March 14, 2024

It’s (past) time to cut costs 💸

Hey there,

It’s not your imagination. Things have gotten pretty expensive. Last week, I paid $50 for take-out tacos! Tacos! Inflation has increased the cost of living by almost 20% in the U.S. since 2020. But it’s not just here. You can compare global inflation by country on the Financial Times website.

So whether you’re a solopreneur or a team of hundreds, it feels like it’s (past) time to be cutting unnecessary costs. Last year, the 37signals Operations team got us off the cloud, which is saving more than $7 million. Here are a few other ways to think about how to get leaner:

1. Always be looking at expenses

It’s hard to sit on the couch for three years and start to get up and try to run. But if you’re constantly exercising, it’s a lot easier to do better and feel comfortable adapting to a new reality.

2. Practice making more than you spend

Speaking of forming habits, if your habit is spending money, then that’s what you’ll be good at. It’s actually the easier thing to do. The harder thing is to make more money than you spend. But, if you don’t practice, how would you ever expect to be good at that?

3. What’s that thing really worth?

Look at something, and ask yourself if it’s worth it. Do the math. If it’s $90,000, and that’s six months of a developer’s time, are you getting six month’s worth of similar value out of this thing? Could we build it ourselves for less? Could we spend that money elsewhere and get more?

4. Cut your subscriptions

A lot of people who run relatively small companies talk about having 10, 15, or 20 subscriptions to pieces of software. It adds up. Does it feel reasonable and reasonable compared to the alternative? You may like Trello or Dropbox or Asana or Slack, but do you like them enough to pay for all of them? You might want to check your assumptions.

5. Watch out for variable costs

Let’s say you’re paying for five different products, and they’re all per seat. When the company grows, and you hire another 20 people or 100 people, everything gets way more expensive. Not just salaries, but also all your tools. It’s the same product you had before. Why are you paying so much more for it? When costs are variable, they can rise slowly until it’s this big huge snowball.

Cutting expenses isn’t just for inflationary times. It’s just good business practice. If you’ve discovered other troves of wasted expenses, let us know about it on LinkedIn or email me.

In the meantime, here are a few other things you might have missed…

Thoughts We’ve Shared

Rapid Fire with Jason and David

Rework Podcast host Kimberly Rhodes puts 37signals CEO Jason Fried and CTO David Heinemeier Hansson in the hot seat in this recent episode. Here are a few of the questions…

  • What book has been the most influential as you’ve built your business?
  • What’s the best single piece of business advice you’ve ever received?
  • What’s the one thing you wish someone had told you when you were first starting your business?
  • What habits do you have that help you be more productive?

Hooks, towel bars and software

Strangely, a recent bathroom renovation crystalized my perspective on product development. When being asked to choose between towel hooks or a towel bar, the choice was obvious: Hooks, of course. Hooks take up no space. Towel bars suck up space. But what do towel hooks have to do with product development? For me, just about everything.
— Jason Fried

Two heads

Product roles are frequently solo roles. There’s a lot of collaboration between designers and engineers, but it’s uncommon for two product people to work alongside one another. That’s why you hear a lot about being the "CEO of the product" or owning things. But we see product ideation as a partnership. What does that look like in practice?
— Brian Bailey, Head of Product Strategy

Things We’re Excited About

We’re hiring!

37signals is hiring a Rails programmer to work on Basecamp and HEY. You’ll be building new product features alongside a designer using our Shape Up methodology, as well as spending time addressing issues to make sure our apps are robust and our codebase is weed-free. We’re accepting applications until Monday, March 25th at 5pm CST.

Or things YOU’RE excited about

Are you one of the thousands of new Campfire fans? (If you haven’t heard of it, read more here.) We’re looking for people who are open to sharing how you use it, or what you like best. Tell us about your experience.

Until next time,
Elaine, COO of 37signals

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