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Commercial freedom (37signals.com)
191 points by scott_meade on Nov 13, 2012 | hide | past | favorite | 73 comments



I was talking about this very topic with a friend of mine recently.

He works in advertising and felt moderately disingenuous about advising young people to go into a traditional ad agency.

There has never been a better, more stable time to start a business for most of the people in the western world. The internet has absolutely equalised just about every market you can think of. Fixed costs are a thing of the past; seed capital is plentiful (although there are the same number of top and second tier VCs, in Europe at least); being young is no longer a barrier to entry but a competitive advantage; there have been enough radically disruptive technologies in the last 30 years that it's pretty easy to convince seed investors to jump on board; we're living in a period where a lot of the world that was in poverty in the last four or five decades is coming out of poverty; middle classes are expanding all over the planet; with accessible languages like Rails and accessible architecture like Heroku it's a piece of piss to build and deploy a prototype…

The list goes on and on for me. The major barrier to entry for creating things rather than working in corporations is the type of personality people have. I see two types of people coming out of universities in Europe: people who see problems and bitch, and people who see problems and have solutions to them. (As an aside, I follow the hashtag #firstworldproblem on Twitter because first world problems are very often the basis of a great product or service.)

If you're a smart person working in a 9-5 then you're missing the biggest opportunity to do something fantastic, whether successful or not, that there has ever been. Forget the industrial revolution, or the early days of the internet. Now is the time to be building cool shit and telling people about it.

Rare for me to agree with DHH but on this topic I really do.


It literally broke my mind about when I realized that I didn't need to ask for permission from anyone to start a business. That very well might have been the first consequential decision I ever made in my life where that was the case.

I think that is related to one of the fundamental mindset shifts you have to go through, and it is a bit of a wrenching one: success is now successfully identifying and exploiting features of reality, such as project feasibility and customer demand, rather than adapting oneself to match the exact published criteria of the decisionmaker who can grant success. (pg has a much better phrase for this in the wealth essay: "wealth does not come from Daddy.")


"broke my mind". made me laugh so hard my wife and dog were staring at me like I was a mad man. thanks for the smile.


Literally broke your mind?


Yes, literally.

People flogging that dead horse fail to realize that a word has many meanings, not always compatible with it's original or primary meaning ("sad gay people", do exist, for example).

If they have looked into a recent dictionary, e.g dictionary.com, they would have read, for example:

lit·er·al·ly   [lit-er-uh-lee] adverb (...) 4.in effect; in substance; very nearly; virtually.

Emphasis mine.

There's even a usage note:

Since the early 20th century, literally has been widely used as an intensifier meaning “in effect, virtually,” a sense that contradicts the earlier meaning “actually, without exaggeration".


Or section c of this OED entry: http://www.oed.com/view/Entry/109061?redirectedFrom=literall...;

"c. colloq. Used to indicate that some (freq. conventional) metaphorical or hyperbolical expression is to be taken in the strongest admissible sense: ‘virtually, as good as’; (also) ‘completely, utterly, absolutely’. Now one of the most common uses, although often considered irregular in standard English since it reverses the original sense of literally (‘not figuratively or metaphorically’)."

Which is followed by examples dating back to 1769.


I won't usually leave a comment like this, but well done! That's GrammarNazi^3 (which should sound like "O. G. to the 3" in your head), and is why I originally love the Internet.


The dead horse is the word itself. Words that are mistakenly used to mean their opposites (literally, peruse, etc) so often that newer-and-opposite-meaning becomes normal, make it impossible for a careful speaker to use them at all. What's sad is that those who defend the traditional and more useful meaning are considered Nazis. You already have "figuratively". Use it. Why ruin literally?


Be careful there, he said "mind" not "brain". And also, obligatory kxcd: http://xkcd.com/1108/



Weird, it works from my location. (Colombia)


This is a wonderful essay!

I often think about how extraordinarily lucky I am to be living through this technological boom. Computation, automation and mass-communication will continue to transform human society even more for decades. High-end software development skills will become even more scarce. Immersing yourself in the boom by running a software shop with a bunch of good friends - the best of times!

Earlier tonight I was talking to someone about how odd it seems to me that software startups normally aim to operate at a loss. Perhaps I am a romantic, but I like the idea of a business making a good profit. Especially when dealing with something as lucrative as software, a business should be profitable from day one. I have always regarded David and Jason highly for having a similar attitude.


>High-end software development skills will become even more scarce.

