Notes: Sink or Swim. The Five Most Important Start-up Decisions

The following are my panel notes from SXSW. As I am not the fastest typer I have paraphrased what was said. Should you notice any mistakes please do point them out in the comments for corrections.

Decisions that cause change

Who decided that engineers get free soda? And when should it stop?
Why does the cursor change into a hand when you mouseover a link?

Slide of the web 2.0 logos

How many of these will still be going in a year's time?

Q:(Saying no to VC)

CS: Servers are getting cheaper
EW: We took VC because it was in a market that was going to grow fast and seemed like a good idea to take it. I didn't realise what a big thing it was to take it.
CS: If you had done the weekends and nights develop would that have changed?
EW: It wouldn't have been the same.

JSp: VC's want you to take risk - higher risk greater retune where as if you are doing it yourself you can be more conservative. VC's will want you to pour money into the company. When you grow slowly and organically you avoid problems.

CS: Do you think you'd start another company.
JSp: not likely...

JS: Both you (JSp) and I started something in NYC.
JSp: Its better hiring in NYC compared to Silicon Valley because in Silicon Valley people have more choice!

ML: Do you all have a blog? Is it all about expressing angst etc?
EW: It's a platform to news out about stuff. With more traffic I get less keen to express personal angst.

CS: I'm new to blogging. I doubt I'd get personal or angsty. blog disclaimers: I don't think you can separate you views from those of your company. I definitely post when we have new things. Our independent blogs are the company blogs.

JSp: I created my website because I wanted to write about the software management process. Once I left Microsoft I found that people outside weren't doing things like running bug databases etc. though I don't think they are like that any more. I just got office 12 and it's really slow and speaking to the product manager it was an old snapshot. IE Microsoft takes a long time to produce stuff.

JS: The del.icio.us mailing list meant people could start flame wars and go off-topic. Just talking to people is the most important thing.

ML: How did delicious create the buzz without a blog.

JS: RSS feeds and ways to connect things to your blog.

Why did you say no to Google?

Js: Google rarely buy companies for strategic reasons. They normally look for low risk products. they will do acquisitions to get people.

CS: Google wants to have more software for Mac. We nearly became part of Apple and we nearly created iTunes. It's about being happy. We are 10 people that love what we do and that's better than making a bazillion dollars. It became clear that they were interested in us for our employees. The staff at Panic decided that if they wanted to they could already work for Google. We never talked about the money thing if we had I would have a tear in my eye! It was a kick in the ass to work harder.

EW: I have a different answer to that. We had 6 people. I had poured 4 years into my life into Blogger. Google was private at the time and the talk of the money was theoretical. Going with Google meant that Blogger could reach it's potential.

JS: It was interesting to talk to Google Amazon and Yahoo! all in the same week. I worked on Wall Street before I worked on del.icio.us. Google couldn't tell me what my job would be they just said I would be an engineer.

Q: from the audience to EW how do you feel about Blogger since you left Google?
EW: I was naively optimistic. We were the first company that they acquired. We got there and it was frustrating it felt like we were competing with the search. Despite that the team after I left has been on a roll. they've continued to develop it and it has a lot of pageviews.
CS: Was it the politics why you left
EW: They wouldn't let me have Eric's job.

Q: Why free soda.
JSp: We have free soda but the most important thing is the private office a quiet place where there's no salesmen in the background. It's our no1 perk.
CS: We don't have free soda and no fancy offices just one big space. a bunch of nerds with headphones on. Everyone gets free t-shirts.
ML: Panic has a really strong brand. There's passion about working for Panic.
CS: We hired this guy Tim and he couldn't believe he was here. Our biggest perk is everyone is working on something they like.

JS: We did free soda but the walk to the coffee place was more invigorating.
EW: I have nothing to add.

Q: How do you translate brand to users.
JSp: the fogcreek brand is better known that it's products. If anyone reads Joel on software and needs bug-tracking software then we will be on their list. If we had a product that people use every day then we would have more users.

Q: What's your attitude on hiring people as we begin to grow?
CS: For Panic it's a gradual process we only hire people when we need them. It does take a while for people to get up to speed. We only hire when necessary. We started in 1997 and it's a person per year.
JSp: When you hire an intern you can make them a summer offer and it saves them a lot of trouble in 3 months that have proved themselves.
EW: when it comes to VC funded start-up it's easy to hire too fast and the more stuff you need to do you more people you need. you have to be careful about timing that as the VC's on the board may be putting too much pressure on you to hire people. If things are changing all of the time if you have to navigate that with a bunch of people that can be deadly. We consciously slowed it down.

JS: At delicious we did a variant of the internship thing where we would get people in for one thing and then we would get them in permanently if they were good, we got someone in who sent in loads of bug reports to my JavaScript code. There was tons of crap that wasn't the product so we should have had an office manager.

Q: Did anyone have a business plan
CS: no we just went.
JS: for us we had a product and the plan was to build the product...

Q: What would you say to people who have a great idea. but no tech skills

CS: Get a co-founder. We get emails like that and we get scared to ask what it is
JSp: An idea is not worth that much it's the execution of the idea that is worth something. I know a VC that won't fund a idea that doesn't have more than on e person/
CS: You idea should boil down to one simple idea. encourage you to whittle down you idea to simple.

Q: What' the mistake you made that nearly sent the whole thing down the toilet.
JS: for me it was do I leave the financial market to go into the tech start-up. I inadvertently made a lot of good choices. there were some hiring issues
JSp: in the history of Fcreek coupons and deals didn't help. releasing new versions is what worked. When we do a new version we get double sales.
CS: I agree the same when we release new versions sales go up.
JSp: Every hurdle your product has to jump that a potential for someone not choosing you software. Making the product better is the best use of time.
EW: I always try to do too much. We started Blogger and it was the simple thing that took off.
JS: Instead do we have to do this thing. The first question should be do I have to make this decision. It's what we decide to leave out that's as important.

Q: What the best advice to someone looking to start up?
JSp: Never take a step that could affect your ability to move forward. We never had to close the company if we could get consulting gigs for one person. We signed a 5-year lease and the worst-case scenario was that if we failed we would have to leave the space.
CS: the advice I would give. Is making sure that the product you make is something that you want to make. Thus you will have passion for your product.

Q: Are you hiring risk takers?
Jsp: No if they are any good if your cheque bounce they will just go off and get another job. Some people are more into a big company. the people you hire early on people are more generalist.

Q: I've never understood how Delicious makes money.
JS: Before the acquisition. We were really careful about how we put advertising on the site. All the time it's getting bigger

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