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You know, in retrospect I think the big problem with our investors was that we weren't forceful enough with them. I think investors like to be bossed around, like horses. It reassures them when you're in control. But these guys were much older than us and had given us huge sums of their money, so it was hard for us to boss them around.
andrew mentality
Graham: There were always people trying to buy us. There was another one just at the point where we found Fred Egan—a Japanese company that later made an imitation of our software and went on to become a big success in Japan. Rakuten, they were called.
Livingston: They copied you?
Graham: Not very well. It's sort of like if you copied a dog by taking a photograph of a dog and sticking it onto a cardboard cutout. From certain angles it would look like a dog, but if you threw a stick and yelled "fetch" it wouldn't do anything. The Japanese market wasn't as far along then, so in their market, this was pretty advanced. But the entire time, there were always people trying to buy us, of various levels of seriousness.
this is a really funny time capsule given what rakuten is now
It was pretty miserable. Basically, the angel investors played chicken with us. They knew we couldn't get money from anyone else, since we didn't even know for sure if we owned our software. So they proposed to do a cramdown round where they would refinance the company, I believe, at a pre-money valuation of zero—meaning all the common stockholders were completely wiped out. To keep us around, since they kind of needed us to write the software, they were going to give us options. So we called their bluff. We said, "If you do that, we're leaving."
Livingston: You and your cofounders said you were leaving?
Graham: Yeah, all the technical guys. So when it came down to that, they compromised and we ended up doing a funding round at a low, but reasonable, valuation—$12 million, I think. We got bought only a couple months after that round closed. But we had to do the round because we were in debt at that point.
Another advantage of telling the truth is that you don't have to remember what you've said. You don't have to keep any state in your head. It's a purely functional business strategy. (Hackers will get what I mean.)
lmao he's so annoying
Newmark: At the end of '97, we were getting about one million page views a month. At that point, Microsoft Sidewalk—or their PR people—approached me about running banner ads. I had decided to not do them, because they'd slow the site down and they were kind of dumb. Banner ads are, more often than not, kind of dumb. More importantly, I thought about my own values and I was thinking, "Hey, how much money do I need?" I was already doing well as a contractor. So I figured I would just not do that.
At that point, I got the first inkling of what I now call my "moral compass." I better understood it later—particularly since the presidential elections, because then I realized that people were claiming a moral high ground who actually didn't practice what they preached, and it's about time for people of goodwill to reassert their idea of what's right and what's wrong.
<3
We got the newspapers on the Internet during that time. You take it for granted, but all the newspapers are pretty much online now. They control their own distribution. They have their own websites. It doesn't all funnel in through an iTunes. The music guys, I'm not sure why they did this, but they sold their souls. Somebody else controls not only the distribution of their product, but they control the pricing. What do you have if somebody else controls the distribution and the pricing of your product?
You'd think that everybody would want to have our jobs. We've all been handsomely rewarded. The stories are not like, "Hey, we had patrician backgrounds and silver spoons, and we bought our way into this." We just "thought" our way into these industries. The power of thought and math and science and computing, you're given that for free—it's a choice you can make. You take that choice, and it gives you sort of a magic wand to be a captain of an industry that's still fairly young, that's driving the whole world economy. I don't know. This is just a mystery to me. Women running these companies have very rich lives. I don't know.
neil
Greenspun: One big turning point was getting Levi Strauss as a customer. They had acquired a small company that made custom-cut khaki pants, and they wanted a web front end for this new factory that they were building that could take your measurements and sew you a pair of khakis to your specs. They asked around MIT, "Who's really an expert on building this kind of thing?" They came to us and it was a happy coincidence, because they were happy to pay for lots of software and infrastructure and tools and let us keep the rights to it all.
That was one good thing about working for non-technical companies. If you worked for IBM, they make their money by owning technologies, so if you build a technology for them, they want to own it. Whereas publishers or clothing companies, they make their money by having a brand or unique content. I did a lot of work for Hearst Corporation and they don't want to give away the content of Cosmo magazine or their relationship with Fabio, but if you build some Perl scripts for them to do server administration, it doesn't occur to them that that's something that they have to own and prevent other publishers from getting hold of.
So Levi's was a great client and it was a big turning point because it gave us the money to build whatever we needed to build.
For programmers, I had a vision—partly because I had been teaching programmers at MIT—that I didn't like the way that programmer careers turned out. Now that I fly airplanes, I realize that the average programmer is really much less happy in his/her job than the average airplane mechanic, which is pretty sad when you consider that becoming an airplane mechanic is an 18-month trade school education. For $30,000 and a year and a half, you can become an airplane mechanic (even less if you want to work as an apprentice for 3 years and get your FAA certification). You work in a small group, you meet the customer directly. You don't have the alienation from the customer that Karl Marx talked about as being a bad thing about factory work versus craftsmanship—that you never find out if your work really connects with people because you're in a factory and the customer is at the other end of a railroad line.
Airplane mechanics have a direct interaction with the customer. A lot of the jobs require two to three people, so it's kind of social, and I noticed that they're just really happy. Programmers are isolated. They sit in their cubicle; they don't think about the larger picture. To my mind, a programmer is not an engineer, because an engineer is somebody who starts with a social problem that an organization or a society has and says, "OK, here's this problem that we have—how can we solve it?" The engineer comes up with a clever, cost-effective solution to address that problem, builds it, tests it to make sure it solves the problem. That's engineering. If you look at civil engineers, architects, they're all dealing directly with the customer and going through the whole process.
a marx reference in this book ... wow
I wanted them to have a real professional résumé. In the end, the project was a failure because the industry trends moved away from that. People don't want programmers to be professionals; they want programmers to be cheap. They want them to be using inefficient tools like C and Java. They just want to get them in India and pay as little as possible. But I think part of the hostility of industrial managers toward programmers comes from the fact that programmers never had been professionals.
wish he could be more specific about who 'they' is