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“It is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God” — Matthew 19:23–26

Angels are merely the entry level in the holy trinity of startup money. Proceed along the illuminated path and you’ll quickly be granted an audience with the wise venture capitalists. And finally, if your hockey stick is strong, you’ll get to audition in front of the investment bankers who will weigh your ability to look shiny just long enough until the lock-up period on insiders selling shares is up. And guess what these people call that final affirmation: A LIQUIDITY EVENT. The baptizing required to enter financial heaven. Subtle, isn’t it? Oh, and then, once you’ve Made It™, you get to be reborn an angel and the circle of divinity is complete. Hale-fucking-lujah!

You might think, dude, what do I care? I AM SPECIAL. I’m going to beat all the odds of the unicorn sausage factory and come out with my special horn. And who gives a shit about the evangelical vocabulary of financiers anyway? As long as they show me the money, I’ll call them Big Dollar Daddy if they want to. No skin off my back!

So first you take a lot of money from angels desperate to not miss out on the next big unicorn. Then you take an obscene amount of money from VCs to inflate your top-line growth, to entice the investment bankers that you might be worthy of foisting upon the public markets, eventually, or a suitable tech behemoth. And every step along this scripted way will you accumulate more bosses. More people with “guidance” for you, about how you can juice the numbers long enough to make it someone else’s problem to keep the air castle in the sky inflated and rising. But of course it isn’t just guidance, once you take the money. It’s a debt owed, with all the nagging reciprocity that comes with it.

Now, if you truly want to become the next fifty-billion dollar Uber in another five years, I guess this game somehow makes sense in its own twisted logic. But it’s more than worth a few moments of your time to reconsider whether that’s really what you want. Or, even more accurately, whether an incredibly unlikely shot at that is what you want.

Don’t just accept this definition of “success” because that’s what everyone is cheering for at the moment. Yes, the chorus is loud, and that’s seductively alluring, but you don’t have to peel much lacquer off the surface to see that wood beneath might not be as strong as you’d imagine.

Let’s take a step back and examine how narrow this notion of success is. First, ponder the question: Why are you here?

“Get Your Ticket To Join The World’s Largest Companies and Most Exciting Startups: It’s not just startups that come to Web Summit. Senior executives from the world’s leading companies will be joining to find out what the future holds and to meet the startups that are changing their industries.” — Web Summit invitation.

That’s one reason: You think you’d like to be mentioned in that headline: The World’s Largest Companies and Most Exciting Startups. In other words, you too would really like to try that unicorn horn out for size. And white, white, is totally your color. It’s meant to be.

Because while that area north of Silicon Valley is busy disrupting everything, it still hasn’t caught up with the basic disruption of geography. So if your angel or VC can’t drop by your overpriced office for a jam session, well, then you’re no good at all, are you?

The real question is why do you startup? I don’t actually believe that most people are solely motivated by fawning over the latest hockey stick phenomenon. Bedazzled, probably, but not solely motivated. I invite you to dig deeper and explore those motivations. As inspiration, here were some of mine when I got involved with Basecamp:

Independence isn’t missed until its gone. And when it’s gone, in the sense of having money masters dictate YOUR INCREDIBLE JOURNEY, it’s gone in the vast majority of cases. Once the train is going choo-choo there’s no stopping, no getting off, until you either crash into the mountain side or reach the IPO station at lake liquidity.

I wanted to make a product and sell it directly to people who’d care about its quality. There’s an incredible connection possible when you align your financial motivations with the service of your users. It’s an entirely different category of work than if you’re simply trying to capture eyeballs and sell their attention, privacy, and dignity in bulk to the highest bidder.

I wanted to put down roots. Long term bonds with coworkers and customers and the product. Impossible to steer and guide with a VC timebomb ticking that can only be defused by a 10–100x return. The most satisfying working relationships I’ve enjoyed in my close to two decades work in the internet business have been those that lasted the longest.

We have customers of Basecamp that have been paying us for more than 11 years! I’ve worked with Jason Fried for 14, and a growing group of Basecamp employees for close to a decade.

I keep seeing obituaries of this kind of longevity: The modern work place owes you nothing! All relationships are just fleeting and temporary. There’s prestige in jumping around as much as possible. And I think, really? I don’t recognize that, I don’t accept that, there’s no natural law making this inevitable.

The strategies employed to pursue the 30% for $3M are often in direct opposition to the strategies needed for a 0.3% shot at making $300M. Shooting for the stars and landing on the moon is not how Monday morning turns out.

