In the podcast, REWORK host Kimberly Rhodes talks with 37signals co-founders, Jason Fried and David Heinemeier Hansson, about their journey spinning off products. They stress the value of keeping contracts simple and how once the handover is done, it's best to take a hands-off approach and let the new team run things. They share their experiences with boards and underline the need for trust and flexibility.

Key Takeaways:

00:43 - The steps they took to transition "Know Your Company" into its own independent entity.

04:49 - Contracts don't offer as much protection as people believe.

10:58 - The differences in spinning off a startup vs. a long-established company.

14:53 - Letting capable partners take the reins and run the show independently.

18:51 - The challenge in finding the right partner for a spin-off business.

20:12 - In any transaction, things may not turn out as expected, but it may be worth taking calculated risks.

23:19 - Contracts don't necessarily prevent disputes and can sometimes escalate them unnecessarily.

Links and Resources:

Canopy, formerly known as Know Your Company

‘Know Your Company’ Deal Structure

Books by 37signals

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The REWORK podcast

The Rework Podcast on YouTube

The 37signals Dev Blog

37signals on YouTube

@37signals on X