Jason Fried

September 14, 2021

Is a business different from a company?

Is there a difference between building a business or building a company? They've always seemed synonymous — interchangeable — to me, but now I think there's a difference.

We just completed the search process for a new COO at Basecamp. It's essentially a brand new position at the company. We had a COO for one year about five years ago, but for the rest of our 22 year existence, we haven't had someone in that position. The only two C-level executives at Basecamp (and 37signals before that) have been me and David. We're deficient in Vitamin C.

Aside from exposing us to a number of smart people we'd never have met on our own, the search also carved out a wonderful space to reflect. Reflect on what we've built over the last 22 years, how we've built it, and where we want to go next.

In that reflection I spotted a reality I hadn't really considered. We've built an outstanding business — profitable every year for 22 years. But what about the company side of the equation? We have over 100,000 paying customers, and we're financially stable and resilient (thanks to the business end), but structurally we're less sound, supported by just a couple of points of contact. The business overcompensates for the company.

Why was this new to me? As Orwell said, to see what's in front of one’s nose needs a constant struggle.

We've leaned on a formula with just a few ingredients — strong products, strong opinions, strong word of mouth growth, and strong individual contributors. While hundreds of smart, autonomous decisions are made by people doing the work, and valuable contributions come from all corners, David and I are the only two tasked with thinking strategically about the company itself. That feels flimsy. If nothing else, two people who see many things the same way inherently lack perspective. That view can still get you far, but how much further could we go with a wider point of view coming from a dozen distributed eyes, rather than four centralized ones?

So as part of hiring our COO, we're going to begin investing significantly on developing leaders from within, and bringing in structural leadership from the outside. More people with an executive mindset to complement our outstanding crew of individual contributors. And we'll build out a few new dedicated groups and departments that were perviously handled on borrowed time by people already responsible for doing other jobs.

Further, we're going invest in other forms of resiliency and redundancy throughout the company. Historically we've run Basecamp with an eye towards efficiency. We've run exceptionally lean, and to great effect. But running on 3% body fat forever isn't healthy over the long term. We need more inefficiency! More people not assigned to specific work. More roamers, more room to move, slide, and adjust. More ability to pick up reactive work as it comes, rather than always being focused on the work we define up front. And there probably shouldn't be only one person who can do a specific job.

It'll take some time, we'll bump into obstacles we can't yet see, certain setups will turn out to be setbacks, but it all starts with a commitment to improve.

All this is to say we're about to rework ourselves into a more capable company. One that's doing more, in parallel, rather than sequentially. One that doesn't balance on a couple points, but rather one that's supported by a grid of columns. Swipe a leg, the others keep us standing. Stable, resilient, and distributed. Stronger.

I never looked forward to building a bigger company. Reflexively, I've always wanted to keep thing as small as possible. Like an instinct I knew by heart, baked in by hearing myself say it — and think it — over and over. But my mind has been changed, and I'm looking forward to turning the page and digging into the next chapter.

Here we go.