In 2007, Drew Houston flew to San Francisco determined to find a co-founder for Dropbox. At the time, it was just him. No backers. No team. On a friend’s advice, he walked into Y Combinator’s offices unsolicited to talk to Paul Graham about finding the right person. It didn’t go well.
“It wasn't a great experience, coming in unannounced,” Houston recently told students in an exclusive Dorm Room Fund interview at MIT. “Getting into Y Combinator is like getting into a great school. So imagine having your two minutes with the dean of admissions and them coming away thinking you’re an asshole. That plane ride back was the worst. No co-founder. Lower chance of getting into YC. I was panicked.”
The good news is, early founders can turn things around. Soon after he thought it was all over, Houston teamed with fellow-MIT alum Arash Ferdowsi and made it into YC. Today, he’s led Dropbox to nearly 200 million users — and the company’s growing faster than ever before. This hasn’t been a piece of cake, but Houston’s rocky start did teach him to forge ahead and throw out assumptions that discourage many would-be founders. Looking back, he recommends six strategies that helped him cut through the fear, drown out the noise, and make it happen.
Apple's had several near-death experiences. As author, investor and now Google advisor Guy Kawasaki puts it, the company must have a guardian angel. And in the mid-1980s, that guardian angel was Aldus PageMaker.
“In the 1980s, we thought we had Macintosh all figured out,” says Kawasaki, who worked on Steve Jobs’ stealth Macintosh task force from 1983 to 1987. “We thought it would be a spreadsheet, database, and word processing machine. We were zero for three. The one bright spot in the entire Macintosh software universe was desktop publishing. Aldus PageMaker invented desktop publishing, and it saved the company.”
Few people know this story, not since the post-iPod era dawned. But it’s a prime example of what Kawasaki has coined the “art of enchantment.” Aldus PageMaker had the ability to enchant customers, so much so that it resuscitated a whole other company — a company that has gone on to make customer enchantment core to its design.
Defined as the ability to put someone under a spell, as if by magic, being enchanting sounds like something you’re either born with or not. But Kawasaki disagrees. In fact, it can be highly tactical, especially when applied to business. He spoke about it at Stanford’s Entrepreneurship Corner, and has even written a book. So, as we enter the holiday season — arguably the season of enchantment — we thought it apt to bring you the tactics that can make or tank your technology, no matter how good it actually is.
Andy Rachleff is President and CEO of Wealthfront, a software-based financial advisor. Prior to Wealthfront, Rachleff co-founded and was general partner of Benchmark Capital. He also teaches courses on technology entrepreneurship at Stanford Graduate School of Business. Follow him on Twitter @arachleff.
“The defining difference between Silicon Valley companies and almost every other industry in the U.S. is the virtually universal practice among tech companies of distributing meaningful equity (usually in the form of stock options) to ordinary employees. Before companies like Fairchild and Hewlett-Packard began the practice fifty years ago, distributing stock options to anyone other than top management was virtually unheard of. But the engineering tradition that spawned Silicon Valley was much more egalitarian than traditional corporate culture.”
— Steven Johnson, The Peer Society
A psychology study at UC Berkeley broke students into groups of three, with one person chosen to be the leader of a project. At some point, the researchers would bring in a plate of four cookies.
"We all know the social norm is not to take the last cookie," says Robert Sutton, management expert at Stanford's School of Engineering. "But the research showed consistently that the person in power would take that fourth cookie. They even tended to eat with their mouths open and leave more crumbs. And this is just in the laboratory. Imagine that you're a CEO and everywhere you go you're empowered, and everyone is kissing your ass. You can start to see why it's so hard to be good."
Made famous by his 2005 book The No Asshole Rule, Sutton has spent hours studying the moves made by technology's top leaders, including Steve Jobs, Andy Grove, and others. More recently, though, he's turned his attention from negative qualities to what the best bosses in the world do and understand. A lot of it has to do with an innate sense of human emotions, but the good news is management can be learned.
In this Stanford Entrepreneurship Corner Talk, he breaks down what it takes to become a great boss — which, as it turns out, makes a much bigger difference than you might think.
Todd Jackson was in a small conference room with a handful of designers, engineers and Mark Zuckerberg. The topic at hand: the Facebook News Feed redesign, intended to declutter the Facebook experience and make it even more engaging. They went over the latest mockups, discussing photo sizes, text density, and the redesigned website navigation. Then they honed in on one seemingly minor point: turning people’s names from blue to black. Jackson, the product manager in the room, knew this was more complicated than one might think.
In fact, Zuckerberg had a simple philosophical stance on the matter — that people’s names should remain bold and blue because people are at the center of Facebook. The people are what all the content pivots around, and they should stand out, he said. Jackson’s team had a different contention: in order to more deeply engage its audience, Facebook needed to evolve to showcase content first.