I wanted a life beyond work. Hobbies, family, and intellectual stimulation and pursuits beyond Hacker News, what the next-next-next JavaScript framework looks like, and how we can optimize our signup funnel.

I wanted to embrace the constraints of a roughly 40-hour work week and feel good about it once it was over. Not constantly thinking I owed someone more of my precious twenties and thirties. I only get those decades once, shit if I’m going to sell them to someone for a bigger buck a later day. These motives, for me, meant rejecting the definition of success proposed by the San Franciscan economic model of Get Big or GTFO. For us, at Basecamp, it meant starting up Basecamp as a side business. Patiently waiting over a year until it could pay our modest salaries before going full time on the venture. It meant slowly growing an audience, rather than attempting to buy it, in order to have someone to sell to.

By prevailing startup mythology, that meant we probably weren’t even ever really a startup! There were no plans for world domination, complete capture of market and customers. Certainly, there were none of the traditional milestones to celebrate. No series A funding. No IPO plans. No acquisitions.

Our definition of winning didn’t even include establishing that hallowed sanctity of the natural monopoly! We didn’t win by eradicating the competition. By sabotaging their rides, poaching their employees, or spending the most money in the shortest amount of time… We prospered in an AND world, not an OR world. We could succeed AND others could succeed.

All this may sound soft, like we have a lack of aspiration. I like to call it modest. Realistic. Achievable. It’s a designed experience and a deliberate pursuit that recognizes the extremely diminishing returns of life, love, and meaning beyond a certain level of financial success. In fact, not only diminishing, but negative returns for a lot of people.

I’ve talked to more than my fair share of entrepreneurs who won according to the traditional measures of success in the standard startup rule book. And the more we talked, the more we all realized that the trappings of a blow-out success weren’t nearly as high up the Maslovian pyramid of priorities as these other, more ephemeral, harder-to-quantify motivational gauges. I guess one way of putting what I’m trying to say is this: There’s a vast conspiracy in the world of startups! (Yes, get your tinfoil hats out because Kansas is about to go bye-bye). People act in their own best interest! Especially those whose primary contribution is the capital they put forth. They will rationalize that pursuit as “the good of the community” without a shred of irony or introspection. Not even the most cartoonish, evil tycoon will think of themselves as anything but “doing what’s best”.

And every now and again, this self-interest shows itself in surprisingly revealing ways. Like when you hear angels brag about how YOU CANNOT KNOW WHICH BUSINESS IS GOING TO BE THE NEXT UNICORN. Thus, the rational play is to play as much as you possibly can. I find that a stunning acceptance of their own limited input in the process. Hey, shit, I don’t know which mud is going to stick to the wall, so please, for the sake of my six-pack of Rolexes, keep throwing!!

This whole conference is utterly unrepresentative when it comes to the business world at large! That’s why the mindfuck is so complete. You have a tiny minority of capital providers, their hang-arounds, and the client companies all vested in perpetuating a myth that you need them! That going into the cold, unknown world of business without their money in your mattress is a fool’s errand.

Don’t listen! They’ve convinced the world that San Francisco is its primary hope for progress and that while you should emulate it where you can, that emulation is going to be a shallow one. Best you send your hungry and your not-so-poor to our shores so we can give them a real shot at glory and world domination.

They’ve trained the media like obedient puppies to celebrate their process and worship their vocabulary. Oh, Series A! Cap tables! Vesting cliffs!

But in the end, they’re money lenders.

Morality pitted against the compound leverage of capital is often outmatched. Greed is a powerful motivator in itself but it gets accelerated when you’re serving that of others. Privacy for sale? No problem! Treating contractors like a repugnant automatron class of secondary citizens to which the company needs not show allegiance? PAR FOR COURSE.

Disrupt-o-mania fits the goals of this cabal perfectly. It’s a license to kill. Run fast and break societies.

Not all evil, naturally, but sucking a completely disproportionate amount of attention and light from the startup universe.

The distortion is exacerbated by the fact that people building profitable companies outside the sphere of the VC dominion have little systemic need to tell their story. VCs, on the other hand, needs the continuous PR campaign to meet their recruiting goals. They can’t just bag a single win and be content henceforth.

The presentation of unicorns is as real as the face of a model on a magazine cover. Retouched to the nth degree, ever so carefully arranged, labored over for hours.

