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March 07, 2007

Founders at Work

GUY_8597.jpg

This is a picture of my copy of Founders at Work: Stories of Startups’ Early Days. It has broken my record for the “book with most stickies.” My system is that the stickies on the top edge are ideas for my next book, and the ones on the side are ideas for this blog.

As you can see, it’s a gold mine for great stories about entrepreneurship. Here is a list of some of my favorites. The major lesson: Entrepreneurship is all about tactics, hootspah, not knowing that things are not done “this way,” and making do with not enough money. You’ll LOL at points and wonder if a better title would not have been Flounders at Work.

  1. Sabeer Bhatia (Hotmail) on how he decided whether to tell venture capitalists the real idea he wanted to get funded. “If they passed the litmus test of not rejecting us for the wrong reasons and said, ‘OK, we don’t mind that you’re young, we don’t mind that you don’t have management experience, only when they would start poking holes in the actual idea would we share the Hotmail idea with them.”

  2. Woz (Apple). “All the best things I did at Apple came from (a) not having money, and (b) not having done it before, ever.”

  3. Mitch Kapor (Lotus Development) on how much money he asked for from Sevin-Rosen. “I think I said probably $2 to $3 million. We had nothing. We hand an early-stage under-development spreadsheet, and me and Jon Sachs. So that was the biggest number I felt I could ask for without being totally absurd.”

  4. Evan Williams (Blogger.com) on how he raised money to buy more servers. “We posted it on our website, and it said, ‘Hey, we know Blogger is really slow. It’s because we need more hardware. We don’t have the money to buy it, so give us money, and we will buy more hardware and we’ll make Blogger faster.’”

  5. Tim Brady (Yahoo!). “The funniest thing I can remember was when there was a huge storm in May of ‘95, and the power grid went down for a few days. We had to go rent a power generator and take turns filling it with diesel fuel for 4 days. 24/7. We were laughing, ‘How many pages to the gallon today?’”

  6. Mike Lazaridis (Research in Motion) on the importance of recruiting students. “’…What’s important to me are the signs on the back of the building.’ Of course, everyone recoiled from that. I explained to them, ‘I don’t really care if anyone else knows where the building is. All I want is the students to know where the building is.’”

  7. Mike Ramsay (Tivo): “I remember one weekend, we took the entire company, what was about 60 people at the time, and we divvied them up and went to all the Fry’s stores in the Bay Area, because they were selling at Fry’s. We set up demo stations and the employees were giving demos. It was great because almost everybody had no experience of what it’s really like to sell in a retail store.”

  8. Paul Graham (Viaweb): “Neither of us knew how to write Windows software, and we didn’t want to learn. It seemed like this huge steaming turd that was best avoided. So the main thing we thought when we first had the idea of doing web-based applications was, ‘Thank God we don’t have to write software on Windows.’”

    On raising money: “The advice I would give is to avoid it. I would say spend as little as you can because every dollar of the investors’ money you get will be taken out of your ass…”

  9. Catarina Fake (Flickr): “So Flickr started off as a feature. It wasn’t really a product. It was kind of IM in which you could drag and drop photos onto people’s desktops and show them what you were looking at.”

  10. Brewster Kahle (Thinking Machines): “The blessing of Thinking Machines and the curse of Thinking Machines was that it had a lot of money. If you have a lot of money, then you can be detached from people that are going to pay you in the future.”

  11. Founders.jpg
  12. Chuck Geshke (Adobe) on the reaction of the spouses of Xerox execs to a demonstration of PARC technology in 1977: “They loved this stuff. They sat down and played with the mouse, they changed a few things on the screen, they hit the print button and it looked the same on paper as it did on the screen. They said, ‘Wow, this is really cool. This would really change an office if it had this technology.’”

    [This is why you should always listen to your wife. And if you’re a woman, you should never listen to your husband.]

  13. Ann Winblad (Open Systems). “So I get in front of these 60 or 70 guys and these guys are probably all in their 50s and I’m in my 20s, and we had a ‘blue light special,’ where we said, ‘If you give me a check today for $10,000, you can have unlimited rights to one of our modules.’ …I went home with, I think, like 12 or 15 of these $10,000 checks in my purse.”

  14. James Hong (Hot or Not) on his first beta site. “My dad was the first person that ever saw Hot or Not besides Jim and me, and he got addicted to it! Here’s my dad, a 60-year-old retired Chinese guy who, as my father, is supposed to be asexual, and he’s saying, ‘She’s hot. This one’s not hot at all.’”

