete attention to your competitors, and your customers, and your products, and your employees, and your vision. You have to make some decisions and prioritise. So David and Jason would rather spend their time making the people who use their products very happy, instead of worrying about customers they don’t have yet, who might be being approached by their competitors.

They quote Henry Ford; ‘The competitors you should be worrying about are the ones that don’t care about you. They are the ones who are focussed on building their own business.’

According to David and Jason there is a business cold war going on, especially in the software industry, where everyone is spending their time trying to get one-up on everyone else. ‘We have to add two more features to counteract the one new feature from our competitor’. There are very few winners in this world where companies try and outspend their competitors, and everyone ends up looking the same.

Business is like software
They feel that businesses should be malleable, as we aren’t building bridges or skyscrapers. A company can change, it can try new things, it can iterate. ‘We try new stuff all the time, some works and some doesn’t. Our business itself has ‘bugs’, and we fix them as we go.’

‘When people think of a business as a monolith that has to have a lot of structure and policies, then they are sort of screwing themselves.’

‘There are few phrases I hate more than ‘this is how we do things around here’’. It is such a wrong and circular argument, but you hear it all the time.

The book has a simple structure with one idea every page or so. ‘The whole point of the book is that it is short, it is a quick read, because… aren’t you supposed to be doing something? These business books that take you a week or two to read, just seem like a waste of time.’

Learning from mistakes is overrated
‘There is a weird obsession, especially in the tech world, where everyone is telling you to fail early and fail often. What is that advice, fail often?’

‘Our take is that there is certainly some thing to be learnt from failure, but you are better off learning lessons from things that work well. Focus on the things that have gone right for you and try and do those things again. If you think that failure is so natural it will happen to you, you will start making really bad business decisions, and not looking at the odds.’

The obsession with growth

‘What is the point of everyone trying to build a billion dollar company? What is wrong with a million dollars? When did a million dollars become a small amount of money? When did running a business that generates $10 million a year become not a good and cool thing to do?’

‘Typically what happens is that people aren’t very happy working at these big big companies, and they are very slow at innovation. They have to acquire innovation by buying the small guys. The small guys are where the innovation and excitement happens.’

‘Why not build a great little company that is doing incredibly well, you can generate millions of dollars a year in profit. Who is going to be ashamed of that? And you can enjoy it, and you can get to sleep. That to me is really what it is all about.’

Entrepreneurs have a bad name
‘That word has so many bad connotations, it means risking everything, including your family, because you have to go all-in, right away. It’s just not true. The way we build our software company was by doing work on the side. You don’t need to throw away all your safety nets on day one and charge after this thing with a everything you have.’

‘In many ways I think the American dream has been perverted. I think before, it was simply financial independence, and somehow it has become this thing where you have to build a billion dollar company. It should get back to the way it was.’

I will leave my favourite quote from their interview to the end. ‘Starting a business does not have to be rocket surgery’. I’m not sure if this was a deliberate play on rocket science and brain surgery but I would like to adopt it as a business start-up slogan.

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