September 21, 2004
Persistence Pays. Part 1
My mentor in business is a guy named Vinod Khosla. He funded Excite and believed in us when no one else did and we knew from the beginning he was a different kind of guy.
While we were still in the garage (literally), we met with at least 15 different venture capital firms. The meetings we're all the same. We showed them our search technology, showed them "concept-based" search, and showed them targeted advertising. To a firm, the first question they asked was a very reasonable one: 'great stuff guys, but what's your business plan? how are you going to make money?' Of course, being 22 years old and fresh out of college we replied, 'we thought you could help us out with that.' Apparently, that's the wrong answer. Who knew?
Rinse, lather, repeat.
Then we met Vinod...
By then, our deal had developed a certain "smell" -- smart guys with interesting technology but an uncertain business plan. The demo to Vinod started off like they all did, but about 10 minutes into the meeting things got very different. He interrupted
"Can the technology scale? can you search a large database?"
Big Pause. It's not the money question. No one has ever asked us this before. Ummm.
"We don't know, we can't afford a hard drive big enough to test."
Then, an amazing thing happened. Ten minutes into this meeting, his first introduction to the company and us, he pulls out his his cell phone, dials his assistant and buys us a $10,000, 10Gb hard drive.
He had me at hello...
This story had a happy ending. Vinod, along with the venture capitalist who introduced us to him, Geoff Yang, invested in the company's first round of financing.
Happy ending notwithstanding, the funding process was my first glimpse into the power of persistence. We had lots of opportunities to give up. We were told by many smart people that we didn't have a fundable idea. In retrospect, I think the fact that we didn't give up had little to do with smarts and everything to do with sheer denial and belief.
We had a slogan in the early days. We were "unencumbered by reality". To us it meant, we didn't know we could fail, therefore we had to succeed. When I look back on those days and even look on what I'm doing today, a lot of what allows me to persist, in the face of many people who don't believe, is this feeling of being unencumbered by reality. I think all entrepreneurs need to be able to step into this realm for a time. Otherwise, there are too many opportunities to stop.
Tomorrow (or the next day if the stuff really hits the fan at the new startup), I want to tell a story or two about how Vinod showed me the real meaning of persistence. I thought I knew what persistence meant, but I realized that I knew nothing when I encountered the master...
September 21, 2004 | Permalink
TrackBack URL for this entry:
Listed below are links to weblogs that reference Persistence Pays. Part 1:
» Unencumbered by reality from Occam's Razor
Great story by Joe Kraus, founder of Exite of his encouter with Winod Kosla, and what makes a great VC While we were still in the garage (literally), we met with at least 15 different venture capital firms. The meetings [Read More]
Tracked on Sep 22, 2004 1:30:42 AM
» Striving to be Unencumbered by Reality from Dana's Blog - Internet Marketing and Sales Technology Ideas From the Trenches
Joe Kraus at Bnoopy relates a story on persistance, denial, and belief in your ideas. We should all be so "unencumbered by reality" sometimes.... [Read More]
Tracked on Sep 22, 2004 5:56:24 AM
» Unencumbered by Reality and Persistance from Inventors Viewpoint
Bnoopy: Persistence Pays. Part 1 Wow, talk about coincidence.... When we went to see a VC years ago, we had the technical issues pretty much mastered, or so we thought. We didn't have a business ... [Read More]
Tracked on Sep 22, 2004 3:54:25 PM
» Quick Web Dev Link Dump Drifting into Media Center Plans from Olivier Travers
Yes, yes, I'll eventually get to use del.ici.us and integrate it with my weblog. In the meantime, here's a quickie: speaking of the devil, del.icio.us news and announcements blog Furl acquired by Looksmart Pinder Johal speculates about the tentative Go... [Read More]
Tracked on Sep 23, 2004 3:35:52 AM
» Persistence is money from Big Blog Company
Joe Kraus, one of the founders of Excite , has started a blog called Bnoopy, an entrepreneurship blog on September 14. Already there are two riveting posts about persistence in starting up and getting ahead with business you believe in.... [Read More]
Tracked on Sep 23, 2004 4:44:21 AM
» Persistence from Our Existence
There is a great new weblog for entreprenial insight by Joe Kraus (Bnooby), a founder of Excite. I especially enjoyed the story where Vinod Khosla jumped up after ten minutes in their first meeting and ordered a 10gig hard drive... [Read More]
Tracked on Sep 23, 2004 6:53:50 AM
Tracked on Sep 23, 2004 7:03:04 AM
» Great vs. Good vs. Bad VCs from Infectious Greed
Joe Krause (of Excite fame) relates an instructive story about Vinod Khosla of Kleiner. Why is this story instructive? Because it shows the difference between a great VC and a merely good VC (and don't even get me started about... [Read More]
Tracked on Sep 24, 2004 8:17:45 AM
» Persistence is the Key! from Shyblog
Ever have one of those days were life seems to be presenting a theme to you? Persistence and perseverence is my theme for today: Bnoopy: Persistence Pays. Part 1 Bnoopy: Persistence Pays, Part 2 (Also, see my previous post... [Read More]
Tracked on Sep 24, 2004 1:32:51 PM
» Sunday, October 17, 2004 11:14 PM from Critical Section
Hey, I've got a new blog for you: Joe Kraus' Bnoopy. Joe was a founder of Excite and has some great stories about "the old days" of the 'net. See especially Persistence Pays, Part 1, Persistence Pays, Part 2, and Moons Over My Hammy. Great stuff.... [Read More]
Tracked on Oct 18, 2004 3:05:56 AM
Tracked on Jan 3, 2005 11:08:03 PM
» The Power of Persistence... from blahgKarma
Two excellent posts about Persistence with a capital “P”. Joe’s stories are very cool, and whether you’re a budding businesswoman or a seasoned entrepreneur, you should take a read. My own... [Read More]
Tracked on Mar 21, 2005 11:07:11 PM
I stumbled upon this site from entrepreneur.com, but I must say you write really well, so well I read everything word to word (and that's rare for me with websites)!
