David Heinemeier Hansson is one of the most influential voices on the Internet. He is the author of the immensely popular Ruby on Rails programming framework, is a noted blogger and media figure, and is elegantly opinionated when it comes to the best ways to make great software. People follow David’s lead in droves, and for good reason. As a partner in the multi-million dollar company 37signals, David is one of the most successful young entrepreneurs in today’s Web economy.

Creators of Basecamp®, Campfire™, Highrise® and Backpack®, and authors of the widely read “Signal vs. Noise” blog, 37signals is an advocate for all things simple and beautiful. The UIRC is delighted to share this conversation between David and EffectiveUI developer Brad Umbaugh about a range of topics — from software development to the productivity gains associated with making people happy.

Brad Umbaugh: David, thanks for calling in today. It’s wonderful to have you with us.

David Heinemeier Hansson: Happy to be here.

Umbaugh: Your company, 37signals, is quite successful.  You have an enormously popular blog and you’ve written several books. You built a great open-source programming framework that people just love, and you’re actually making money selling software on the Web. Why are your ventures so successful?

DHH: Well, I think the biggest reason is because we don’t identify ourselves too much with the whole notion of the Web world. We identify ourselves more with the notion of a small business operating under proven approaches — like the crazy idea of charging money for products, which seems like a lost art for a lot of Web startups out there.

The best example of how we try to be just like a regular business is that we try to maximize our profits and minimize our expenses. No news there. The wonderful thing about working with the Web is that it’s in some ways easy to do both things. It’s much easier for us as a 10-person company to reach a huge audience than it is in the traditional world where small companies have a hard time getting heard. With our blog and our book, the Web really gives us a platform to present our products.

In many ways, it’s very productive, easy and cheap to build new applications if you have a good idea and an eye for what you want that you can actually accomplish with a small team. Our whole approach is to stay as small as we possibly can and have an influence through other means than just throwing a ton of software out there.

Umbaugh: 37signals has several successful products on the market. Were you ever tempted to give products away for free and use advertising to generate revenue?

DHH: No, never. I don’t think that that’s an attractive business model at all. There are a lot of people who focus on creating an audience and just get users for the sake of getting users. To me, that just isn’t interesting.

For me, it’s interesting to get users who like your stuff so much that they’re actually seeing real value from it and thus, are willing to pay for it. That’s much more of an affirmation that you’re doing something worthwhile rather than just getting a lot of users who want to use your stuff for free.

Most of the people at 37signals have been involved with other businesses and have seen what happens when companies don’t charge for their products or services. If you don’t start out charging money for your products, then you have to do something else. That usually means taking venture capital money or taking some sort of investment to fund your growth. That typically doesn’t lead to a healthy happy work environment. I mean it certainly can. There definitely are companies out there who made it work, but I’d say the majority of the VC-funded companies I’ve talked to — their practices, their lives in the workplace — are pretty far removed from what I would call an ideal situation.

Companies too often merely try to please users and get them to pay for stuff just to satisfy investors, satisfy the three to five-year exit window, and satisfy other external demands. Those are just distractions. For us at 37signals, we’ve managed to create a good situation in large part because we’ve been able to cut out distractions.

Umbaugh: Your book, Getting Real, outlines your software development process and your business philosophy in general. What are some of the core values you put forth in Getting Real, and how do you think software developed using that philosophy ends up benefiting the end user?

DHH: One of the big themes in Getting Real is the notion of less software. I think way too many companies and teams try to overachieve by building a ton of software, by building tons of flexibility into their software, including tons of features and by imagining all the things that somebody out there might need in some way, some day. I think that’s a really hard way to develop software because it’s so much fumbling in the dark.

What we try to do and what we advocate in Getting Real is focus more on needs that are closer to you, things that you can directly relate to, things that will directly determine the quality of something. For us, on both the business side and the software side, our approach is simplicity.

Simple alone is a huge feature that’s often vastly overlooked. When people compare software products, they often compare checklists of features. In other words, the product that has the longest checklist appears to be the best.