The web is the greatest entrepreneurial platform ever invented. Lowest barriers of entry, greatest human reach ever. I love the web. Permission-less, grand reach, diversity of implementation. Don’t believe this imaginary wall of access of money. It isn’t there.

Examine and interrogate your motivations, reject the money if you dare, and startup something useful. A dent in the universe is plenty.

Curb your ambition.

Live happily ever after.

This talk was originally intended for Web Summit 2015 in Dublin, but I had to cancel at the last minute, so it got posted first on Medium, and now it’s here.

David wrote this on Nov 05 2015 There are 38 comments.



Love this. Thanks for sharing this in so much detail, even after the talk got canceled.

Valuable stuff.

I talk about this all the time as well (very inspired by your talks and the 37s books).

It’s also very interesting how it aligns with millenia-old thinking, like Taoism, for example.

It’s not just startups, but I guess since “we” are in this industry, it’s what we see most of, but making people feel like they have to go big or go home is a terrible byproduct of a money-driven society.

Aiming for the moon or atmosphere is definitely acceptable. There’s plenty of room there for everyone :)


Mark Henke


One of your recently most enjoyable blog posts. Thanks.

Paris Smithson


Bravo David!!



“About 12 years ago, I co-founded a startup called Basecamp”

Isn’t this incorrect. DHH was not a founder 12 years ago.

According to Basecamp own “About Us” page it states:


Basecamp was founded in 1999 by three equal partners: Jason Fried, Ernest Kim, and Carlos Segura.

At the time, the company was called 37signals.

It wasn’t until Febuary of just last year (2014) that the COMPANY called Basecamp was created. What which point, I assume DHH became a founder. So DHH has been a founder for 1 year, not 12 years.

More info can be found here:


Pete Marcano


This is dead on. It’s a shame you weren’t able to give this talk at Web Summit… I was there last year… I met a lot of people who should need to hear this and take it to heart…



Nonetheless as an example raising equity in real estate deals makes perfect sense. There’s a real value in equity providers but it’s a very powerful weapon people over-use.



Tiffany, 37signals was founded in 1999 as a design-service business. Basecamp, the product business we run today, was founded in 2003 under the 37signals umbrella. In 2014, we completed the transition that had started almost a decade earlier and renamed the 37signals holding company to “Basecamp”. None of this is a mystery or a secret.



Well said! I’m glad somebody articulated this nonsense.

However success means different things to different people at different stages of life and maturity.

VC’s catch these kids during their “stupid but technically smart” stage of life. Just like the military can easily sign up kids right out of high school. Just like modeling agencies get teen girls bound to stupid contracts. Just like record labels get young artists to sign away precious rights they later regret.

Regardless, it’s great to have the freedom to do stupid things too :)

Stuart Hostler


It’s nice to have somebody cut through the bullshit every so often. Most of us swim in the start-up kool-aid occasionally; but I’ll be referring to this whenever I need a reminder of what dry land looks like.




Nonsense, and off-topic. Granted, the statement could’ve been worded just a little differently, but the fact of the matter is that DHH built the darn thing, he even built Ruby on Rails in the process, all while he was a student busy doing other things at the same time. This was just a side project. So, who cares what he said in the first sentence of this article, he has every right to say he founded Basecamp. And, that’s not even the main point of the article.



One of the best posts I’ve read all year. As a young startup, I WILL be returning to this post often for a pick me up.



Thank you so much for this.




In reference to Tiffany comments, does that imply you and Jason had to buyout the other original founders (Ernest & Kim)?

Or are Ernest & Kim still equity owners?



Coming out of my first Websummit, your message rings load and clear. So many people, with so many dreams, so many investors with so many dreams. Some will play the game of getting investment well, many will try to play the game and get burnt, but my heart goes out to the majority of startups (at websummit and beyond) that will have spent their very precious money exhibiting and searching for money instead of investing in themselves.

An event for startups cannot be only about raising money, so many don’t deserve or need it. I would love to see more tracks on educating entrepreneurs on how to build a solid business. Or more opportunities for startups to find customers/users. If funding is the right move they should be taught how to get it on the right terms, and what it truly means to raise money. Raising money makes a lot of sense for some entrepreneurs, but certainly not most.

I think you are a bit hard on the investor community, after all their business is all about making money. The same way you seek to make your clients happy at Basecamp, they seek to make their LPs happy. They are in the business of turning a dollar into 2,3…10

David, maybe we can get you to speak at Startupfest in Montreal. Diverse ideas and experiences are always our focus. This could be a good topic for an outright Oxford style debate…Montreal style.




