Founders at Work.pdf

Evan Williams 119
Livingston: And your financial future is contingent on them getting acquired or
going public.
Williams: Right. After two years of pouring our hearts and souls into this, it
seemed like a crappy option. Fortunately it didn’t work out, though. There was
another company in New York that was a startup but that had some funding we
talked about merging with. And the group that was funding them actually gave
us a bridge investment. They gave us $50,000 while we tried to figure it out.
But that didn’t seem like a good deal either. They wanted to do it, but we
decided not to. (That company went away fairly quickly.)
Livingston: Then you ran into Dan Bricklin.
Williams: Yes. So this is December or January of 2001 and the second potential
acquisition hadn’t worked out, so basically we got to the point where we sat
everyone down, and I said, “OK, everyone is laid off as of today, including me.”
We had warned them a few weeks earlier that we didn’t have money in the bank
to meet payroll. Obviously when you are in that state, tensions rise a lot and
morale wasn’t good and relationships with my cofounder weren’t good. I said, “I
am going to stick around because I took a half of a million dollars of other
people’s money. And we have all of these users.” (The service was still running.)
This whole time, this service is growing. In terms of users, we were getting
more and more successful. Which also caused other problems in that we
needed more hardware and we had all of these scaling problems. In January,
right around the time that the rest of the company was being laid off, we did
what we called the Server Fund Drive. We posted it on our website and it said,
“Hey, we know Blogger is really slow. It’s because we need more hardware. We
don’t have the money to buy it. So give us money and we will buy more hardware
and we’ll make Blogger faster.” Surprisingly, it worked really well. We had
a lot of goodwill and people liked us and we had a good brand within our users
because we were very personable and used the blog and we were just honest.
We just said, “We can’t buy hardware, but we have plans and we are not going
to go away if we can get past this hump, so send us some money.” So people
sent us money.
Livingston: What was the biggest check you got?
Williams: We used PayPal, and I think we got bigger amounts from fewer
people than we expected. We had several thousand users. 100 people or so gave
larger amounts, and I am not sure what the absolute biggest was. We suggested
$10, $20. Several people gave us $100, and then a company, CMP, which published
Web Techniques magazine, offered to buy us a server outright, up to
$4,000 worth. So between the users and them, we had around $17,000 to spend
on servers, which is more than we had ever spent on servers, so it was a
bonanza. It worked better than we had ever expected.
We told people we were only going to buy hardware, so I wasn’t going to use
that to pay people. I just spent that money on hardware, but it got the site back
up and running well and meanwhile we laid everybody off. Meg and I weren’t
getting along well at all and she decided to leave and everybody else decided to
leave too.