Well we try to do exactly the opposite. We try to “under-do” our competition by doing less than they do, by having the shortest feature list. That is, in essence, our biggest feature.

When we do customer surveys every few months, the number one thing that everybody says that they like the most about our products is the fact that they’re simple. Simple sounds in some ways, like a cliché. Nobody would say, “I want to make complex software.” But they do say things that amount to the same thing. “I want my software to have tons of features. I want my software to have endless flexibility.” Well, all these things are in essence saying, “I want complex software.”

We’re willing to take a stand for simplicity in software. We’re willing to say, “You aren’t going to get all the features you think you might need some day, you’re just going to have the basics executed beautifully. You’re not going to get all the flexibility you might imagine that you could need, but we’ll give you some.” We’re going to have opinions and we’re going to instill defaults and we’re going to package it up.

We keep comparing ourselves to the notion of chefs. When you walk into a high-end restaurant, you really don’t get a whole lot of choice. Usually, the hallmark of a high-end restaurant is the chef’s menu. The chef prepared courses of a dinner in advance where he made all the choices. You eat there because you trust the chef’s judgment and want his taste. Well, we try to do the same thing. Instead of just giving you a super long menu, we’ll just give you this set course of plates and you’ll have to trust our judgment on it, and I think you’ll end up with a much tastier meal in the end.

That’s one way we describe how we’re trying to be different from people out there, and we’re trying to convince others that they can do the same thing. There’s so much software out there that’s just endlessly complex, that has too many features, that has too much flexibility, and it ends up not being used because users can’t relate to it; they can’t get into it. It feels too complex. It feels intimidating when what they really need is just a small subset of what they’re given.

But most companies out there are afraid to give them just that small subset because everybody we’re talking to is saying, “We want more features; request this, that and the other thing.” It’s actually funny — in our customer surveys, everybody says the number one feature they like about our products, our approach and our company is that we keep things simple. Then in the very same breath, they say, “Oh, I love all this simple stuff. By the way, please add A, B and C.”

It’s incredibly hard to help people realize that if we added their A, B and C, and everyone else’s D, E and F, they wouldn’t like the software anymore. It wouldn’t be simple any more. In some ways, we are in constant conflict and we just have to be willing to embrace that conflict. On one hand you get to please users by doing something that’s simple and that doesn’t have a lot of features. On the other hand, we have to constantly push back against the very same people saying, “I want this, I want that and I want the other thing.”

That’s a rough outline of the approach that we’re preaching in Getting Real on pretty much all levels. It’s not just about the software. It’s also about your policies, your pricing — this whole notion of keeping things simple so that you can have a simple team, so you can execute simply, so you don’t need a lot of money upfront, so you need fewer software developers, so you can do it with less marketing. In many ways it feel likes we’re stating the obvious, but I don’t think it’s so obvious after all, because most companies are not doing it this way.

Umbaugh: Software developers add features under the assumption that customers choose software based on its feature set. How would you convince developers that less software is a competitive advantage?

DHH: Exactly as you’re saying, everybody out there is doing the opposite of what we’re doing. Thus, if you’re doing the opposite of what everybody else is doing, you’re actually unique.

When you talk to anybody who’s used a computer for any period of time, the number one thing they typically say is how much they hate it because it’s too complex; it’s too hard to use. They can’t get their stuff done. So it’s not like users aren’t already predisposed to wanting something simple. I think this is true all over the place and people are selecting the simple stuff whenever they can.

I can think of two other examples not necessarily in the software world, but look at the iPod. There have been so many other MP3 players out there, a lot of them had FM tuners; they had voice recorders; they have laundry lists of features, but the iPod just successfully executed on a few basics really well and it’s overwhelmingly won the market.

Another more recent example, which I really like, is the iFlip portable video recorder from Memorex. It has pretty much one feature — a big red button that says, “record.” When you push that, it records video in not especially good quality, but it’s just incredibly simple to use and they’re selling these by the boatload.

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