Founders at Work.pdf

Joe Kraus 71
People asked a lot of questions about why we did that deal. We couldn’t predict
it at the time, but it led to the acquisition of WebCrawler. The acquisition
of WebCrawler happened because we had acquired Magellan and because
AOL saw it and said, “Hey, this company is doing something.” When we were at
a very bleak stage—we were public and running out of money—we were saved
by Intuit, who we did a $20 or $30 million deal with. The original impetus was
something related to some other deal we had done, which in turn was built
because of the WebCrawler deal.
Reading the Cringely book, which led to a lunch, which led to an introduction,
which led to a $100,000 contract, which led to a board meeting, which led
to a VC, which led to another VC, which led to a financing. It’s the same as
Magellan leading to WebCrawler leading to AOL leading to Intuit, and you
can’t predict these things going forward.
Some famous person said, “Success is 50 percent luck and 50 percent preparedness
for that luck.” I think that’s a lot of it. It’s being ready to take advantage
of opportunities when they arise.
The other thing that surprised me was how well companies can do if you
challenge them with these big, crazy goals. When we launched in October ’95,
we were number 17 in a 17-horse race. We said to the company in January ’96,
“We’re number 1 or number 2 by the end of the year or we don’t matter.” We
did a lot of crazy things—from acquiring companies to building new products
to distribution deals. How is it realistic to say that you’ll go from 17 to 1 or 2 in
a year? It’s crazy, but the company rallied around it. I’m surprised really pleasantly
by the ability of people when challenged to rise to the occasion.
So I guess the last lesson is that people make all the difference in the world.
Everybody says that people matter most, but boy, I’ve never worked with a finer
group of people. They just were inspired.
Venture capitalists, with the exception of people like Don Valentine, would
tell you that they’d rather fund a great team than a great idea. The reason is that
if they have a bad idea, great teams can figure out a better one. Mediocre people
even with a great idea can screw it up in its execution. Or if they have a bad
idea, then they aren’t going to be in a position to think about how to change it.
They’re just going to pursue it blindly.
Livingston: What important lessons did you learn at Excite that you are carrying
over to JotSpot?
Kraus: One is hiring slowly and more carefully. Another is be cheap, cheap,
cheap. Also, get the legs of the business underneath it before you run terribly
fast. We were always playing catch-up at Excite and I never liked that feeling.
You always felt like the traffic, the momentum, the deals were all ahead of
where the business naturally was. You want to be ahead of where it naturally is,
but you don’t want to be two times ahead of it. So, I think really taking the time
to understand the dynamics of the business, so we can scale it, is important,
along with being cheap and hiring well.