  15. On using his parents to moderate the pictures: “I originally had my parents moderating since they were retired, and after a few days I asked my dad how it was going. He said, ‘Oh, it’s really interesting. Mom saw a picture of a guy and a girl and another girl and they were doing…’ So I told Jim, ‘Dude, my parents can’t do this any more. They’re looking at porn all day.’”

    On his newfound dating success with hot women: “All of a sudden Hot or Not happened, and I was starting to date all these attractive women. I got a taste of it, and I realized that looks don’t make up for a good personality. Many of these girls were annoying. They were fun to hang out with, but I couldn’t have a conversation with them.”

    [IMHO, James is the funniest person in the book.]

  16. James Currier (Tickle). “When we started the company, we wanted to change the world, and we had all these tests on the site to help people with their lives. We had the anxiety test, the parenting, relationship, and communications tests. And no one came. …’Let’s do a test for what kind of breed of dog you are.’ …We put it online and 8 days later we had a million people trying to enter our site.”

  17. Mena Trott (Six Apart) on early meetings with the current CEO of the company, Barak Berkowitz. “Barak said, ‘That’s great for a niche or personal lifestyle business, but we’re not interested in investing in that.’ At first we thought, ‘Who is this asshole? Why is he saying that to us?’”

These are just a few nuggets. The whole mine is what you should get.


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Comments

Thanks for this informations. yararli bilgiler icin cok tesekkurler. (escuse me my english is bad.)

Hmmmm, it's also enlightening (and a relief for some) that a few started out saying "right, let's just start a company" but with no initial thoughts on direction, let alone a first-draft product idea.

It’s very good article. Great site with very good look and perfect information.

Thanks Guy, wonderful recommendation. Keen to check it out. Some of those stories were hilarious, but also showed that pushing this thing (your idea etc.) is well worth it. It's amazing how many people give up so early – and it's amazing how, if you push, you will eventually get a chance.
I really enjoyed the Yahoo story, because I wonder if at the time they were laughing ALL the time or only SOME of the time – and how nervous they actually were at the whole thing. I can think of times when I am nervous about my business, yet enjoying it at the same time... sigh... still such a long way to go! But the journey is worth it!

chutzpah

The thing I find most interesting about Guy's post here is not the entrepreneurial aspects, but his "blog story" tagging system. We have just recently come to the realization that "blogging on the fly" did not fit in with the rest of our paying-job lives and the time we were putting into our anchor site. "Current news" regurgitation, which is a pretty speedy blog method, does not quite fit for us,
You did it without even knowing it. It is so fun to run into someone on linkedin or other system and see where they are now and what they have accomplished. the pleasure in knowing that in some small way you helped make them a (hopefully) better person, or more creative, or probably more confident in their abilities.
wow powerleveling lord of the rings power leveling maple story power leveling
wow power leveling

this book was incredibly dense with practical advice from founders. For anyone who wants the "Cliff's Notes" I wrote up a summary post each day for the month of May giving the synopsis of each founder's story along with our perspective having bootstrapped our own startup over the past year-> http://www.grid7.com/founders-at-work-digest/

sean

I read the book from front to back.

Excellent! Highly recommended.

@Aristus: "Geeks + Sunlight"

I'm sure with the cost savings they could afford some protective coverings, like the suits astronauts use for their spacewalks...

This is one of my favorite quotes (Marimba section of book, page 157).

Another story I remember from our first round of funding was when they gave us the checks – the lawyers were there, Kleiner was there, and I said, “Oh great, now I can buy that espresso machine!” and they all jumped me and said, “No, you’re not going to buy an espresso machine with this money. This is to start the company.”

And it became a sticking point. We were very frugal and we didn’t spend money on frilles, but after the IPO there was a really bad time for Marimba when it was very difficult to hire people, and all the early people that had been there 3 to 4 years were starting to leave. Morale was very low, and so I went to the CFO and said, “Look, I want to buy an espresso machine.” And he said, “No, we can’t do that, it’s too expensive.”

A few weeks later, when another senior engineer quit, I said, “Screw it, let’s go buy an espresso machine.” So Jonathan and I went online and bought this super-duper Italian, fully automatic, $15,000 espresso machine on his credit card and submitted the expense form. The CFO almost had a baby. It was unbelievable.

This was a beautiful piece of work, and they came and installed the espresso machine and it was the best money ever spent. Every morning, people would meet and crowd around it. This thing was just it, the bee’s knees, people loved it, they couldn’t stop talking about it. A month later, the CFO came and said, “I’m sorry, we should have done this years ago.” And it tells you something about where you spend your money and what you spend your money on. It’s not just business-related expenses. You also have to create an environment that you like so that people are happy and feel they are valued.

