Founders at Work: Stories of Startups’ Early Days
Oops, I got sidetracked. I’d been talking about startups, and then I got distracted by the “ooh shiny” of speech recognition and ACM problems. I’m not actually done with speech recognition quite yet, but this book was in my queue first. Yeah, no more procrastinating for me! It doesn’t have anything to do with the fact that the book is due back at the library in a few hours! No sirree Bob!
Founders at Work is a collection of thirty-two interviews with the founders of successful technology companies. For anyone interested in tech, tech history, or behind-the-scenes glimpses of startup life, the book offers hundreds of pages of insight, trivia, lessons learned, and advice.
A number of things stand out about the stories, common threads shared between stories. One is that the majority of the companies took a very roundabout path towards success. Many companies started with a business plan that got thrown out at the first available opportunity. Many others started with no real business plan at all. The photo-sharing site Flickr was originally created by Ludicorp to be part of an online game, and didn’t appear until two years after Ludicorp itself was started. PayPal started doing cryptography software for Palm Pilots. They did a website for one of their products as an afterthought; that website quickly defined the company. Pyra Labs, creators of Blogger, was started by friends before they had any product ideas. They eventually focused on building an ambitious collaboration tool called Pyra, and kept each other updated with a dirt-simple blogging system. In retrospect, of course, it’s obvious: it was that blogging system, not Pyra, that solved a real problem in a useful way. Quite a few other products started off with one or two people scratching a personal itch. Bloglines, del.icio.us, Firefox, and Yahoo all started out as humble tools meant for nobody but their creators.
Only a few — WebTV, Software Arts, Research In Motion, Shareholder.com, plus maybe Excite and Six Apart — became successful by the “straight-and-narrow” approach. And of those, note the most are (or were) hardware companies in some form or another. Mike Lazaridis, for example, started RIM when he was in his senior year of college, and dropped his coursework when he was just a month away from graduating!
WebTV was, in some ways, the most conventional story, or at least the one that most closely matches the prototypical Silicon Valley startup mythos. A hacker (Steve Perlman) is messing around and comes up with a cool hack — high-res computer graphics on a TV! Steve shows a friend, they start a company, get funding, and get acquired by Microsoft two years later for hundreds of millions of dollars.
TiVo straddles the fence a bit. They started off with a grandiose business plan involving home networks, servers, and backups. Mike Ramsay, one of the co-founders, called it “flamboyant.” Before long they realized that their original vision was too far-reaching, and scaled their scope down a bit. Wisely, they focused on doing one thing, DVR, and doing it well.
One other thing about TiVo is how it was started. Like several other companies, including Marimba, TiVo was originally just two guys, Mike Ramsay and Jim Barton, with no concrete ideas. They just had a solid belief in each other and themselves. In Mike’s own words, “It would be kind of fun to work together on some ideas, because we come at it from different angles. Maybe we’ll come up with something. Maybe we could do a company.”
Other interesting bits from the book, in no particular order:
- Thanks to Glenn Kelman‘s talk, I guessed correctly that Sabeer Bhatia, co-founder of Hotmail, went to Stanford! Though he was there for his M.S., not a B.S. Anyways, here’s Bhatia’s account of his initial negotiations with Microsoft: “They gave a presentation about how much they liked the company and this and that, and they said they wanted to buy us and placed an offer of $160 million. I knew that that was the opening shot and I said “Thank you very much for making an offer. We really, really like your company and like the fact that you like us so much. We’ll go back to our board and discuss this and get back to you.”” Sounds mighty familiar, after hearing Glenn’s talk!
- According to Steve Wozniak, little real work on the early Apple computers got done in the famous garage. Engineering work happened in Woz’s cubicle at HP and his Cupertino apartment, not the garage.
- Lesson learned from Excite: “Hire slowly and carefully,” and be “cheap, cheap, cheap.”
- Yahoo started taking off when the original co-founders, Jerry Yang and David Filo, were graduate students at Stanford. Quoth Tim Brady, Yahoo’s first non-founding employee: “… And all of a sudden both of them went from doing their graduate work to adding websites to their list for 8 hours a day. As chance would have it, their thesis advisor was on sabbatical, so there was really no one looking after them, so it all worked. Had their advisor been there, it might not have happened.”
- Marimba, 1999. Post IPO, morale is low, people are leaving. One of the co-founders, Arthur van Hoff, wants to buy an espresso machine. “No,” he’s told, that’s wasting company money. Eventually, another guy quits, and van Hoff gets fed up. He and a friend buy the machine with their own money. The CFO, when he learned of this fifteen-thousand dollar espresso machine bought against his wishes, “almost had a baby.” Needless to say, a passing month proved van Hoff right.
- Paul Buchheit, who created the first prototype of Gmail, has an interesting thought experiment: How much would it take to get you to play Russian roulette if the gun had a billion barrels? “A lot of people […] they’d say “I wouldn’t do it at any price.” But, of course, we do that every day. They drive to work in cars to earn money and they are taking risks all the time, but they don’t like to acknowledge that they are taking risks. They want to pretend that everything is risk-free.”