Why Bitcoin Is a Ponzi Scheme with David Heinemeier Hansson

Welcome to Make More Marbles. My name is Brad Hart and we're here to interview the game changers, the future makers, the co collaborators and creators who are here to collaborate with one another towards a better future for all of us. Enjoy the show. We've got a great guest coming up for you right now. Welcome to Make More Marbles. My name is Brad Hart and today I am thrilled, excited, grateful and stoked to have David on the show today. Mr. David Heinemeier Hanson. And if you don't know that name, you should, because David is the founder and creator of a popular project management software that I use and some other folks use, like Draw Shop called Basecamp. But he's also, more interestingly in my book, he's the creator of Ruby on Rails, which has gone on to be creating a lot of the wonderful apps on the Internet that we enjoy, as well as web apps. And I don't want to use the wrong words here, so I will allow him, in his own words, to kind of tell us a little bit about some of the things he's worked on. So, David, why don't you give us a just kind of a journey so far, you know, talk about some of the wins and losses over the years and some of the things you've learned along the way.

Sure. So the two things you mentioned obviously are the center of my professional career. I created Basecamp together with Jason Freed and the rest of 37 signals back in 2003, which was also sort of the year when I went serious with Ruby. And funnily enough, that was really only a couple of years after I learned to program for real. I'd always sort of dabbled with things along the way with programming, but it wasn't really until the early 2000s that I started doing it more seriously. And it was really then discovering Ruby, the programming language, that ignited my sense of contribution to the programming world. And that sense of contribution was born out of and extracted from the work we did on Basecamp. When we first got started with Basecamp, I was the sole developer. Jason was doing design, Ryan was doing the sign, Matt was doing design and some copywriting. And that was basically the four of us at 37signals. And in the beginning, as the company was called back then, so there was just a lot of things we couldn't do. You have one developer like, what are you going to do? There's a lot of ways of building software that's just not accessible to a one man shop. So that was really the need that brought me to Ruby and Got me started with Rails was simply building technology that will allow tiny companies and single individuals, not even working full time, to create the kind of businesses that we build with Basecamp. So that kind of became a focal point for my interest, not just in technology, but in business development in general. How can we create narratives, tools, information that will allow small groups of entrepreneurs to independently create businesses, create things online, create software and sell that, and enrich the world in a way that does not require them to lean on people lending them money in form of venture capital for equity or banking, for other ways that, like, hey, you can build awesome businesses like Basecamp. Like, we built it on the side with these tools that are freely available. It's never been cheaper and easier to do those things. And that has just been something that's been inspiring to me for the past 15 years. So there's the technology side of that, and then there is, as I said, the narrative and the informational side of that. Over the years, we've written a handful of books that started with getting real in 2006, I believe, which was born out of a series of workshops we created called the Building of Basecamp. Because when we first launched Basecamp, just the four of us, a lot of people came up and asked, like, how did you guys do that? Like, I thought building software on this scale, like, took huge teams and back then, big Oracle licensees and all sorts of stuff. And they were like, how did you guys do it? So we put together a series of workshops where we talked it through, that then turned into the book Getting Real, which then about four years later, turned into the book Rework, which is sort of our biggest book. It sold about half a million copies around the world in 22 different languages. And it's really the story again about how we built Basecamp, the lessons we took away, and the inspiration and the counter narrative to the traditional entrepreneurship line on how you're supposed to build a business, how you're supposed to raise money, how you're supposed to do this, that, and the other thing. And we basically said, well, I mean, sure, you can do it like that, or you can do it like we've done it. And that was sort of the pitch. We followed that up with a book called remote in 2014, talking all about the way of working remotely, which we've always done that. When I started working with Jason Back in 2003, I was working from Copenhagen, Denmark, seven times zones away from Chicago, where Jason was based. And we just started working together. We never saw a problem with that. And Then it wasn't until we were well into the development of our company that I realized a lot of people saw that as something weird, that you could build a company remotely, that you could work together remotely. And not only just weird, that it was sort of like a deficiency and like, oh, isn't that holding you guys back? Isn't it doing all these other things? And it was just so bewildering to me to get that kind of pushback. So we wrote a book all about the whys, why remote work is a great way to go and the how. How you can do it and how you can turn it into yourself. And that brings us almost up to today. I've been working on Basecamp on Ruby on Rails for the past 15 years now, writing about both of them, creating software and. And continuing to speak about the way we build businesses and use software to do so. Could you.

That's a great, very well polished story, by the way, and I really appreciate you had all the ups and downs and bits and pieces there. And I recommend every. Check out those books you got getting real. You got Remote, you got Rework, which are all kind of a. For lack of a better word, it's like the follow up to the four Hour Work Week. Okay, cool. We get the power of leveraging different economies. Now. How do you really put it into practice? And how do you manage all that in different time zones, different cultures and different things? We've got people and clients from all over the world that make more marvel. So I totally get that. I'm going to be picking up one of those books which I haven't even checked out yet. But what I really want to understand are some of the leadership lessons and the failures along the way. Because, you know, people will see somebody like yourself and you know, they can respect you for your successes, as we all do. What are the things that we can really relate to? The failures that every single human being has a. Has a story about?