It's not obvious to me. Can you explain your reasoning?


Sure thing, my reasoning goes like this:

My first premise is that we are still in a relatively early stage of the technological boom signified by things like electronics, computers, robotics and the internet. These technologies have changed life on Earth dramatically, but I think there is at least as much to come. In any case, for the next two or three decades, more and more aspects of life will be the object of automation, computation etc. So the demand for software development will continue to increase, and probably by a lot. Software will become an even greater part of the economy and continue to crowd out other types of business.

My second premise is that only a small percentage of the population have the talent and inclination to become very good programmers, and children with these traits often do not get proper encouragement and guidance. So from the beginning, it is very hard for society to produce a large number of programmers. More importantly, the ratio of people who can become good programmers is probably more or less a constant, while the need for software development will grow much faster.

I also see reasons to believe that we are getting worse at producing programmers. For example, software is become more mature, hiding more and more of the internals. I started programming at age seven, in the eighties. In local stores I could buy glossy magazines with articles about programming, often with entire programs that I could copy into Basic etc. For sure, there is the internet now, but what kind of programming culture for kids is there? I could pick my first computer apart and learn all about how it worked. The kids these days learn to use iPads long before they learn to speak, but they never get to see what's inside. Who knows where this will lead? We already know that a lot of graybeards are retiring and they are often impossible to replace since the current generation of programmers is not nearly as hard-core.


The Raspberry Pi could be the foundation of a new generation of programmers : But I don't see the size of the 'nerdy clique' being any bigger now than when I started out (soldering a 6502 machine).

If programming were painting, it's probably easier to become a housepainter now, but the percentage of Picassos is probably the same.


Great analogy with painting! I take what I wrote to apply to good programmers, the core people needed to get serious things done. Tolerably capable housepainter-programmers will be churned out in the millions, to be sure.

Things like the Raspberry Pi is great for reaching the nerdy clique, but I agree that the latter does not seem to be growing. On the other hand, I hear autism rates are way up in the valley - perhaps we can increase the size of the clique by selective breeding? =)


I'm not @meriksson - but I feel the same way.

They're going to become more scarce because computing is being used in more and more places. The demand for developers is increasing - not decreasing - and I don't see any change in that in the next decade minimum.

Yes there are more folk coming into the field. Yes there are more places where smart code is letting people do more with less. Despite that I think it's harder now to find good developers than it was ten years back because the spaces where you need developers us growing stupidly fast.


I agree with your assertion and also think that the increased demand for developers in more places is creating a lot of noise which makes it difficult to match up qualified developers with software that needs to be written. This in itself could be a business idea. Recruiters and job boards are a pretty inefficient way to solve the problem. There have been some startups previously featured on HN that are trying to fix that problem, but I think the field is still wide open.


I agree strongly that this is a wide open space. As an employer I would pay handsomely for recruiting services that I actually believed in. Of all the concepts floating around, I particularly like the idea of programmers having agents, like actors have. I have experimented a bit with this model myself and expect to see a lot of innovation in this area.


What did your experimentation entail? I am curious.

Contracting?


I don't want to put words in meriksson's mouth, but from my point of view our society is becoming more and more dependent on technology but is not becoming more aware of how it works. As the expectations of software and hardware capabilities continually increase, there will be an increased need for people that can meet those expectations. New tools and techniques can definitely help to the existing population of developers to accomplish more, but I think overall more developer talent will be necessary to write all the software that needs to be written. At the same time it seems that there are few students going through school now that are interested in the types of learning that software development requires (science, math, logic, etc.). This is just my opinion, based on things I have been told by friends and family who are teachers. I admittedly don't have metrics to back this up.


My reasoning along the same line is that there will be many more applications for high-end software development skills, vastly exceeding the rate at which new people gain high-end software development skills.

Glad to be a "just a programmer" right about now.


I'm not the OP but here's my take on it: as we evolve so do our tools, and as more and more people start creating their businesses online, the tools to support that will become easier and more efficient it'll get to do that.

Today you don't need a programmer to setup your online website with a store attached to it (and that could be 100% of your business), imagine what you will be able to achieve in a couple of years by yourself.


I think providing generalized software and plugins that non programmers can use for say blogging and ecommerce will always be somewhat limited. Once you get to a certain size the plugins will need customization to really work the way you want them to.

I do have a bit of a biased perspective though, instead of looking for a non programming solution I just jump into the code an make it work the way I want. It is amazing sometimes to see what tools people have cobbled together on a website to get away without programming knowledge.


