Read more about Jason Fried in “Working Smaller, Slower, and Smarter.”

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For our first episode of the year, host Matt Mullenweg talks to Jason Fried, the CEO of Basecamp. Jason runs a semi-distributed company that’s been making project management software for 20 years. He’s accumulated a wealth of wisdom about how trusting employees and treating them with respect can yield long-term success. 

The full episode transcript is below.

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MATT MULLENWEG: Howdy, howdy, and welcome to the Distributed podcast. I am your host, Matt Mullenweg, and I’m here with our first episode of 2020. Today’s guest is Jason Fried, the CEO of Basecamp, a semi-distributed company that’s been making project management tools for about 20 years now. Back in 2013, Jason wrote a book called Remote, which was an early manifesto for remote and distributed work models. I’m excited to catch up with him to hear about what he’s learned in the six years since that book came out and how Basecamp operates today. 

All righty. Let’s get started. 

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MATT: Jason, I am so glad to connect today.

JASON FRIED: Likewise.

MATT: Basecamp, formerly known as 37signals, has been in so many ways an inspiration for Automattic over the years, and I’m sure countless other distributed companies, so thank you for that, first and foremost.

JASON: Of course. And I would say likewise. I mean, you guys are even more distributed than us, so I feel like you’re the ideal situation where we’re getting there because we still have about 15 people in Chicago and we have an office that we’re maybe getting rid of, so we’re going to be following in your footsteps. 

MATT: Ah. So we had zero offices but then with the acquisition of Tumblr we’ve now got a space in New York again, so we’ve gone in the opposite direction.

JASON: Ahh, right. That’s funny how we keep trading. Yeah. We’re not sure what we’re going to do but our lease ends in August so we’re thinking about moving on, as in moving on to nothing and then trying to do that for a while and see what happens. And if that works out, we’ll do that. If not, we can always go back to getting an office again. But we’ll see.

MATT: Just for our listeners who might not be familiar with Basecamp, what do you publicly share about the scale of the company, customers, number of employees, that sort of thing?

JASON: Well we have about 56 people who work at Basecamp and we have close to 100,000 paying customers all-in across all of our different products. Although, Basecamp is the primary product, but we have Basecamp, we have Highrise, we have a few others, but basically it’s Basecamp in all three generations. Some have Classic, Basecamp 2, and Basecamp 3. 

This is as specific as we’ll be, but we generate tens of millions in annual revenues and annual profits. And we’ve been around for 20 years. This is our 20th year in business, and we have been profitable since the start. That’s a big thing for us, is to always be profitable. So that’s the only KPI, we don’t really use those terms, but that’s the only one we have, which is, let’s make sure we make more money than we spend every year, and other than that, whatever happens, happens.

MATT: How do you think about investing more or not?

JASON: We don’t have an investment shortfall kind of thing. It’s not like if we only had an extra — I’m just making up rough numbers here — an extra million bucks, we would do X or Y. We have everything that we need to do and we don’t want more people because we want to keep the company as small as we possibly can. So we have, not a dilemma really but it kind of is, in a sense, because I feel like we’re doing everything we could do and having more wouldn’t help us. 

In fact, I think in some ways it would probably hurt us. We’d be a little bit slower, we’d be probably doing too much work at the same time, which I think can often dilute what you’re really trying to do. We might take on more stuff than we really want to. We might just find work, invent work, to keep people busy. There’s always of course more work to do, but we believe in doing it at a certain pace, and I think having more people, or fewer people, at this point would kind of mess up that pace.

MATT: When you say as small as possible do you mean by customers or by colleagues and employees?

JASON: I mean employees. I mean the number of people who work here. We have always wanted to stay at 50 or less but we’re about 56 right now and that feels like a really good place to be, so we’re very comfortable with that. The thing is that we could have considerably more people, but again, we’re just not really — maybe we’re just not good at it. I’ll just take the blame for that. I’m probably not good at running a much larger company than this and I don’t think David is either. I don’t think we want to. 

I think it also keeps you a bit more honest in terms of the experiments you’re willing to do, which — and in some places more and more and more experiments is a good thing. I think a few are a good thing but I think too many — people can get stuck doing things that never ship over and over and I think that can be a bit demoralizing. 

So we think we’ve got a good enough feeling here right now at least. But then again, we’re the largest we’ve ever been, and I’m sure when we were 30 people we said 30 is enough. So we’re here at 56, that feels like enough right now. A lot of it probably has to do with the success of this other product we’re going to launch next year.

Because the one part of our company that does have to continue to grow is customer service. Product development doesn’t have to grow, we have enough people there, but as we have more and more customers, of course, we have to make sure we support them at the highest level. So that is one place where growth does continue to happen even if we don’t want it to.

MATT: Yeah, for Automattic that’s been pretty large. It’s been at points that half of our company was customer service just because we wanted to maintain a certain level there. And as the customers went up, it just got — it goes linearly. 

JASON: Yeah.

MATT: It’s one of those things that — of course you want to invest in making the product easier and documentation and self-help and everything like that, but at some level if you want a person talking to a person you need some more of them.

JASON: Yeah. You know, you want to do documentation and make things easier and everything, but I’ve also come to change my mind a little bit on it. Earlier on, when we had fewer people, we were focused on the self-help side of things and making sure our documentation was really good and our answers were great online and people could find their own answers. 

And we want to make sure that that’s true too, but I also see customer service interactions as a competitive advantage. Most companies are pretty terrible at it and the larger the company is, it seems like the worse they get. Try to email Google and get help. It’s like — forget it. Or Amazon, sometimes, but not always that great, although quite good sometimes also. It’s one of these things where the larger you get, the more customers you have, the harder it is to maintain that level of standard. 

MATT: Have you tried out a live chat for customer support yet?

JASON: Yeah we do that sometimes. And it depends on availability. And then we also use Twitter as well for that. Those things all work out really well. It just depends. We want to meet people essentially where they are, with the exception of we don’t have a published phone number, but if you want us to call you, we will.

MATT: Yeah. Live chat was a big step function for us. Both in terms of agent and customer happiness, because you can resolve things on the spot. 

JASON: Yes.

MATT: We do a support rotation where everyone at the company does customer service for at least one week a year. Mine is actually coming up in a couple of weeks.

JASON: Your turn, you mean?

MATT: Yes. So if you contact us in the third week of December, you might get me.

JASON: Ha! We do the same thing, we call everyone on support one day every roughly six weeks or eight weeks… So we’ll each do support for a few days a year throughout the year. It’s great and I’m glad you guys do that too. 

I think it’s one of the most valuable things you can do for a variety of reasons — camaraderie, hearing from customers and understanding the language they’re using, sensing their frustrations or their happiness or whatever it might be. And then also just having a lot of respect for customer service as a job and as a career.