Founders at Work.pdf

Tim Brady 129
recognized it as well. So they got a lot of calls—the LA Times, AOL, Microsoft—
wanting them to join their companies. Those conversations were, “Why don’t
you come and bring your project. We’ll host it and you can blow it out.” It
started getting them to think about their project as a business, not just a hobby.
Then an article in Newsweek happened—I think it was November of ’94 or
something like that. Those 3 to 4 months were the critical period from going
hobby to full-fledged business.
They were entertaining taking money and had decided, “We don’t want to
sell ourselves. Let’s go for it, why not?” Even though people were more than
happy to give them money, they thought, “We need a business plan to take
around on our VC visits. Even though we can talk to them about it and they
would probably give us money without it, it would be better if we had a business
plan.” I said, “Well that’s good, because I’m taking a couple classes where I
need to produce a business plan. Why don’t you send me your thoughts, and I’ll
put something together.” They sent me their stuff, I wrote a business plan, they
took it around to a couple VCs, and I ended up turning it in for final grades for
a couple classes.
This was fortunate because, as it turns out, by February of ’95, they were
saying, “We need you now; we don’t need you in June when you graduate.” My
reply was, “I’m in school, and my dad paid for it. Are you suggesting I tell my
dad that I’m not going to come away with a degree?” And Jerry was like, “I’m
not telling you to do anything. You don’t have to do anything, but we need you
now.” So I talked to some of my professors, and you can fail a certain number of
classes at HBS throughout your tenure—it’s a pass/fail grading system. I hadn’t
failed any yet, so I could fail three classes and technically graduate. I was taking
five classes, so I turned in my business plan as a final paper for two out of five,
and passed with those.
That was at the end of March ’95, and there were four of us: Jerry; Dave;
Dave’s friend, Donald Lobo; and me. There was a whole lot of enthusiasm, but
not a whole lot of knowledge about what to go do.
Livingston: When you wrote the business plan, the Internet was so new. Do
you remember what your strategy was when you wrote it?
Brady: No one had any idea how big the Internet was, but the model was advertising.
Advertising was well known, so it wasn’t like we were making up advertising.
HotWired, which was the online version of Wired magazine, was online by
that time, and they were selling advertising. So there was a model out there, but
certainly there were no search engines or directories selling advertising. I just
used your basic business plan format, incorporated Jerry’s and Dave’s ideas, and
added a few of my own.
Livingston: So you leave business school early and move out to California. Did
you have an office? What did you first start doing?
Brady: There was a consumer electronics show down in San Jose in March ’95,
so Yahoo’s coming-out party was a booth at this show. The show was mostly
hardware and software companies. There were no other Internet companies