How do you treat your staff? Like 37signals, or like this prick?

[Update 10 March, 1030 AEDT: I’ve written a follow-up article which, while bound to piss off a few people, explains precisely why I’m so concerned about this issue. There’s also my first follow-up, written on the weekend.]

Photograph of Jason Calacanis

“Chalk and cheese” is how I’d describe two approaches to staff management I stumbled across this week. One treats staff as trusted contributors to a shared enterprise, the other as disposable work-droids from which you squeeze every last effort.

Jason Calacanis (pictured) has started various firms, including Mahalo, a “human-powered search engine”. (Don’t worry, I’d never heard of it either.) In How to save money running a startup (17 really good tips) there are some good tips — like outsourcing accounting and worrying more about good chairs than tables. But to paraphrase the bad ones:

  • Hold meetings at lunchtime so people never get a mental break from work.
  • Don’t provide phones so staff have to use their own.
  • If someone shows signs of working hard, buy them a computer for home so they end up working nights and weekends too.
  • Buy a good coffee machine — not because you’d like to give your employees good coffee, but to prevent them “wasting time” getting it from a nearby barista.

But that’s not the worst…

The worst one for me, and this is the precise quote:

  • “Fire people who are not workaholics… come on folks, this is startup life, it’s not a game. go work at the post office or stabucks [sic] if you want balance in your life. For realz.”

Can you imagine what it’d be like working for this guy? Do you think you’d get much loyalty in return for being a wage-slave?

As Duncan Riley says in TechCrunch, “Expect to check your family at the door if you want to go work for JCal. Up to 18 hours a day for $30-35,000 (what I’ve heard is the going rate for base Mahalo employees), you’re never allowed to go outside during this time or have a proper break.”

Compare that with the enlightened attitudes at 37signals, creators of truly innovative software which I use every day, like Basecamp and Highrise. They trust their staff!

Here’s the 3 workplace experiments they’ve just implemented:

  • A 4-day working week. “People should enjoy the weather in the summer. We found that just about the same amount of work gets done in four days vs five days… Three-day weekends mean people come back extra refreshed on Monday. Three-day weekends mean people come back happier on Monday. Three-day weekends mean people actually work harder and more efficiently during the four-day work week.”
  • They fund people’s passions. “We want our people to experience new things, discover new hobbies, and generally be interesting people. For example, Mark has recently taken up flight lessons. 37signals is helping him pay for those. If someone wants to take cooking lessons, we’ll help pay for those… Part of the deal is that if 37signals helps you pay, you have to share what you’ve learned with everyone. Not just everyone at 37signals, but everyone who reads our blog.”
  • A corporate credit card for everyone, for whatever they want. “If you want a book or some software or you want to go to a conference, it’s on us. We just ask people to be reasonable with their spending. If there’s a problem, we’ll let the person know. We’d rather trust people to make reasonable spending decisions than assume people will abuse the privilege by default.”

37signals have responded to Calacanis’ post:

Fire the people who are workaholics! Here’s five reasons why:

  1. Workaholics may well say that they enjoy those 14-hour days week after week, but despite their claims, working like that all month, all the time is not going to be sustainable. When the burnout crash comes, and it will, it’ll hit all the harder and according to Murphy at the least convenient time.
  2. People who are workaholics are likely to attempt to fix problems by throwing sheer hours at the problem. If you’re dealing with people working with anything creatively that’s a deadbeat way to get great work done.
  3. People who always work late makes the people who don’t feel inadequate for merely working reasonable hours. That’ll lead to guilt, misery, and poor morale. Worse, it’ll lead to ass-in-seat mentality where people will “stay late” out of obligation, but not really be productive.
  4. If all you do is work, your value judgements are unlikely to be sound. Making good calls on “is it worth it?” is absolutely critical to great work. Missing out on life in general to put more hours in at the office screams “misguided values”.
  5. Working with interesting people is more interesting than just working. If all you got going for your life is work, work, work, the good team-gelling lunches are going to be some pretty boring straight shop talk. Yawn. I’d much rather hear more about your whittling project, your last trek, how your garden is doing, or when you’ll get your flight certificate.

