SEASON 2 - EPISODE 147 - MARCH 26, 2025

Build a Business that Runs Without You

Can you build a company that thrives even when you’re not in the room? In this episode of The REWORK Podcast, 37signals co-founders Jason Fried and David Heinemeier Hansson talk about the jobs they’ve created for themselves and how they’re able to step away without progress coming to a halt. They discuss the fine line between being involved and letting the team run things without them.

Key Takeaways

00:14 - The importance of creating a job for yourself that you enjoy
02:45 - The tragedy of owning a business you don’t love
06:56 - Staying relevant in your business and knowing when to step in
15:14 - Knowing when to step back so your team can grow
17:51 - Maintaining a life outside of your business and having work/life balance
20:36 - The parts of the business that require the founders’ involvement
23:33 - Jason and David’s stance of not being serial entrepreneurs

Links & Resources

Transcript

Kimberly (00:00): Welcome to REWORK, a podcast by 37signals about the better way to work and run your business. I’m Kimberly Rhodes from the 37signals team, joined by the co-founders, Jason Fried and David Heinemeier Hanson. Well, we always talk about business on this podcast. I think for a lot of entrepreneurs it’s easy to think that they’re running a company when they’ve actually just created a job for themselves. I know when I was an entrepreneur, I created a company, but it really was just a job. The business would not continue to sustain itself without me. Jason and David haven’t done this, so I thought we would talk a little bit more about that, how they’ve created a company that really runs without them. You guys can step away and the business continues on. So let’s go back, when the company first started, were you thinking about 37signals as this company that could run without you or were you just creating jobs for yourselves?

Jason (00:52): Well, I mean, I have created a job for myself too. Way back in the day when I was just freelancing and David was freelancing and we were separate, and even before that when I was in college and actually late high school, I made some software and sold that. But back then I didn’t think of it as a company or a job. I thought of it as me just making a product and selling it. Job didn’t ring a bell and I had a name because you kind of make up a name and you make up a logo and you feel whatever. But it was just me making something that I wanted to make and putting it out there. So I have done that. And then if I didn’t do that, in that case, I was making software, so money was coming in for a while, but if I didn’t keep it updated or respond to customers or something, eventually that would fall apart.

(01:31): So I have been there and it is interesting to be on the other side of that, which is to have employees, which is kind of what you ultimately need if you want to be able to step away for a minute, you need someone else to carry the torch and do the work if you’re not there. And of course, David and I don’t do all the work for the company anyway. We couldn’t. We’re not capable of all of the work. But when you have other people around and other people who are in leadership positions and other people who are able to do stuff and there’s momentum, you can step away for a while, which you can’t do as a freelancer. Things just don’t happen if you don’t have someone else to do the work. So I think there is a distinction there, but ultimately at the end of the day, even if you’re an entrepreneur who’s created a company that employs multiple people, you still have to create a job for yourself.

(02:10): And I think that David and I have both talked about this in the past, which is that ultimately we wanted to create a company we wanted to work at, which means we wanted to create a job we wanted to do. And I think that is really important because you talk to a number of entrepreneurs and they don’t really like what they do, they’re stuck with it. They’ve created a monster for themselves. They can’t step away or they think they can’t step away, and they probably could, but they think they can’t. They are micromanaging everything, their fingers on everything, and people are like, how do you deal with quality and how do you make sure It’s like you got to figure out a way to not have to be involved with everything.

David (02:45): Yeah. I find that it’s so tragic when I talk to entrepreneurs who’ve built a business that is successful and they’re not really happy about their day-to-day. They don’t enjoy the motions of the business. They may very well enjoy the trajectory. They may be enjoying the success. They may be enjoying all these other things, but they don’t enjoy the day to day. And whenever I see that or I hear that, I always think this isn’t going to last that much longer is it? And sometimes it lasts another three years, another five years, but it’s not the thing you’re going to be wanting to do for 10, 20, 30 years or however long your career is because it’s just very hard to sustain that kind of investment, emotionally investment into a company if you don’t, the day to day. The day’s are long. Eight hours a day is a long ass time to be doing things you don’t want to do.

