Why we choose profit
Skip the fluff. Hear the best bits.
Just 5 minutes. All value, no filler.
📓 Key Takeaways
📘 Profit is a decision, not a reward. Most companies chase growth first and hope profit shows up later. Jason and David flipped that. They chose profit from day one. They built a business that spends less than it earns. That’s why 37signals is still standing 25 years later.
📘 Profit buys freedom. When you don’t need investor money, you answer to no one. Want to follow a hunch? Do it. Want to try something weird? Go ahead. Profit gives you that luxury. If something flops, no big deal — you’re still standing. That safety net is the margin.
📘 Profit demands discipline. Saving money matters just as much as making it. One dollar not spent is one dollar you get to keep. That kind of thinking shapes the whole company. Everyone becomes sharper with decisions. You don’t just throw money at problems — you solve them smartly.
📘 Profit pays — over time. Jason and David didn’t wait for a billion-dollar payday. They pulled money out every year. Bit by bit, that added up. Meanwhile, other founders waited for buyouts that never came. Some got nothing. 37signals got freedom, security, and time. That’s how you win slow.
📘 Profit reduces risk. Running a business is already a gamble. Why stack the odds against yourself by leaving everything in? Taking money off the table spreads your risk. Put it in a house. In the market. Anywhere but back into the same pot. One failure shouldn't wipe you out.
📘 Profit requires humility. You have to believe in yourself to build something. But don’t fall for the myth of invincibility. That hot streak might end. The product might fail. Timing might shift. Profit is your hedge. It says: “This might not last, and that’s okay — I’m ready.”
📘 Profit prevents regret. If your business dies tomorrow, will you have something to show for it? Too many founders ride the wave and end up with nothing. Profit-taking avoids that. Whether you last two years or thirty, you can look back and say, “It was worth it.”
📘 Profit builds customer trust. A profitable company stays alive. That matters to customers. They’re not just buying your product — they’re betting you’ll still be here next year. Profit signals reliability. It shows you're in this for the long haul, not just a quick flip.
📘 Profit lets you enjoy the ride. This isn’t about private jets. It’s about not living on ramen for seven years. It’s about enjoying your life while you build. Buy the car. Take the trip. Have some fun. That joy keeps you going. You’re not grinding for someday. You’re living now.
Actionable Plan
👉 Review your company’s current revenue and expenses to ensure you're making more than you're spending.
👉 Set a specific goal to take a fixed percentage (e.g., 10%) of profits off the table annually for personal savings or investment.
👉 Establish a profit-sharing program for employees, e.g., allocate 10% of annual profits to a pool for distribution.
👉 Identify and cut unnecessary recurring expenses (e.g., cloud services) to increase profitability.
👉 Allocate a portion of profits to diversified investments outside your business, such as an S&P 500 index fund.
👉 Conduct a quarterly review to determine how much profit can be safely removed while maintaining business operations.
👉 Develop a public-facing message highlighting your company’s profitability and long-term stability as a competitive advantage.
👉 Create a written policy ensuring discontinued products remain accessible to current users ("end of internet" promise).
👉 Set a policy to avoid external funding unless absolutely necessary, maintaining operational control and freedom.
👉 Reframe company spending by asking, “What exactly are we investing in?” before re-investing profits internally.
💬 Top Quotes
You don't get to choose like and get it automatically, but you do get to choose and think about like how do we want to run this place? Do we want to like be behind the April all the time? Do we want to just focus on growth? You know, this is one of the reasons why you know, some people take money. They take money and they lose a bunch of money for a long time spending other people's money to try to get mine share or market share
We decided to go different route, which is to keep our costs very, very low up front and to not get ahead of ourselves and to try to make more money than we spend as early as we possibly could, which turned out to be the first year. And then we've just sort of stayed there
We choose to be profitable because we choose to want to stay in business. That's the only way to stay in business over the long term, ultimately, unless you can continue to convince other people to give you money that you're not going to pay them back on, or you might eventually, it's some way in the public markets
What I love most about profit is the freedom it affords you. When you are profitable, when you don't need other people's money, you get to do pretty much whatever the hell you want, which is pretty convenient for us because that's how we like to operate
There's a discipline to make sure that we're not squandering our money. That the money we spend is actually, in many ways, as important as the money we earn. If we save $1, say on a cloud exit, we, first of all, don't have to make another dollar to make up for those costs
We made it by taking a little bit or sometimes a lot of bit, depending on where the profits were, off the table every year for 25 years. Like if you keep doing that, there's enough left over that it's a very nice pleasant place to be
So I like both those aspects of it. I like the Lucy Goosey of the opportunities of the profit margin and allowing you to experiment and not being sort of drummed up in all of it. And I also like the discipline of it
If two years from now, like everything is AI agents just doing everything for you. And there's not even a user interface. It's just all in your ear. You're dealing with her and basically it doesn't make any sense anymore. It's all gone. Well, do you know what? We can look back upon that ride and go like do it at a good time
I would say like, for what and for why? So next year, you can make a hundred that you're just going to put back in the business again. To David's point, like at what point do you see the results of that?
Running a private small company is incredibly risky. The chance that you're going to survive is close to zero. It's very, very, very, very hard. And the longer you go, in many ways, the harder it's going to get and the more risk you're taking on
If you get the opportunity to take anything off the table, you should. It's a responsible thing to do. And people think about reinvesting. You can reinvest all over the place into other people's businesses. They're less risky. They're more diversified
Here's the beautiful part of this. If it all ends tomorrow, you'll be really glad if you took some money off the table. But guess what? If it doesn't end tomorrow, if it goes forever, you'll also be really glad if you put some money off the table. Because you got to enjoy life while it was going on
So maybe just realize that it's okay to enjoy life along the way. It doesn't mean you're not dedicated, it doesn't mean you're not a serious entrepreneur. It doesn't mean that you don't believe in your business. It just means that you're not delusional
The fundamental point here is that you can't build a reliable product unless you build a reliable company. The company doesn't exist in two years I don't care how good your product is it's gone right so that's the idea is if you want to make things feel like making things you got to keep making things to keep making things you need to be able to make a living hopefully that's what the profit side is all about
