How to start a startup

Not Spending It

When and if you get an infusion of real money from investors, what should you do with it? Not spend it, that's what. In nearly every startup that fails, the proximate cause is running out of money. Usually there is something deeper wrong. But even a proximate cause of death is worth trying hard to avoid.

During the Bubble many startups tried to "get big fast." Ideally this meant getting a lot of customers fast. But it was easy for the meaning to slide over into hiring a lot of people fast.

Of the two versions, the one where you get a lot of customers fast is of course preferable. But even that may be overrated. The idea is to get there first and get all the users, leaving none for competitors. But I think in most businesses the advantages of being first to market are not so overwhelmingly great. Google is again a case in point. When they appeared it seemed as if search was a mature market, dominated by big players who'd spent millions to build their brands: Yahoo, Lycos, Excite, Infoseek, Altavista, Inktomi. Surely 1998 was a little late to arrive at the party.

But as the founders of Google knew, brand is worth next to nothing in the search business. You can come along at any point and make something better, and users will gradually seep over to you. As if to emphasize the point, Google never did any advertising. They're like dealers; they sell the stuff, but they know better than to use it themselves.

The competitors Google buried would have done better to spend those millions improving their software. Future startups should learn from that mistake. Unless you're in a market where products are as undifferentiated as cigarettes or vodka or laundry detergent, spending a lot on brand advertising is a sign of breakage. And few if any Web businesses are so undifferentiated. The dating sites are running big ad campaigns right now, which is all the more evidence they're ripe for the picking. (Fee, fie, fo, fum, I smell a company run by marketing guys.)

We were compelled by circumstances to grow slowly, and in retrospect it was a good thing. The founders all learned to do every job in the company. As well as writing software, I had to do sales and customer support. At sales I was not very good. I was persistent, but I didn't have the smoothness of a good salesman. My message to potential customers was: you'd be stupid not to sell online, and if you sell online you'd be stupid to use anyone else's software. Both statements were true, but that's not the way to convince people.

I was great at customer support though. Imagine talking to a customer support person who not only knew everything about the product, but would apologize abjectly if there was a bug, and then fix it immediately, while you were on the phone with them. Customers loved us. And we loved them, because when you're growing slow by word of mouth, your first batch of users are the ones who were smart enough to find you by themselves. There is nothing more valuable, in the early stages of a startup, than smart users. If you listen to them, they'll tell you exactly how to make a winning product. And not only will they give you this advice for free, they'll pay you.

We officially launched in early 1996. By the end of that year we had about 70 users. Since this was the era of "get big fast," I worried about how small and obscure we were. But in fact we were doing exactly the right thing. Once you get big (in users or employees) it gets hard to change your product. That year was effectively a laboratory for improving our software. By the end of it, we were so far ahead of our competitors that they never had a hope of catching up. And since all the hackers had spent many hours talking to users, we understood online commerce way better than anyone else.

That's the key to success as a startup. There is nothing more important than understanding your business. You might think that anyone in a business must, ex officio, understand it. Far from it. Google's secret weapon was simply that they understood search. I was working for Yahoo when Google appeared, and Yahoo didn't understand search. I know because I once tried to convince the powers that be that we had to make search better, and I got in reply what was then the party line about it: that Yahoo was no longer a mere "search engine." Search was now only a small percentage of our page views, less than one month's growth, and now that we were established as a "media company," or "portal," or whatever we were, search could safely be allowed to wither and drop off, like an umbilical cord.

Well, a small fraction of page views they may be, but they are an important fraction, because they are the page views that Web sessions start with. I think Yahoo gets that now.

Google understands a few other things most Web companies still don't. The most important is that you should put users before advertisers, even though the advertisers are paying and users aren't. One of my favorite bumper stickers reads "if the people lead, the leaders will follow." Paraphrased for the Web, this becomes "get all the users, and the advertisers will follow." More generally, design your product to please users first, and then think about how to make money from it. If you don't put users first, you leave a gap for competitors who do.