Sure. So the funny thing is, when I look back on the trajectory of what we've done with Basecamp and my professional careers, I don't look at any of the steps as failures. To me, it's all part of it. It's all part of that journey to get where I am today. I needed to take the road that I took. So a lot of times I kind of get questions like, what's the one thing you would have told yourself in the past that you would have wished you'd done differently? And my answer is always nothing. I didn't want to Know anything. Like, the journey and the discovery was as much part of the fun as anything. If someone had just come along and handed me all the conclusions, it's kind of like summarying all great works of art. And it's like, there was a man, he liked a woman, they went on a journey, and they got married. Like, what the. That is not interesting. Right? Like, I need to experience this journey myself. Which, I mean, of course, that doesn't mean that we didn't take lessons along the way. And so, of course we did. But I don't want to go back to my former self and try to impart this wisdom on myself, because in part, it doesn't work like that. One of the metaphors I've really taken to heart is, I think it was Clayton Christensen, who talks about having space in your brain for lessons and for advice. And a lot of the time, I simply did not have space in my brain. The slots were not open for the lessons that I came to learn over the years. If I had just tried to jam it all in on day one. Right. I needed to go through all the trials and tribulations that we've gone through growing the company to be able to be ready to simply understand and internalize those lessons. So, I mean, again, that's sort of a little bit of a glib answer to it, but it's also.

No, no, it's true, though. And I guess I wasn't. I guess I just like to show people that you're human. Right. That's really the point of that question, is to say, hey, you went through some stuff. You didn't always get it right, but in doing so, you became the author and the reader of your story at the same time. Right.

And I mean, I think that that's. That's really where the point is. Because, for example, when I look back at my trajectory, I didn't want to take any other path. That didn't mean that everything worked at all. When Jason and I first started working together, we built an application called Single File. Jason had been building FileMaker Pro apps for the Mac back in the late 90s.

I used FileMaker 10 years ago. That thing is a beast.

Yes. And he wanted to convert this into web application because he had been doing work for clients and he was trying to learn how to do it. And that was actually how we met. Jason was trying to convert these FileMaker Pro apps into PHP, and he was struggling a bit with it. So he wrote a thing on his blog. I wrote him an email out of the blue. Never met the guy saying, like, hey, here's how you do it. And Jason just decided it was easier to hire me than to learn how to program. So we ended up working together. But that first application we created, single file, that didn't go anywhere. We put all this effort and time into it, and, I mean, it wasn't a flop, as in, like, no one showed up, but it certainly wasn't Basecamp either. Right? Sure. But going through that, I should say, like, it was part of that journey. It was part of that realization. Oh, interesting. Like, here was something that worked in the past on a shareware level. It didn't really translate in the same ways to online and kind of keeping an inventory of the physical books that you have and how you lend them out. This wasn't a big market. Right. And that was the same thing with Basecamp. What's funny is Basecamp didn't come around because we sat down and said, oh, let's build a product business. Let's come up with some idea. Let's brainstorm this out. Let's figure out how to. How to make a great application that can make us a lot of money. No, it came out of the fact that we were building web designs for clients, and we just realized managing all that stuff over mail is a mess. You involve more than three people, and any email chain evolves into a huge mess of who has the right file and did you get that message? And blah, blah, blah. Right. And we just thought, that's not making us look professional. This is kind of like a bad look for us. We can do better. We know how to build software. Let's just build some software to solve this problem for ourselves. Right. So we started building this piece of software, Basecamp, for ourselves. And it wasn't until we were halfway through the process that we realized, hey, you know what? We have sort of the outline of something that maybe other people might be interested in using. So we talked to a couple of people in the industry, and they all said, hey, do you want my credit card? I need this. Like, we need this. We have the same problem. Right? Like, our inboxes are a mess when it comes to project management and clients. Can we pay for this? And we went, yes. And we then turned this thing that was halfway finished already. It's just an internal project into a product. And then, I mean, just as another example. So we didn't know anything. Right. That was part of this whole journey. Like, no one had given us all the facts, all the conclusions up front. So we didn't Know anything. Which meant that we thought, hey, we could just charge, like, a yearly fee for this piece of software. Let's just charge 499 for Basecamp every year. And we build it all out, and we have this plan all laid out, and we're just about ready to launch, and we're like, all right, we got to talk to the credit card processor, which back in the day was not as simple as just signing up the stripe and then taking credit cards like, five minutes later. That required mountains of paperwork, and it required meeting with bankers and all sorts of annoying crap, right? And then we go through this whole process and they go like, yeah, what you're trying to do now, you're not gonna sell anything on a yearly subscription basis. You're a. They didn't even call it startup. You're like a completely unknown quantity here. What if you guys go out of business in two months and all these clients, all the customers have paid you for a year? They're gonna come back to us and say, we want our money back, and you guys are gonna be out of business. No, you can't do that. You have to charge on a monthly basis. And we went, oh, shit. We built this whole thing out, right? So we just went like, okay, let's scrap this whole yearly billing system we have. Let's just launch the damn thing, and then we will have 30 days to build a new billing system, because we're going to give everyone a 30 day trial. And that's what we did when we launched Basecamp. It originally did not have any billing system. We didn't have a way of collecting credit cards. They didn't have any of those things. We just thought like, well, if no one shows up on day one, first of all, we will not have wasted our time building a billing system if no one's willing to pay for it. And second of all, let's just get it out here and see how it goes. So we launched the thing 27 days later, when. Three days before the first customers were supposed to pay for it. We had a billing system and we could.

