Tim May <[EMAIL PROTECTED]> presumably wrote: [I'm not sure if Tim actually wrote the following, as a splat proceeded the "Back" but nothing else in the paragraph. Apologies in advance if I'm misattributing.]
> Back in the 1970s and early 80s, high tech start-ups were difficult > to do. It took some really good ideas, or at least the departure of > a talented group of people who had already developed > something. Examples like Sun and Cisco are examples of where the > core technology had already been developed (Stanford, in both cases) > and where the companies could begin to SELL PRODUCTS almost > immediately. I cannot help but wonder how the cycle of "start company, get financing, hire friends, build stuff, retire rich" was influenced by increasingly Draconian intellectual property agreements and whatnot. I was too young for gainful employment in the 1970s, but maybe some folks who worked in high technology at that time could shed some light. I'm particularly interested to know whether this "we all of your thoughts" business came about as a result of people going out on their own to sell products they developed on their own time while in another technology company's employ. (I know not what Stanford's intellectual property rules are, but at Ohio State, if you develop something significant while working there and go off to take it to market, they're almost certain to want a piece of that action. On the other hand, they do have a whole department that exists for the purpose of working out licensing terms and providing support that would theoretically be helpful to getting a product to market. I believe this is a relatively new development, though, probably being conceived during The Boom.) > The third and probably most important reason is that a "good idea" > is not enough. Products that people actually pay money for is the > raison d'etre of companies. Whether the products are widgets or > programs or services (though beware of service companies, as the > money is usually not there), a company MUST sell something. A lot of > folks seem to think companies are just cool places to play around > with ideas at. Having worked at a pre-bubble high-tech company (Megasoft Online, which tanked in December 1997), I was painfully aware of this point. We had a good product (Web Transporter, which would manage software on remote systems, e.g., desktops, from a central point), a really good development team, and enough VC to have a chance to make up for the product's early-market negative equity. Ultimately, there was a big disagreement about how to sell the product (sales guys wanted to sell the thing for a gazillion dollars to megaclients, but we thought it would make more sense to get more people using it so we could get more feedback from many different places). The bottom line was that the route we wound up going (megaclients for megabucks) had a megalong sales cycle. The sales force staffed up and tried to sell the earliest releases of the software -- even succeeding in a few significant cases -- but couldn't get enough to cover their own expenses, much less the actual development of the product. Somewhere during all of this time, the whole "push technology" stupidity came about, and people wanted to know how our product stacked up against "other push products", when it wasn't really comparable to what most of the other guys were doing. The point was that we were solving a business problem being able to maintain software on 30,000 desktops or whatever. (The sales guys' idea of going after the big clients wasn't completely stupid; our software had the best ROI on really big networks.) This was in early 1997, when people were getting all giddy about the technology and not paying attention to what it would do for them. We finally ran out of money, failing to secure another round of financing. This was actually a pretty interesting problem. The parent company was in the manufacturing business; they produced media with software on it, and broadened a bit to cover the management of the whole process. So if you had to produce 50,000 diskettes or CDs with some software on it, they'd handle the whole thing. The "Online" part of the business was started when they recognized that floppy disks were pretty much out of fashion, and that CDs would follow once some new stuff came out. They bet that the new stuff would be circumvented if you go straight to the net, and just forget the physical media, since the value wasn't in the technology (tapes, floppies, CDs, or whatever), but in the process. Some offered to fund the manufacturing business (which was profitable, but sucked dry by supporting this Online thing), others just the Online part, but the board didn't want to split the companies apart. If nothing else, the experience served as a valuable lesson, which made me cautious about the whole New Economy thing. Something that I was quick to observe (at least after Megasoft's financial problem was revealed to the developers; maybe I didn't notice it before) was that many companies were confusing VC and revenue. The lessons have been valuable; Interhack probably would not have survived if we had followed what lots of folks were telling us we should do to turn the group into a company in 1999-2000, or if we had pursued any of the interest that the capital guys were showing us at the time. Bootstrapping a company is hard if you don't have a bunch of money to throw at it. It is possible, but requires serious financial discipline, throughout the company. People who expect to walk into a job with super deluxe office space, a big support staff, and a huge salary just aren't going to find a place in a company that's getting itself off the ground. Scott McNealy makes a lot of money now, but if that's what he demanded from Day One, he wouldn't be at Sun. We've got a lot of people out there who have never seen work at any other time, so their expectations got all skewed. Part of the correction of the weirdness presently at work in high tech will be the expectations that managers, marketers, and engineers have about themselves and each other. Managers think they're gods because they're running the company. Marketers think they're gods because they convince people that they need the products. Sales guys think they're gods because they close the deals that keep the companies in business. Engineers think that they're gods because if they didn't build the stuff, there'd be nothing to sell. The truth is that all are correct about what they do, but none is a god. Having something to contribute to a larger effort, that requires many different backgrounds and skills, merely makes one employable. Get on with a good team, doing a good thing, finding a good market, and you can get rich in the process. But if you go to work so that you can retire in five years, never having to think about money again, you're probably going to have some trouble. > To close on a less bleak note, this is a fine time for people to > "get back to basics." Crypto still has serious problems to solve. Key management is still a big problem. User interfaces are a big problem. Integration with non-hacker tools is a big problem. In theory we know how to do all of these things, but bringing it to market isn't all about engineering. It's about marketing (showing people there is the need), selling (getting people to plonk down money for it), and managing (keeping everyone able to do their jobs so that the company will make more than it spends in the course of delivering the product to satisfied customers). It's not the technology that matters, /per se/. It's the value that the technology provides to the people who ultimately must see a reason to pay for it. -- Matt Curtin Interhack Corporation +1 614 545 HACK http://web.interhack.com/ ObPlug: Author, /Developing Trust: Online Privacy and Security/ (Apress, 2001) There are 10 kinds of people: those who understand binary and those who don't.