To make something users love, you have to understand them. And the bigger you are, the harder that is. So I say "get big slow." The slower you burn through your funding, the more time you have to learn.

The other reason to spend money slowly is to encourage a culture of cheapness. That's something Yahoo did understand. David Filo's title was "Chief Yahoo," but he was proud that his unofficial title was "Cheap Yahoo." Soon after we arrived at Yahoo, we got an email from Filo, who had been crawling around our directory hierarchy, asking if it was really necessary to store so much of our data on expensive RAID drives. I was impressed by that. Yahoo's market cap then was already in the billions, and they were still worrying about wasting a few gigs of disk space.

When you get a couple million dollars from a VC firm, you tend to feel rich. It's important to realize you're not. A rich company is one with large revenues. This money isn't revenue. It's money investors have given you in the hope you'll be able to generate revenues. So despite those millions in the bank, you're still poor.

For most startups the model should be grad student, not law firm. Aim for cool and cheap, not expensive and impressive. For us the test of whether a startup understood this was whether they had Aeron chairs. The Aeron came out during the Bubble and was very popular with startups. Especially the type, all too common then, that was like a bunch of kids playing house with money supplied by VCs. We had office chairs so cheap that the arms all fell off. This was slightly embarrassing at the time, but in retrospect the grad-studenty atmosphere of our office was another of those things we did right without knowing it.

Our offices were in a wooden triple-decker in Harvard Square. It had been an apartment until about the 1970s, and there was still a claw-footed bathtub in the bathroom. It must once have been inhabited by someone fairly eccentric, because a lot of the chinks in the walls were stuffed with aluminum foil, as if to protect against cosmic rays. When eminent visitors came to see us, we were a bit sheepish about the low production values. But in fact that place was the perfect space for a startup. We felt like our role was to be impudent underdogs instead of corporate stuffed shirts, and that is exactly the spirit you want.

An apartment is also the right kind of place for developing software. Cube farms suck for that, as you've probably discovered if you've tried it. Ever notice how much easier it is to hack at home than at work? So why not make work more like home?

When you're looking for space for a startup, don't feel that it has to look professional. Professional means doing good work, not elevators and glass walls. I'd advise most startups to avoid corporate space at first and just rent an apartment. You want to live at the office in a startup, so why not have a place designed to be lived in as your office?

Besides being cheaper and better to work in, apartments tend to be in better locations than office buildings. And for a startup location is very important. The key to productivity is for people to come back to work after dinner. Those hours after the phone stops ringing are by far the best for getting work done. Great things happen when a group of employees go out to dinner together, talk over ideas, and then come back to their offices to implement them. So you want to be in a place where there are a lot of restaurants around, not some dreary office park that's a wasteland after 6:00 PM. Once a company shifts over into the model where everyone drives home to the suburbs for dinner, however late, you've lost something extraordinarily valuable. God help you if you actually start in that mode.

If I were going to start a startup today, there are only three places I'd consider doing it: on the Red Line near Central, Harvard, or Davis Squares (Kendall is too sterile); in Palo Alto on University or California Aves; and in Berkeley immediately north or south of campus. These are the only places I know that have the right kind of vibe.

The most important way to not spend money is by not hiring people. I may be an extremist, but I think hiring people is the worst thing a company can do. To start with, people are a recurring expense, which is the worst kind. They also tend to cause you to grow out of your space, and perhaps even move to the sort of uncool office building that will make your software worse. But worst of all, they slow you down: instead of sticking your head in someone's office and checking out an idea with them, eight people have to have a meeting about it. So the fewer people you can hire, the better.

During the Bubble a lot of startups had the opposite policy. They wanted to get "staffed up" as soon as possible, as if you couldn't get anything done unless there was someone with the corresponding job title. That's big company thinking. Don't hire people to fill the gaps in some a priori org chart. The only reason to hire someone is to do something you'd like to do but can't.

