Book Review – Founders at Work (Part 1)

One of my favorite startup books is “Founders at Work” by Jessica Livingston, wife of Paul Graham. Each chapter is a story of a famous startup and a tell-all about those startup stories.

My co-founder, James Malcolm, gave me this book in our first year at AccelerEyes. I learned many great lessons from these stories. Today I’m sharing notes I took from the first 10 stories in the book as Part 1 (more to come tomorrow):

Max Levchin, Cofounder of Paypal

Nearly stopped after disagreements associated with a merger with X.com (over a Windows vs Linux argument)
Focus on fraud was a big reason why they were successful
The adapted the technology to the market

Sabeer Bhatia, Cofounder of Hotmail

Never became profitable before acquisition
Huge problems with DFJ over “right of first refusal” terms
The origin of viral marketing is attributed to Hotmail’s practice of appending advertising to outgoing mail from their users

Steve Wozniak, Cofounder of Apple

Gave away a lot of his fortune by falling out with Steve Jobs
Example of a perfectionist designer
Division of labor so that everyone used competitive advantage

Joe Kraus, Cofounder of Excite

Key strategic collaboration with Netscape
Started with the desire to invent something new
Lesson on recruiting: Don’t give up too easily if you really want somebody

Dan Bricklin, Cofounder of Software Arts

Built the killer app for PCs, “VisiCalc”
Strategic collaboration with Apple
Killed by horrible legal dispute with a distributor, just as Lotus 1-2-3 hit the market
Simple idea, great positioning

Mitchell Kapor, Cofounder of Lotus Development

Left VisiCalc to start Lotus
Probably violated his non-compete agreement
Interesting story of standing up to investors

Ray Ozzie, Founder of Iris Associates Groove Networks

Anti-MVP Philosophy
Prefers a 10-year focus, needing lots of money to build and not launching it until it is ready
Acquired by Microsoft

Evan Williams, Cofounder of Pyra Labs (Blogger.com)

Had a really tough time figuring out how to make money on Blogger
Lost everyone in the company during tough times and turned it around
Acquired by Google
Lessons Learned: 1) Simplicity is powerful, 2) Money follows impact

Tim Brady, First Non-Founding Employee of Yahoo

Left Harvard MBA to join (but still graduated)
Two Yahoo founders were EE graduate students at Stanford
Product marketing is emphasized
Need to “feel” bigger than a startup to the outside world
Need to bring in real CEO talent at some point

Mike Lazaridis, Cofounder of Research in Motion

Founded many years before successful
Positioned near University of Waterloo
Landed $600k early on that made it worthwhile

What are your favorite famous startup stories?

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