(03:40): Now I occasionally have to do a lot of things I don’t want to do for like an hour, and I’m always wincing. I’m like, I don’t want to do this. And I procrastinated and I push it off and I’m like, maybe I can deal with next week. I’m like, oh man, what if this was every day all the time that I was just doing things I didn’t want to do? I’d be miserable. In fact, I couldn’t do it. I think that’s their honest truth. There are entrepreneurs who are just forces of nature who can just force themselves to do a bunch of stuff they don’t want to do because they’re so outcome orientated that that’s able to sustain. I’m not. I’m very much process orientated. I very much have to enjoy the actual act of doing the work. And I think Jason and I have just designed a business that allows that to happen, that we’re not running a business that’s only about the outcomes.

(04:27): We’re running very much a business that’s about the process. Do we enjoy the day-to-day, the month to month, the year to year? And that’s what allowed this company to continue for as many years as it has and that there isn’t this fixed end date to it. Now, all that being said, I was just away for a bit. Jason was just away for a bit due to circumstances of life. And I also find it very satisfying to realize, you know what? There’s something more durable here than just a job that Jason and I like. That’s a requirement. It has to be there because if we don’t do that, we’re not going to continue doing it at all. But also that the ship keeps sailing if we’re not constantly micromanaging the wheel, I find that very satisfying. It feels like something is built not of straw, but of actual brick.

(05:23): And I don’t know if it’s going to last as long as break, but it’s going to last a little bit of huffing and puffing. It’s not going to blow over just the second that we step away from it. And when you see that in action, it is one of those things where you’re like, oh, wow, the thing grew up. Because it really wasn’t that in the early days. I think Jason and I had stepped away 2005, 2006, 2007, it probably would’ve fallen apart because with 5, 6, 7, 8 people, that’s not enough. There are other things that are great about that small size, but it really duly, truly requires you to be in it and all the time. In fact, very literally so. I remember for the early years I dared take a vacation and I went to Hawaii and I just arrived at the damn hotel and there was six missed calls from Jason.

(06:12): I’m like, Jesus Christ, it just arrived and the servers are down and I’m sitting outside the hotel because at that time, that was the only place I could get proper wifi on my little laptop and desperately trying to fix things and like, oh yeah, I don’t do that anymore. Mostly. Occasionally we do have an outage, and occasionally I do call in from somewhere, but most of the time, most of the things that just the little hiccups along the way, I just read the report afterwards and I be like, you don’t actually appreciate that until you sit down and think about like, oh yeah, I used to. If I wasn’t there, the thing would stay down and now there’s a whole team and they can deal with the vast majority of things and almost everything, I just read the report afterwards and go like, well, that’s nice.

(06:56): So I think there’s a fine balance though because I think if you end up being so inconsequential to the business that you’re not actually adding anything at all that someone else in the business couldn’t add just as well, maybe it is time for you to think about what you’re doing with your life. I do think as founders, as entrepreneurs, you do have some need to be indispensable, at least in some situations some of the time. If what you do could just as well be done by anyone else at any other time, that one is hard to sustain, I think. And if you try to sustain it, you get out in this ego trip land that really isn’t healthy and you start inserting yourself in ways through force or mechanism that isn’t improved, the process isn’t improved by you being part of the chain, you just inserting yourself and actually making it worse for everyone.

(07:50): So I think there’s this room, there’s this sort of pendulum, this dance where on the one hand you do have to offer your company something special occasionally to both feel personally validated and for the company to need you, but also at the other time, it’s also okay if they don’t miss you for a hot second. It’s like it’s all of those things at the same time.

Kimberly (08:11): Okay. So you guys both like your jobs that you’ve created for yourselves. My question is over time, over the 20 plus years of this business, have there been times where you’re like, yeah, I’m not liking this. I need to make a change. Have you changed your job descriptions over the years?

Jason (08:26): David and I both talked about it before, we’re like, there’s been times where we’re like, do we want to do this anymore? Something really shitty happens to the business or in the business and we’re like, I don’t need this. I don’t want to do this. I don’t want to deal with this. And then the best advice I think we ever got was from a few different CEOs during some tumultuous times, just time. Just let some time go by because you don’t want to make those decisions while you’re really hot. And this is true in life too. If you’re really pissed off at your kids or something, you step back and let something pass for a minute. Don’t make some really rash decisions in those moments. I think both of us have stepped back in a lot of ways from a lot of things, whether it’s being too intimately evolved in too many things, too frequently, whether it’s doing too much of the work itself.

