SEASON 2 - EPISODE 149 - APRIL 9, 2025

Building on the Side

Have a day job but dreaming of launching the next big thing? In this episode of The REWORK Podcast, a listener question sparks a conversation with 37signals co-founders Jason Fried and David Heinemeier Hansson about juggling consulting work while building products on the side. They share real talk about timing, expectations, motivation — and why your side project should serve you, even if it doesn’t turn into a smash hit.

Watch the full video episode on YouTube

Key Takeaways

00:12 - Host Kimberly Rhodes reads a listener question about balancing consulting with product building
01:01 - Why it’s easier than ever to build something—but harder than ever to get noticed
05:48 - The barrier to entry is low, but staying in the game is the hard part
08:05 - There’s no formula for what will take off and what won’t
13:08 - Aim for more than just small wins—set bold goals
16:04 - You have to be fully invested if you want your idea to stand a chance

Links & Resources

Transcript

Kimberly (00:00): Welcome to REWORK, a podcast by 37signals about the better way to work and run your business. I’m Kimberly Rhodes from the 37signals team, joined by Jason Fried and David Heinemeier Hansson, co-founders of the company. This week we’re going to dive into a listener question that we got in and I’m just going to read it to you guys as it came in. “As an experienced designer/UX product person in the incredibly difficult job market in tech, I know I’m not alone, I’m wondering if you have any advice for people currently exploring building a consulting business as the main way to earn income while building products on the side. The idea is that one of these side products could generate enough income eventually to work on full-time in 37signals/Basecamp/HEY style. With the origin of 37signals being a web design shop around the.com era, any advice?” That came in from Siddharth. I think most people know 37signals started as a marketing firm, built the product on the side. Siddharth is looking to do the same thing.

David (01:01): I think it’s a really interesting time right now because it has never been easier in so many ways to build something on the side to have a hobby project. You can get AI to assist you with half of it. It’s never been cheaper to host it. It’s never been easier to start in so many ways compared to when we were trying to do it literally 20 years ago. Something as basic as processing credit cards was actually surprisingly difficult. You had to convince a bank person in a physical outlet that they should allow you to charge credit cards. Now you just sign up for Stripe or something else like it and you’re off to the races. So it’s never been easier to have a shot at it. But at the same time, I also think it’s probably never been harder to get attention. It’s probably never been harder to not just get lost in the daily sea of everything happening all the time all at once, and I don’t actually envy that situation.

(02:00): I think the fact or the instinct here is good to realize, you know what, I’m going to need some income if I’m going to sustain my opportunity to take some shots at some things, even if I know those are long shots, that I have something solid. I work for someone else who’ve already cracked something because they’re able to pay me and I twiddled with my stuff on the side. Just as long as you’re realistic about the prospects. Don’t take a shit job, you’re going to hate on the premise that in nine months one of your ideas is going to take off. That seems like a recipe for resentment, and I don’t think you want that. I think you want to find a job you could actually enjoy and actually realize you know what, the odds are such that this is how I’m going to make my money.

(02:50): I’m going to work for someone else. The world is full of entrepreneurs who really wanted to run their own business and it did not pan out and they ended up working for someone else. So keep those two ideas in your head at the same time that you’re not just taking a dead end job thinking that you’re on the cusp of discovering something amazing that’s going to be your sole income in five minutes from now. That probably isn’t going to happen. It could and it’s fun to try and you should make such that your attempts are enjoyable in and of themselves even if they don’t pan out. This is a lesson that Jason and I have had to really internalize over the past 20 years. We have built a lot of different products at this company. Some of them have been phenomenally successful like Basecamp, some of them have been really successful like Highrise or HEY and quite a few of them have been, do you know what base hits at best, paying for our expenses at best. And a fair number have not even managed to do that.

(03:50): So I think you really gain a humility against the prospect of anything taking off. Even when you have, as we do now, a very large platform where we can promote things, we can certainly get eyes on something on day one, no problem. We didn’t used to have that. Now we have that. That’s a major leg up to be able to have. We have really good experienced people on our team who can build any idea that we come up with very, very well. The execution could be excellent. And still, with all of those things, we’re in no way, shape or form assured a hit just because we do something. So when I take that and think like, do you know what? What are the odds for an individual trying to do this? They’re long, but also, so what? So what? As long as you have a setup that you cannot just stomach but you can actually enjoy, you’re working on yourself as you’re pursuing these ideas, which is in Jim Rohn’s immortal words, the best way to make yourself more valuable, that you are not just working on your job, you’re not just working on your project, you’re working on yourself.

