Founders at Work.pdf

238 Founders at Work
Fletcher: Well, I didn’t take VC this time; I didn’t have to.
Some of the software design we carried over from ONElist to Bloglines, the
way the website was put together and how we scaled certain things. And certainly
some of the people. Everybody I worked with on Bloglines, I’d worked
with at ONElist before. It felt like ONElist, version two.
Livingston: Can you remember any near disasters from ONElist?
Fletcher: Tons. We were growing so fast with ONElist—a percent-and-a-half a
day for the first year or two. We had a million users at 11 months, which in ’98
was an amazing thing. We had horrible scaling problems the first year. We had
lots of downtime because I didn’t know how to set up monitoring systems. I
guess that’s one thing I did a lot better with Bloglines.
I didn’t even have a cell phone when I started ONElist. Now, it’s easy to use
your cell phone as a pager and you can set up systems. With ONElist, I was
always scared to leave the computer. Just because I knew things would crash.
With Bloglines, at least I had a greater degree of freedom. Especially when you
get something like a Treo, where you can basically log in from your phone. I
remember fixing stuff while sitting in front of a slot machine in a casino.
Livingston: Did you have good relationships with your VCs? Did it suddenly
impose new requirements on your company?
Fletcher: I guess the answers would be “no” and “yes.” As an entrepreneur, I’d
never talked with VCs, I didn’t really know how VCs thought, so it was an education
the whole time. I didn’t even have a mentor. No VCs were blogging. I
didn’t know anybody who had started a company. I was just flying blind.
We raised $4 million from CMGI and Bertelsmann Ventures in December
of 1999 as our series A. We had been self-funded to that point—we’d survived
the first year on $55,000. That got us to a million users, and then we took
$4 million. I had never seen a term sheet before, I didn’t know what I should be
negotiating for, I didn’t know what I shouldn’t be negotiating for. So, mistakes
were made, but I can’t fault myself for that. I didn’t know what things I should
throw out from the term sheet and the lawyer couldn’t tell me.
The great thing for entrepreneurs these days is that there is so much more
information out there than there was in the ’90s. Any number of people that
have gone through this are blogging. All sorts of VCs are blogging now. There
are a lot more books out now. You can just do a search and find sample term
sheets, for example. All things considered, I certainly can’t fault the outcome,
but I made mistakes along the way.
The VCs did come in 2 weeks after we took the money and said they wanted
to replace me as CEO, which was interesting. I was pretty wrapped up ego-wise
with the company. When you start a company, it’s your life. So you think you are
the only one that can run it. You think, if you’re not around, it will fall apart—or
at least I did—for all of these things. It was very difficult for me to separate
myself from the company in that way. So there was a fight over that for quite a
while before I acquiesced, and we brought in a new CEO. It turned out that
that was very good for the company and, had I been more mature, it would have
been a less painful process.