(09:13): At some point, if you’re in there all the time, other people step back and you don’t really want other people to step back. You want other people to step up and they can’t if you’re in the way. So I think us moving a bit out of the way is very, very helpful for other people to grow and for leaders to emerge and for things to be run better in many ways, and to practice this idea of what’s it like when we’re not around all the time. And so I think that’s been true for sure, and I think it’s healthy. I think it’s required too. I don’t have the stamina, frankly, to work today the same way I did 15 years ago, and I’m also not as good at many of those things as I used to be. I’m better at other things now, and so you kind of have to change your job description as you go anyway. I think that’s the biggest thing is to be able to adapt to the realities of where you’re needed now and what you’re good at and what you’re not good at, step away and let other people do.

Kimberly (10:01): David, you have lots of nodding over there.

David (10:03): That differential value, where is it mainly me who can do a really good job at this? That has become much clearer for me over the years, and I’ve become much more in tune to the idea that there’s a bunch of things I could do and that some of the time I even enjoy doing, but I’m not adding anything that someone else in the team couldn’t already do. So I’ve become more aware of the ways where, do you know what? I’m really good at this. So when this is needed, I’m going to step in. And to some extent also being more confident in that role that sometimes that is kind of butting in. I have some very specific opinions about a subset of things, and I know when those subset comes up, I’m going to insert myself in that discussion. But just knowing where is that right?

(10:54): Where does it actually add some value? And I think especially when you’re trying to build bricks and those bricks that are other humans and those humans sort of want to step up, as Jason says, knowing when that insertion actually teaches someone else some of what you perhaps foolishly believe or is actually true that you’re good at is also quite satisfying. It is satisfying to step in occasion go like, all right, see, can you see how this is? Ah, yeah, okay. Then you step back, you try to see did that lesson stick and sometimes it doesn’t and you deliver the lesson again. And sometimes I also have aspects of the business where I’m just going like, this seems so easy to me. There’s something in this. Maybe I’m just good at this because for whatever reason, that little slice of what it is we do occasionally doesn’t come as easily as I would’ve imagined it to do.

(11:47): The second part of it is, Jason and I have now run this company for well over 20 years together. It’s also okay to enjoy it, enjoy it in a different way, in a more relaxed way, a little more lean back. I don’t have the same burning desire to optimize every week’s worth of work in the way I did in 2009 where it was much more micromanagement because we were trying to get really far with an insanely lean team. So some of it is, for example, on expense management. The company’s bigger now than it was in 2009. It does some things more, but there’s also a lot of other things… It doesn’t necessarily produce more than we did in 2009, but we can do it in a slightly more lean back way. There’s a little more fat, which means there’s a little more reserves, which means there’s a little less need to just squeeze everything all the time to the max.

(12:47): Okay. I think the squeezing is actually good, and you need to focus on things and having deadlines, for example, and some degree of that. It’s good. You just don’t need to do it all the time. Not all of it has to be the sprint. I think some of that does come with age. I do think there is less stamina for needless sprinting. I think this is one of the reasons, by the way that Silicon Valley really enjoys young people so much, right? You’re like 80 hours a week. That sounds so exciting. So exciting. I mean, you could hardly pay me any amount of money to work 80 hours a week. I don’t care about any work problems that much that I don’t want to spend 80 hours a week for literally week after week after month after month after death march, right? No, we’ve transitioned out of that.

(13:33): I mean, one week maybe, I’m trying to remember the last time. Well, actually I remember, so that’s a bad example. I’m trying to say I don’t remember the last time I worked 60 or 80 hours a week, but those weeks are actually seared into my mind because we did have some pretty rocky times, not like a million years ago. But other than that, in the normal circumstances, it’s okay to lean back a little in part because the alternative for both Jason and I to just say like, okay, I’m done. I’m going to sit on the couch, and you know what? Totally honest, there are weeks where I go, maybe I should just do that. Maybe should just sit on the couch. And then I talked to literally every single entrepreneur I’ve ever known about how life on the couch is, and then they go like, yeah, that lasted me about three months at the max. And then I was bored out of my head and I was miserable, and I was all these things. And I go like, I want to believe I’m different, that I could just chill in relaxed state on the couch. And I know it’s not true, and I know it’s not true because whenever I go on vacation for fucking two weeks, the first 10 days I go like, oh, this is amazing. I could just do this. And then day 11, 12 and 13, I’m like, okay, so we going?