"All we needed was an idea for a product that people were willing to pay for"

This is the difficult part, in my opinion.

Sure, "Ideas are all around us" but finding one that people will genuinely pay for, in a market big enough to be profitable yet not already saturated with high quality competitors, is very difficult.


I don't want to downplay your point, because it's certainly not trivial identify a problem where people are willing to pay for the solution to that problem.

However, if you know anyone in an industry other than software development, this can be a great source of ideas. Just ask a few questions about what their day to day job responsibilities entail. Then sit back and let them talk. I find that most people pretty quickly start talking about the pain points. Some of those pain points are likely to be something that people would pay to solve. Plus you give your friend/family member/acquaintance a chance to vent which they probably appreciate as well.


As a non-programmer who has some frustration of trying to automate his work schedule the last several years, I think many users don't understand WHAT could be automated, or consolidated, or integrated, etc.

Like many things in starting a business, what "sounds" simple is in fact pretty difficult.

Learning to ask the right questions is also difficult in just figuring out the needs of your "acquaintances/friends."

If you can find just one small annoyance factor, and ask a secondary question just a little bit deeper, then a little bit deeper, then a little bit deeper, you may hit a wall of "I don't know," and that could be a potential solution.

Like regular conversation, questions tend to tree from one another.


This suggestion always drives me batty, because it sounds like a good idea, but either my acquaintances are just spectacularly unhelpful or it requires some great skill that is always omitted from the suggestion.


If they allow it, you could go with them to their workplace and have them explain what they're doing as they do it. This will give you a much better idea of what their workday actually entails and make up for your friends' inability to describe their activities.


The missing piece is your own analysis. They cannot tell you how to solve their problem, you must do that. They can only tell you where their problems lie. Combining your greater understanding of the wider internet domain and your ability to ask pertinent questions, with what you and your team might be able to accomplish, possible solutions will sometimes reveal themselves.


They can't even identify the essential problem in many cases, because they don't know how technology can help. They can only describe the symptoms, and you have to diagnose the problem, like a doctor.


I think this is the problem that the "Lean Startup" methodologies aim to solve, enabling you to cheaply and quickly test out ideas in order to find the one that will satisfy the criteria you listed.


Yeah, it's such a simple thing that nerds don't seem to get. Put out ads on craigslist, adwords, indiegogo. Whatever sells, do that. The biggest problem is having more ideas than time to write them into an ad, there's too many potential products. You can outsource the creation of whatever sells so executing isn't even that big a hurdle (though you do have to be careful with initial pricing on the ad so that costs don't get you).


Do you have examples of these ads? I'd love to see how other people phrase them as I'm investigating this kind of stuff for myself at the moment.


The problem is that products "that people were willing to pay for" are not necessary products which will EVER get you into startup mode (high growth). It can be a very good business but it will never be a startup.

So in SV a lot of people abandon these kind of ideas because majority of VCs and incubators will not invest into these ideas. So young entrepreneurs ends up chasing non-profitable "get eyeballs" first think about profit latter ideas.

And, no - market is not saturated with high quality competitors - for example, you can make Basecamp for "industry X" (i.e. teachers?, doctors?) you will make money to live quite comfortable.


The problem is that products "that people were willing to pay for" are not necessary products which will EVER get you into startup mode (high growth). It can be a very good business but it will never be a startup.

For certain definitions of startup. NB if you ask a VC what they'd call a startup, it's in their interests to funnel you into thinking startups only ever go through VCs, go for growth rather than profit, and must end in an exit event (IPO or sale to another SV company). If you choose to accept that definition, you are limiting your choices dramatically.

If not being a startup can be a very good business, why not try it out? What have you got to lose? Not much. What have you got to gain? Valuable experience, and maybe some profits. Most startups actually began as just very good businesses (very small in scale), and take years to grow to something more substantial, changing along the way.

So in SV a lot of people abandon these kind of ideas because majority of VCs and incubators will not invest into these ideas.

37 signals (for example) is a successful company which many would call a startup (at least in their early days), but was not funded by VCs or incubators. That's not the only way to start or grow a company.


  > you can make Basecamp for "industry X" 
Or just bingo cards creator ;)


Nobody said it has to be an original idea. It's not difficult to find an idea for a product that people are willing to pay for that is already being done by someone else, but that you can do slightly better/different/cheaper. In fact, I would venture that has a much better chance of success than an original idea.


