Growing Pains and REWORK

We’re less than a year old and our team has grown from two guys in an apartment to over ten people running a classroom. As founders we’ve hit the point where we need to transition from being chiefs of everything to managers. What we never learned in business school is how difficult that shift can be.

Being young and inexperienced is a blessing when running a startup. You know what you don’t know (a lot) and, if you’re smart, learn to put your ego aside and seek out advice from people with much more experience than you.

Lately we’ve been devouring books on management in search for guidance on how to scale and oversee a fast growing team. We recently read REWORK, a book co-authored by the founders of 37signals. We’re huge fans of David Heinemeier Hansson, the book’s co-author. Not only is he the creator of Rails, but a successful entrepreneur and all around badass who has competed in races including the 24 Hours of Le Mans. Given his track record, we think he’s clearly someone worth listening to.

Here are three of our lessons learned from REWORK:

Lesson #1: Focus on making a dent in the universe

“To truly be inspired for great work, you need to know that you’re making a difference. That you’re putting a meaningful dent in the universe. That you’re part of something that’s making a difference and that your role in that something is significant… If you’re void that sense of purpose, the pleasure in your work will eventually wane and ultimately feel hollow.”

Running a startup is often compared to piloting a rocket ship. There is something equally spectacular and terrifying about performing death-defying stunts in front of crowds everyday. The anxiety of a single spark blowing away your leaky fuselage never goes away. While fear can be a great motivator, without a sense of purpose driving you, every new obstacle in your path will either whittle away at your nerves until you become battle hardened or cause you to self-combust. Without a strong belief in your own mission, you will eventually give up in the face of adversity.

Believing that what you’re doing has meaning, in your own ability to produce amazing work, is the only way to ever punch above your own weight in life and keep on moving. For 37signals, their mission has always been to “build the simplest possible thing we can with simple solutions” using software. Continuously scratching their own itch has been their way of making a dent in the universe.

Lesson #2: Having an enemy gives you a great story

In REWORK, DHH and Jason Fried write about the need to have an enemy:

“Sometimes the best way to know what your app should be is to know what it shouldn't be. Figure out your app’s enemy and you’ll shine a light on where you need to go.”

Having an enemy allows you to position yourself. In 37signals’ case, they developed and marketed Basecamp around the idea that it was the anti-Microsoft Project. What they lacked in features they made up for with a simpler interface and the convenience of web-based software.

As a new player in a space against a massive competitor, they were able to underdo their competition and use Microsoft Project’s marketed strengths (hundreds of features) as weaknesses (too complex).

Lesson #3: Emulate drug dealers

37signals has borrowed approaches that have worked well in other industries. By giving a little bit of your product away for free, you can get your customer hooked on it. It’s also a sign that you stand by what you’re selling. If you’re not confident enough to do this, you probably don’t have a strong enough product.

There’s also some actual proof behind their statement, at least as it applies to software. In surveys with 100 different SaaS companies including Zendesk, TOTANGO found that companies that didn’t require a credit card to sign up had a significantly higher end-to-end conversion. It makes sense: if you start a free trial and begin using software you forget all about it until your 30-60 days are up and it’s time to pay.

conversion-comparison

Are you a 37signals fan? Have you read REWORK or excerpts from REMOTE? If so, what key takeaways do you think other startups should know?