Jason (14:47): Could you imagine David just painting watercolors every day?

David (14:54): I actually have an envy of… is it a skill? Is it a disposition? I want to believe it’s a bit of a skill because I also want to believe that when I’m 85, I don’t feel this way that no, maybe the watercolors are great, and that’s just what I did today. I painted some watercolors poorly because I’m not good at it, but let’s just chill.

Kimberly (15:14): Okay. You guys have both kind of referenced this earlier, how you grew the business so it could run without you. Jason, you mentioned hiring. David, you mentioned being able to step back. Talk me through your thoughts on how much of it is the company around you versus you? How much of it is you’ve built this thing versus you personally as an owner have opted to be able to step back?

Jason (15:41): It’s the same thing at the same time, it’s not a…

Kimberly (15:44): But I think you could choose not to step back.

Jason (15:48): I think that’s more of a personal thing. If you’re just obsessed with something and you can’t step back from it or you feel like you’re so important that you were absolutely needed in every step, in every stage, every moment, that could be an ego thing. It could also be true in some cases. There could be some businesses that are built that way or they have a lot of incompetent people filling roles and someone really does need to do all that work. I don’t know. But we didn’t sit back and intentionally decide to build something in a way where we could step back in eight years. It wasn’t like that. It’s just you hire the best people you can find, who do the best work they can, who are good genuine people, who have good character, who like to help others. And one of the byproducts of that is that you actually end up with a good organization.

(16:28): You create an environment where people can do great work where you don’t step on everyone’s toes or you’re not on top of everybody, where they have space to do their work, where you’re not loaded up with meetings and everything where no one has any time, where you’re not asking people to work on the weekends and then you end up having good people who do work and are good at what they do. They’ve had a lot of practice doing the work itself, and they’re practicing 40 hours a week on their job versus practicing six hours a week because the other 34 are just full of crap that they have to deal with. So you end up with the great place that you feel like you can step back a little bit and also step in. Now when you step in, it’s kind of more noticeable that you’re there.

(17:05): But I think these are all side effects of just building a good organization full of good people and having other people step up and having room for them to step up. And I was thinking about this. I’m not sure this is a good metaphor, but there’s something about if you’ve got a couple water and you put a big rock in it, there’s no room for anything else. It displaces all the other liquid, it’s all gone, and some of it splashes out and never comes back. And so when you take the rock out, if you have an organization that’s left with just very little water in the glass because you drop the rock in too hard, you’re kind of screwed. You screwed yourself. Again, that’s not a fully worked out metaphor, but there’s something to that where you need to be able to drop in, be noticeable, and then come out and not have lost anything. That’s sort of where you want to be, I think. And I think hopefully what we’ve built.

David (17:51): I think what often happens to businesses that don’t end up in that place is that the habits you acquire early on, they just stick with you. So if you early on are in this all in 80 a hundred hour week mode where everything is a crisis all the time, all the hair is on fire, there’s constantly things that need to be put out, it’s actually quite difficult to snap out of that. You are putting all your identity eggs in that one basket and that one basket is work, and that’s all there is. You’ve neglected every other human relationship in your life because it’s just work, work, work. You’ve neglected perhaps your body, you’ve neglected your hobbies, you’ve neglected everything else that would make you human. So of course when there’s just that one thing, you’re just going to put that back? It’s the one damn egg you have that’s a gold egg.

(18:42): You’re not just going to put that golden egg down and then what? Be empty handed? I think humans deal poorly with that. So I think our ability to now be more at ease and at peace with being out of the cup is directly traceable to an origin that wasn’t this man all in all the time everywhere approach. That’s the origin myth I think, or not even origin myth, origin reality of a lot of startups that have this just all encompassing, it’s got to be your entire life for 10 years. Jason and I enjoyed life a little along the way. We didn’t try to just mash it all out. Again, the metaphor of there’s work being this giant rock in the cup, there’s literally room for no water around it. It’s just work, work, work, work, work. And then realizing after 10 years, like no, there was room for that along the way.

