print barcode zebra vb.net Livingston: You ve done startups in the East and West Coast hubs. Is one place in Font

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better than the other for startups
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Kahle: Oh, I think it s much easier to do a startup on the West Coast. There are all the facilities and services available to you. You can put together a marketing department out of part-time people. You can hire an accountant to just do exactly what you need. You need a lot less infrastructure that you control to do a startup on the West Coast than on the East Coast. If you started with $8 million, you can buy everything you need; but if you are starting, just you, you can do a startup out of your bedroom. In fact, a lot of people do. In fact, most bedrooms I think are startups! The idea that you can start on a shoestring, that you can hold a meeting in a coffeehouse and that s OK, is perfectly legitimate on the West Coast. Livingston: Why not in Cambridge Kahle: Maybe you can do that now in Cambridge; maybe it s changed. But
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there s a more institutional idea that you have to be more proven. San Francisco is full of dreamers. It s the people with the new ideas. It may be bad, they may be inappropriate, they may fail, but I love the idea that we can do something new and different something that hasn t been done before, something that s going to affect a lot of people. There s an idea that you can pull something off here. That sort of uplifting nature to San Francisco and the Bay Area in general really lives on. This is a city of dreamers, and that s what makes it just a wonderful place to live and to work.
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Livingston: Looking back on all of your experiences, what surprised you most Kahle: How long things take. To start a company and to get to a point where
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one has a critical mass you have an office, you ve got your CFO, you ve got all of the infrastructure to become a viable entity. I think about 20 to 40 people is a golden size, because you re not spending all of your time doing things that you re not that good at. There are other people in the organization with more specialization in different areas. It takes a couple years to really get that debugged.
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You can grow it instantly. You can hire 40 people in an afternoon, but they won t necessarily work together well; they won t understand what s going on. It takes a while. So 6 months, 9 months goes by often just putting together all the pieces of infrastructure. With Alexa, it took a year to build the company to the extent where we could do our first real product release. WAIS was the same way. The first product release came a year after the start. It always seems like it should be much quicker than that.
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Livingston: What can big corporations do to preserve the startuppyness of the
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Kahle: My first company was bought by AOL, and what AOL wanted to do was
inject the Internet into its veins. So they went around and bought a bunch of companies. And I d say what they d bought the company for, if I had been more worldly, they actually achieved. It just wasn t what I was looking for. I had built a little company. It made something like $3 million a year, which I thought was pretty great. I wanted it to get to $10 million or $20 million, but that was a rounding error for AOL it was noise. They needed us to help on the big issues. So I worked on strategy for the company for 12 months to get the company going in the Internet direction. And that s really what they wanted. It just wasn t something that I knew how to do. I really liked running something that I knew how to run. When I did the startup that was bought by Amazon, I said, Leave us on our own. We re smart and independent enough to be able to do good work that will inject things from the side into your other organization. The thing that Jeff Bezos did that I thought was very smart was that he ran us through his organization and others through ours. He used us, at least for the first few years, as a think tank in some sense a live and breathing example of how else they could do things. Alexa s major value in the first year of its being acquired by Amazon was to take some of the lessons that we had learned of how to do things much cheaper than they had. They had gone through an explosive growth phase, and they were spending $100 million a year on hardware. We couldn t believe it. Here was this little company that had been living its whole life, and we hadn t spent $10 million. So Jeff said, OK, Brewster, you know how to do this stuff cheaply. What should we do I said, You should stop buying hardware. You ve bought plenty. He said, OK, we re going to stop buying hardware. It caused enormous pain to their organization, but it was the right thing to do. They needed to become profitable. They learned a lot of lessons from this. They could use an outsider that was still inside. We were not as independent as a Bain Consultants or something like that, but we knew what we were talking about because we had actually built stuff. We dropped the cost of their Internet connections by 90 percent just by saying that you can go and negotiate deals in this and this way. So we paid for the acquisition of our company in the first year just by the capital costs that they saved.
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