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Founders at Work

Stories of Startups’ Early Days

By Jessica Livingston
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Founders at Work by Jessica Livingston

Founders at Work (2007) is a revealing look at what went on in the early days of over 30 influential US startups. In their own words, the founders of landmark companies such as Hotmail and tell their stories about the many ups and downs and twists and turns it took to make their ideas a reality. They also share the lessons they learned and the insight they’ve gained looking back on the trials and tribulations of those chaotic early days.

Key idea 1 of 9

Many startups, like Paypal and Blogger, didn’t end up with the same idea they started out with.

In talking to the founders of numerous startups, the author found some interesting commonalities between some of the most successful of the past few decades. Among the most obvious is the fact that many big startups ended up with an idea or product very different than the one they started out with.

Take Paypal, for example. You know Paypal as one of the more popular ways to transfer money and make payments online, but co-founder Max Levchin didn’t set out to help people do that.

In the late 1990s, Levchin was working on software for early handheld computer devices like the Palm Pilot. It all started when he created an emulator that generated single-use security passwords, which at the time, people had to buy bulky, expensive devices to do – or even several devices for different passwords and systems. Levchin’s emulator software made all those devices obsolete, putting the technology right into your Palm Pilot.

But the market for this service wasn’t that big around the turn of the millennium, so Levchin thought, what kind of information do people need to keep secure on their devices? The answer was credit card information, which then led to software that let you securely “beam” money from one Palm Pilot to another.

Soon, Levchin and his co-founder Peter Thiel were gaining around 300 users a day, but they maxed out at around 12,000 users. Far more popular was the online money transfer demo on their website. This demo had attracted around 1.5 million users, so it was clear where PayPal’s attention needed to be: web-based money transfers. And once that shift was made, they were soon gaining 20,000 users a day, leading to Ebay eventually purchasing PayPal for $1.5 billion in 2002. is another example of success coming in a different way than expected. Evan Williams and his co-founders started Pyra Labs in 1999 to make project management software. The blog was just one tool with which they were working.

But in working on that tool, they made it super easy for any person, from any computer, to log in, write and instantly publish their work for all to see. It had nothing to do with project management, and Williams nearly went broke in the process, but thanks to his determination and the generous fans who loved the software, ended up a success story. It gained a million users, started generating revenue and was acquired by Google in 2003.

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