I love that. Yeah, because most people, they do everything except be an entrepreneur, right? They go and they start a bank account and an LLC and they get business cards and all this stuff. You have a way to get paid, and you had the product out there in people's hands, and they were giving you valuable feedback so you could make it better in the meantime, which for you guys, you know, is really easy to just take that feedback and code it now, have you Been a coder all your life? Like, where did you get started with that? Yeah, you started.

Nope. I mean, I'd always been involved with computers in one form or another, but I hadn't been a programmer all my life. I tried to learn how to program. I tried to learn several times, I think. First time when I was 6 or 7, getting magazines where at the back of the magazines there'd be games typed out and you could turn to the back of the magazine and you could type it in. I had an Amstrad 646 when I was six years old and I tried to type in a couple of games and I got like one or two semicolon wrong and nothing worked. I don't think I ever got a game working.

I was actually. I had one of those basic computers, you know, and I could code, like the little game where you had the two clowns and the trampoline. You had to pop the balloons. I used to play with my dad. We got it to break one day and it would just completely go around in a circle and just keep popping balloons. So we'd like run over the clock on the. On the point system. It would start over. We just unplug the controller and watch it rack up points all day. It was super fun.

That's awesome. I never got that far. So my programming skills were not even sufficient for me to type in a piece of software from the back of a magazine. But then I tried again. A couple of. Well, I shouldn't say a couple. Maybe when I was 12 or 13, I tried another game. I mean, I was always interested in games. That was my attraction to computers and home computing in general. It was all about games. But the whole thing of building my own games, I just. I didn't have it. I didn't have any natural sort of talent in that department, I suppose. But I still got involved with computers and I had a lot of friends who were programmers, and most of those friends were programmers in this sort of, what I consider hardcore sense of assembler and whatever development languages and tools that were used back then to create software. And that was all about vector programming and bitmaps this and bitmaps that. And like, none of it made any sense to me. So I just thought, like, that's not for me. And it was really until I discovered the web that I thought, oh, I guess I can kind of figure out what this HTML is, what this CSS thing is, and let's get some stuff up on the web. So it was born from my sort of love of games. I was creating these gaming websites all about reviewing games and getting them online and getting these things up and running. And it just turned out it was kind of like easier for me to do that if I learned some of this stuff myself. And then it wasn't until, yeah, I was in my late teens, early 20s, where I just decided, okay, I've worked with these programmers for long enough. It's a pain in the ass to ask them. Whenever I want to change anything on my damn site, I'm sure I can just change the file. Back then it was all PHP and ASP. Net and in many ways it was a better time. I think it's like we take huge steps forward in programming productivity on some levels. And we also made it infinitely more complicated to get started. PHP in particular, I thought was just such a great gateway. You had a single file that talked straight to the database and intertwined with HTML. It wasn't that complicated, right? So that's how I got started. And still. So I was programming, so to speak. I didn't think of myself a programmer at all. I didn't even think of myself as a programmer when I was kind of being paid somewhat to do program. It really wasn't until I discovered Ruby and fell in love with programming that I thought, oh, maybe I'm a programmer.

I love that. That's one of those pit little moments that changes the world, right? You just started out by following your curiosity and all of a sudden you created a movement. Can you speak to the open source movement now? And what exciting things you see with maybe OpenAI or some of the future technologies that are coming down the pipe.

This is interesting. When I started with the web, the open source movement was already going pretty well. Some of the early tooling that I used was the Apache web server, MySQL database, PHP programming language. There was all this open source tooling. So I kind of got bred on open source, which is, I guess, different from other people at the time who were either in Microsoft or Borland or whatever camp where they were used to paying for tooling and technology, or if they were working with Oracle or pl, SQL and all those proprietary tools back in the day. I got going with Open Source from day one. So it was kind of like in that sense, like remote working. I'd always done remote working, so that just felt to me, that was the normal, like that was the baseline. And then there's all this weird proprietary software with the odd one out. But I mean, I obviously clearly realized pretty quickly that just because I Got up through that way. That wasn't the way the world spun, right? Like in the early 2000s, there was tons of proprietary software. I worked at a couple of shops, including a Java and J2E shop for a while where it was just all proprietary software. And I always thought that it was such a weird world. But hey, I got going with this thing and when I then started creating my own software, it wasn't even a discussion. I remember in the early days, people asked me, well, why didn't you release Ruby on Rails as a paid thing? Couldn't you make a lot of money? And I was like, what are you talking about? Infrastructure software is supposed to be free, right? I was building on all these tooling. I feel like that's odd. If I take the database and the web server and all these things for free. And then my thing that I'm contributing, I say like, hey, you gotta pay me for that. That just didn't sit right in my ethics at the time. I felt like I owed the open source community to share the things that I created. So that's what I did. And Ruby on Rails was open source from the get go and from the start. And today, especially in the web world, that's not even discussion. Even Microsoft, who back in the day was the staunch defender of proprietary software and proprietary development tools, they've all switched to open source. Like all the web stuff that they're doing today, Typescript and so on, it's all open source stuff. So it's just been interesting to see that evolution. So to me it's not really like, how is the open source movement different or whatever? The open source movement is everything. You look at any of the major tech and web companies today, they're all bred on open source. Everything from Google to Facebook to whatever. Like they're releasing all their tooling as open source. This is just a standard way that we collaborate. So to me it's not really a distinction in that sense. Like software is open source when it gets comes to infrastructure, tooling and so on in these domains that we're talking about.