If hiring unnecessary people is expensive and slows you down, why do nearly all companies do it? I think the main reason is that people like the idea of having a lot of people working for them. This weakness often extends right up to the CEO. If you ever end up running a company, you'll find the most common question people ask is how many employees you have. This is their way of weighing you. It's not just random people who ask this; even reporters do. And they're going to be a lot more impressed if the answer is a thousand than if it's ten.

This is ridiculous, really. If two companies have the same revenues, it's the one with fewer employees that's more impressive. When people used to ask me how many people our startup had, and I answered "twenty," I could see them thinking that we didn't count for much. I used to want to add "but our main competitor, whose ass we regularly kick, has a hundred and forty, so can we have credit for the larger of the two numbers?"

As with office space, the number of your employees is a choice between seeming impressive, and being impressive. Any of you who were nerds in high school know about this choice. Keep doing it when you start a company.

如何创业（四）节省开支

（接上，对于黑客的定义请见前文）
当你真的得到了启动资金以后，该如何使用呢？尽量节省着用，这是我的建议。几乎每场失败的创业都是直接因为资金断档造成的。当然其中可能有很多深层次的原因，但是这个最的直接原因是我们应该努力避免的。

在网络泡沫时期，几乎每个创业公司都想着“快快搞大”。理想状态下这意味着尽快争取到更多客户，但实际操作的时候却很容易演变成马上雇佣很多员工。就算你能避免如果你能争取到许多客户，那敢情好，可是这种期望往往是不切实际的。人们总是想要第一个进占市场然后囊括所有客户，一点空间都不留给竞争对手。不过我认为在绝大部分生意中先入优势都不会大到这种境界。我们再次以Google为例，当他们创始的时候搜索引擎市场看上去是一个垄断市场，大企业依靠百万美金的营销创立他们的品牌效应：Yahoo, Lycos, Excite, Infoseek, Altavista, Inktomi。显然1998年对于加入搜索引擎的竞争是太晚了一点。

不过Google的创始人们发现，品牌在搜索领域几乎没有什么价值可言。你只要在任何一点上能做出更好的产品，用户们就会蜂拥而至。作为对这一观点的佐证，Google从来不打广告。他们就像一家经销商，销售那些自己也乐于使用的产品。

Google超越的那些竞争者们如果将百万美元花在提升软件水平上，可能还会取得更好一些的成绩。对于未来的创业者而言这是一个很好的警示，除非你处于一个产品没有本质差异的市场上，例如香烟雪茄洗涤剂之类，不然，做一大堆广告只说明你的业务正变得越来越差。而网络业务不应该会有什么很类似的产品，那些约会网站猛打广告，正说明他们快要完蛋了。(Fee, fie, fo, fum,我闻到这些公司背后市场营销总监的体味了）（我认为这些词只是模仿音调，没有什么特别含义，译注）

受环境所迫，我们公司的业务成长缓慢，但回头看来却是好事一件。每个创始人都充分掌握了公司的每项工作。除了写软件，我还必须做销售和客户服务的工作。销售业务并不好做，我虽然一直在坚持，但明显我没有一个优秀的推销员所需要的那种耐心和诚恳。我给潜在客户提供的信息是：你不在网上做销售实在太愚蠢了，如果你要在网上做销售，不用我们的软件同样是很愚蠢的。这些信息都是正确的，但显然不能让客人感到愉快。

不过我很擅长做客户服务的工作。想象一下，一个客服不仅对产品知无不详，而且在产品存在bug的时候还会发自内心地道歉，并立刻在和你打电话的时间内修好它。客户们简直爱死我们了，当然我们也很爱他们。因为当你只能通过口耳相传来发展的时候，你的第一批客户一定是那些主动发掘到你的优点的聪明人。在创业的早期阶段，没有什么比有头脑的客户更有价值的了。如果你倾听他们的话，他们能告诉你们很多提升你们产品的竞争力的方法。除了给你这些免费的建议，他们还正在付给你可爱的美金。

