Founders at Work.pdf

Paul Graham 217
Livingston: So a few months later after this horrible low period, you have a
great high period because you get bought by Yahoo. How did that happen?
Graham: We especially wanted to get bought by Yahoo. If you had asked us,
“Who do you want to get bought by?” we would have said, “Yahoo.” In fact, we
did say that; we kind of spread the word that we saw Yahoo as the ideal acquirer.
We’d tried to do an online demo for Yahoo about 6 months before. We
could do demos by phone where we’d talk people through editing a site and we
could see from the log files where they were clicking. I tried to do a phone
demo for Tim Koogle in the fall of ’97, but he couldn’t even get to our server. It
turned out some router was hosed halfway between us and them.
The way we really got onto their radar screen was through Ali Partovi. He’d
had Robert and Trevor as teaching assistants in CS classes at Harvard a few
years before. He had a startup called LinkExchange that was talking to Yahoo
at the time, and their VC was Mike Moritz, who was also Yahoo’s VC. In the
end they got bought by Microsoft instead, but not before they’d told Yahoo
about us.
Livingston: How did it go with Yahoo?
Graham: We liked them. They were like us. They had hacker values, basically.
They were from graduate programs in computer science too. They were our
tribe of people, not these weird business people we kept having to deal with.
Plus they weren’t jerks about the acquisition. So many companies play hardball
in acquisitions. It’s so stupid. Don’t they realize that the people they’re
trying to squeeze are going to have to work for them afterward? Yahoo was very
upstanding about the deal. They didn’t require any vesting, for example. We
could have quit the day after the deal closed. But because they’d been good
guys, we worked hard to make the acquisition work out well for them.
It did, too. Yahoo made a lot of money from this software. When you tell
people you sold a startup to Yahoo in 1998, they get this knowing look, like you
sold someone a bag full of air for a hundred million dollars, but Viaweb was a
real money-making acquisition for them.
Livingston: What was the most surprising thing about being acquired?
Graham: For me the most surprising thing was the day the deal was going to be
announced. There was a point where I had to change our front page to read
Yahoo instead of Viaweb and then it really hit me. Viaweb is gone. Viaweb
doesn’t exist anymore. That was so weird. And I told myself, “Look Paul, don’t
get sentimental. You built this thing to sell it. That was the whole point, and
now you’ve sold it, so stop whining.” But boy, it was strange to think that when
I clicked on “publish” and replaced the Viaweb front page with the Yahoo front
page, Viaweb would never be seen again.
It was also kind of weird that when the deal closed, we all became Yahoo
employees. It was like one of those dreams where you have to go back to high
school. Up till that point we’d been independent, and then suddenly we were
employees, with bosses. And the weirdest thing was, we, or I at least, actually
started to think of them as bosses. Now whatever I did was either submitting or
rebelling, whereas before it had been just doing.