The image is intriguing.... but the real sales tool here is your recommendation and that of others. You effectively answer "why" we need to have this book. Great job!

When we initiated our website last year, we knew that keeping it fresh might actually be more difficult than the large amount of work which went into building it. Because our content - Hollywood movie history - lends itself well to the short-story blog format, we figured that using a blog for the "current" content might be a good way to go. The thing I find most interesting about Guy's post here is not the entrepreneurial aspects, but his "blog story" tagging system. We have just recently come to the realization that "blogging on the fly" did not fit in with the rest of our paying-job lives and the time we were putting into our anchor site. "Current news" regurgitation, which is a pretty speedy blog method, does not quite fit for us
. And so we have begun our own "virtual and actual" desk-drawer system for collecting blog ideas, akin to Guy's post-its. We're still learning, so it was positively reinforcing to see that someone of Guy's broad interests and publishing skills also needs something to keep the chaos of good ideas in order!

correction: Max - paypal... sorry Max!!

I just started reading this - great! The first two chapters on Max Levchin (ebay) and Sabeer Bhatia (hotmail) are insightful. Woz's story, as told in his own words, is an ode to an egomaniac. He's so full of himself, which is an amazing contrast to some of the other folks profiled here.

Thanks for sharing this book - while I can't identify with the success of these folks, I do intimately recognize my own pain as a start-up entrepreneur.

It's "Chutzpah" not "hootspah". It's Yiddish not Scottish.


Guy,

You should see my copy of your book! I've routinely quoted your text during lectures, and have told many new entreprenuers to read your book then keep it on their desk...

I'm glad you are doing the same...

keep up the good work!
-amish

When we initiated our website last year, we knew that keeping it fresh might actually be more difficult than the large amount of work which went into building it. Because our content - Hollywood movie history - lends itself well to the short-story blog format, we figured that using a blog for the "current" content might be a good way to go. The thing I find most interesting about Guy's post here is not the entrepreneurial aspects, but his "blog story" tagging system. We have just recently come to the realization that "blogging on the fly" did not fit in with the rest of our paying-job lives and the time we were putting into our anchor site. "Current news" regurgitation, which is a pretty speedy blog method, does not quite fit for us. And so we have begun our own "virtual and actual" desk-drawer system for collecting blog ideas, akin to Guy's post-its. We're still learning, so it was positively reinforcing to see that someone of Guy's broad interests and publishing skills also needs something to keep the chaos of good ideas in order!

**********

Tony,

One of hte key skills of a blogger is knowing what to steal!

Guy

I also saw "Forbes Greatest Business Stories of All Time" when buying "100 Great Businesses and the Minds Behind Them" - it looked pretty good too.

Inspirational books like these 3, James Dyson's "Against the Odds: An Autobiography" and Guy's many books are important reads when you're involved in a Start-Up...they remind you that you only win by never giving up.

For those looking for other books along the same lines as "Founders At Work", check out "100 Great Businesses and the Minds Behind Them" (2006). I highly recommend the audio book version. It's both entertaining and insightful. Enjoy.

RE: Same sex partners-- the "spouse" test works for anyone in a relationship where the significant other isn't in the same line of work. Or even working on the same stuff in general. I like how Miyamoto put it in his keynote the other day: the "Wife-o-meter"

Back in my filmmaking days I read an interesting semi-formal study done by John Boorman (director of "Deliverance" among other fine films.. "Zardoz" ;)
He asked his peers what kind of movie they would make with unlimited money, and any cast they could choose, living or dead. Nearly every single one, over 90% anyway, said they would freeze up. They couldn't do it. They said you can't work without those pressures. Funny how creative juices work that way, isn't it?

As always, a cool post by Guy. Will most certainly read "Founders at Work"...sounds interesting.

I like this post and will buy the book once I get the chance.

I choose this as the post of the day!

http://postawards.blogspot.com/

Great post ... off to Amazon to put it on my reading list. Thanks!

I feel the same way about James Hong's interview. I spent some time with him at SFBeta and I told him that his interview was the most raw. Initially he wasn’t sure if I had complemented or criticized him, but after a bit of explanation he said “thanks.”

James is a great guy. Jessica's book is fantastic.

An amazing book. I worry that Guy broke it before I had chance to use the info in it to my advantage :-)

It definitely sets the bar very high for anyone in the midst of writing another best-selling book. (I can't think of anyone who's doing that at the moment ;-) )

btw...there was a John Scull at Apple, wasn't there?

***********

There was a John Scull at Apple. He was "Mr. Desktop Publishing." The person who commented about the book losing credibility is actually wrong. Jessica is right: It was John Scull, not John Sculley, who did the dtp evangelism.

Guy

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