我们的公司在1996年正式启动，到年底的时候我们有了大约70个客户。鉴于当时是“快快搞大”的年代，我对我们公司的弱小很是担忧。不过事实上我们的发展方向才是正确的，太快的做大会让你的公司难以转向。第一年是我们提升产品质量的好时机，到了年底的时候我们的产品质量已经远远超过竞争对手的想象了。而且因为每个公司里的黑客们都已经有了充分的客户交流体验，我们对于网络营销的理解远超任何对手。

这些条件是我们创业成功的基石。没有比真正理解你的生意更重要的事了。你可能以为任何做生意的人理所当然的应该理解自己的业务，其实不然。Google成功的秘诀可以简单地归纳为，他们了解搜索业务。当他们创业的时候我正在为Yahoo工作，而我知道Yahoo不明白搜索这件事，因为有一次我尝试告诉公司高层我们拥有更好的搜索系统的必要性，而我从内线得到了这样的回复：我们Yahoo不要再只做一个“搜索引擎”了，搜索业务只是我们网络业务的一小部分，贡献还达不到我们一个月的增长率。我们已经是一家“传媒企业”，“门户网站”，或者其它什么高级玩意，搜索业务有没有都无所谓，就跟脐带一样剪掉也没关系。

确实，搜索业务只是整个页面中很小的一部分，但那是很重要的一部分，因为那是网络服务的起点。我想，Yahoo现在学到这一点了。

绝大部分网络服务商不明白的事，Google却了然于心。第一条就是，就算广告商付钱给你而用户是免费的，你也必须把用户放在广告商之前。我最喜欢的一张保险杠贴纸上写着，“如果群众开始自主，那领导者只能跟随。”。引用到网络业务中，这句话可以改成“争取到所有的用户，广告就会挤破你的门槛”。所以首先要为你的用户设计好你的产品，然后才去考虑如何利用它赚钱。如果你不把用户放在首位，那你的竞争对手将会有机可趁。

你必须了解用户心理，才能创造出他们喜欢的产品。你的公司越大，这件事就越困难。所以我说“慢慢成长”，你花钱花得越慢，你就有越多的时间去研究客户。

另一个节省开支的用意是形成一种勤俭的文化。这是Yahoo也很擅长的一件事。Yahoo的总裁David Filo，却对自己私底下的称号“吝啬鬼”很自豪。我们一到Yahoo就收到了他的Email，他浏览了我们的工作目录之后，询问我们是否真的需要把那么多个人资料存储在公司昂贵的RAID硬盘里。我对此印象深刻，Yahoo作为一家市值十亿记的公司，仍然能够注意硬盘中每一个字节的浪费。

当你从风投哪里弄到几百万美元之后，你可能会感到自己已经挺有钱了。你要搞清楚这只是一种幻觉，那些有丰厚利润的公司才是有钱的公司。资本并不代表利润，那只是投资人希望你用来获取利润的道具。所以除了银行里公司帐户那几百万，你们基本上还是一个穷公司。

创业初期的公司形象，应该是一个刚毕业的大学生，而不是一家律所。以酷和廉价代替昂贵和震撼的视觉效果。我们可以从一家创业公司是否使用Aeron chairs（某种按摩椅的知名品牌，译注）来判断他们是否明白这个道理。在网络泡沫时代，Aeron chairs在创业者中很流行。尤其是当那些公司都使用同样的型号的时候，场面就像一群用风投的钱玩过家家的小朋友。我们公司使用的椅子连扶手都没有，当年看上去有点寒碜，但回头想想，这也是我们在不知情的情况下就作对的重要事情之一。

我们公司处于Harvard Square（哈佛广场，文化胜地，译注）的一幢木制三层楼中。1970年之前这里是一间公寓，浴室里还有有爪足浴缸的存在（claw-footed bathtub，高级货，小的没见过也没听过，译注）。这房子墙壁上用铝箔填充来阻挡宇宙射线的裂缝，代表着它曾经有过某个思路很特别的主人。当某些大人物来访问我们的办公室的时候，我们对于这幢房子的层次确实深感汗颜。不过事实上这里是一个很适合创业公司的地方，我们的角色不是那些平庸的制服组，而是虽然弱小，却勇于开创突破的幼兽。这正是创业者该有的心态。

