Founders at Work

PayPal was founded in December 1998 by recent college grad Max Levchin and hedge fund manager Peter Thiel. The company went through several ideas, including cryptography software and a service for transmitting money via PDAs, before finding its niche as a web-based payment system. That service became wildly popular for online vendors, especially eBay sellers, who preferred it to traditional payment methods. PayPal went public in early 2002 and was acquired later that year by eBay for $1.5 billion.

When coworkers Sabeer Bhatia and Jack Smith began working on their first startup idea—a web-based personal database they called JavaSoft—they were frustrated because their employer’s firewall prevented them from accessing their personal email accounts.

If any one person can be said to have set off the personal computer revolution, it might be Steve Wozniak. He designed the machine that crystallized what a desktop computer was: the Apple II.

Joe Kraus started Excite (originally called Architext) in 1993 with five Stanford classmates. Though they began by developing technology for information search and retrieval, their decision to go into web search ultimately made their site the fourth most popular site on the Web in the late 1990s.

Dan Bricklin and his friend Bob Frankston founded Software Arts in 1979 to produce VisiCalc, the first electronic spreadsheet. Spreadsheets used to be made on paper. As a student at Harvard Business School, Bricklin thought how convenient it would be if they could be made on desktop computers instead. He wrote a prototype in Basic over a weekend, and then he and Frankston set about turning it into a product.

Mitch Kapor founded Lotus Development with Jonathan Sachs in 1982. Their spreadsheet software, Lotus 1–2–3, quickly surpassed VisiCalc to become the new industry standard.

At the University of Illinois, Ray Ozzie worked on PLATO Notes, one of the earliest collaboration applications. Later he wanted to develop collaboration software of his own, but couldn’t find funding. After he led the development of Lotus Symphony, Mitch Kapor and Jonathan Sachs decided to invest in Ozzie’s idea, which would become Lotus Notes. Instead of working as an employee, Ozzie founded Iris Associates in 1984 to develop the product for Lotus. It was an unusual form of startup, but it worked.

Evan Williams cofounded Pyra Labs in 1999. Originally, Pyra intended to build a web-based project management tool. Williams developed Blogger to manage his personal weblog, and it quickly became an important mechanism for sharing ideas internally at Pyra.

Yahoo began in 1994 as a collection of links to research papers maintained by two Stanford grad students, Jerry Yang and David Filo. They gradually added links to new types of information, and the site grew rapidly in popularity. By the end of 1994, Yang and Filo were considering turning the site into a startup, and they asked Tim Brady to write a business plan for it.

Mike Lazaridis founded Research In Motion (RIM) with his friend Doug Fregin in 1984 while still an undergraduate at the University of Waterloo. One of their first projects was a local area network that ran industrial displays. Near the end of Lazaridis’s senior year, they landed a $600,000 contract to build a similar network for General Motors. A few weeks shy of his graduation, Lazaridis left school to focus full-time on the company.

Arthur van Hoff was part of the Java development team at Sun Microsystems when he left in 1996 to found Marimba, a software distribution company. Joining him as cofounders were two fellow developers from the Java team, Sami Shaio and Jonathan Payne, and Kim Polese, Java’s product manager.

Paul Buchheit was Google’s 23rd employee. He was the creator and lead developer of Gmail, Google’s web-based email system, which anticipated most aspects of what is now called Web 2.0. As part of his work on Gmail, Buchheit developed the first prototype of AdSense, Google’s program for running ads on other websites. He also suggested the company’s now-famous motto, “Don’t be evil,” at a 2000 meeting on company values.

One weekend in 1995, Steve Perlman tested his theory that the Web could look as good on a TV screen as it did on a computer monitor. In 3 days of roundthe- clock effort, he built a thin client for surfing the Web, using a television as a display. He invited his friend Bruce Leak over to see what he’d built, and they knew right away it was a big enough idea for a startup.

Mike Ramsay and Jim Barton founded TiVo in 1997. Their original plan was to create a network server for homes. Realizing it would be hard to explain to consumers why they needed one, they narrowed the idea down to one component of the original plan: the digital video recorder (DVR). The first version was launched in 1999.

Paul Graham and his friend Robert Morris started Viaweb in 1995 to make software for building online stores. A few days into writing the first prototype, they had a crazy idea: why not have the software run on the server and let the user control it through their browser?

Joshua Schachter started the collaborative bookmarking site del.icio.us in 2003. As often happens with startups, del.icio.us began as something Schachter built for himself. He needed a way of organizing his collection of 20,000 bookmarks, and he hit on the idea of “tagging” them with brief text phrases to help him find links later. He put del.icio.us on a server and opened it up to other people, and it began to spread by word of mouth.

