Founders at Work: Stories of Startups' Early Days

by Jessica Livingston

sprinters reach their highest speed right out of the blocks, and spend the rest of the race slowing down. The winners slow down the least.

Business is broken the same way that car was. The effort that goes into looking productive is not merely wasted, but actually makes organizations less productive.

It looks weird, but it goes fast.

What surprised me most was how unsure the founders seemed to be that they were actually onto something big. Some of these companies got started almost by accident.

They all were determined to build things that worked. In fact, I'd say determination is the single most important quality in a startup founder.

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Starting a startup is a process of trial and error. What guided the founders through this process was their empathy for the users. They never lost sight of making things that people would want.

Successful startup founders typically get rich from the process, but the ones I interviewed weren't in it just for the money. They had a lot of pride in craftsmanship. And they wanted to change the world.

"Hey, these guys were once just like me. Maybe I could do it too."

Even though it's not rocket science to reverse-engineer this stuff, no one else had done it before me,

It's really cool, it's mathematically complex, it's very secure, but no one really needed it.

But that actually is what moved the needle, because it was so weird and so innovative. The geek crowd was like, "Wow. This is the future. We want to go to the future. Take its there."

I'll have to go and commit ritual suicide to avoid any sort of embarrassment.

for the next 12 months just iterated like crazy on the website version of the product,

I think there's a very strong power of default where, to them, certain behavior to solve a particular problem is well understood. There are people that make careers out of risk management in big banks. They know that what you do is this and you don't do that.

The default of how you do these things is very powerful, if you've been in the industry for a long time. So we were sort of beneficiaries of our naivete. We thought, "We don't know how to do this; let's just invent it."

I have this IQ bias-anybody really smart, I will figure out a way to deal with.

There are all sorts of tactical decisions that we made here and there that played out to be wrong, but it's not like I could have predicted it.

I think the hallmark of a really good entrepreneur is that you're not really going to build one specific company. The goal-at least the way I think about entrepreneurship-is you realize one day that you can't really work for anyone else. You have to start your own thing. It almost doesn't matter what that thing is. We had six different business plan changes, and then the last one was PayPal.

"I'm single and don't have a family. Why don't you quit and start working on this and I'll give you half of my salary?"

we had a term sheet for a much higher valuation. But when we would talk to any other VC, the other VC would call the guys at DFJ and they'd say, "No, don't invest in them."

And the next thing we know, he claims that this idea was his.

That's one thing about the Internet: if you have something that's good, it spreads by word of mouth and like wildfire. You just have to hire a small PR firm and do it.

We didn't have any money and Tim was at the Olympics in Atlanta and he refused to fund us because we wanted a slightly higher valuation.

at that time we knew we had to not share too much information with DFJ as well.

"I really haven't thought of an acquisition, but at the right price I can think of anything."

Once you've got a lead in terms of a subscriber base, that is unassailable. It can't be replicated easily. So

Once you have tasted this kind of success, once you've tasted that it works, that you've got subscribers who are telling you it's good, you know you are going to get there.

I think I knew that Hotmail was going to become successful one day. I was just shocked that all of that happened in a span of 20 months from start to finish.

there are thousands of such ideas under our noses even as we speak. Why things happen, I just don't know.

you have got to own the customer.

make sure you write a business plan because it will crystallize your thoughts to communicate your ideas with somebody else.

Essentially it's a plan that says what the company is going to do, what problem it is going to solve, how big the market is, what the sources of revenue for the company are, what your exit strategy is for your investors, what amount of money is required, how you are going to market it, what kind of people you need, what the technology risks are, marketing risks, execution risks.

don't try to change user behavior dramatically. If you are expecting people to dramatically change the way they do things, it's not going to happen. Try to make it such ...

you've got to own the customer and make sure there is a full loop between your product and that it has the least amount of resistance before you get to your end customer.

There are some things that, even though you go to school for a certain reason and you gain skills, are just natural talents that people have.

Back in high school I told my dad, "I'm going to have a computer someday." And he said that it cost as much as a house-the down payment on a house. And I said, "Well, I'll live in an apartment." But I was going to have a computer someday. So it starts with a huge dedication. You start with a lot of motives and values and who you are going to be in life. You start with those very early-some of mine even go back to elementary school. I decided there that I was going to be a fifth grade teacher, and I stuck to it and was. But some of these things you want so badly in life that, when the door opens, you are going to get there.

but what they did was say, "Let's build a computer. Like all the computers before, it has an instruction that can add 1 to an accumulator, has this many registers, it can move a register to memory, it can add, it can exclusive-or them, it can exclusive-or them with memory."

would design my own, fresh, without knowing how other people do it. That was another thing that made me very good. All the best things that I did at Apple came from (a) not having money, and (b) not having done it before, ever.

Every single thing that we came out with that was really great, I'd never once done that thing in my life.

I didn't learn anything about designing computers in college.

I was super shy, so the only way I could ever get noticed was if I designed great things.

my approach in life was to just use my own knowledge. I know what's going on better if I'm not going through a tool.

"I'll get known by doing good stuff."

"Even if we don't get our money back, at least we'll have a company."

Hewlett-Packard couldn't do a simple project, which was really what was interesting.

Polymorphics technology Sol computer that came next (it was out of our club), had a keyboard and a video display. No computer had done this before that.