Founders at Work summary

Another commonality among many early startups was that their ideas weren’t always so well-received, at least not initially. Innovative ideas can seem confusing or too tricky to understand for people, which is problematic if your idea needs funding to develop.

This was the problem for Steve Perlman and his WebTV idea. In 1995, Perlman was already a respected figure in Silicon Valley, having helped Apple develop the first Mac with a color display. Yet Perlman had difficulty selling his idea for interactive TVs that involved more than just changing channels.

Not all startups began with a great idea. Sometimes they didn’t have any idea at all!

This was certainly the case for Joe Kraus, co-founder of Excite, an early web search tool. In 1993, Kraus teamed up with five friends from Stanford University, and they proved that sometimes having an idea isn’t as important as having a good team.

The idea for Hotmail came when the founders were annoyed at not being able to access their email outside of the office firewall. Indeed, many startups began as solutions to personal problems, until the founders realized that millions of other people could also benefit from their idea.

The most famous example may be Yahoo, which started out as a collection of online footnotes in the form of web links for all the references being made in the PhD thesis papers of two Stanford grad students, Jerry Yang and David Filo. Quickly, the site grew, with new categories and links being added based on suggestions by enthusiastic fans.

Oftentimes, the best solution to a problem isn’t going to be some complex tool that comes with a 500-page user manual. Like Joshua Schachter using descriptive tags to help organize his bookmarks, the best solution is often simple and easy to use.

Simplicity has always been at the heart of Apple, even in its earliest days when engineer Steve Wozniak was working in his apartment, putting together the first Apple computers.

As Philip Greenspun found out, venture capital often comes with strings attached, whether it’s the addition of investor-approved executives or handing over shares in the company or a percentage of the profits. So, if you’re launching a startup and want to stay in control of your business, many founders recommend that you reduce costs or find a way to avoid bringing in new investors.

Joel Spolsky knew about Greenspun’s dilemma with investors, and he founded Fog Creek Software with the aim of following ArsDigita’s lead while avoiding their mistakes.

Of all the advice given by the founders with whom the author spoke, one of the most repeated was how important it is for entrepreneurs to listen to their customers. With this in mind, the emphasis should be on creating something of real value to others.

Certainly, this was what Paul Graham, of Viaweb and Y Combinator, advises. In fact, “Make something people want,” was the phrase printed on Y Combinator t-shirts. As Graham sees it, the very basis of a startup should be about creating a product or service that makes other people happy and then converting that happiness into money.

Sometimes the stars align, and your product comes out at just the right time to compliment all the other things that are going on in the zeitgeist. Certainly, this was the fortunate case for photo sharing software Flickr.

Caterina Fake and her husband Stuart Butterfield didn’t plan on this timing, as Flickr is another case of a successful product not being the startup’s original idea. In 2002, Fake and Butterfield began working on Game Neverending, a videogame partly inspired by the popular pet games like Tamagotchi, where a user takes care of a virtual pet and gives it toys while trading items with other users.