If your start-up can only succeed by being a sweatshop, your idea is simply not good enough. Go back to the drawing board and come up with something better that can be implemented by whole people, not cogs.

Precisely. Innovation is creative work. Happy employees are loyal employees — and they’ll put in those extra hours voluntarily when they’re really needed.

Mr Calacanis may have generated more dollars in a shorter time than 37signals — or maybe he hasn’t, I don’t know. But I know who I’d rather sit next to on a long flight. And I know who I’d invite to dinner or to share a beer.

49 Replies to “How do you treat your staff? Like 37signals, or like this prick?”

  1. Mr Calacanis’ list reads like satire, but it’s actually not. How post-modern!

    Anyway, with the tight labour market in Australia at the moment and the aging population, employers are going to have to be more like 37signals to survive.

  2. I think a new corporate model is needed. The current model that many companies (even here in Australia) are based on, tend to operate with the Calacanis mentality. A lot of corporations tend to ignore the individual. We’ve had major headlines in Australia in the past year that have pointed toward cold corporate conduct that’s lead to suicide for some employees, and senior executives or spin doctors offloading responsibility. There can be a sense of paranoia and/or apathy in some workplaces that trickles from management. I’ll never forget being told (upon gaining permanency in a corporation, and querying the possibility of adding further study in relation to my job) by my manager: “Why? So you can take those skills to another company?” And that’s from a well known Aussie corporation that I won’t name.

  3. This topic is going to explode across the blogosphere this weekend! There’s already plenty of discussion at the original post, TechCrunch and 37signals.

    Duncan Riley has Twittered:

    Duncan Riley hmmm @jasoncalacanis isn’t happy with my post. Jcal, I’m not happy that you insult me by saying I should work at Starbucks.


    Duncan Riley Having read the [TechCrunch] comments I’ve confirmed that half the people in the Valley are immoral and lost.

    Someone called Morgan has said:

    I have not seen any very successful startups where the developers weren’t at least a little monomaniacal about their work.

    On the contrary, I’ve been at two successful startups (defined here as wildly successful IPOs) where having those fanatic developers was a core reason of why they were successful.

    The people who were putting in overwhelming hours at those companies weren’t doing it because they’re workaholics. They were doing it because they were true believers. Both in the company itself and the product they were building.

    It’s not about the workaholics making the company successful, it’s about the company being one that the employees can believe in, to the point of wanting to be there, wanting to be making it better.

    In those cases, you don’t fire the people who are passionate about building your company. You support them, and accept that they’re going to crash occasionally, and try to nerf the crash some…

    In my experience, it’s the fervent employees who are the core of successful startups. This was true at McAfee Associates (went public in 1992), and PayPal (went public in 2002), both successful startups that I was part of.

    You also need people who aren’t as fervent, who can see a wider view, so it’s always a balance. So you can’t really ‘fire’ either of them, out of hand.

    Wow. A long enough comment from me for now. More soon…

  4. Everybody seems to be focusing on the workaholic issue. My main issue with Calacanis’ list is the active promotion of a unhealthy work environment. If people want to be workaholics, that’s their choice and most companies need a couple to keep going. However, to actively promote a sweatshop type environment — that is where I draw the line.

  5. People need to chill out a little bit. Jason’s run at least a couple of successful businesses. In my experience that normally only happens if the people working for you are happy. I don’t think any of his points raise the debate to the level of calling him a “prick”.

    In a “Startup” scenario, don’t you think it’s fair to say that you need people working for you who are dedicated and willing to put a tremendous amount of effort out for the good of the company. If an employee’s not up to the task, what’s wrong with letting them go? Sorry if that “offends” anyone, but it’s got to be done.

    PS: Don’t know the guy personally. Just my 2 cents.

  6. I don’t think Calacanis is a workaholic. I think he is passionate and as he says in his follow-up, work is a game to him — he’s playing, not working. I get that, and I think it’s awesome. So he gets it, but that list did not convey the attitude that he wants his employees to all join him in that game. Rather that he wants to get more production from them. So I’m seeing a missing sense of trust in him that people will work out of the same passion that he works.

  7. I just posted a comment to that effect on Calcanis’ blog. Replace ‘hard work’ with ‘passion’ and it sounds like Guy Kawasaki instead of coming across like Ebenezer Scrooge.