(19:42): I don’t feel actually that my work life is that hugely crazily different from what it was 10 years ago. There’s a little more step back, there’s a little more recognition of where I’m at in additional value and so forth, but it’s not night and day. It’s not like we went from a hundred hours to 20 hours. We went from maybe 42 hours to 37. I don’t know, something. There’s some degree of it. And I do take more liberties of being like it’s okay to be away from the business because in part also I think we’ve realized both Jason and I, that our differential value are on when the tanker needs to change direction. When we just need to travel towards the destination, we’ve already pinned in the GPS, the company is more than capable of staying on that path, even if something pops up, even if there’s an iceberg, all these things.

(20:36): But when we really want to change things, when we want to go new novel places, Jason for example, pins out the new products. They come out of Jason’s head to like this, I see a need here. This is what I want to build. This is where we’re going. We have great capable people who can continue to develop HEY, to develop Basecamp staying the course, but when we’re going somewhere totally new and novel on the product side, Jason comes in. When we go trying to go somewhere totally new and novel on the technical side, I step in. When we were to make the decision about where should we have all our servers? Should we go all in on the cloud? Should we go all in our own stuff? Yeah, I’m going to be needed for that conversation. I’m going to be needed to drive that through.

(21:17): Now we’re working on two products simultaneously. Jason is quite needed in that process, needs to be overseeing it even if there are other people doing that work. And then you start realizing, oh, okay, that’s my major value. Which then also means when you’ve programmed the GPS and you’re going where you want to go, sometimes the best thing you can do is just lean back, right? Enjoy the show. You’ve done your part, you’ve done the product management part, you’re overseeing whatever, but it’s not like all hands on all the time. And now that we are, for example, out of the cloud, there’s a bunch of optimization and whatever that I don’t need to be in the thick of. So realizing that distinction and where your value is I think does make it easier. And so do reasonable habits that you’ve trained over 20 years to have room for other stuff to fill your time. By the way, kids, amazing ingredient to add to that dish if you want to step away because they will literally pull you physically. Dad, come here. We’ve got to play Fortnite at 6:30. And then I think you realize there are other things in life than work.

Kimberly (22:24): Well, And David, I think you make a good point about not being a hundred hours a week from the very beginning, going from 42 to 37 because at some point that is not sustainable. So if you’re starting from a point of all in, it’s my whole everything, it’s my identity and it’s all I ever do, that’s just not sustainable for 20 years.

David (22:44): No, and I also think this is why you see a lot of entrepreneurs, they sell their business and then they just collapse

Kimberly (22:51): Yeah

David (22:52): Three months and then they wake up realizing, oh shit, I still want to be in the game, but I needed to get out. I couldn’t continue at that pace. And that seems, again, Jason has this great point of I’m done creating businesses. This was it. I’m not doing another one. And I’m like, yeah, that is actually already, I don’t really want to do this again. We’ve spent over 20 years doing this one. Let’s keep it how we like to have it. I mean, as long as we want to keep working, I’d like to have this place is the place I want to keep working. And then at some point when I’m done with that, I’m not doing it again. Jason, do you still have this on your Twitter profile, not serial entrepreneur?

Jason (23:33): Yeah, not serial entrepreneur.

David (23:34): It’s amazing.

Jason (23:37): Yeah, it’s not for me either. Yeah, one business is plenty. And then look, hey, we could also get shoved out of business for a million different reasons, and then we don’t get to decide these sorts of things that can happen. But I think what also ends up happening is you have people who maybe they sell their business, they have a little bit of money, and then they end up becoming an investor, and the reason they become an investor is because they want to be near other things that are interesting and exciting, and I think it’s actually kind of a depressing outcome.

Kimberly (24:04): Oh, why?

Jason (24:06): I find it the idea that when you sell your business and you make some money that you just become an investor. That’s literally becomes the default thing everyone seems to do. I just find that to be depressing.

Kimberly (24:16): But why is that depressing? I mean, you’re still close to it. You’re seeing a business be built, but you don’t have to be in the day to day.