This!

Every few decades there is some revolution, but there is very rarely one that is as revolutionary as the one we are living in now.

The argument can be made that the shipping container did something similar (with respect to distribution) that the internet is now doing - but that's only half of the equation.

The other half is building the product. Before the internet, sure you could find a public library near you and hope they have the right information (for you) that will help you learn the skills needed to build the product you want from scratch.

Now, everybody has access to not just the right information, but the best information - and it just gets better every day.

It's like having the library of congress at your street corner, no matter where you live, 100 years ago.

It is unprecedented how much we can do right now, how many people we can reach, and how much of an impact a single person can have with such few resources.

This is why I love economic progress. Without 'economic growth', we would have never reached here. People don't get that economic growth is synonymous with advancement. If we don't grow, we can't advance - and if we don't advance we can't grow.

I don't get why people would advocate not focusing on growth. If we don't grow, we die - if only for the fact that population growth is not slowing.

But also for the fact that in order to push civilization forward, we have to grow which creates the environment for these types of disruptions.


I really enjoyed this article. It was an upbeat analysis and he put some good thought into why software freedoms are important for business.


Definitely agree. It's a great counter to the narrative that everything is getting worse (China's GDP overtaking the US, inflation, higher taxes, etc). The things that really matter to building a business are still awesome.

We're incredibly lucky to live in this time and build stuff with minimal hassle.


It was a great article, and I was happy to see David write something with a positive slant. He's a deft operator of flamethrowers, but it's nice to get the other side of him too.


Another benefit to add to that list - no inventory to manage...


An all my domains are open 24/7 without my intervention and without employees, just think how crazy that would have sound 25 years ago.


I sometimes wonder if this is here to stay, and indeed may even expand to other fields; or whether it's a transient phase, and in the future, people without lots to spend on capital won't be able to build businesses. I think the first is correct, but who knows. A serious think about the question and the economics behind it would be fun to read.


Wait, DHH races in Le Mans?


Yes, a Porsche GT3 - number 37 of course!

http://37racing.com/about


That's so awesome. TIL.


I still think there is one middle man that is very tough to get rid of: banks or payment gateways, like visa.

They still are getting their cut!

If bitcoin is going to change that, it is also going to create opportunity!


As a software developer I love this part about my job. But its these freedoms that I feel are now challenged by the App Stores.I hope they don't foretell the future of our industry.


It helps that the internet is a medium that makes it very difficult to harm other people, either intentionally or accidentally.


"There's gold in them hills!" The (growth of) the Internet is like the days of the Gold Rush in the US. Everyone tries to strike it rich, and one a very few actually do find 'gold'. But I'll tell you who ALWAYS made a killing: The clever guys that sold the shovels and axes. Be a tool. (You know, like the guys at 37Signals).


There are more than 5 countries the US currently has trade sanctions or embargoes on, aren't there? That would make this blog post an admission of violating some federal laws, wouldn't it?

IANAL, I don't know why my mind jumps to such things... I doubt any website's been prosecuted for not having some kind of country blocklist.


Which countries? I can think of no more than 5.

Also, a trade sanction is sometimes limited to certain types of trade.


Software is so new, regulators haven't figured out how to push out the little guys. Enjoy it while it lasts.


So, what's next?


DHH needs to get off his high horse. He's hacked his way into providing a tiny service for artsy folks but he's not exactly hacking on immortality tech or AI like some of us. The government needs to consider redistributing some of his wealth. This essay is him gloating about sitting on piles of cash, where's the concern for starving african children or terminal cancer patients. He should sell his company and work on immortality tech. He can start with extracorporeal devices like described here http://www.youtube.com/watch?v=JuBDhT7Y5GU


marshallp needs to get off his pony. DHH's is not gloating about the piles of cash he surely has on this essay. He's talking about the unprecedented and amazing opportunities unregulated internet gives businesses.

And about your career counseling, I'd rather have DHH building niche web software with nice UI than have him build life supporting medical equipment.


Why should he keep building nice UI's. He's proven himself as a can-do hacker and has millions in the bank. He could spend his resources saving lives instead of polishing what's a tiny hill in the global landscape of ideas.


He should keep doing whatever he wants to do.

You could propose him a venture on life supporting devices and see what he tells you.

