Founders at Work

by Jessica Livingston

Cover image

Publisher: Apress
Copyright: 2008
ISBN: 1-4302-1078-8
Format: Trade paperback
Pages: 453

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This is the book whose basic idea sparked the fantastic follow-up Coders at Work by Peter Seibel, so I was favorably inclined towards it before I opened it. Similar to Coders at Work, it's a collection of interviews using roughly the same questions, but with an interviewer who follows up on interesting topics depending on who she's interviewing (sadly, much less than Seibel follows trains of thought). The interview subjects for this book are thirty-two founders of startup companies, plus a bonus "interview" with the book author herself. All of the startups are technology startups, and mostly around the tech boom, although Livingston goes as far back as Apple (Steve Wozniak) and Software Arts (Dan Bricklin) and as far forward as 37signals (David Heinemeier Hansson), the company responsible for Ruby on Rails.

With thirty-three founders and startups compared to Coders at Work's fifteen programmers, and with 150 fewer pages, the interviews feel more compressed. I missed the longer, rambling discussions of areas of interest. Livingston stays tightly focused on the feel, politics, and money of building a startup, and the digressions into more general topics of management or workplace styles are kept limited. Coders at Work left me feeling like I knew a great deal more about the philosophy and approach of the people interviewed than I had before; I didn't get that impression from Founders at Work.

The advantage of this shorter and faster-moving layout, however, is that one gets more of a sense of overview. There are a lot of individual data points here from which to build a general impression of the startup world and draw conclusions about things that seemed similar across multiple experiences. The most obvious, and the one that I think most people are likely to comment on, is the number of startups that completely changed business plans in the early days or had some side project explode and become the main focus of their company. It also helped a lot with understanding the social dynamics of startups, why Silicon Valley is such a popular place to start (venture capital and a trained workforce are huge), and the degree of financial turmoil that startups go through.

Perhaps most fascinating to me was the overall sense from the interviews of the interaction between startups and venture capital. While I don't want to generalize too much — some startups had very positive experiences with their venture capital partners, including finding good management and finance mentors — I think it's fair to say that the venture capital funding component of the startup was the most stressful, frustrating, demoralizing, and demotivating part of the process for many of the founders. About half came away with an intense dislike of venture capital, and not just because of the inherently difficult tradeoff between giving up control and needing money. There are stories of hardball negotiations, venture capital firms taking outright advantage of na├»ve founders, and of course Philip Greenspun's story of the history of ArsDigita (notorious in the industry). Those founders who went on to start a second company almost never used venture capital, and while that's largely because they didn't have to, several mentioned their past experience as reason why they wanted to handle funding differently.

I appreciated Livingston's attempts to bring breadth to the topic, including looking at some projects that weren't startups in a traditional sense. In additional to regular companies, there are also chapters on Gmail (run in a semi-startup way at first inside Google) and Firefox (a startup-style open source project within the larger Mozilla project). She also interviews some people with a far different attitude towards running companies than the business- and profit-centric model followed by most; particularly memorable is Craig Newmark of craigslist. There are founders here who went for the traditional plan of growing and then selling the business or going public (a "liquidity event"), founders who are still running their business, founders who took no funding at all, and one interview with a founder who has gone on to be a venture capitalist (not to mention the author, who now works for an angel investment group).

It's a rather overwhelmingly male group, but Livingston, in addition to answering her own questions, does interview two female founders: Caterina Fake of Flickr and Mena Trott of Six Apart. I was very glad to see those perspectives included, and Fake has one particularly memorable account of sexism in the startup finance world. I was surprised by how much I generally liked all the founders interviewed; the only exception was James Hong (HOT or NOT), who appears to have made a huge amount of money providing what's essentially an exploitative pseudo-porn site crossed with a dating service, and who appears to have no awareness whatsoever as to why people might find that distasteful. I suppose he has no reason to need any awareness given how much money he made off the idea.

The one obvious flaw in this method of studying startups is hard to avoid: huge survivorship bias. Nearly every founder here was successful, at least to the degree of having a liquidity event and a good-sized payout. I'm glad Livingston interviewed Greenspun about the collapse of ArsDigita, but even there, with an arguably mis-managed company that eventually folded, he got an undisclosed payout through a legal settlement. It's tempting to draw conclusions about the similarities between these founders and derive from that some lessons for success, but that's exactly what the problem of survivorship bias cautions against. The reader has no way of knowing how many other startups tried a given tactic or had a given attitude and still failed. Founders at Work walks the reader towards some stock conclusions, such as the need for determination in a founder, and those conclusions aren't entirely without merit. But without a survey of failed startups as well as successful ones, it can at most highlight necessary conditions and can say little about which tactics make the difference between successful and failed startups.

Overall, I think Coders at Work was a better-executed take on this concept, partly for the personal reason that it deals directly with an area of interest for me, partly because each person was interviewed in more depth, and partly because its subject material is less vulnerable to survivorship bias. I was entertained by this book and learned interesting trivia, but mostly it cemented my lack of desire to ever work for a startup. But this style of interview collection is a great idea, and I would love to see similar collections of interviews focused on other groups of people.

Founders at Work provides a fascinating overview of startup culture and of the type of attitude that startup founders generally have, with some looks at equally fascinating exceptions like Steve Wosniak. It also provides a lot of raw, if biased, material to mull over when forming personal opinions about the tensions between money, business, workplaces, customers, and users who may not be customers. I recommend it, even to people whose reactions to mentions of startups is to back away with their fingers crossed.

Rating: 8 out of 10

Reviewed: 2010-10-09

Last modified and spun 2015-03-24