Yeah, I love that you've kind of made that distinction too. Because the movement has survived through all these different iterations. It never stopped being a good idea. Obviously the best answers come from crowdsourcing. A lot of smart people working on a problem eventually find the right solution. Can you. I guess there's a two parter to that question. Can you speak a little bit about some of these open AI projects or, or VR? Some of the things that you see coming that are really interesting opportunities and what you're excited about, what people should be getting focused on, perhaps maybe some of the languages they should be learning, like Solidity for example, if they're going to code Ethereum contracts or what are your thoughts about people getting into the space now?

So what's interesting is from a consumer perspective, which is really where I am, I love what's going on in AR and virtual reality. I got a great taste of a proper VR setup a couple years ago at our office when someone brought in a whole rig and I went like, oh, this is so obviously the future. But at the same time, all of that technology is exactly, or feels to me exactly the same way that game programming did to me. It's all bitmaps and vectors and that I don't understand. So I'm really just a layman in that sense of it. Those are not my domains at all. I'm just a excited spectator and user and consumer of these things. And obviously it's great for people to get into it. I don't really know heads from tails. For the Baltic event where I apply my professional expertise is in web development and in information technology, in infrastructure and sort of back end systems. And then I let the people who sort of get the bitmaps and get the vectors figure that when it comes to VR and AR and all these other exciting opportunities, it sounds like you're.

More of a realist. What can I actually affect and take action on? Now I'm more of like a visionary. Like you're an integrator type. I get it. Okay, cool. So let's say I wanted to work with you or work for you. What would you give me advice about? Like, let's say I'm a coder or I'm somebody who wants to get involved with the project that you're working on, or I'm sure you have conversations with friends like what do you guys look for in the people you hire?

Sure. So that's one of the things I think is wonderful about the open source movement, is how in some specific ways it's extremely accessible. I've worked with people, especially in the Ruby on Rails community. We have about, I think 6,000 individual contributors who've contributed code to the Ruby on Rails framework over the years from, I think, just about every country in the world. And what really sort of matters there is kind of the echoes of Gary Vee and what he espouses for entrepreneurs showing up and doing the work, really that takes you beyond 99% of everyone else. The Number of people who in these communities are willing to show up and do the work is a tiny, tiny minority of all the people using it, which is totally as it should be. Like, if everyone who used Ruby on Rails also wanted to contribute to it, we'd have a traffic jam. You can't process sort of contributions in terms of code, at least from it.

Reminds me of Wikipedia. Everybody looking at this page right now donated a dollar. We'd be done with the fundraiser. Thank you, Jimmy.