If you ever author a book, let me know and I will buy it.
Posted by: Chris | Sep 22, 2004 2:42:32 AM
I echo CK's thoughts. The content's great, but man, the writing really grabbed me too.
Posted by: Charlie Uniman | Sep 22, 2004 5:30:15 AM
Hey Joe, how many persistent 22 year-olds are getting funded today? Are you funding based on how the deal smells? None, no?
Well then! The entrepreneurs of yesteryear (oh, the grand old 90s, I remember them well!) MUST have been mutants of our species, grandiliquent in intellect and character. NOT.
The bubble economy was a great tailwind that drove the velocity of money. Without it, the great home-run hitters of yesterday's Ponzi-scheme companies couldn't hit the ball into the side of a barn if they were batting with an ironing board.
Posted by: ned | Sep 22, 2004 10:09:20 AM
Man, linking a cliffhanger like that is a mean thing to do. I guess we know how it ends but that's a really lame place to stop the narrative. :)
Posted by: Jonathan Ellis | Sep 22, 2004 2:25:52 PM
Thanks for blogging on this topic.
Reading “Persistence Pays. Part 1” one can conclude that getting funded by VC isn't as threatening as it is sometimes presented. Some of the entrepreneurial literature sources claim that seeking VC funds should be last resort, because “…venture capital takes ownership away from you…”
Could you please share your thoughts on this controversy.
I have a personal interest in knowing your opinion, since I am having hard time in balancing my day job with “garage”-type startup, which is going to release its first product in the end of November. Additionally I am in the midst of setting up a new endeavor that is going to push limits of Social Software.
Posted by: gen | Sep 22, 2004 8:22:43 PM
Great site, to echo the other's compliments. And great writing.
Just wanted to share my story of persistence, not of a business entreprenuership, but of personal entreprenuership.
When I went to earn my MBA, I was just planning on trying to move up from programming to being in technical management. Yawn, just one of the masses. And I majored in finance because I had been interested in investing since high school. However, when I took a course on entrepreneurship I found a new path. But not the path one would think given this intro.
I like the idea of entreprenuership but I'm not a big risk taker normally. I like same-old, same-old (only worked for two companies in over 20 years). So starting a business was more a dream than anything, perhaps starting my own software company some day. However, that class introduced me to that most seductive of things to nerdy people like me: the business plan.
With that, I found a new understanding of my love of business games like Business Strategy (board game) of Avalon Hill and The Business Simulator (software) from Strategic Management Group. Strategy and finance and business all came together for me and I realized that I wanted - really needed - to get a job where I would get to do something with strategy. So I made a career switch from something where I was successful and good in to something which I had no idea how to get into but knew that I had to get into, which is a classic entreprenuerial thing to do. I even found a job search book that recommended taking a business plan approach to your job search and followed their advice.
Being an alumni of a local university, I signed up for job listings. I soon realized 1) there aren't many jobs available to do that and 2) I wasn't really experienced enough to get many (any) of the jobs that were available. Yikes, double jeopardy Batman!
And the ones I did get interviews with, I was totally unprepared for them, as much as I prepped for them (that also taught me how random interviewing is. I got one with a major bank and I knew I struck out with the guy I spoke with. But the guy who I was suppose to interview with - damn traffic - I hit it off with after calling him for a post-mortem. But that prepared me to eventually get the job I did get). After over a year, I was getting kind of desperate and thinking that I might have to give up the dream.
Then a job opened up at a market research firm that also dealt with business plans for programming companies. It was the ideal job for my background! Using the lessons learned from prior interviews, I prepared better and aced the first day of interviews. I got the call back. I was elated!
Unfortunately, the second day went as poorly as the first day went well. I was deflated... I knew I was getting the thin rejection letter, but I was hoping, just hoping, that somehow they would find it in their heart to have enough sympathy not to send it out so that I would get it before Christmas. Of course, I got it on Christmas Eve. Ho ho ho.
Here's the payoff. Because this was something I really wanted to get into, I mustered up my bravado and gamely called my contact at that company and let her know that, while I'm disappointed with their decision, that I'm serious about being in the business and I boldly asked them about competitors in the area and if she had any ideas how I might get into the field.
That chutzpah paid off. The one guy I had totally hit it off with on the first day had a project and needed a contrator. When she called to see if I was interested, I couldn't believe it. Was I interested? Hell yeah! I would have crawled all the way there (30 miles and across a major bridge) to do it. After 2-3 project meetings, they decided that I had the right stuff after all (well, after one last meeting with the only person in the company who I didn't interview yet with) and offered me my dream job. And I'm still chugging away after a little over 12 years now.
Also, you coin a phrase - "unencumbered by reality" - that reminds me of the Beatles and kind of relates to your experience. They were unencumbered by the reality of the musical world as they never took much formal lessons in music (though I'm sure Paul got a great informal education from his father, who was a musician). So they did things musically that any educated musician would have been taught not to do. It's the breaking of rules that you did not know exist.
I don't know if that's the best way to approach things in life for success, but it certainly seems to be the best way to approach things in life to achieve greatness, being unafraid to try new things (because you don't know any better) and eventually there will be someone who just seems to hit the right chord with the market.
Posted by: Martin | Apr 11, 2005 12:00:26 PM
Posted by: poke | Jun 11, 2005 2:36:55 PM
The comments to this entry are closed.