(04:58): You’re going to get smarter, you’re going to get better, you’re going to get more experienced. And even if all of that compounds to a person who happens to be an employee working for someone else, that’s great and I think you should do it anyway. I think anyone who has a consulting style engagement should have some experiments cooking, some ideas spinning around whether you actually launch them or you don’t. Maybe that is optional, although it’s better if you do launch it. You learn a lot of things by putting something out into the market and having total strangers tell you what they think by whether they buy it or not or the feedback sometimes, the comment section. Strangers will absolutely tell you what they think of it, your friends won’t. So putting it out there into the market is a great way to go.

Jason (05:48): To me like, he could probably get a client pretty quickly, I would start with that. So like, think of your consulting business as one of your products that you’re making. And this is probably the easiest product you’re going to have to sell, which is that you can just help someone with what they’re doing versus building something from scratch, having to find a customer base or a customer who’s going to buy it. They’re going to have to discover it, they’re going to have to buy it, they’re going to have to implement it, integrate it into their own workflow, the whole thing. And they’re going to have stay with you unless you’re selling something one at a time. They’re going to have to stay with you as a subscription. That’s actually a much harder customer to get than it is to go down to some friends’ business that and pitch in and do a little consulting gig.

(06:26): So I would do the consulting gigs, I would line those up, I’d get those going. I’d think of them as one of my products I’m putting out there. It’s me, the product is me. And then you can also build other products on the side and explore those and see if you can get any traction. But as David mentioned, and as we’ve talked about before, starting something is always the easiest thing. The hardest thing is sticking around and staying at it, getting enough people to support it that it can stick around. And so I think what we’re seeing right now is a magnification of this problem that it’s never been easier to start something which is exciting and incredible, truly is. It’s amazing that you can make things so fast, but it just amplifies the reality, which is that that’s not the hard part. The hard part is not coming up with the idea and making the thing and having AI help you make something and spinning something up and vibe coding something into something. That’s actually become easier than it’s ever been before and will only get easier.

(07:19): So that is not the hard part anymore. The hard part is like, now what? So I got this thing I made that’s sort of incomplete. It’s kind of half ass it’s good enough for me. It’s interesting, there’s something there. I have to promote this to customers. I’ve got to get people to pay attention to it. I got to get people to pay for it. I got to get people to try it and then maybe convert into paying for it. I’ve got to build an infrastructure where I can make sure it’s available to them and reliable. People are going to have some questions about I got to be around for that. I may have to hire another employee. That’s the hard stuff. And so consulting’s actually really easy compared to that. So I would absolutely start with consulting and you may end up with consulting and then just kind of dabble on the side and figure something out. Maybe something takes fire, takes hold, maybe it doesn’t, but consulting is a product as well. So I would start there.

David (08:04): What I also think is interesting here is entrepreneurship in this regard is not actually the first industry who’ve ever had to go through this explosion of ease, explosion of ease to market. Oh, now you can vibe code something even if you’re not, whatever, you can get something out there. There are plenty of other industries who have gone through something similar. I am a huge fan of the Lefsetz newsletter, this guy who’s been writing about music for literally 50 years. And he has one of his hobby horses that he loves to send a newsletter out on regularly is that it’s never been easier to publish music. It almost takes nothing to get your very well produced, by the way, piece of music onto something like Spotify. That used to be really hard to get your CD into the stores where customers could actually buy it. You had to sign up with a record label.

(08:58): They had a very narrow number of slots in their roster that they were willing to take someone onto. But then if you made it in, you were kind of, sorta guaranteed at least something. You were guaranteed a base hit because they were going to push it, right? Now all that’s more or less gone away and now you have this free fall where there’s never been more published musicians alive who could reach a worldwide audience. And they realize that even though they’re good at playing music, even though their friends like their songs, it’s incredibly difficult to get attention on a broader scale to build something more sustainable. And I think we’re entering that era with software entrepreneurship in a large extent. There is an explosion of people who have access and capabilities, often AI-assisted, assisted by falling prices for hosting it, and all these other things that make it such that so many more people can take the idea they have into their head and put it into the market.

