Founders at Work.pdf

Arthur van Hoff 157
van Hoff: Marimba is an unfair case because we were willed on like crazy by
the investors. We really had an unfair opportunity because when we got funding,
the VCs were calling us. They all wanted to invest because they had heard
about us and wanted to find out what we were doing.
So we got a really good first round of funding—$4 million from Kleiner
Perkins. Though I thought they wired the money in these situations, they actually
gave us a check. So we had two checks—from the Kleiner fund and the Java
fund—and Sami goes, “Let’s go to Kinko’s and make copies!” So he takes the
checks to Kinko’s and comes back with the photocopies, and he forgot to take
the checks out of the copy machine! Luckily they were still there.
Another story I remember from our first round of funding was when they
gave us the checks—the lawyers were there, Kleiner was there, and I said, “Oh
great, now I can buy that espresso machine!” and they all jumped me and said,
“No, you’re not going to buy an espresso machine with this money. This is to
start the company.”
And it became a sticking point. We were very frugal and we didn’t spend
money on frills, but after the IPO there was a really bad time for Marimba
when it was very difficult to hire people, and all the early people that had been
there 3 to 4 years were starting to leave. Morale was very low, and so I went to
the CFO and said, “Look, I want to buy an espresso machine.” And he said,
“No, we can’t do that, it’s too expensive.”
A few weeks later, when another senior engineer quit, I said, “Screw it, let’s
go buy an espresso machine.” So Jonathan and I went online and bought this
super-duper Italian, fully automatic, $15,000 espresso machine on his credit
card and submitted the expense form. The CFO almost had a baby. It was
unbelievable.
This was a beautiful piece of work, and they came and installed the espresso
machine and it was the best money we ever spent. Every morning, people
would meet and crowd around it. This thing was just it, the bee’s knees, people
loved it, they couldn’t stop talking about it. A month later, the CFO came and
said, “I’m sorry, we should have done this years ago.” And it tells you something
about where you spend your money and what you spend your money on. It’s not
just business-related expenses. You also have to create an environment that you
like so that people are happy and feel they are valued.
Livingston: Did you get along with your VCs?
van Hoff: VCs are an interesting bunch; you can’t live with them, you can’t live
without them. They are instrumental in your success because they give you
money and a really strong endorsement. They have this mafia-like network of
connections and they help you with deals and find the right executives. They
are really working your case.
In my experience, it rarely happens that they turn against you, because
you’re a team and if the team isn’t working, the company will likely fail.
Occasionally, when you’re a screw-up, they’ll have to make a tough decision and
fire someone, but that’s rare in my opinion. Because they wouldn’t invest in
your company if they didn’t believe in you and your team. So I’ve always had a
good experience working with VCs.