Founders at Work.pdf

408 Founders at Work
Trott: No. We never sought out money. Joi Ito contacted us because he was
using the product, and he was interested. He was actually probably more interested
in just talking to us about what we were doing. And then he said, “If
you’re ever interested . . .” We kind of ignored him because we didn’t know
what to do. We didn’t have any desire to take money. We had heard all these
horror stories about people receiving venture money (this is 2001/2002), and
even though we didn’t think we could have the aspirations to be something
huge, we certainly didn’t want to crash and burn because we took money when
we shouldn’t have.
And we didn’t know anything about it. Are you supposed to pay them back?
We didn’t understand that investors put money in and they own a part of your
company. All we had heard were bad things that happened, and we didn’t
know why.
So Joi contacted us and he was smart because he was also a user of the product.
He knew that we wouldn’t ignore user questions. He was asking technical
questions and he donated, so then we felt really obliged. Then in December of
2002 we finally met him at the Supernova conference. We met him with Barak
[Berkowitz], who is now our CEO, and they talked about what we were interested
in doing, and we said, “We’re working on this hosted service”—it didn’t
have a name yet—“It’s easy and it’s this thing that we think we can get a lot of
people using.” But to us, a lot of people meant that if we had 130 people using
it, we’d break even. If we had 3,000 users, we’d be set for life. And we would
maintain a service where it was 3,000.
Barak said, “That’s great for a niche or personal lifestyle business, but we’re
not interested in investing in that.” At that time we thought, “Who is this asshole?
Why is he saying that to us?” First, we didn’t care—we didn’t seek him
out. And also we didn’t want someone else telling us that our goals weren’t
ambitious enough.
After that lunch, they invited us to go to Japan to talk. We were like, “OK,
we get a free vacation.” We didn’t think that we would take any money. The fact
that Barak was challenging whether we could do it made us want to do it more.
We also knew that, if they didn’t invest in us, they’d invest in somebody else. At
the time, Blogger hadn’t been bought by Google yet, and we thought, “OK,
Blogger will get the money if we don’t.” (Which was probably true if they hadn’t
been bought.) And we didn’t want that—we wanted a stake in it and didn’t want
to be a footnote.
We always had an ambitious, “we want to win” attitude, but we never had
the stakes so high, because it never occurred to us that we could do it. I think
that’s one of the good things, too: since it never occurred to us that we could do
it, it didn’t occur to us that we couldn’t do it. We just had to put our minds on it.
And that has been really key to what we’ve done. The lack of experience made
us think, “Why can’t this just be done?”
So time flies and we grow the company, and we acquired a couple companies
in between.
Livingston: How much funding did you take?