(09:57): So that now means that the market is just going to be absolutely flooded constantly with these new ideas that come out. And occasionally one of these ideas is going to fire off and they’re going to break out and they’re going to be a huge hit. And half the time you can’t tell why because the market is this mysterious machine where you go, why did this thing at this time take off? And you’ll have plenty of theories after the fact. Well, it’s because it’s perfectly made. It’s because the branding would just right. It was because they had a really clever marketing campaign. And people just making up shit because no one knows. No one knows. And again, to our own example, we’ve seen this time again, we put things out in the market. I think that is a wonderful idea. We’re just ahead of the market.

(10:42): This is just, and then crickets. And then other times we put something out that I don’t think too much about and you just go like, boom. It blows up. Jason and I get this all the time with writing or things we appear at where you’re putting ideas into the sphere and all these golden nuggets you’ve been noodling on for weeks, like just nothing. And the cast away write up or tweet that you do, goes to the moon, right? So I think you just have to accept that. You have to accept that it’s a gift that you can get your ideas out there and that that gift comes with a corresponding curse that’s also easy for everyone else and you therefore not guaranteed any response and therefore should not just do it for the outcome. You should not just do it for the result that this is going to turn into a business because then you’re going to be disappointed because it’s almost a statistical guarantee that it’s not going to work.

(11:37): You’re going to have to do this for other reasons, then this is going to be an amazing business. You’re going to have to do it for reasons like, I’m going to learn a lot on this project. I’m going to have a lot of fun in this project. I’m going to meet some people I wouldn’t have otherwise. I’m going to explore new domain or new territory. I’m going to make myself better. And then if I am a consultant, I’m going to be more valuable as a consultant who’s gone through all those things if I sell those services of someone of my stature and experience and expertise next year. So win-win either way. That’s really what I’ve tried to orientate my entire life around. That all the possible outcomes, any given action could take, I got to be at least content, if not outright happy with all of them.

(12:23): It takes off? Wonderful. It’s a base hit? Great, we’re paying some of the bills. No one gives a fuck? What a great learning experience. How did I become better? What skills did I pick up? What technologies did I explore? What designs did we try? What little ideas can I now take and put forward perhaps into something that’s a little bit more of an assured success? This is something we’ve done with our software products basically since the start. We had this amazing breakout success with Basecamp and then we’ve done a million other things and as I said, some of those million other things, they didn’t really pan out, but in almost every single case we learned something we could then put into Basecamp. And whether your Basecamp is your consulting career, is your consulting company? Great still.

Kimberly (13:08): Okay, let me ask you this about these base hits. I think this will help Siddharth in his question. It sounds like he’s wanting to create many products, hoping one of them will take off is how it’s written. Give me your thoughts about, or maybe advice for him about knowing when it’s time to rip the bandaid off. If we’ve as a company put out all of these base hits, for Siddharth, does he just keep putting out things? Does he need to focus his attention on one for some period of time? Do you guys have any thoughts about that? I know it’s hard to say.

Jason (13:39): It’s hard to say because it depends on what these things are and how much attention you want to give them. I mean, when we put something out, for example, we still spend months on it, many months to build something before we put it out. Some people, peer levels put stuff out in three days and just like, I dunno, does it work? Does it not work? I don’t know. Who cares? I’ll make a hundred things and whatever. I’ll make ‘em really fast and whatever. So it just depends on how you approach it. If you’re going to be building a lot of things, you cannot take 8, 9, 10 months a year to make those things because you’re just not going to be able to put that many things out there. So I would say if you’re going to take that approach where you’ve got a bunch of ideas and you want to make a bunch of things, you’re going to have to make them a lot faster.

(14:17): And I think the chances of them taking off or going to be a lot slimmer ultimately because there’s probably not that much there. And especially these days where anyone can kind of make their own thing that might do one or two things, it’s going to be very hard, I think to get some traction there. But I don’t know, it depends. I don’t know what your ideas are. I don’t know what you want to do and it’s really hard to say, but I also wouldn’t go at it trying to hit base hits. I’d go try and make stuff that you think is fantastic and is great and you hope that it is a home run, but it might end up being a base hit or it might be a foul ball or you might strike out, but we don’t go in and go, we’re going to hit some base hits here.