Basecamp / DHH

It’s it a bit hipocritical to talk about the VC industry they way are given that you took investment money from Jeff Bezos VC company called Bezos Expedition?




Shawn, Ernest and Carlos were bought out before we launched Basecamp.

Dan, wasn’t venture capital. None of the capital went into the venture. Jason and I personally cashed out a minority stake that gave Jeff no control or rights beyond a minority claim on profits. A claim which has since returned his original outlay in full.



Finally some sane opinions in this era of startup bootcamps, incubators, angels and vc’s! A wonderfully worded and constructive criticism to todays hypes.



Usually, your writing is so tight and clean. That read like a drunken rant. Still, several good points buried in all that bitter rambling. It’s not the American way, though. Over here, winner take all, fuck everyone else, and second place = first loser.




Seems like your contributions to 37signals/Basecamp should at least be mentioned on your About Us History page


As it is today, DHH – you’re not even mentioned in the companies history at all :(



Bravo David is right!

LOVE your irreverence, your clarion voice, your audacity, your values.

I found my way to 37signals after reading an article on CNN (a guy who reclaimed his life from the devouring expectations of our work-a-day [and NIGHT] business culture)...

I am an HR pro who has stoked the furnace of growth (and decay) for decades recruiting hundreds and hundreds of folks. One particularly brash VP flat out said that he wanted “software slaves”...

Given some of the comments – seems dreams of Unicorns die hard.



Reads like a manifesto for lifestyle businesses! In fact I think that should be the subtitle.



Hey Dan- It’s “hypocritical”. We’ve been with BC since its classic days…and these guys are the real deal. They practice what they preach…their friends and neighbors can validate that. These guys have been an inspiration to us and thousands around the world.



Hm, I feel there are two contradictory claims in here. Sentences are intertwined that mean “Please be open to other ways to do things…”, and then ”... because only my way is valuable”. Because it’s obviously quite hard to disagree with the former, readers should be careful not to consider it legitimacy for the latter.

I’m pointing this while having a lot of respect with what the 37signals-become-basecamp people have built, and most of all a lot of admiration for how what they built reflect so well their personal values. But perhaps a bit of extra open-mindedness towards other people’s values and choices, and how they’re not necessarily ill-intended just because they’re different, would go a long way?



I don’t think that you understand exactly how much I agree with you about this statement. You can’t see what a big grin I have on my face, how many times I just pounded my fist on my desk in excitement. This. This is the lesson that the technology sector seems to have forgotten. And I think that it has steered us in the wrong direction for far too long.

As an example of just how long this has been bothering me, I remember in late 1999/early 2000, the moment that another unicorn of its day, Google, started showing its first 1 or 2 ads to the right of your search results (heh, remember when it used to be just 1 or 2, and they were only on the right hand side? How quaint..), I wrote them an email, saying that I would be willing to pay them as much money per month as I was paying for my dial-up internet connection at the time, if they would but serve me directly, by taking my cash in exchange for their service. Rather than try to monetize me via third parties.

I have been waiting 16 years for an answer to that email; it still has not arrived.

So yes, there’s an incredible connection possible when you align your financial motivations with the service of your users. And unfortunately, too much of the tech sector does not have that connection. Kudos to you for continuing to create that connection all these years, and thank you for writing about it.

Alex C

on 07 Nov 15

At the end of the day it pays to know yourself and what you value. Your 20s and 30s are very valuable years of your life. You’ll never be so young and attractive again. Your health, especially your mental health is priceless.

It costs way more to fix diseases with pills and doctors, than it does to prevent them with a low-stress life.

And ultimately how do you want to spend your time? Do you want to be a manic burnt out workaholic with no time for friends, family and lovers?

I became a part-time freelancer, working 1.5 days a week. I moved to Spain to reduce my cost of living and have better weather. I spend lots of time reading, exploring and playing computer games because that’s what seems most interesting to me right now. It has the most intrinsic value.

If you really want WORLD DOMINATION, love your big vision, love the hustle, love the intensity – then that’s great. A 0.003% chance of $3 billion is worth it.

But the problem comes when we are suckered into misinvesting the most valuable resources we have: time, energy and health.



Thanks David for these words of encouragement. I’ve been building a software product called BookedIN for nearly 5 years now. All self-funded. It has been a long and painful road but I’m now very close to being able to work full time on it and couldn’t be prouder.

