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I think Yahoo is smarter now about dealing with startups than they were then. We were one of the first companies they bought, and I think the idea was, back then, that what you should do with an acquisition is integrate it, in the same way that a sugar cube becomes integrated with your tea. We basically got dissolved within Yahoo, and all the people working on Viaweb or Yahoo Store as it then became got dispersed to all the corresponding bits of Yahoo. The engineers got put with the engineers and the people working on customer support got put with the support people and the sales guys got put with the Yahoo sales guys. It seemed to Yahoo that this was the most efficient, organized way of doing things, but actually it was terrible for us. We had been this little tight-knit group that worked really well together and suddenly we were spread out all over Yahoo.
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Livingston: Any general thought you have on the acquisition process, since you had several offers Graham: Never believe it s a deal till the money s in the bank. Even at the point
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where you walk in that room to sign the final papers, there s still a 10 percent chance the deal s going to fall through. At the point where people say, We want to buy you, the chances of it falling through are like 80 or 90 percent. So you can t let yourself believe. If someone wants to make you an offer, fine, but don t change your plans based on that. Just keep going.
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Livingston: Looking back, what surprised you most in your experience with a
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Graham: One thing that was surprising was that it actually worked. There we
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were, in the summer of 1995, thinking, We don t know anything about business, but we re good programmers. Maybe if we write a really good program, we ll make something all these users will want and we ll get lots of users and then some big company will buy us. And 3 years and enormous numbers of ups and downs later, that s exactly what happened. We had this theory about how business might work, and we sort of forced it to conform to our theory. I know Robert was surprised that we made any money, because I have a real index of how he was feeling about Viaweb early on. A couple months in, he and I were having dinner, and I made a bet with him that if he ever made a million dollars out of Viaweb, he would get his ear pierced. So the day after the Yahoo deal closed, Trevor and I grabbed him by one arm each and took him down to the Garage in Harvard Square, where all the teenagers get their nose rings, and we got his ear pierced. He spent a long time trying to pick out the smallest one.
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Livingston: Some aspects of business turned out to be less of a mystery than
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you had thought. What did you find you were better at than you thought
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Graham: I found I could actually sell moderately well. I could convince people
of stuff. I learned a trick for doing this: to tell the truth. A lot of people think that the way to convince people of things is to be eloquent to have some bag of tricks for sliding conclusions into their brains. But there s also a sort of hack that you can use if you are not a very good salesman, which is simply tell people
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the truth. Our strategy for selling our software to people was: make the best software and then tell them, truthfully, this is the best software. And they could tell we were telling the truth. Another advantage of telling the truth is that you don t have to remember what you ve said. You don t have to keep any state in your head. It s a purely functional business strategy. (Hackers will get what I mean.)
Livingston: Were there things that nontechnical people misunderstood about what Viaweb was doing Graham: Constantly. No one ever seemed to get that the software ran on the
server. Nowadays there are so many web-based applications that you take this for granted, but this was a year before Hotmail. We would explain to people how the thing worked and give them a demo and they would say, Great. Where do I go to download it After we got bought by Yahoo, a reporter who had been covering us for the past 2 years wrote an article about the Yahoo acquisition and at the end said It only takes 10 minutes to download. After covering us for years, the guy still thought this was client software.
Livingston: Is there anything that you would have done differently Graham: I wouldn t worry so much about seeming like a real company. Now I
would just say, keep it a bunch of guys operating out of an apartment for as long as you want, because there s nothing to be ashamed of in that, especially if you re writing great software. Another thing I would do is open an online store ourselves. We did use our software for building our website. We were the only one of all our competitors who actually used our software for building our own corporate website. But we didn t have anything people could buy online. If we had been selling stuff, we would have understood what life was like from the merchant s point of view.
Livingston: What was one of the funniest moments Graham: Probably the time we tried starting a gas generator inside our office.
There was this huge blackout in Cambridge that lasted for about five hours. We always had our servers in our offices with us. We didn t trust this collocation stuff. Nowadays, collocating is the standard thing to do and even big companies do it, but we felt like we had to have those servers in the room with us. So when the power went out, our servers were really dead. We had some battery-powered UPSs, but they would only last for half an hour. They were really designed for power spikes, not for the power going out for 5 hours. So I dispatched Trevor to Home Depot to buy a gasoline-powered generator as fast as possible, while I sat there watching the UPSs power go down, turning off servers one by one thinking about which customers were on each server and which ones would be the maddest, and turning off whichever server would have the least mad customers on it. Eventually I had to turn off all the servers, because it took Trevor a while to get to Home Depot and back. Finally he showed up with this gas generator, and we weren t really sure where to put it because we were in this small office building in Harvard Square.
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