(14:53): We don’t make a new product that we hope is going to be a base hit. It could turn out to be that, but you’ve got to have a lot of conviction. So I would say the chances that you have 10 ideas that are going to be home runs, I’d say it’s pretty slim. I would focus on one thing that you think is going to be really, really, really, really damn good. Put your time into that and see what happens. And if that doesn’t work out, and by the way working out, you’re not going to know in like 10 days. You might need to spend months, you might need to spend a year pushing it, talking about it, trying to get traction. You might get some and lose some. This idea that you just put something out so it’s a hit overnight it, it’s extremely rare.

(15:27): I mean it almost never happens. So that’s the other thing to keep in mind. No one probably knows who you are and whatever you put out there, you’re probably going to put it out to almost nobody to begin with. So you can’t judge whether or not it worked in five minutes. You have to give things, you got to cultivate, you got to grow the plants, you water it and you got to wait a little bit. You got to do all the things, you got to tend it. You got to do those things to see if they’re going to work. So I wouldn’t just be rapid firing, making new things, unless that’s really what you want to do. And then you can do that. Some people are doing that. Obviously it’s never been easier to do that, but I don’t think there’s a lot of examples of that really panning out quite yet.

David (16:04): I think therefore it is important to keep that duality in mind that on the one hand you should have a belief that this idea is good enough that it could go all the way to the moon. Don’t invest your time in mediocre ideas. No, be super excited about the idea. Have ambition for that idea. Have faith in that idea and then at the same time, glance over at the statistics that tells you it’s not going to work out. And you can actually keep these two conflicting ideas in your head at the same time and then try to needle your way through it where you go, do you know what? I’m going to put all I got into it. This is the thing Jason’s actually taught me well over the years that let’s go in assuming it’s going to work. If we go in assuming it might not work, you know what?

(16:56): You’re not going to put your all in to it. And if there’s anything you need these days, it sure as hell is you’re all in. Everyone else is putting in their all in, their best thoughts, their best competence, all this stuff into it. You can’t show up half-assed and then expect that there’s going to be a prize for you. That just doesn’t work. And you actually need that conviction because you’re going to have sort of a dip in motivation of like, oh, I think it’s not going to work. Oh, this is a great idea. This is a stupid idea. It’s going to fluctuate, right? So you need to go in with that conviction, whether it fluctuates, whether it go up and go down, I believe this is going to work. And then also, again, knowing it probably won’t. It probably won’t. And when it then doesn’t or does, you’re going to be happy either way because you did it in a way where you did it with integrity regardless of what that means to you.

(17:47): You’re not doing it in a slimy way, you’re not doing it in a quick scammy, make a buck kind of way. You’re doing it in a way where you go, you know what? I could put my name on this if there was a little box, a little plaque, I’d proudly write made by David on it so people knew who made it. I got to be hiding behind something here. I’m going to make something I’m proud of because that’s just going to make me feel good about it. I also think it generally works in the market when you’re authentically excited, enthusiastic, and integral about what you’re building, and then I’m going to build it in a way that if it is not work, I’m going to be better now than I was when I started. I’m going to be smarter, I’m going to be more competent.

(18:29): I’m going to be more experienced. I will have picked up new skills such that if nothing else, I’m a better person. That game you can’t lose. That’s impossible. There’s no way if you become all of those things — better, smarter person, more capable — than you’re going to look back upon that, I wish I was as bad at this as I was a year ago. No way. No way is that going to be the analysis. So you got to have that as a focal point here. You got to have that as a centering mission that half of this is me just getting better and then the outcomes, they come or they don’t. And I’m going to keep pushing and keep believing, but I can’t control the weather. Maybe it’s going to rain. Okay, I’m going to walk a little bit in the rain. So what? Rain’s actually fun. It’s great. The Danes love to say there is no bad weather, there’s just bad clothing. Put on a damn raincoat and keep walking.

Kimberly (19:29): Well, Siddarth I hope that advice helped. We’re going to send you some REWORK merchandise as a thank you for sending in your question. REWORK is production at 37signals. You can find show notes and transcripts on our website at 37signals.com/podcast. Full video episodes on YouTube. And if you have a question for Jason or David, send us a voicemail at 7 0 8 6 2 8 7 8 5 0. You can also text that number or send us an email to rework@37signals.com.