Founders at Work: Stories of Startups' Early Days

by Jessica Livingston

When you get very, very tired-and I had been up four nights all night long; Steve and I got mononucleosis-your head gets in this real creative state and it thinks of ideas that you'd normally just throw out. I

Every single time I showed the Apple II, before we started the company and even slightly after we started the company-before there was much word around about it, every single person who ever saw it ... The engineers at Hewlett-Packard came to me and said, "That's the best product I've ever seen."

It had all these kinds of things and not one bug ever found.

I was just shaking, I was quivering, and I showed him the game running, and I said, "This game was so easy to write! Look at this, go ahead-change the color of the bricks." This would have taken me a lifetime to do in hardware and I did it in half an hour.

In the years 1980 to '83, when the Apple II was the largest-selling computer in the world, we didn't advertise it once.

Always seek excellence: make your product better than the average person would.

If you say, "I have to have a tool," and you are a prima donna-"I have to have a certain development system"-if you can't figure out a way to test something and get it working, I don't think you're the right type of person to be an entrepreneur.

A lot of times papers got things wrong.

It's like every book I read that I just think, "God, this is not how this person was at all." So I don't really care, I don't try to correct anything.

I didn't seek the success-I wasn't like the entrepreneur who wants it. So the money to me didn't really mean much. Pretty much I gave it all away to charities, to museums, to children's groups, to everything I could. It

"Look, those guys are always going to want you and it's rare that you are going to be in the position in life where you have so little responsibility, except to yourself. So now's the time to do it. Yeah, we don't know anything. We're dumb and we're just coming out of college. But now's the opportunity."

We were so naive we didn't know we could fail, and therefore we almost had to succeed.

The tables were all Formica. I won a fax machine at Office Depot. We stole our chairs from Oracle Corp.

The intentional things were rarely pivotal in those early days, but the being persistent, following-your-nose thing made a big difference.

We liked the fact that he didn't ask us the "how do you make money?" question. We answered honestly, "We don't know because we can't afford a hard drive that's big enough to test." In a kind of Jerry Maguire "you had me at `hello"'

But we would have never, ever survived as a company without having something bonding us other than the pursuit of a business idea.

The hardest part in a startup is that you wake up one morning, and you feel great about the day, and you think, "We're kicking ass." And then you wake up the next morning, and you think "We're dead." And literally nothing's changed. You

It's completely irrational, but it's exactly what you go through. The thing is, you never know.

Even up to the time when Excite was several hundred people and we were the fourth largest website in the world, it didn't feel real. It doesn't feel...

It's just this complete, everyday banging your head against the wall trying to figure out how to convince other people that this thing is the biggest thing in the world.

Microsoft made a buyout offer for Excite in late '95, and even then I had Microsoft's CTO, Nathan Myhrvold, yelling at me, "Search is not a business. People are just going to search a few times and then bookmark what they want to go to."

We fell into the classic problem of how, when a new medium comes out, it adopts the practices, the content, the business mo...

For example, all the television programming in its early days looked like radio. It was literally the same guys reading the radio program on telev...

We were too young to realize that existing companies' biggest problem is legacy. Period.

You felt there was the threat of the larger companies with deep pockets getting into the space? Kraus: Right, and they never did.

(If you are 22 and trying to make these big decisions, it's great to have a very active guy like Vinod helping you out. And I mean active. I was talking to Vinod twice a day easily. He's one of the senior partners at Kleiner Perkins and he's spending multiple hours a day on my business, which you just don't get. But that's Vinod's style.) We decided to bid $3 million.

He said, "We haven't lost. Let's meet with them. Let's show up in their lobby unannounced." We did all this stuff; we called them constantly; we just basically acted like the bidding wasn't over. And made a total pain in the ass of ourselves. It would have been embarrassing if it weren't so serious.

I see way too many people give up in the startup world. They just give up too easily. Recruiting

great people don't look for jobs, great people are sold on jobs.

I love this stuff; the persistence part is the part that I like. It's actually not fun when it's happening, but you know it makes a difference because 99.9 percent of the people give up.

The other thing that surprised me was how well companies can do if you challenge them with these big, crazy goals.

One is hiring slowly and more carefully. Another is be cheap, cheap, cheap.

People who saw it, who needed it, got it. Sorry, no some of the people who needed it got it. You have to be a person who is able to look at a general-purpose tool and be able to think, "How would I use that to solve my problem?" Most people are not that way. They look for a tool that is being used already for something close to their problem and then understand what it is. Many people who saw the spreadsheet with an example, if the example wasn't in their field, they couldn't make the leap. Because they're not programmers in their mind.

But, if you showed it to somebody where it clicked, either because they understood the general-purpose nature and could apply it to their own needs, or you showed them an example, like financial forecasting or something that they did, and they knew the other tools in the world, they got very excited. If you showed it to a computer person who didn't have those needs, they'd say, "That's kind of cool, but what's so special about that? I could just do it in Basic."

"You're competing against the back of the envelope. It's got to be really easy to use."

Oh God, the whole system, the operating system, the screen buffer, the program, and the data that you're running on, fit in 32K. A screenshot of VisiCalc doesn't fit in 32K nowadays.

What I do realize is there are advantages to selling at a peak.

I didn't get much fortune out of it, but, on the other hand, the fame has basically given me a meal ticket ever since, and I learned a lot from it,

that-that's just a way of testing your own understanding of things. By arguing with others about it, that's how you learn.

we came within days, within minutes, of declaring bankruptcy at one point.

I was so convinced that VisiCalc had a lock on the market that I had to convince myself that we were going to do something that wasn't fundamentally a spreadsheet.

In Hollywood, the very successful directors like Steven Spielberg quickly understood that they also needed to be producers and have their own studio in order to retain control.

I was totally unprepared for the magnitude of the success and the rate of growth.

I think business at all costs is just wrong. I think there are certain things that you just don't do, and that acting with integrity and decency in business to me is

just a given.

I like working with entrepreneurs who have a compatible set of values and are inspired by a vision and are passionate about some piece of disruptive technology-who are going to create something that actually has value for people in a way that can be a game changer.

I'm not sure that we were that much smarter than anyone else. But we had the requisite smarts and we were in the right place at the right time.

They just didn't think things through from first principles.

These were supposed to be our investors, they were supposed to be on the same side, but they were highly adversarial and totally willing to take advantage of us.

I don't care that that's the way the world works, it's wrong.