Exactly right. Like, it just. That's not how it works and that's not how I would want it to work. I mean, if you look at. It's a. It's a power curve, right? Like, you have a handful of contributors who contributed a very large stake, and then you have a very long tail who've rounded things out. And that's sort of just how I look at it. Like, show up, do the work, and do work that you're interested in doing. I mean, there's a myriad of motivations that someone could apply. So why do you want to do open source work? Why do you want to get involved with something like Ruby on Rails, for example? And I've always come back to the number, the easiest way to get into it is to work on something you care about, work on your own personal problems, contribute your unique understanding. Because you worked on a problem, you hit a bug, you wanted a feature that wasn't already in the framework in some shape or form, right? So that goes for some of it. When it comes to the open source work, when it comes to who we hire as programmers at Basecamp, it's really not terribly different in many ways, showing up, doing just a little bit of effort. One of the things we're big on, for example, is when people apply. I don't care about resumes. How long you've worked at some company in the past doesn't, I don't care what MIT degree that you have, this, that, and the other thing, I don't care. It's just not relevant. What's relevant to me is that someone shows up, does the work, and does great work. So we try to look for indicators of that, right? And for me, a lot of it is something as simple as the COVID letter. A lot of people will apply to a job at Basecamp and they'll just send their resume. And I mean, I'm sorry to say it. It goes straight into the dumpster. Like, I never look at just resumes. I look at a hook in a cover letter to make me interested in this application. Right. So just being a real human, talking about, like, what you've done, why you're interested in the things you've worked on, and sort of explaining that, in a sense, that appeal to someone else who sits on the other end and has to read through 400 applications. I mean, that already puts you ahead of the pack. But then again, it also comes back to having done or doing the work and showing aptitude for it. I always look at the actual code. A lot of people can talk a good game, and fewer than all those people can also create programs that I'm willing to work with, work on, read. So a lot of it is kind of like you have to show the aptitude, too. It's not just enough to sort of sound good and be a quote, unquote fit. The aptitude has to be there, too. So I always look at code. In fact, oftentimes I look at that first. We always ask all our programming applicants to send along some sort of sample code, right? Because the fact of the matter is, I mean, maybe that's brutal, but it takes very little. If I look at four source files, I usually have a very good indicator for whether this is a person that I see sort of that sparkle and promise for. And a lot of it comes down to sort of the mechanics of programming, the labor of programming. It's kind of like a craft in the sense that, like, if you're applying to be a blacksmith or whatever, right? And someone. You come into the blacksmith's den and he asks you, hey, swing this thing and craft this thing in five minutes, right? You see so much. You see so much technique, you see so much approach in just a little bit of work. It's not a perfect indicator, but I find it's a way better indicator than what a lot of other software development companies use, which is puzzles. How many golf balls can you fit into a yellow bus that's driving through New York upside down? I don't give a f. I don't give a. About these sort of artificial puzzles and indicators of whether someone is quote, unquote intelligent or whatever, I would have failed all that. I tweeted a while back, maybe it's almost a year ago, that if I had done an interview and someone had asked me to go up to a whiteboard and implement a bubble sort algorithm, I would have failed, right? And that struck a chord, I think, with a lot of people, because that truly is how a lot of, especially the major tech companies are doing their interviews, that they're asking candidates to go up to a Whiteboard and start programming some sort of algorithm that has no bearing or relation to the actual work that they have to do. Hey, if you're hiring sorting algorithm or whatever, persons ask that. If you're hiring people who need to build web applications, that's the wrong question. And in all the cases, I think how many golf balls can fit in the yellow bus is the wrong question. So that's a long way to say that we want to look at work, but real work, actual work, representative work of what someone is actually going to be working on once we hire them. Right, because that's really what matters. But then at the same time, we hire a lot of junior developers. At basecamp, I actually find that in many ways, it is easier to hire a junior developer. I hear from people all the time, oh, we can't find these senior people. We need people to be able to, quote, unquote, hit the ground running. That doesn't happen. Anyway, you hire a senior person and they're usually steeped in the ways of wherever they were working before in the ways that they were working before. I find that a lot of junior developers are a lot more open to the way we work, which in some ways are weird and other ways are traditional. But just the fit of going from not having any preconceptions about how things work versus having to unlearn a lot of things of how things worked in whatever other environment they were in, it's actually easier to level up than it is to level sideways or level down in some senses. So we've had a lot of luck hiring junior developers. And just on promise and sparkle, as I like to say.

Promise and sparkle.

Yes, promise and sparkle. You look at an application, you look at the COVID letter, you look at a few pieces of code, you have some human conversations about values and approaches to software and listen to that. You know what? You can usually, in most cases, deduce a pretty good sense of, does this person have the promise and sparkle that we're looking for?

I love that. And that kind of also dovetailed into my question about leadership lessons and how you kind of, you know, leadership is really more about selection. At the end of the day, I think it's like, who are the right people? Invest your time, energy and attention and money into, right? Who's the right team to support you in your mission and vision? So you seem to have nailed that and have a really good understanding. What are some other companies or, you know, I know it's all about the code and, like, I don't know, in this world. I guess it's a good question that you've looked at and you say, okay, these people have very solid product, very solid code that they've written, very solid programs that they've created. And I love their culture. What do you, who do you model and who do you look up to in the space?

So it's funny, just yesterday I saw that Inc. Had awarded mailchimp Company of the year and I could not applaud that more. I love the story of Mailchimp. So Mailchimp, I think it's been around for 18 years. Not as Mailchimp, the company that's doing what they're doing right now, but as the group of people who ended up building Mailchimp in much the same way as Basecamp was not always Basecamp. It was 37 signals from 1999. So they have this long trajectory of sort of working at it. They took $0 of venture capital, which is one of my pet peeves and sort of topics. So I deeply admire them for that. They ended up building a company that today is doing half a billion dollars in revenue. They've been profitable since, I don't know, I think since the beginning. And they have 700 people working for them. And they built their business on the free open web in ways that are not scammy or spammy or slimy or any of the other things that I would ascribe to a lot of sort of ad driven businesses. They simply sold a great piece of software for small companies to do email marketing. I mean email alone, how unsexy of a technology is that? We just talked about AR and VR and all these exciting sexy new technologies, right? Email. Email been around since what, late 60s, early 70s in some form, right? And here we have a company of 18 years that's built a half a billion dollar a year business on the back of that. Bootstrapping their way to that and staying private. I love it. It's just amazing. Another company I have a lot of respect for, sort of a little bit of self dealing, Shopify. Good friend of mine, Toby was one of the early members of the Rails core group. And back In I believe 2003, 2004, he was building a shop called Snow Devil to sell snowboards. And he ended up just like we did with Basecamp in some ways to realize, hey, this piece of software I'm building to build a shop, like maybe we can make that into a software platform. And today he's running billion dollar business based on Ruby on Rails.

Becomes the way once again, right we had this problem and we solved it. We scratched our own itch and now everybody wants our solution.

