Founders at Work.pdf

214 Founders at Work
There was one investor who I think really wanted to run the company. He
had just sold his own startup, and he was pretty young. It was hard for him to
just be a passive investor. For a while he actually came to work for us, as a VP.
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.
Livingston: So now you have Fred on board and you are becoming more legitimate.
What did you do next?
Graham: Soon after we got Fred, we raised more money. I don’t remember
exactly how much—maybe $800,000. A lot more money than we ever had
before. We really shifted gears at that point. Up till then, we had been operating
out of an apartment. In the very beginning, we operated out of Robert’s
apartment. Then after we got the $100,000 in that first round from the angel
investors, we rented the apartment upstairs from Robert’s. We had that for
about a year and then after we got Fred and we got this new round, we actually
rented an office and started hiring people. We really started to look like a
company.
Livingston: Were you worried that you didn’t look enough like a company
before that?
Graham: We were big beneficiaries of that rule that on the Internet, nobody
knows you’re a dog. We were just a bunch of guys in an apartment with computers.
Nowadays more people accept that startups look like that, but not back
in the mid-’90s. People still expected a company to have a real office. I think if
some of these companies whose online stores were on our server could have
actually seen the room that the server was sitting in, they would have freaked.
Thankfully they never did.
If anybody ever did want to come and visit us, we pulled all kinds of tricks to
make ourselves seem more legit. When that first giant company wanted to buy
us and sent people over to check us out, all we had in our so-called office was
one computer. Robert and Trevor mostly worked at home or at school. So we
borrowed a few more computers and stuck them on desks, so it would look like
there was more going on.
One of these Potemkin computers was Robert’s, from the apartment downstairs.
And in the middle of this big visit from the company, Rtm comes upstairs
boiling mad because he’s come home and discovered his computer’s missing.
He’s like “What have you done?” We said, “Shhh, shhh, we had to borrow it.
We’re trying to look real. Don’t worry, we’re not using it. It’s not even plugged
in.” He was really mad, but he let us keep using his computer as a prop for
another hour until they left.
Livingston: So you are growing as a company, you get a lot more funding, what
happened then?