DHH vs. Calacanis on This Week in Startups

Best quote: "If you're not working on your best idea right now, you're doing it wrong." ~DHH<p>The difference is between "I want to build something great that makes the world better" and "I want to build something that makes money." And really, when comparing 37signals to Mahalo, the mentality the leadership has is what inspires the community opinion and quality of product coming from those companies.<p>Note: I don't mean this as a all-too-common-on-HN cheap shot against Jason Calacanis. My point is that when people talk about Calacanis' camp, they talk about the quality of the business. When people talk about 37Signals, they talk about the quality of the product. Neither is wrong - they're just different.

I think both of them are making decent points. I don't understand the community's desire to have one of them win or "rip apart" the other. Seems just like a well balanced debate to me.<p>Calacanis seems focused on DHH's interest in having complete control over a smaller business with continuous revenue. He keeps pushing DHH with scenarios where DHH has a huge payday, DHH says he wouldn't do it and Calacanis acts surprised. I totally understand DHH's perspective. I can't imagine not working, that sounds so boring, so DHH has found what he loves to do and is doing it. Why is it surprising that you'd choose valuable, profitable and rewarding work over one big pile of cash?

Tho, I only watched 15 minutes 47-62, I did not find the interview very interesting. If anything it reflects the biases and cultures of the countries they were each raised in. The comment about having a steady job and income stream is exactly what you would hear from my father, who also bootstrapped his own construction consulting business in India from working during the evenings to owning it full time. America is a nation of excesses and trying to grow you wealth in excess of what you require is based in American cultural roots.<p>Digress: It is what makes American the richest nation in the world that cannot afford a health care policy for all its citizen while much poorer nations provide better health care for their citizens.

I loved the quote from David when he said selling to Fortune 500 companies takes "strippers and steaks."<p>Overall, great interview.<p>I'd love to see Jason C take on Jason Fried and DHH.

Obviously DHH can't publicly say "sure we'd love to sell 37 signals for a nice profit." I don't see the profundity in latching on to this point. No customers of 37signals want to hear that it's being shopped around.

The no venture capital thing is getting to be a bit much for me. Some businesses and some situations require outside money, some don't.<p>In the hypothetical situation described where Basecamp grew as fast as Youtube or Facebook DHH says he wouldn't raise external financing. I call BS.<p>Businesses with recurring revenues and upfront capital costs that grow fast enough will need to raise money. You need to convert the future cash flows from those customers into cash now to pay for the capital assets to serve those customer today.<p>Sure, a single customer may net you $150 in a year and only require $15 in capital investment. Unfortunately you need to spend the 15 dollars on day one and you only make 12.50 on day one (month one). If your growing slowly you can self finance it off previous customers or a small founder investment.<p>If your growing Youtube fast you get fucked to the tune of that 2.50 shortfall x however many million users you just signed up. The only way to do it is leverage or vc. Take your pick, your raising money.

What a fantastic interview. Thank you guys! I'd love to see Paul Graham on the show.

Great part about 'fire the workaholics' 'do less' @ 1:20 or so. Jason rips DHH to shreds.

DHH makes very good points about profit.<p>But he seems to imply that all other startups or majority of them do not get this basic point. He also thinks that 37 signals would be making the same kind of profits 20yrs later. These points do not fit in with how insightful and bang on he is with his business sense.

What a great interview. I find myself going back and forth agreeing with both of them. Calacanis makes a reasonable argument. DHH says something crazy-sounding and unexpected. Then, DHH goes on to explain it in more detail and sounds perfectly reasonable.

I'm not sure why JC keeps harping on the unique visitors number. More uniques = less commitment to the product. Unique visitors are people who search, click, leave. How are you going to build revenue off people who don't care about your product?<p>How long do those unique visitors visit? When I <i>accidentally</i> click a mahalo link, my instant reaction is to hit the back button, yet, I'm one of those numbers he's using to justify his business model.<p>Unique visitors is essentially irrelevant. If a unique doesn't stick around long enough to see or click on an ad, what's it matter?

Funny how Calacanis is analyzing DHH's psychological (e.g. is DHH afraid of money?) reasons for not wanting to sell 37signals implicitly assuming that it's stupid &#38; insane.

nice quote when they talk about Facebook<p>DHH: "... begging for advertising crumbs which these companies are essentially doing..."<p>Really odd perspective to have. Why is charging users directly any better? Online advertising expenditure is <i>slightly</i> more than crumbs.<p>Also I'm pretty sure total advertising expenditure online is massively more than people paying for subscription/services online.

I loved the interview, and I agree with most of DHH's comments, but I think that being absolute on the correctness of a number of opinions (like, "all VC powered companies are flawed" etc) is fundamentally wrong, absoluteness is not the case when you talk about people and their actions.

Great interview!

What is interesting here between JC's style/outlook and DHH's style/outlook is:<p>1. World recession is decreasing capital exits, investments, etc..DHH's outlook wins<p>2. Increasing amount of college graduates have college loan debt loads..DHH's outlook again wins<p>3 SV in recent years has been more focused on get there fast(money) but screw the product quality or customer quality..<p>I see JC and DHH representing both what VC/angels have in the past make possible represented by JC as opposed to the new way DHH's.<p>I think in the long term, 10 years out, that VC/angels will be gravitating towards DHH's way rather than the old way that from 1980s until now led the VC industry.

Good video indeed

I expected them to be swinging for each other from the buildup this got!