Totally, totally in both of those cases. Right. Like, same thing with mailchimp. So I love those stories. I love those sort of. We didn't just sit down and brainstorm, what kind of business should we start? Let's like pursue something. No, we were trying to solve our own problems and that usually turns into pretty good solutions when you have that good of a focus group yourself to satisfy. So mailchimp and Shopify, two good examples of companies I have immense respect for. What's even better, I think with both of them is another pet peeve of mine, is that neither of them are based in Silicon Valley. Basecamp is out of Chicago, mailchimp is out of Atlanta, and Shopify is out of Ottawa, Canada. Just to show that there is a alternative path to sort of the state traditional approach. How do you build a software company? Oh, you go to Silicon Valley, you raise a lot of money, you hire a bunch of people locally who pay, what, 4,500 bucks a month for a closet to live in. So I love the stories from all those angles as well. On top of the tech angles.

That's beautiful. I love it. Okay, so I need to transition this conversation into the blockchain space. And I know crypto is exciting.

Woohoo.

Everybody's making tons of money with crypto. Everybody's a genius in a bull market. But obviously, if you're like me, you probably think that blockchain is more exciting development. What are some of your thoughts about that? What are some of the industries you see being disrupted? Are you dabbling at all in the blockchain space and if so, what. In what projects you have going on there?

Yeah, yeah, My main dabbling is, I done it all the time on Twitter.

I love it.

Please.

Contrarian viewpoints, please. Coming up next.

And I think the main industry that bitcoin right now has disrupted is the Ponzi scheme. This is the most effective Ponzi scheme of, I think, probably all time. At least it's the fastest growing Ponzi scheme of all time. And I think it has a good likelihood of being the biggest ruin of all time.

I was just tweeting, is this blockchain?

No, this is Bitcoin.

Or just specifically, I think this.

I mean, most of my commentary applies to bitcoin and the way that has been rolled out, but I think it applies to the, what was the term irrational exuberance that's spreading across all of the cryptocurrencies right now. And the way that this whole thing has pivoted from like, oh, this is going to be like the fast, easy currency that we can use to buy things without and transfer money.

Speculative asset class.

Right. And now we have. Now it's the fancy word for this is store of value. I think the more accurate term for this is wild gambling market. And I think that it's. I mean, I'm taking a harder line on this in part because I want provide, as Derek Sivers calls a counter melody.

Well, and also I want to get your opinion because you understand the code, you can actually go look at the blockchain and tell me whether it's, you know, sound and secure, as they all say it is. I don't know. You know, what the hell do I know? I just.

Yeah, I mean, the fact of the matter there is. It's just like with AR and VR that is outside of my pay grade to some extent and I don't understand all of the technology.

I have a creator of Rubio, Rails doesn't know how it works. Then maybe we do have a Ponzi scheme game.

Got it. I think clearly there's something there, clearly the blockchain and the way of being able to verify these things and single transfer, blah, blah, blah, blah. There's something there. Right. It's not like that. There's nothing interesting about the underlying technology. What I'm finding just is that that is all getting swept up in the fact that this Ponzi scheme is running at 400,000 miles an hour right now. Right. And I, I was racking on Bitcoin back when it was worth 20 bucks. Right. So to some clearly. And I get this pushback whenever I tweet. Anything that's even mildly critical of Bitcoin is like, well, you said that about 20 bucks. Yeah. Because I intrinsically think that there are some problems here around the way we're attaching to this and dealing with it and quote, unquote, reinventing banking and transfer of money and the future of money and so on that I think is completely. That does. It's irrelevant what the value is, the fluctuation and so on is a far more pertinent point. The fact that Bitcoin has gone up what, 15,000% in a single year to me just underscores the fact that this is a wild west in all the negative aspects of that word. But I think it's just what I find so sort of hilarious. So I tweet about a lot of things. Right. I don't know, I have 50,000 tweets over the last eight years or whatever and I tweet about a lot of controversial things. I tweet about Middle east peace process, US foreign policy, literature, code, whatever, and nothing, absolutely nothing gets me the kind of pushback and scorn and attacks that as if I tweet anything even mildly critical about crypto.

It's the Lord of the Rings, you know, it's Gollum and the my precious ah, to my bitcoin.

That's exactly what it is, right? And I just find that so hilariously ironic from sort of a community that's all about like, oh, we're this alternative, blah, blah, blah, right? Like that any alternative viewpoint on what's going on right now is seen as sort of an attack on like, on the whole movement as such, and on the technology. But I mean the technology itself. I think it's also just hilarious. I was just reading an article this morning about how the transaction price on Bitcoin has spiked to $26 per transaction at certain times, right? And you just go like, hey, wait a minute, did you guys just tell me like 5 years ago this was about fast free transactions that were. Some of the. What really gets me is some of the use cases that you hear present. Oh yeah, you can have this guy in New York sending bitcoin to the farmer in Kenya and he can just buy a new plow and like, yeah, right, like all that shit got thrown out the window the second the champagne bottles popped with all the. You could buy crystal now with bitcoin, right?