一幢老式公寓同时也是软件开发的好场所。如果你尝试一下，你会发现分割成立方体的空间很合适编写软件的状态。有没有发现黑客们在家里的小空间比在办公室里工作显得轻松自在得多？那你为何不把办公室弄得像嘉一样呢。

当你选择创业公司的地点时，不要仅仅挑选那些会让你们看上去比较专业的地方。专业这个词代表优秀的工作成果，而不是电梯和玻璃墙。我建议创业者们尽量避免驻扎在专业办公楼，租一个公寓就好。创业的时候，你会经常想要索性住在办公室里，那何不就弄个可以住的办公室呢。

除了更便宜且便于工作，公寓往往还比办公楼位于更好的地段，在创业中这是很重要的。生产力的关键在于晚饭后的加班。这没有电话铃声骚扰的几个小时是工作出成果的最好时机。当你的员工成群结队地处去吃饭，在餐桌上讨论问题，然后回来解决它们的时候，你们的产品会发生了不起的进化。一旦你的公司进入那种所有人一下班就开个车回郊区的家里吃晚饭的境界，某些特别重要的理念基本上就不复存在了。如果你一开始创业就进入这样的阶段，那你只能求神保佑了。

今天如果我要再次创业，我只会考虑以下三个地点。on the Red Line near Central, Harvard, or Davis Squares (Kendall is too sterile); in Palo Alto on University or California Aves; and in Berkeley immediately north or south of campus. （地名，请恕我懒得翻译，译注）这些我所知仅有的有创业成功希望的地方。

节省开支最重要的方法就是雇佣尽量少的员工。我可能有点极端，但我还是觉得雇佣新员工是一个公司所能做的最烂的事。在创业阶段，人工成本是巨大而令人最为讨厌的经常性开支。雇佣更多的人往往意味着过度的发展，甚至必须搬到一些不适合软件开发工作的地方。而最大的问题是，雇佣更多的人会让你的工作效率降低：以前只要把头伸进某个办公室三言两语解决的问题，现在要找齐八个人一起开个大会。所以你应该雇佣尽可能少的员工。

在网络泡沫时代很多创业公司采用了相反的方法，他们就想着尽快把自己做大，好像没有相关头衔的一个大部门你就没法做任何事情似的。大公司才可以这样做事情。不要雇佣人来填满你未来的组织结构图，雇佣新人的唯一理由是你有些想要做的工作没人能够完成。

既然雇佣不必要的员工又昂贵又没有效率，为什么几乎每个公司都这么干呢？我认为主要是因为人们喜欢有很多人为自己工作的感觉。这是一种劣根性，尤其体现在CEO身上。如果你曾经掌握一家公司，你会发现人们问的最多的问题是你有多少雇员，这是别人判断你的身价的一种方式。不仅仅是一般交往中人们会问，那些写新闻的也会注重这一点。而且他们对于上千人的公司会刮目相看，而10个人的就不屑一顾。

这太荒唐了，如果两家有相同收益的公司，员工数量较少的那家明显经营得更好。当别人问我我创业时有多少员工，我总是回答“20个”，而他们就会摆出那种明显不以为然的表情。我曾经想过加上这么一句“不过我们的主要竞争对手，那个有140个雇员的家伙，一直被我们打得落花流水。要不然我们用这两个数字间比较大的那个来申请贷款你看如何？”

考虑到办公室空间，你的员工数量最好保持在看上去紧凑和真的拥挤之间。任何一个读过大学的聪明人（nerds，类似于极客，本人认为用聪明人足以表达在这里的意思，明显作者喜欢新鲜的词汇，译注）都会明白这个道理。当你创业的时候，别忘了保持这个员工数量。