The Lesson of Basecamp

Human capital is the gating factor to growth.

I’ve said this many times. I usually apply it to economics and politics. The seeming move leftward is built on our being a technology economy. We no longer depend on resources like oil. We run on brains.

This also applies to individual companies like Basecamp.  It’s not enough to pay people well and empower people. Tech companies must let employees feel empowered if they’re to succeed.

This is what Basecamp, which ironically is selling a mobile work platform, chose to ignore when it instituted a ban on politics. It tried to be gentle about it, offering generous severance to those who disagreed. One third left.

My guess is the one-third leaving are the more talented third. Despite repeated attempts by Robert Zafft at Forbes to say this is addition by subtraction, it’s subtraction by subtraction.

Basecamp is based in Chicago, but its employees are everywhere. It’s not just competing with other Chicago-area employers for talent. It’s competing with everyone.

I learned about this early in my freelancing career. In the 1980s, when I tried to write for Atlanta publishers, I was treated like garbage. I was low-balled on fees and kept on a short leash. It wasn’t until I began seeking work from around the country, and around the world, that I got respect.

There are costs and opportunities here. You can be based anywhere, but so can employees. That means competing with everyone for talent. If you want the best talent, your employees must feel empowered. Telling them they can’t talk about politics is ridiculous. You can tell them to be polite about it. You can meet with people who take it to extremes. You can offer classes on Netiquette. But to say, “don’t talk about X” means “don’t think about X” and once you say that it’s all they’re going to think about.

There are tech bosses who don’t understand what their industry needs to thrive. They’re sitting on piles of cash and think that’s what matters. That’s not what matters. What matters is imagination. You don’t find great imagination among people who feel stifled, in their lives, by their responsibilities, or based on their views.

Mitt Romney once said, “Companies are people too, my friend.” He was ridiculed for it, but tech companies consist almost entirely of people. The best companies make their people feel heard and valued. That means listening to what they have to say. Everything they have to say.

It’s tech workers who are driving America’s shift left, more so than its leaders. That’s the lesson of Basecamp.