Mark Fletcher was a senior software engineer for Sun Microsystems when he started ONElist, a free Internet email list service, in 1997. He ran ONElist as a side project until he received venture funding a year later. Yahoo acquired ONElist (later renamed eGroups) in June 2000.

In 1995, Craig Newmark started an email list to publicize events in San Francisco. As “Craig’s List” grew in popularity, he switched from a mailing list to a website and added categories. Without consciously realizing it, he was about to take a big bite out of the classified ad business.

Caterina Fake started Ludicorp in the summer of 2002 with Stewart Butterfield and Jason Classon. The company’s first product, Game Neverending, was a massively multiplayer online game with real-time interaction through instant messaging (IM). In 2004, they added a new feature—a chat environment with photo sharing—which quickly surpassed Game Neverending itself in popularity.

Brewster Kahle started WAIS (Wide Area Information Servers) in the late ’80s while an employee of Thinking Machines. He left in 1993 to found WAIS, Inc. WAIS was one of the earliest forms of Internet search software. Developed before the Web, it was in some ways a predecessor to web search engines. Kahle sold WAIS to AOL in 1995.

At Xerox PARC, Chuck Geschke and John Warnock developed a language called Interpress that would allow any computer to talk to any printer. When Xerox seemed slow to commercialize this technology, Geschke and Warnock started their own company, Adobe, to produce a successor of Interpress called PostScript.

In 1976, Ann Winblad started Open Systems, an accounting software company, with the help of $500 she borrowed from her brother. The advent of the microprocessor and the first affordable PCs created a new opportunity for programmers. Winblad was one of the first generation of entrepreneurs who figured out by trial and error what a software startup was. Six years later, she and her cofounders sold the company for over $15 million.

David Heinemeier Hansson helped transform 37signals from a consulting company to a product company in early 2004. He wrote the company’s first product, Basecamp, an online project management tool. He also wrote companion products Backpack, Ta-da List, and Campfire.

Philip Greenspun founded ArsDigita in 1997. Though the company lasted only a few years, ArsDigita is famous in the startup world both as the embodiment of a new model for software consulting and as an all-too-colorful example of the dangers of venture capital.

Joel Spolsky founded Fog Creek Software with his friend Michael Pryor in 2000. They didn’t have a specific product in mind, but were motivated to start the kind of software company where they would want to work—one where programmers were the stars.

Steve Kaufer, Langley Steinert, Nick Shanny, and Thomas Palka started TripAdvisor, an online travel site, in 2000. Frustrated by the lack of unbiased, useful information for travelers, they created a site that, in addition to searching relevant content already on the Web, let users contribute personal reviews of destinations, hotels, and attractions. The online travel forum was a pioneer in the now common practice of having users pick the winners, instead of leaving the choices up to human editors.

While looking for a job in 2000, James Hong launched a website with his friend Jim Young just for fun. HOT or NOT lets users submit photos of themselves and have others vote on their “hotness” on a scale of 1 to 10.

James Currier came up with the idea for Tickle (founded in 1999 and originally called Emode) after taking a personality test in one of his Harvard Business School classes.

Blake Ross and Dave Hyatt started Firefox as a side project while working at the Mozilla Foundation. They were working to revive the struggling Netscape browser, but became frustrated by the constraints imposed on them. So Ross and Hyatt decided to build a browser that they would actually want to use.

Husband-and-wife cofounders Mena and Ben Trott started Six Apart (named for the number of days between their birthdays) in their apartment in 2001. Trott’s personal blog, Dollarshort, was growing in popularity, and she was dissatisfied with the blogging software available at the time. So she and Ben decided to develop their own and share it with some friends. Movable Type became popular almost immediately on its launch in October 2001.

Lycos was started in 1995 when CMGI’s investment group, @Ventures, bought a search engine developed by Michael Mauldin at Carnegie Mellon University and Bob Davis signed on as CEO. The company grew rapidly over the next several years as Internet usage exploded.

In 1982, Ron Gruner, Craig Mundie, and Rich McAndrew founded Alliant Computer Systems to build parallel supercomputers. Their goal was to build a machine that used multiprocessing to achieve better performance than the fastest single-CPU machines, but in a way that was transparent to developers.

Jessica Livingston founded Y Combinator in 2005 with Paul Graham, Robert Morris, and Trevor Blackwell. Y Combinator developed a new approach to venture funding: to fund startups in batches, giving them just enough money to get started, working closely with them to refine their ideas, and then introducing them to later stage investors for further funding. In three years they have funded more than 100 startups.