In this conversation, Jackson had to wear multiple hats. He needed to absorb Zuckerberg’s argument. He needed to advocate for his designers and engineers. And he needed to think through all of the other pieces and people these changes might touch: internal user operations, external news publishers — not to mention the site’s users. This usually boils down to two sides of the same fence: founders or executives pushing for product changes, and the engineers and designers trying to build them.
Such is the plight of the product manager. And Jackson knows better than most. As a PM on Gmail during his time at Google, and on News Feed at Facebook — and now as the CEO of his own, newly-launched Android startup, Cover — he’s worked through tough problems with some of tech’s luminaries. If anyone knows how to balance multiple interests, it’s him.
“When I was a young entrepreneur, board meetings were by far the worst days of my life,” says Jeff Bonforte, the veteran company-builder who just sold his latest, Xobni, to Yahoo. “Board meetings are the height of insecurity for a CEO. Basically it’s a group of people who can both judge you and fire you based on that judgment.”
He’s had his fair share of bad experiences. At his first company, iDrive, he'd find himself every quarter standing in front of the room, sweating bullets, struggling to get through his meticulously-prepared slides. “It was a mess,” he says. “They’d just sit there and tell me how insufficient I was, how I needed to bring in someone more senior, or smarter. Then it just hit me. I don't need this. I don't need people to attack me for four straight hours. I need people who can help me.”
This shift in philosophy has shaped the way Bonforte has handled his board members and meetings ever since. The core of his new strategy: Your success as a CEO is contingent on your board doing their best to help you — so put them to work. Of course, this is easier said than done.
David Friedberg was driving home from his job at Google, stuck in traffic in the pouring rain. On the side of the road, he noticed a bike rental shop for tourists, shuttered early due to the weather. The next day, he saw the same thing, and the next — for a week. “It got to the point where I’m sure the guy who owned the place wasn’t even showing up — no one wants to ride bikes in the rain. And I thought to myself, that’s a pretty crappy business.”
But then he thought about it more. “It occurred to me that whether or not this guy was making money in a given month was based on how many days it rained. That’s actually a huge problem.” Digging a little deeper, Friedberg discovered that upwards of 70% of businesses are affected by the weather every year — a simple stat that gave birth to an idea: an insurance service for companies that would pay out when bad weather was on the way.
At the time, he didn’t know anything about the insurance — or really the weather, for that matter. But he founded the company anyway and called it Weatherbill. Last week, he sold it for $1 billion.
Today, it’s better known as The Climate Corporation, a service used by thousands of farmers across the country to protect their income against nasty weather — and the Valley’s most recent success story. But this victory was hard won. In fact, right before unveiling the company’s rebrand in 2011, Friedberg gave a Stanford Entrepreneurship Corner talk about exactly how hard it was, and what it taught him about entrepreneurship — all before he had glimpse of his eventual happy ending.
Mike Brown's date stared at him in shock as he told her he’d have to cut their evening short after only 30 minutes. She must have assumed the rendezvous had gone terribly wrong, but that wasn't it. Brown — a veteran of both Facebook and Twitter, where he built their corporate development teams — had just gotten a text message from his CEO. It turned out all of the major companies in Silicon Valley were after the hot startup his company was hungry to buy, and his CEO had just made a handshake agreement with its founders. He’d also promised that the acquisition would be done in 48 hours. Now it was up to Brown to make it happen. Fast.
In the end, his company paid up and sprinted to complete what turned out to be an incredibly strategic talent acquisition. The entrepreneurs sold their company with a terrific outcome – a solid financial return, little distraction from business as usual, and good new jobs for the team. But talent acquisitions come in many shapes and sizes. And as more large companies starve for technical star power, the rate of acqui-hires is only accelerating. One might think this would give entrepreneurs more leverage, but that isn’t always the case.
Brown – who, incidentally, ended up marrying that blind date — may be sitting on the other side of the corporate development table, but he’s uniquely qualified to offer advice to founders looking to sell and to help entrepreneurs optimize for M&A success.
"I can't tell you how many times we've met with early-stage companies, and they start by telling us their big vision. They say, 'This is what we're about and what we want to change.' But when we ask them what they actually do, they can’t tell us. If you can’t answer that question, don’t do anything else until you can. Nothing else matters."
This is Brooke Hammerling, unfiltered. Her company Brew Media Relations match-makes young companies with journalists, influencers and anyone else who can help propel them to stardom. Today, her roster includes Wordpress, Charity:Water, Wealthfront, Oracle and About.me — all known for bold, creative communications strategies. She also happened to make the cover of The New York Times’ Sunday business section a few years ago as the poster woman for doing tech PR differently.
When it comes to whether startups need help in this area, she has a somewhat subversive opinion: they don’t. Even while at Brew, she’s helped hash out PR plans for a number of entrepreneurs who can't afford full-time agencies or in-house support. And she’s got a playbook of tactics for those who want to do it on their own.
Ian Langworth started his career as an O’Reilly author and software engineer at Google. Today, he’s the co-founder and CTO of Artillery, bringing console-quality gaming to the web browser.