Jason (24:23): In some strange ways it feels like telling people how good you were at high school sports or something like that. It just has a little bit of that you’re even useful anymore. I mean, this is part of the thing. This is a previous episode we just recorded before this one, which we didn’t quite get to this point, but it was similar. We’re talking about AB testing and results being different each time, and I’ve kind of come around to this feeling that all advice is complete bullshit. It’s not even worth listening to because it’s so contextual. So based on timing, I was thinking about this. I’d give myself the same advice in two different situations and do very, very different things because the context is totally different. And some advice would be like, you want to stick it out and figure it out as you go.

(25:03): And there’s other advice. I would go, no, I’m going to quit because it doesn’t make any sense anymore to do this, it’s so obvious. Advice is this tiny moment, this point in time. And so my point is I’m getting a bit off track, but you’ve run your business for a bunch of years, you got some money, and now you feel like you want to put that money to work in other people’s business because the money still needs to work and you still want to stay involved in some way. It just, I don’t know, something. I’ve done a little bit of this, but I’m still running a business too. I would feel weird personally, this is just my thing about getting out of this and then just investing other businesses as my job. It feels sad to me. I don’t know how else to put it. I feel like I’m judging everyone else, and it’s more about how I would feel about it, I guess.

David (25:47): I feel exactly the same way, exactly the same way,

Kimberly (25:49): Really?

David (25:51): Yeah. When I was in Denmark during the pandemic, I invested in a bunch of Danish startups and with the best and nobelist of intentions, and then I sat in on a bunch of board meetings and a bunch of product meetings, and I always got the sense that everyone was just placating me and like the only fucking reason they were listening to me babble and rabble on was because I had a checkbook. And I’d be like, I didn’t even get mad about it because I’m like, do you know what? That’s exactly what I would think. That’s exactly what I would think. Oh, look, better be nice to this man. He’s giving us money. This is just what you’re supposed to do and this is what the normal human thing to do is to be nice. And it drains authenticity out of it in a way that I find really off-putting.

(26:40): And I mean, if any of these investments are listening in, I’m not talking about you. You’re wonderful. Our relationship, very special. None of this applies in your specific situation, but there is just a sense that it is a fundamentally inauthentic relationship because it’s so predicated on the check. Whatever I bring from my little observation, my little lessons is so small compared to what they really want is can you give me the money and shut up.

Jason (27:08): That’s kind of what I meant about the high school analogy. It’s like, would you listen to some high school football star who was good a high football 30 years ago about how you should play football now? That’s kind of how it feels like. Well, this person ran a business for a long time and now they gave me a bunch of money, so I guess they know what they’re talking about. Probably not. They haven’t started a business in a long time. I’ve written about this in the past where I’m the worst person to ask how to start a business. I don’t know. I haven’t started one for 25 years. I have no idea how to start a business today. I really don’t know what to do. Don’t ask me, ask someone who just started one six months ago. They’re actually going to have the information. So yeah, having the money is the ticket, but then it’s like people only listening to you for that reason.

(27:47): To me, again, this is just me. I find it to be kind of weird. The other thing I would just add to this aside is I’ve always found it a little bit odd that in some ways money has to keep working. This idea, you make your money, you work, you make some money, you put aside, and then you have to keep putting that money to work. That money has to keep working. It can’t rest. It can’t just be there. You can’t earn a basic decent return, so you don’t lose, let’s say you make five or 6% a year because just you want to beat inflation, that’s fine, but to have to make sure that money keeps returning in a big way. I’ve always just found that to be, I don’t know. I mean, it’s interesting when it happens, I suppose, but as a job, it doesn’t resonate with me.

Kimberly (28:27): Okay, so you guys are going to keep the job that you’ve built. That’s good to know.

Jason (28:30): For now.

Kimberly (28:31): Okay.

David (28:32): Shake the Magic 8 Ball. Ask again tomorrow.

Jason (28:36): Yeah. Yeah. Right.

Kimberly (28:38): Well, thanks for that. I feel like we went a little off topic, but it worked.

Jason (28:42): Yeah.

Kimberly (28:43): REWORK is a production of 37signals. You can find show notes and transcripts on our website at 37 signals.com/podcast. Full video episodes are on YouTube. If you have a question for Jason or David about a better way to work and run your business, leave us a voicemail, 7 0 8 6 2 8 7 8 5 0. You can text that number or send us an email to rework@37signals.com.