But just like anything, you know, it's. It's looking like there are going to be different blockchain enabled currencies that will usurp bitcoin and ultimately create that as. Yes, that's the progenitor. Yes, it has its limitations, yes, it has its problems. But I do believe, at least in my own opinion, I'm happy to be wrong. And I tell everybody always, you know, don't ever invest an amount of money that you're not comfortable losing a hundred percent of, like literally all of overnight, without recourse, forever. Because that's essentially what we're dealing with here. There's no recourse. It goes away, it goes up tomorrow. If somebody hacks it, whatever, it's gone. So starting with that caveat, I do believe that underneath all of this, this blockchain thing may have some legs. It's just a better system for a lot of reasons, in its theoretical component, in its state that it currently exists in, but yeah, you're right. With like bitcoin being. It's ridiculous. Like 90% of wallets are $100 or less worth of bitcoin. Like, who's going to transact those wallets ever? You know, most of them have been lost or maybe the Fed picked them.

Up or whatever, or stolen or any of you lost the keys.

And like, it's just ridiculous. So the amount of actual players in this currency, it's going to eventually get so consolidated that it's going to be ridiculous and therefore have to collapse.

I will take it even harder line because I think I've heard a lot of commentary like, oh, well, the exuberance that's going on right now in bitcoin in particular is ridiculous. But the underlying thing is really good. I'm starting to question the underlying thing too, because I think it's actually a really dystopian, cynical view of society to think that money in this sense has to be so disconnected from the world that it exists in, to be so unregulated as it is with Bitcoin to be so enabling as it is. I don't think that there's a sort of. I don't think it's a surprise, the main adoption of Bitcoin in terms of the currency aspect, at least not the speculation aspect, but the currency aspect is not necessarily the most savory bits. And you can say I've heard the argument too. Well, yeah, I mean, criminals also use cars. That doesn't make all cars criminals. But if you look at the percentage of actual transaction volume and interest and sort of the use of it on traceability and so on, it sort of tilts one way, which to me is the same way in many ways, as you look at American gun policy, not all gun owners go out and shoot people, but like, sort of. There's a problem with the underlying mechanism here that I think is deeper than just like, well, you can use this for good things and whatever too. I think it's very cynical view of society, actually. I think it's, it's. I saw a thing from 2015, I think 82 persons in the US had declared their gains in bitcoins to the IRS. I think that summed it up pretty well. Right. This is about 82 people. In 2015, there were probably more than 82 people. And to be fair, that's a couple of years old and before this latest bull run, Right. But I'd be surprised if that number today is getting anywhere near close to the number of people who, at least in Paper or in bits made. The wealth that they've made on Bitcoin, they're all going to declare it. No. People are using this to stuff it into the master system, to hide it and do all sorts of other things that I don't think is actually good for society. I think societies, I think the value of this system, the untraceability and irreversibility and all these factors of it make a lot of sense if you're in freaking Venezuela or North Korea or any highly repressive societies. But when used in Western societies that are supposed to have sort of strong, well developed sort of civic systems and institutions, I think it's a way to get to the societies, it's a way to get to Venezuela, it's a way to get to North Korea. I mean, that's wild extrapolation, but that's. I'm not. I don't even like the underpinnings. I don't like what it says about society. I don't like what it says about debt and money and these other factors to it. Notwithstanding that, I completely respect the, the technology. Right. And I will also accept that I have. You could call it double standards on this point. When it comes to cryptography in general, for example, I am a fervent believer that say the government should not have the golden key to break any encryption of WhatsApp or iMessage or any other forms of encryption. Because I do believe that we need privacy when it comes to the exchange of information and communication. I don't think that that applies in nearly the same way when it comes to currencies. So, I mean, there's a lot of topics there. And I can go on ranting and I have, and I accept the fact that I could totally be wrong at Bitcoin. Tomorrow could go to 200 billion a coin and everyone could go like, hey, if you listen to David, you would have missed out on this crazy wealth generation. Right. But even that in itself is also just such a misnomer. Right, Right. So wealth generation, like, is there a productive capacity of Bitcoin? No, no. Where is all this coming from? Because money's flowing in, right? Like this money is not being generated. This is not. We're not growing the GDP here of the world.

Like it really has utility at this moment.

No, exactly. Speculative can be said of other things, blah, blah, blah. But I think that there's just something here that this money isn't free. It's not just appearing out of thin air. It's worth 10,000 or $20,000 a coin now, because that's what people bid it up to, which means that all this money is flowing in from somewhere, and usually that ends in a sucker punch for the last sucker anyway.

Yeah, no, that's. That's really brilliant, and I appreciate you being passionate about it.

And.

You'Re right. Ultimately, you're right, you know, and I share a lot of your kind of residents about the whole thing. But then again, I've managed to get into Bitcoin at 100 bucks. You know, I was looking at it at 5 cents. I didn't buy any of that. And I should have, but whatever. Yeah. I could have been a billionaire at one time. No, seriously, I could have bought a hundred thousand bitcoins at 5 cents. I had the money I put into a bitcoin trading app for a kid who was trying to build Coinbase. He was out of his element. I could have just put that money into bitcoins. It would have been telling it.

Which, I mean, that's really what gets me in part about this right now with bitcoin, is that a lot of people are looking at that and they're using that as justification for why they should get in now. Right.

And that's what I tell everybody. You don't have a crystal ball and you don't have a time machine, so you're not going to be able to replicate these kinds of results, period.