    But… I can’t help but notice that he shows disdain (or at least apathy) for IT administration and maintenance. I infer from his style, too, that MIS is an alien concept. If he prefers operating his infotech as un-manageable commodified assets… what does that imply about his utilization of human resources?

  8. Cool, interesting comments came in overnight. I’ll respond to this page’s comments now, then read the other’s and also see what’s happened at TechCrunch and 37signals, then post a comment to my follow-up post. You get to see my thoughts evolve, O Lucky Readers!

    @Snarky Platypus: I agree re the Occupational Health & Safety aspect, and touched upon that in my other post as part of the “dangerous employer” discussion. I don’t think it matters whether the workers think it’s OK to keep going hour after hour, the employer has a duty of care to ensure they work with their long-term health in mind — just like they have to make a scaffold worker or miner wear safety equipment even if that worker reckons “She’ll be right, mate.”

    @John Walker: Welcome. Here in Australia we have what’s traditionally called “a more robust standard of public debate”. Americans are often shocked by the language we use. A former Prime Minister called the Senate “unrepresentative swill”, and another senior opposition politician referred to the government as “a conga line of suckholes”.

    Even the f-word and the c-word can be used un-bleeped on network TV after 9.30pm, and in context they can be used any time of the day apart from specific G-rated hours. It’s amusing to see visiting comedians shocked when panel-mates on a show first use the words — and then they self-consciously try dropping one themselves. It’s so sweet. But I digress…

    You ask:

    In a “Startup” scenario, don’t you think it’s fair to say that you need people working for you who are dedicated and willing to put a tremendous amount of effort out for the good of the company.

    Perhaps, but that’s rather different from requiring everyone to be a “workaholic” — the latter having a quite specific meaning beyond “working hard”:

    Colloquially, a workaholic is a person who is addicted to work. This phrase does not always imply that the person actually enjoys their work, but rather simply feels compelled to do it. There is no generally accepted medical definition of such a condition, although some forms of stress, obsessive-compulsive personality disorder and obsessive-compulsive disorder can be work-related. Although the term “workaholic” usually has a negative connotation, it is sometimes used by people wishing to express their devotion to one’s career in positive terms…

    A “workaholic” in the negative sense is popularly characterized by a neglect of family and other social relations. The term has no clinical definition, however.

    Workaholism in Japan is considered a serious social problem leading to early death, often on the job, a phenomenon dubbed karōshi.

    I assume people use the generally accepted-meaning of words — I mean, communication is impossible otherwise. So when Calacanis said, specifically, to fire anyone who wasn’t workaholic…

    @Emma McCreary and @xavier watson: Welcome to you too. You raise much the same point, I think: the entire tone of Calicanis’ list is penny-pinching. Little tricks to shave off 10 minutes here, 20 minutes there — many with the underlying assumption that a worker isn’t “working” unless they’re inside the building and at their desk.

    In all of this, too, there’s an unspoken assumption: that “the start-up scenario” (i.e. the specific infotech methodology of faster-faster business construction leading to venture capital and an IPO with untold riches at the end) is the preferred or only way things should be. I challenge that, and will explain further a little later.

  9. Calacanis obviously didn’t write the best tip for his deontology: Outsource everything to [any] Asian country. Even the CEO job.

  10. I am astounded by the the lack of startup reality people have about industry changing startups. I think attacks like this one are coming from three groups of people: Those who’ve never been in a startup and are blogging from their ‘full time’ 9-5 jobs at some cushy big company and start up companies that are ‘lifestyle’ companies (like 37 signals) where they have nice small business providing some limited audience service or product that will never get to be more than a few million (or 10’s of millions, max) dollars a year making their ‘startup’ lives very comfortable.

    If you want to change an industry (Music, movies, media, distribution, manufacturing, biotech, greentech, you name it) it requires massive amounts of work with little capital and incredible dedication to the job.

    Especially if you’re trying to bootstrap it as much as you can and not end up owning 15% of your company amoung the founders and employees with VC’s hogging 85% of that $100M payout.

    I say: Wimps and wanna be’s are the complainers.

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