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37Signals

Startup School 2009: 37 Signals has some lessons for European startups

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Portable HDTV and DVD player costs $300

jasonY combinator’s annual startup school event was held in Berkeley last Saturday and featured a stellar lineup of speakers including the founders of Twitter, Facebook and Zappos. The founders speaking were almost universally charming and funny, even Mark Zuckerberg who I was determined to dislike (he does look around 12 though). This reinforces my belief that charm goes a long way in business.

Jason Fried of 37signals gave one of the talks which seemed most relevant to European startups. His business partner is actually from Copenhagen and they worked together for 2 years before meeting in person. Here’s a summary of his presentation and a chat I had with him afterwards.

  • Bootstrap your startup because it teaches you how to make money. Funded companies are focused on spending it.
  • Charging for something forces you to be good. People care about something they have to pay for so you will get very good and honest feedback.
  • Useful is more important than innovative. “Cool” wears off, useful doesn’t.
  • Software has no edges. This makes it more difficult to stop it from expanding beyond where it should. Think of your product as a museum and the features as the pieces of art you select. Only the most important pieces should make it into the museum.
  • You can’t make just one thing. Every product has a byproduct. Again this is harder to see in software than with physical products. In the case of 37signals, books and conferences have been byproducts of the software products.
  • Say sorry in the right way. Don’t say “we apologise for any inconvenience which may have been caused” when you should just say “I’m really sorry”. Talk to your customers as you would to any other human being.
  • The best are everywhere, not just in the golden California Valley. So live somewhere you love. Don’t feel you have to move just to make your company work.
  • Failure is not a pre-requisite for success or a rite of passage. Unfavourable comparisons are often made between the tolerance of business failure in the US and in Europe. Maybe we should worry about that less. Jason advises replicating what succeeded as opposed to learning from your mistakes – the results are much more predictable.
  • Europe can be a less risky place than the US to start a company because of the social security system here. You are never going to starve or have to do without medical care even if it all goes pear-shaped.
  • In some European countries it may be more frowned upon to succeed spectacularly than to fail. In countries like Denmark or the Netherlands, standing out is often not considered to be a good thing.
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