If you want to be a successful entrepreneur -- and everyone in the room here at TechCrunch40 apparently does -- one good source of information is people who have gone before you, and succeeded. The pre-lunch keynote panel delivered three excellent examples, plus one powerhouse VC.
The session featured Mike Moritz of Sequoia Capital moderating a discussion with David Filo, cofounder of Yahoo, Chad Hurley, cofounder of YouTube, and Marc Andreessen, cofounder of Netscape. There were a few interesting biographical nuggets in there (Chad got his start selling art, and Marc started with a lemonade stand). And it is a real testament to the pull that TechCrunch organizers Jason Calacanis and Mike Arrington have that they were able to get these three guys onstage. (Filo, for one, very rarely makes public appearances like this.)
Below, my notes from the panel.
Mike Moritz of Sequoia Capital introduces the panelists, David Filo, cofounder of Yahoo, Chad Hurley, cofounder of YouTube, and Marc Andreessen, cofounder of Netscape. Moritz predicts, looking at the crowd here, that next year TechCrunch 40 will be bigger than MacWorld. Mostly silence, and a few groans, indicate the crowd's not pleased with the joke.
Chad Hurley talks about his first businesses: A plan to sell his artworks, hatched when he was just a kindergartener in suburban Philadelphia. After that, there were several other youthful ventures, including a knife business in high school.
David Filo came out to California in the early 1990s and was "in the right place at the right time," he says. His first exposure to computers was as a senior in high school -- relatively late -- but then went on to do a graduate degree in computer science.
Marc Andreessen started his first business as a kindergartener, too, with a lemonade stand in front of his rural Wisconsin home. "My strategic miscalculation was that I lived 10 miles out of town, at the end of the road, actually." He came to California in January of 1994, which he says was a "relatively dormant time" in Silicon Valley.
David: "When we first got started, we didn't think of what we were doing as a business at all. It was just for our own use and entertainment. It wasn't until about 9 months later that we realized this was good for something more than just procrastinating on our Ph.Ds." Got forced into the decision because they had to do things like register a domain name, which made them think about what they were doing as a business.
Moritz has slipped his shoes off and is playing with them with his feet. It's an odd elfin sort of look.
Marc and Netscape loaned the Yahoo guys some rack space at one point.
Marc: For a startup to work, it has to have a really crazy idea, because if it's not really out there, the big companies like IBM and Microsoft will already have done it. The problem is that, out of 1,000 crazy ideas, 999 of them really are completely lunatic. So that combination of lunatic and workable business idea is really rare.
Marc: How they got traction in 1994 was that initially they implied they'd be charging for Navigator, but when it came out, they made it free for most users. At the time that was pretty unusual, that a venture-backed Valley company would be giving away its product for free, so they got a lot of adoption for that reason.
Chad: YouTube was just three people when they launched in the spring of 2005, had closed their first round of funding by that fall.
David: "When we came to you, Mike, I think you made the comment that we were the first company Sequoia had considered that had no revenue and had no prospects of any revenue."
Marc: Why he wouldn't want to be CEO: "It's an unrelenting stream of bad news." You have to be able to filter that, act on it, and not let it get to you emotionally.
Mike asks Marc what he's learned from early experiences at Netscape that he took to his later startups, and Marc turns the question over: Actually, he tries not to take too many preconceptions from one startup to another, because the businesses are different and the market conditions are different too. He also tries to avoid bringing too many team members from the previous company, because he wants to build a new culture that's appropriate to the business.
Most traumatic moments in their businesses? Chad: When they started out, they had just a couple of servers in a colo facility, and quickly maxed out the provider's bandwidth. So they had to move to their own data center -- a difficult move which took the site offline for a day or two.
Marc: Loudcloud was actually within 60 days of running out of money at one point. They had gone public (2001), raised a ton of money, but vastly overbuilt their infrastructure and were now losing money. Had to sell off part of the company to EDS and "restart" as a software company.
Which entrepreneur do these guys most admire? They all agree on this one: It's Steve Jobs. They admire his ability to create (and turn around) Apple, to deliver presentations, and to create great products.
Audience member wants to know: Tips for startups? Two each please, Mike demands.
Marc: Have a founder who can be a CEO. Avoid hiring people too quickly -- small teams build the best products.
Chad: Keep the team small so you can iterate quickly. Don't rely too much on outside advice -- solve your own problems.
David: Do something you're passionate about. Attract other people who are passionate so even if you fail, people will feel like they've done something worthwhile.
Favorite websites? Not including your own.
David: Sequoiacap.com
Chad: TechCrunch.com, and Facebook.
Marc: Amazon.com.
