What really happened at Basecamp

In response to the Basecamp partners’ “full Coinbase” heel turn that I wrote about yesterday, Casey Newton spoke with Jason Fried, DHH, and numerous employees and reported on what’s been going on behind the scenes:

The controversy that embroiled enterprise software maker Basecamp this week began more than a decade ago, with a simple list of customers.

Around 2009, Basecamp customer service representatives began keeping a list of names that they found funny. More than a decade later, current employees were so mortified by the practice that none of them would give me a single example of a name on the list. … Many of the names were of American or European origin. But others were Asian, or African, and eventually the list — titled “Best Names Ever” — began to make people uncomfortable.

The series of events that led to yesterday’s policy change — which Newton confirms was not fully discussed internally before it was dropped like a bomb via the founders’ personal blogs — began with things like this, but grew to include a broader question of how the company is handling diversity and inclusion. Between the lines of it all, it sure seems like the “committees” Fried railed against refers to an employee-led DEI Council, as does the new ban against “societal and political discussions” on company forums.

As I called out yesterday, unlike most tech companies with enough of a public profile to trigger this much discussion, Basecamp is an LLC under the near-total control of its two managing partners. That in itself is not that unusual; with the rise of “founder friendly” equity structures in the last decade, there are plenty of VC-backed businesses that also have dictatorial leaders and toxic work environments. The main difference is that unlike (say) Coinbase’s CEO Brian Armstrong (who tweeted a high five at Basecamp yesterday), the Basecamp partners aren’t accountable to investors or a board of directors — the buck really does stop with them.

“There’s always been this kind of unwritten rule at Basecamp that the company basically exists for David and Jason’s enjoyment,” one employee told me. “At the end of the day, they are not interested in seeing things in their work timeline that make them uncomfortable, or distracts them from what they’re interested in. And this is the culmination of that.”