The Cashflow King: “Here’s How I Do It”, Negotiating w/ Jeff Bezos, Elon’s Cracked Rocket

What is Jason Fried's approach to long-term planning?

Jason Fried has a unique perspective on long-term planning. Instead of rigid, long-term goals, he prefers adaptable, short-term strategies. Long-term planning, according to Fried, is based on past thoughts and assumptions, which may no longer be relevant.

Key points of his approach include:

• Short-term thinking: Fried focuses on six-week planning cycles, which allow his team to stay flexible and responsive to immediate needs.

• Adaptability: By making decisions based on current realities rather than past assumptions, his company can pivot quickly when necessary.

• Avoiding rigidity: Long-term plans often tie you to outdated ideas. Fried advocates just starting and adjusting as you go.

• Focus on present insights: Instead of following a static plan, he encourages making decisions grounded in present understanding.

His philosophy is well articulated in the quote:

"I don't plan long term because I want to do what I think, not what I thought."

This approach aligns with the idea of continuously adapting to new information and conditions, much like Alex Hormozi’s strategies for quitting or pushing through.

How does Jason Fried's company manage without setting goals?

Jason Fried's philosophy revolves around avoiding traditional goal-setting, which he believes ties people to outdated ideas. Instead, 37signals operates successfully by focusing on profitability and doing their best work at all times.

His company has been profitable for 25 consecutive years, thanks to this unique approach. Fried emphasizes that setting goals often leads to dissatisfaction because they are based on who you are when you set them, not who you will be when you reach them.

He shares,

"Our only goal is to be profitable every year. We've achieved that for 25 years."

Instead of goals, they prioritize:

• Profit: Ensuring the company remains profitable yearly.
• Quality of Work: Doing the best work possible every day.
• Flexibility: Being adaptable to the current business environment.

This strategy not only reduces stress but also enables them to respond effectively to new challenges and opportunities. The focus remains on the present reality, avoiding the rigidity of conventional goal-setting models.

For more context on operational strategies without rigid goals, consider how successful teams adapt and perform, much like teams in the sports world.

What was it like negotiating with Jeff Bezos?

Jason Fried's experience negotiating with Jeff Bezos was anything but ordinary. Fried described Bezos as incredibly optimistic and intelligent. He recalled that Bezos approached him after several of Bezos's investment companies started using Basecamp. The admiration was mutual, leading to a discussion about investment.

"I remember bringing this idea to David. I had been exploring with one of my designers for a while and he's like, yeah, that, that is interesting. Like, let's see where this goes."

Fried and his partner, David, met Bezos in Seattle. There, they quickly realized that Bezos's interest was genuine. Even during the first meeting, Bezos's enthusiasm for new ideas was evident. He was described as charismatic and likable, traits that made negotiations smooth and constructive.

What stood out in the negotiation was the unique deal structure. Bezos exercised extreme flexibility, making a personal investment rather than a corporate one, and ensured that Fried and his company retained control. This agreement allowed 37signals to continue their operations free from external pressures.

Bezos's investment wasn't just financial. It included trust and respect for Fried's vision. As Fried noted:

"We worked out some deal, which was ridiculous. He knew it was stupid. He's like, put together something. I need something."

This negotiation highlighted Bezos's entrepreneurial spirit and belief in long-term potential, making it an unforgettable experience for Fried.

How does Jason Fried generate interest in his products pre-launch?

Jason Fried masterfully creates buzz around new products even before their launch. One key tool in his arsenal is the founder letter. Here’s how he does it:

• Point of View: Each letter starts with a strong point of view, often challenging the status quo. This captivates the audience by addressing common frustrations and offering a fresh perspective.

• Clear Messaging: The letters are concise yet compelling, aiming to instill curiosity and urgency. They typically start by raising a pertinent issue and then positioning his solution as the breakthrough.

• Emotional Connection: Fried uses relatable scenarios and everyday language to resonate with readers. This connection makes potential customers feel understood and part of a movement.

• Transparency: These letters are candid about the company's intentions and values, which garners trust and anticipation.

• Call to Action: Each letter concludes with a clear call to action, encouraging readers to sign up or express interest, thereby generating a robust mailing list even before the product hits the market.

"I don't know why more people don't do it, but you have to have a point of view first of all," Fried states. This simple yet effective strategy primes an eagerly waiting audience, as seen with his successful launch of Superhuman.

Fried's ability to blend narrative and strategy ensures that every new product launch is met with enthusiasm and high engagement, setting the stage for a successful entry into the market.

What are Jason Fried's views on financial risk and profit management?

Jason Fried's approach to financial risk and profit management is rooted in simplicity, conservatism, and sustainability. He believes in reinvesting in the business while also ensuring personal security through profits. Here's a closer look at his methods:

1. Conservative Investment:

• Fried primarily invests in index funds and a few trusted individual companies.
• He avoids high-risk investments, preferring stability.

2. Profit Distribution:

• At the end of each year, Fried and his business partner pull out all profits.
• Since their business is an LLC, they must pay personal income tax on all earnings, making reinvestment less appealing.

3. Cost Management:

• Keeping costs low is a cornerstone of Fried's strategy.
• They minimize payroll and spend little on customer acquisition, leading to high margins.

4. Risk Aversion:

• While open to new opportunities, Fried avoids risks that could jeopardize the business or personal financial security.
• Reinvestment is carefully considered, focusing only on what's essential.

Fried's approach ensures not only the company's longevity but also a steady personal financial growth, echoing his belief in a low-stress cash flow business model.

For more context on successful financial strategies, consider reading about Warren Buffett’s Investment Philosophy.