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http://docs.google.com/View?docid=dd8936t8_66g2ngbchb

David Heinemeier Hansson's Speech about Making Money at Startup School
2008, by Vlad

37Signals -- not hiring, not looking for investments.  Happy just
charging money for a product.

37Signals thought for a week about solving the slashdot joke.

1. Great Application
2. (???)  Price
3. Profit!

If you have a price, people can pay you.  There are many ways to do
this:

37Signals - packages, 30 day free trial, pay monthly while you like it

campaignmonitor - recommends e-mail service, $5 + 1 cent per
recipient, don't care about catching a wave when they go surfing, they
keep making money every month (reference to a Sequoia presentation
about trying to catch the next trend)

faxitnice - sending a fax; pay per fax

Not rocket surgery - (but most businesses will fail)

Odds are not created equal - tiny chance of creating next facebook;
you're being brainwashed thinking you have great odds.  but a not too
shabby chance of creating an app that you can sell and make good
profit.

2K customers x $40/mo x 12 months = $1m/yr

To keep this up, you might need 5% conversion rate   40,000 signups to
keep 2K  (110 signups/day).  If this doesn't make 1m in yearly sales,
a quarter of that is also great, with 500 customers and making
$250,000 a year.

How to get customers:

Customers can be flakey, hard to get, can sign up for one month and
then quit

Focus on Fortune 5,000,000 - companies who need to have needs
satisfied

"We both know some people who own more than a billion (dollars) and
they're not any the happier" Craig Newmark
"Finding a good cause is incredibly hard and time-consuming" Craig
Newmark

Do something you can keep doing.

The notion to make tons of money to sell out and retire is crazy.
Most entrepreneurs he talks to focus on that.  They think they won't
be doing anything afterwards and sometimes that's true, but in that
case they're talking about using Outlook on Windows and attending
meetings all day.  Why not focus on creating companies you can run for
20 years?  You have more time than you think.

Many sites are doing great and having customers.

VC's (Sequoia) will ask them, where is the network effect? How will
you get viral?

Zappos might expedite your shipping and send you shoes free the next
morning within hours of ordering the evening before, to make the
customer happy.  They're making customers happy, even though they're
also getting paid!  Other companies are worried that if they don't get
investments in 3 months, they're screwed.  Zappos just sells shoes,
shoes!  They're just doing it better than other guys.

Our first product: basecamp.

1) Developed by 3 people with other commitments - billed 10 hours per
week to 37signals for this, but those were actual work hours
2) Grew for a year before we gave up the extras
3) Ran on a single server for the first year

When you charge money, scaling problems rule!  If you're having
scaling problems, it means you have more people paying and you just
buy more servers.  It's what you want.

If you fail thats great because you can blame it on us -- techcrunch
screencap of a Michael Arrington August 13 2007 story saying 37Signals
Drives Another Company to the DeadPool.

Try solving your own problems.  Your own company is not unique, there
are probably two hundred others who have the same problems.

What would you change or do different?  Do you wish you had done
something different?  No, I'm pretty happy with how things turned out--
apologies for sounding arrogant, but he didn't have time to prepare a
less arrogant response.

Fortune 5million customers are small companies of 3 people, 5 people,
a guy doing something in his spare time.  People are just looking for
simple solutions.  They don't care about vcs, funding, or anything
else.  No business is too little.  By focusing on the customer you
really don't need to make yourself look good to VCs, go to golf games
with them, stripper parties, or anything else.

A guy working on the technical side of an adult business in LA says
he's trying to work 14 hours a day but he ends up playing games and
surfing the web.  The response?  Get a parent filter. (laughs) Work
just 5 hours.  And get something done.  If you could get 3 great hours
in per day you will get a ton more done.

Thank you.  (Very, very loud applause.)