This summer, I read “Founders at Work: Stories of Startups’ Early Days” by Jessica Livingston, founding partner of seed-stage venture capital firm Y Combinator. This book is a collection of interviews, so summarizing is a bit difficult. But I will mention a few stories that resonated most with me and some overarching lessons I learned from all interviewees.
Interviewer Jessica Livingston transcribes a series of interviews with founders of high-tech startups, mainly those that came into inception during the first Internet bubble. Therefore, Livingston’s own background in VC allows her to dig deep into business matters during her questioning, which I really appreciated, as she always seemed to ask the right questions at the right time. She chronicles the reflections of founders at companies such as Adobe, Apple, Craigslist, Firefox, PayPal, TiVo, Yahoo! and more.
Yahoo! In particular, had a very interesting story to me. Originally created as a collection of links to research papers created by Stanford students, it soon became a phenomenon for engineers throughout the country, as they would ask founders Jerry and Dave to add other relevant research papers. In the interview with Tim Brady, the first non-founding employee and “director of production,” he explains that the founders “had been doing it for themselves” as they were writing their “Ph.D. theses” and wanted to “keep track of all the technical papers that they would have to reference” Soon enough, they added new categories for other topics they were interested in, and Yahoo expanded immensely.
Tim Brady, getting his MBA at Harvard, recognized the momentum they had and dropped out to make a business plan and pitch it to VCs. They received $1 million from Sequoia, which was a lot of money at the time, and the employees at Sequoia helped find temporary management for Yahoo! while they searched 6 months for a CEO.
The search for employees was tough, as the internet was a brand new space and thus it was hard to convince people to join. Additionally, it required a lot of time commitment, having to work numerous hours with the possibility that the website could never even take off.
However, as we all know, Yahoo! enjoyed much popularity, as it was the first of its kind and went public about a year after getting funding. Although there were many tempting offers to acquire Yahoo!, it was clear that the founders had utter faith in the company and did not want to sell.
During his time at Yahoo!, Tim Brady explains that there was always a nervous tension that Stanford would claim ownership of Yahoo! since it was created on their servers, but instead, Stanford just said to get off their servers since it was bogging everything down.
Brady also explains that “it was a task just staying on the wave that was the Internet,” and he was juggling new responsibilities every day, balancing between the speed and the look & feel
of the website, all under so much uncertainty in where the company would go. One of the biggest pitfalls of Yahoo!, he claims, is that they missed out on Hotmail. After having dinner with the founders, Jerry and Dave thought it wouldn’t catch on and declined, but once they realized their loss, they found the second best option, Rocketmail. This was very shocking to me,as I wonder why Yahoo! seemed to be a company of such risk yet didn’t want to get involved with Hotmail and later realized their mistake and tried the next alternative.
Another thing that stood out to me was that Yahoo! had a competitor search engine called Excite, but they would redirect searches to there so customers knew Yahoo! wanted them to find their data, even if they didn’t make money off of it. This really shows me that the founders and employees ofYahoo! truly wanted the best for their consumers and did not care about competitors as they knew they were first and still had the advantage, so they may as well help customers find their answers.
What this all comes down to, as Brady explains, is the fact that “the people that started it were awesome…not just in effort or handling the responsibility they were given, but just good people, doing it for the right reasons. You could see it in the product and the way we acted” (139).
Within this one story, there are so many lessons to be learned, and these were also echoed in all the other stories throughout the book. With all the founding stories, the companies all had a team of founders, rather than an individual. Some started with a clear idea and stuck with it, but more often, as with PayPal and Tivo, the final product was much different than the original plan. Additionally, technical skills were majorly varied and the thing that was most necessary was persistence. Another thing I found interesting was that many interviewees felt they were so off and on, having some moments feeling like they could do it all and take over the world, and other times when they thought there was no way their idea would take off.
It also was interesting to see how driven yet down-to-earth these successful founders seemed to be. Additionally, I really enjoyed this book because it gave insights into so many different fields of operating a business: pricing strategies, business development, technical support, hiring decisions, venture capital, business partners, competitors, customer service, market trends, and more. So, if you are interested in entrepreneurship or tech startups, this book would be a great start to get a feel for the ups and downs of a startup.
Every startup is different, but through hard work, fast thinking, relationship building/networking, and a little bit of risk and luck, the opportunity is endless. Overall, I would highly recommend reading this book if you appreciate hearing the candid, upfront, and descriptive answers of founders who made a large impact on the technologies we use today.