How DHH Went to War with Apple Over a 30% Shakedown and Won

When 37signals launched Hey, their Gmail competitor, they built it the same way they had always built Basecamp: a free companion app in the App Store that connected to a web product where all payments happened. No in-app purchases, no Apple involvement in the transaction. They had done this with Basecamp for years without issue.

But Apple had changed its mind. It wanted more. The shakedown demand was simple: use in-app purchasing and hand over 30% of your revenue, or we will destroy your business. For a company that had spent years and millions of dollars building Hey, the threat was existential. Without an iPhone app, an email service cannot compete. Apple controlled the gate to the market.

Apple assumed 37signals would do what virtually every other company does: grumble, pay the toll, and call it the cost of doing business. But DHH and Jason Fried had spent decades building a company with massive margins and zero investor pressure. They had the financial independence to say no and mean it. DHH said he would rather burn down millions of dollars than pay what he called a gangster shakedown. What followed was a two-week public skirmish that caught Apple completely off guard.

In the end, Apple essentially rewrote its rules to fit an exemption around Hey. The episode also pushed DHH to explore the world beyond Apple's walled garden. He built his own Linux distribution, now used by tens of thousands of people, discovered mechanical keyboards, Hyperland, and Arch Linux. He went from being a 20-year Mac superfan who literally starred in an Apple ad to a Framework desktop running a custom Linux setup. Sometimes the biggest creative breakthroughs come from having someone try to lock you out.