I’m in the Web Entrepreneur Panel 2004 hosted by my friend Phil Kaplan. From the SXSW site:
A panel of independent entrepreneurs from across the country discuss building, growing, and maintaining successful Internet-based businesses.
Philip Kaplan , Founder – Fuckedcompany.com
Evan Williams – Google
Jim Young , Founder/CTO – Hotornot.com
Jeff Dachis , CEO – Studio Holdings
Richard Yoo , Founder & CTO – Rackspace Managed Hosting
Some of my (paraphrased) notes:
Jeff said he looks for companies that can go from startup to market dominator and get to $20 million in revenue. He said he looks at things at a macro level. He said he will only dedicate himself to a business if it is a home run.
Yoo says he evaluates business that are stacked in his favor. He says he can feel it when it is a good idea.
Young says that good ideas are a dime a dozen, but the main difference is being able to execute on them. Do you have the resources and contacts to make them happen. There are lots of good ideas, but good ideas that you can do are rare and you need to jump on them. He is very unprotective about his ideas, and he likes to ask people about his ideas.
Williams pointed out that most business do something other then they were intended to do. He said Pyra wasn’t created to build blogger.com. Williams said he was used to be very product orientated, as opposed to being business focused. He says O’Rielly says “business is the context in which to do interesting things.”
Kaplan says he thinks he should go with an idea when it pulls him inwhen he gets obsessed with it. When he can’t sleep and eat, and when the idea is all he thinks about, that is when he knows he wants to do it. Phil says he automates everything as much as possible and that he anticipates every question that someone could ask and puts the answers on the site.
Young said when you get your first competitor you get scared, but it is faltering because your idea is worth imitating.
Dachis talked about how you start with a product-centric view, then once the product is out there and everyone has the ability to copy it and use it. To take something from a product to a company is a big leap.
Phil: Nobody cares about how the software works, they care about how it works, how easy it is to use, etc.
Yoo talked about RackSpace.com and hosting is a commodity business, and that there twist was that they went after power users and gave great services. They got a lot of people who were used to dealing with $10 a month hosting that was not robust, and that these users were spending all their time on technology and not on their service. He said high-tech support was how they dogged the competition. He says now people have gotten better in hosting, but that his reputation and brand are protecting him now.
Dachis agreed that branding helped him at Razorfish, and that he made his web services firm the high end and out priced everyone by hundreds of thousands of dollars.
Williams pointed out that brilliant branding of the panelists including RackSpace.com, FuckedCompany.com, AmIHotorNot.com and Razorfish. He said if they didn’t have great names they would not have been great.
Young spoke about how press was key. Salon did a story on AmIHotorNot.com and Young claims that the press is viral and you just need one good story to get hundreds of hits.
Dachis said that he got started because Razorfish.com had done some cool stuff early. Dachis said he was aggressive about sending press releases (he joked he would do a press release if he tied his shoe laces). Dachis said that he had too much attention and was turning away tons of clients (how ironic).
Kaplan says his web businesses take six months to reach profitability.
Young said everyone at the start thought they were a porn site, so he started a company Eight Days so that he could call people and not say he was from “Eight Days” not “Am I Hot or Not?”
Dachis says “Make money don’t take money.” He says the VC thing got out of control. Williams says that some business can’t be bootstrapped, he points out Google. Dachis concedes you’re not building a cable company with no money. Yoo said RackSpace.com was profitable in a year. Dachis says he paid himself a $1,000 a month till 1999, and that it is nice to finally get paid as an entrepreneur.
Kaplan asked the panel about fear of failure, and asked everyone on the panel about their previous failures.
Williams says Pyra/Blogger.com was his third business. He says early failures are key and that people should “fail fast.” He says don’t worry and just “do stuff.”
Young says AmIHotorNot.com was his second business, and that his first was a failure that he walked away from it. He says that his first company is where he got his skills from, and that failure is a great way to learn.
Yoo says it is not fear but commitment (he got a laugh for that). Rackspace was his fourth company. He says his early companies failed because his team was not open to outside opinions. When he did Rackspace.com he got other people involved to tap their wisdom. When you’re a 20 something you feel like none of the little issues can make a difference. He says all the small decisions are what combined make or break a business. He said he learns quickly now, and that he learns what he and his team are good at as individuals.
Yoo said you have to be careful of not working to hard because you will have not time to meet women (biggest laugh).