After working for a year on what today is called “big data” at the legendary Xerox PARC (where the graphical desktop UI, Ethernet, the laser printer were all invented), I started in the doctorate program in computer science at Stanford University. It turns out the security of a $1,600/month paycheck from the Stanford PhD program as well as the U.S. immigrant visa it affords (in addition to some great Stanford infrastructure) was a truly amazing place to learn about tech innovation and allow me to pursue my entrepreneurial inclination.
I joined Stanford Computer Science just around the time when the “World Wide Web” started to emerge out of a soup of prototypes and protocols. (Curiously back then, “interactive TV” was really the hot new thing in Silicon Valley, and the web thing was regarded somewhat like a better bicycle in the automotive industry…) I built the first group annotation system that worked right into the Mosaic browser and became familiar with every line of code that Marc Andreessen was writing over at NCSA.
At Stanford, I was part of Terry Winograd’s small group of five PhD candidates, which also included Larry Page whose work on search ended up becoming the business story of the century in hindsight. Things move along with a fairly slow yet concentrated calm in the setting of a PhD program, especially at a place like Stanford. One week the group discusses that web links are really unexploited territory for improving search in some way. Weeks pass and not much happens. Some code is written now and then. Sitting in an office that used to be that of the founders of Cisco one wonders now and then whether the truly big stuff may have already happened. Yet one thing holds: the longer-term effect of being on an exponential curve is easily underestimated at any moment of time!
While at Stanford in our group, Scott Hassan had written pretty much the entire first version of the Google search engine (Larry was not coding much). His code was just purely beautiful. Scott had also written the code for a service that would archive the messages of virtually every mailing list out there. I felt like the latter and Scott’s amazing engineering would be a great foundation to build a service that would host group communication more than just archiving it, and I connected with Scott about this and we decided to form a company around this — with Carl Page (Larry Page’s brother) being the third co-founder.
eGroups was one of the first true social networks, before “social network” was a term. We called it somewhat more awkwardly “group communication” back then. I was the founding CEO with the early team consisting of Scott Hassan (now of Willow Garage), Carl Page (Larry Page’s brother), Ramu Yalamanchi (later founder of Hi5 Networks), and Alan Braverman (later founder of Xoom and Yammer).
With funding from Michael Moritz at Sequoia Capital, we went on a fast track to grow the service very aggressively. eGroups grew at a faster rate than any other Internet consumer service back then except for AOL’s ICQ chat service. We grew into the largest email hub on the Internet behind AOL in 1999/2000.
It was a pleasure working with Mike and Sequoia Capital. The very best investors are in an entirely different league than everyone else. They do things differently. Mike, for instance, didn’t even bother to engage an investor counsel to complete the financing. Just used the company’s and saved a lot of time and expense. (Moritz subsequently also invested in Larry’s company, Google — one of the best investments ever made.)
While riding the hyper growth rocket, we surely made our share of mistakes. Some of them stemmed from the crazy dotcom environment even though relatively speaking we managed to keep our feet on the ground and stay clear from a lot of its excesses. We tried hard building a real business with real revenue while competing against others who just focused on accumulating more users.
Monetizing all the users we had at eGroups turned out tough. We simply didn’t manage to crack that nut. So we decided to sell the company. eGroups was acquired in 2000 by Yahoo (subsequent to merging with our biggest competitor) when it had grown to approximately 50 million users. [c|net article: Yahoo buys eGroups in $450 million stock deal] Many of the key engineers ended up moving over to Google and built Google Groups there. Sending a billion email messages fast is not easy to develop and deploy and required rewriting a lot of fundamental software. There’s rumors that at the point of Yahoo acquisition, eGroups still had a copy of the source code of the Google search engine on its servers — but I can’t say.
While working on eGroups, I remember sensing some sort of possibility of a highly cohesive web based interaction network — sort of like Facebook is today. But that never materialized as we were running around trying to hire people and navigate through an investment bubble. My biggest regret in hindsight is that I didn’t resist our board in hiring “experienced” engineering managers; it would have been better for the founders to continue to be hard-core engineering leads as opposed to transforming into crappy general managers. Silicon Valley has gotten smart on that over the past decade. These days, Facebook shows how much bigger and more meaningful a business we might have had a chance to grow into.
Stanford professor Yoav Shoham pinged me one day to join him in on creating a company that’s eBay for enterprises. I became the co-founding CTO and developed the initial plans and designs with Yoav. When both eGroups and TradingDynamics received initial funding during the same week, I chose to focus on eGroups (see above). Still, 15 months later, TradingDynamics got acquired for the value of the GDP of an African country. [c|net article: Ariba completes $720 million TradingDynamics buy] More high beta followed. Down to zero value for some years. Then ten years later, TradingDynamics is now routinely used for all component sourcing in large corporations such as IBM.
I co-founded FindLaw with two Harvard/Stanford law graduates, Tim Stanley and Stacy Stern. FindLaw grew into the largest legal website. Our first funding came in the form of a customer paying in advance for a year’s of service. Acquired in 2001 by Thomson Reuters. [Articles: West Group acquires FindLaw; early NY Times article about FindLaw] It takes some very dedicated founders and being early on an investment wave to bootstrap a business — but can be a lot of fun and lead to some very solid value.
Tank Hill Projects
In 2000, I teamed up with Mark Pincus (now of Zynga), to create an incubator for launching companies developed by us. But after raising $10m and hiring 50 people (including a Ukrainian development team), we concluded wrong time, wrong place, wrong approach and chose to return the money to the investors. Few investors see their money back without asking, so this actually set a good example for people trusting us to not keep sitting on their money if we don’t find a good use for it.