37Signals is a product company having successful products in the market already.
We are an IT service company whose revenue literally and linearly dependent on the number of hours we work.
So need optimized solution for company and for developers.
PS: You can add employees but foxconn's 920,000 employees generate around ~100 million in profit per year. Google's 26,316 employees generate around 80 times that much profit meaning they are generating ~ 2,800 times the profit per person.
Everyone has chance of improvement and we believe by investing our own time may help individuals to improve themselves.
For e.g. Not every programmer has good writing skills or spoken english skills which is required for communicating with overseas client. We can spend time in improving that.
I am just arguing here to have fruitful discussion. I am just taking the opposite side right now so that we can uncover more points.
The downside is that you are solving the same problems over and over again.
Right now, a 4-day work week sounds nice, but a 2-day work week sounds boring. So there's a balance somewhere, varying for each person and job. But 40 hours is certainly less than people used to spend farming. It used to be "6 days a week, work from sunup to sundown."
To the OP, if the Microsoft article inspired you, you may also want to read this article about Henry Ford moving to a 40-hour work week - http://www.worklessparty.org/timework/ford.htm
Unfortunately, as you mentioned, you run a services company so you are rewarded based on the numbers of hours worked and not directly on productivity.