There's a (tiny) chance he hasn't gotten into life supporting devices because the opportunity hasn't shown itself. On the other hand it might just be that this area is too far out of his domain of expertise or he's just not interested in it. Maybe he doesn't feel like immortality is a worthy goal to pursue. Maybe he donates thousands monthly to whatever charity he feels truly help people. Maybe he drinks all that money with friends after race driving.


> Maybe he drinks all that money with friends after race driving. > Maybe he donates thousands...

Damned good show if he does. The world needs more young, selfish playboy millionaires who make absolutely no public show of being philanthropic. Leave that stuff to the billionaires. (No irony or sarcasm intended; I love to see the rich having fun, as long as it's not to anyone else's detriment.) Matthew said it well in the Bible: "Take heed that you give not your alms before men, to be seen of them." He didn't have much to say on car racing, but even Jesus liked a boozy wedding.

> Maybe he doesn't feel like immortality is a worthy goal to pursue.

It's usually only the most awful people who do think it's worth pursuing. We'd all like a few more years, but it takes a special sort of narcissist to think their presence will be appreciated after 200, 500, 1,000, 1x10^6 years...


What if it's a relative you'd like to see live another 10 or 20 years because they're too young to die?

Yeah, we need more playboys. The kid with cancer or malnutrition and his family should just learn to cope with death.

Anti-death people are such narcissists. The financiers like you are the true heros. You get a lot of hookers and blow and we should be thankful for you consuming them.


I believe in all the causes you have mentioned but please stop polluting this feed.

You get people to contribute to good causes by being able to influence them and not nag or harass or bully them.

Please get this book and read them because not all talk = influence:

http://www.amazon.co.uk/Influence-Psychology-Persuasion-Robe...

http://www.amazon.co.uk/How-Win-Friends-Influence-People/dp/...

I believe in what you profess but you are going about it the wrong way and even me who believe in your course find you annoying.


> The financiers like you are the true heros. You get a lot of hookers and blow and we should be thankful for you consuming them.

It's a hard job, but someone's got to do it. Glad you're appreciative.


That's why I said government maybe needs to redistribute wealth if these rich folk genuinely don't give a shit about poor people. They can keep their money if they invest in society improving stuff. That's why I said immortality tech. He could get involved in miniaturizing extra-corporeal devices (artificial organs) that keep people alive even if their hearts or lungs get too damaged. He can start by watching that video and contacting those people and putting together a team of engineers to get it done. If you're not doing an Elon Musk, then maybe the government needs to raise your taxes.


Ignoring all the problems like: who gets to decide; how are the decisions made; how often is success measured; what corrective measures are allowed; what is the best way to help the poor; what is the best way to redistribute the wealth; how to prevent lobbies from destroying the plan; how to avoid money escaping the countries implementing this into tax heavens.

Ignoring all that (and many more questions of the sort) I'm left with only one question: how exactly is Musk helping "the poor"?


He's helping the poor by making energy cheaper indirectly through kickstarting an electric car industry.

The tax issue can be resolved by luxury taxes. If people decide they'd like $100 million yacht, tax them $200 million for it. Countries like Singapore already have punitive taxes like that on cars.


How many Teslas would Musk sell when his $100,000 car becomes $250,000 after tax?


How the guy decides to spend his own money that he earned is none of your business. Mind your own, please.

If you think it's such a travesty that the guy has money and enjoys it, then maybe you should go to all the people who consensually traded with him and tell them what bad people they are for buying his products and services.


Maybe you should visit your local cancer ward or rat-eating homeless indian peasants and then decide what's what.


And how on earth seeing suffering/poor people convinces you that the solution is to grab from the rich and give it to the government?

That's one of the less efficient ways to solve most problems, even after discounting corruption.


Like I said earlier, a luxury tax. The capitalist utopia of singapore has them. Tax the rich and give it to NASA or create multi-billion dollar seed fund for immortality hacktivists.


AFAICT taxes in Singapore only create a welfare state that relieves somewhat poverty. A noble and worthy goal, but there are still poor people in Singapore. What about cancer cures and immortailty research, are they big there?

And now for the things you haven't addressed. Why is the government the most efficient way to solve the problem? Why cancer or immortality or space exploration are more important than food or malaria or sex education? Just because you like them?

I think you should stop and think real deep about the questions I've stated and implied in this thread, and answer them in length, with references where appropriate. Then share them.

Else all you end up doing is coming across as a naive angry fanatic with not too much reading comprehension skill (remember all this started because you misinterpreted DHH's essay) who doesn't even get to see the problem and is boasting about solutions.




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