Exactly. Which is the same thing as saying, like, hey, if I bought Apple stock five years ago, if I had known the lottery numbers of yesterday, yesterday, we could have done all these things. Right? So the coulda, woulda, shoulda. I think it's just more appealing in some ways with bitcoin is because it feels more accessible or whatever. And the returns are so spectacular. Right. Which is why I've likened it to penny stocks in the past. Normal companies raising money and exchanging or selling equity, they're not raising. They're not jumping 15,000% in a year. Right. Like, these sorts of spectacular returns are only really generally accessible in very unsavory territories. And I mean, that is part of it where I feel like the wagon is just unhinged right now.

So, David, I know you have a lot going on right now, and we want to be here and be supportive, and we're grateful for you sharing your, you know, your wisdom and collected kind of opinions about things over the years and things that you've thought a lot about, obviously. And the Make More Morals podcast is all about helping people win more through collaboration as opposed to just competition. And I'm sure you're a fan and a proponent of that. You wouldn't have even agreed to be on the show. So we appreciate you being here. What are some ways that we can help you with connections, resources, opportunities, people, systems to move your mission forward faster?

Well, one of the things I'm passionate about as we talk about these things is a diversity of narratives. Diversity of narratives. When it comes to bitcoin, as we just talked about right now, there's. There's a lot of excitement and there should be in a well functioning system, criticism and counters and opposition to these sorts of things, regardless of whether the thing in itself turns out to be the best thing ever. The only way you kind of get an informed society, I believe, is that you have opposing forces looking at the issue from both ends, which is why I sometimes take an even more aggressive stance on certain topics. Then perhaps the merits just outright warrant simply because to provide that counter narrative. The same is true when it comes to our story of how to build a business and building it in a untraditional fashion, at least through the lens of software coming out of Silicon Valley and so on. So we try to spread this message. I have a bunch of posts up on Medium, for example, that where I try to provide this counter narrative reconsider is one of them that you can point your followers or listeners to. There is. I have another thing about uncontrolled growth and actually the problems with that, which is also part of where this bitcoin criticism in some strains come from. That this un. Natural expansion, I think is often, I.

Have a quote a lot. Growth without contribution is the motto of cancer.

Right?

Unchecked growth will just continue to create more problems for itself.

Yes, and I think that, that, I mean as we just talked about Bitcoin, I think in itself there are just problems with something expanding at the rate this thing is expanding right now, right? Like a black hole that's ultimately going to end up swallowing the world. And anyway, that's why I try to. That's why I enjoy. I enjoy looking at topics from the angle of like, what is the prevailing narrative here? Let's explore the counter narrative to that. And then what I've also then found is not only is that counter narrative fun to explore, it's often also what I end up believing after examining both narratives, both the narrative and the counter narrative, is that the counter narrative is more appealing and that I will actually personally want to live and work like that. That's certainly how we've treated things when it comes to business Practices and so forth. That's how we ended up writing Rework and other things. They weren't speculative treatises on how we think the world should work. No, they were accounts of how we actually operate in the world, how we run our business, how we do things differently, how we live the counter narrative. So pointing to those things, reconsider and medium Rework as the book. We have a new book coming up this new year called the Comm Company that we're pretty excited about. It was all born out of Jason having a ponder on the very common notion where people say, oh, it's so crazy at work. Oh, how are you doing? Oh, it's crazy at work. Why is it crazy at work? Why is it good that it's crazy at work? Why are you celebrating that it's crazy at work? Why are you wearing that like it's a badge of honor? We went like, that's not how we want things to be. That's certainly not how we want to run Basecamp. That's not how we want to run our business. We don't want it to run crazy. We want it to run calm. What are some of the principles and approaches that you can take if you want a calm business, not a crazy business? And what are some of the advantages you can get out of running a company like that? So that is the premise of our new book, the Comm Company. Hope to Release that in 2018. Got to finish writing it, but it's pretty well underway so far. So that's probably the stuff I want to pick. No, that's.

Is there a specific URL or link or do you have a personal website where all these are linked?

Yep, I'll Twitter spell it. It's david.heinemeierhandson.com maybe you can link that in your show notes. But what is easy to remember is on Twitter, I and that's certainly a place where right now you can get plenty of bitcoin, counter narrative and otherwise pointers to all the other stuff that I'm doing and writing and thinking about.

Beautiful, David, thank you so much for being on the show and on behalf of everybody in the Make More Marvelous community. Thank you for being here. And if there's any parting words of wisdom for the audience, I'd love to hear.

Well, I'd say in general, I mean, this is part detrite but don't look for the silver bullet don't look for the one thing you wanted to do different don't look for the regret Love your fate Figure out how to fall in love with the things that you have and the path that you're on and the learning that you're taking. You don't look back at things with at.

That's not trite at all. That's beautiful. Thank you, David. Thank you for being here. Thanks so much for listening to the Make More Marbles podcast. For more tips, hacks and strategies to create an amazing, abundant life in your health, wealth and relationships, whatever that means to you, head on over to makemoremarbles.com check out our cool explainer video about what we're about, and join our community of entrepreneurial game changers. We want to help you level up your life in every possible way. And don't forget to subscribe to us on itunes, Stitcher, or Google Play, wherever you're listening to your podcast. And please do leave a review. Thank you so much and we'll see you on the next podcast.