Over the years, I’ve had a few informal conversations with investors and pondered pounding the pavement to raise money so I can go faster but I know this would just trade one set of headaches for another (likely much bigger). Currently, I work with a great team, enjoy a balanced life and remind myself to appreciate what I have as often as possible. That being said, it’s shamefully difficult not to feel like a failure when you’re constantly inundated with endless news feeds of companies growing to billion dollar valuations overnight. Greed is a difficult beast to tame I guess.

Anyhow, just wanted to say thanks. Yours and Jason’s continuous reminders to “keep it real” have been a great help over the years. Keep spreading the word brother! :)



Hi , I don’t know anything about the startup system but our family was ruined monetarily when my son started up but still I appreciate the people who have knowledge and to share because I am also a teacher who value the thought of innovation



@Mike above

You shouldn’t feel like a failure for building a sustainable business. I’ll let you in on a secret, VCs sponsor those articles you read for two main reasons:

1. To make the value of the companies they invested in rise based of pure hype. They’re trying to produce the “Fear of Missing Out” in other investors. 2. To make people like you feel like they need VC money to be successful. If no one took their money, they would be out of business.

Those articles are their advertising in disguise. Hoping to cause FUD that blossoming businesses won’t get anywhere without them.

Feel good about yourself. Enjoy your life. Keep plugging along at your pace.



Amazing article and on point.

The only thing that bothered me however is that every instance of the word “Basecamp” is linked. Isn’t one or 2 per article enough? Theres even one paragraph thats 3 lines long and has the word Basecamp linked twice in that one paragraph! This really diminishes the quality of the writing and makes it seem like a purely fluff marketing piece.

Chris Chowdhury

on 08 Nov 15

I really appreciate this, David.



Hi David, I love your post.

I was so excited reading each paragraph. That been said one still has to be careful because it demonized VC’s and doesn’t answer an old question on how a young start up can survive going against big well established brands that have the money to disperse. You talked about angels from the bible, the same bible says money answereth all. Also, noticed that you borrowed money at some point in your comments not in the article which makes me feel you blindsided me (me because I can’t speak for anyone else) about that. It means at some point everyone needs the big cash, it is only a matter of when and how.

I don’t think been a money lender is a problem or a start up wanting to start big is a disease. I think doing it with the wrong terms i.e. without your core values is the problem and it had be nice if that reflected also.

I feel the days of starting very small in your garage and growing slowly for 15 odd years is fast coming to and end. That era is over and like in the transition of most eras in life the new era of quicker start-ups have not found a good stable point where they represent both core values and big money. It had be smart for anyone intending to start or keep running a business to be aware of that and not draw the short end of the stick. Personally, I think this model is here to stay maybe not in this form.

Scott Yates


Fantastic post. Your math about chances of outcomes is really helpful. I tried to do something similar when writing about the Giga-Om collapse: http://www.inc.com/scott-c-yates/big-lesson-behind-gigaom.html

Being “customer funded” is the only way to go!



Jason and David “took a part of some people’s work life and made it a little better. That’s it.” and the result is that they probably have way more money than the vast majority of startup founders – even successful startup founders who have their companies acquired.

So doing this unicorn stuff to get rich is a bad strategy.





on 10 Nov 15

The startup industry has matured enough to have its own jargon. It’s very dangerous when industries create jargon. It means they can no longer explain what they are doing, at least not in clear understandable words. This usually leads to a lot of misunderstanding and deception as people claim to understand each other, yet have no clue what is being said.

Thanks David for this well written post.



“Curb your ambition” ? – Well, that is definitely the best advice to move our planet onward. And sorry, once you understand that you love what you do, you won’t call it work any longer.


on 11 Nov 15


@DHH: What you have achieved is no doubt the ideal. Great company, very profitable and a huge success doing everything on your own terms.

My only point would be that you tout your success as an alternative to venture capital like you took the more likely option to succeed. I don’t believe this is the case. I think your success is just as unlikely as the unicorns you discuss. Not to take anything away from your success and I congratulate you. But nonetheless timing and a bunch of other factors definitely came into play for Basecamp and trying to replicate this as an easier way to succeed than taking venture capital money in my opinion is naive.


on 12 Nov 15

Great read David. Awesome as always. Just came across this article today that reinforces your point:




Read all of David’s posts, and follow David on Twitter.

If you liked this Business post by David, you’ll probably like reading Video: “The [venture capital] industry has…, Cabin fever, and Give me spark