November 22, 2005
VV Show #20 - Joel Spolsky of Fog Creek Software
While some entrepreneurs fret over new business ideas, Joel Spolsky of Fog Creek Software focuses on hiring the best and brightest for his New York City-based software company, and then figures out how to make a profit with the products they create. He bootstrapped his company to profitability and built a loyal following of fans along the way. While Joel developed Fog Creek's first product called FogBugz that tracks bugs, he let his 2005 summer interns develop their own product called Copilot that has already hit the market. Joel's out to prove he can put capital to work, scale his business, and maybe even revolutionize venture capital along the way.
Update: Joel returned for a second interview on Venture Voiceover three years later in 2009.
1:30 Starting career at Microsoft
- 'In those days Windows was remarkably cheesy.'
6:00 Gaining versatile skills in a big company
9:15 Starting Fog Creek Software
- 'I think what happened around 1999 when I finally made the decision to jump off, is that so many people were starting companies and they were being so successful -- and they were all so stupid -- that I felt I could probably do better than they did.'
- Released bug tracking software FogBugz.
15:00 Trying to build a content management system
- City Desk never really took off.
16:35 Bootstrapping a company with Aeron chairs
- 'Our model is to make the best working environment for programmers' leading to profit.'
19:30 Project Aardvark
- Used four summer interns to launch a new product.
23:00 Recognizing good business opportunities
- At a New York Tech Meetup, Joel felt none of the six businesses pitched addressed a pain that people have.
- 'I don't think you can make a high tech company in the long run that doesn't have geeks making the key decisions, unfortunately for the MBAs.'
28:00 Fog Creek Software management training program
33:45 Avoiding venture capital
- 'I think venture capital is radically misaligned with the needs of founders and entrepreneurs.'
- 'I wrote an analysis in those days called 'Fixing Venture Capital' -- it should have been called 'venture capital is broken' because I never got around to explaining how to fix it.'
- 'People are starting to think about exit strategies.'
Refers to Paul Graham article about VC.
- 'The VCs, basically, by refusing to invest in anybody during the nuclear winter of the dot com fallout, have actually, unfortunately, now created a super-breed of entrepreneur that is immune to the need for money.'
- 'At some point we might say, 'hey, the IPO window is open, let's accelerate a bunch of that future revenue, put it all in our pockets right now so we can spend it while we're young and good looking.''
51:15 Venture Voice listeners started podcasts
November 8, 2005
VV Show #19 - Derek Sivers of CD Baby
Many would-be tech titans dream day and night about how their hot new idea will change the world. Derek Sivers just wanted to have his independent band's CDs sold over the Web. No one would do it, so he built his own music store. CD Baby now generates $25 million a year in revenue and is the single largest digital distributor of music in the world according to Napster. And he did it without a dime in venture capital. Derek holds true to some very basic beliefs in business and a desire to keep revolutionizing the music industry.
1:30 Career as a musician and the birth of CD Baby
- Studied at Berklee College of Music.
- Got a job at Warner Brothers in New York City.
- 'Was working inside the music industry just enough to know I didn't like that side of things.'
- 'I was in a circus for 10 years.'
9:00 The importance of automation
10:30 Advice for starting a business
- 'Just give yourself a 10 day deadline, and just launch it' with almost no features.'
11:45 Training for business in the circus
- 'It was actually really good training that I had a boss that was just an idiot.'
- 'I'm usually the least slacker-like one in the crowd.'
- 'CD Baby is a total rebellion against the traditional world of distribution.'
18:30 Building a business in an unconventional way
- 'The joke is that CD Baby is run with all the corporate formality of Bob and Jimmy's tackle shop in Key Largo.'
20:30 Is building a business easy?
24:15 Company size
- About $25 million in revenue by 50 employees.
24:40 Steve Jobs encounter
- Integrated CD Baby with iTunes.
- 'The cool thing is we're friends with them all.'
- Mentions friendly competitor IODA.
- Loves the book Good to Great by Jim Collins.
34:15 No investors
- 'During the dot com days you kind of had to whack 'em [investors] off with a stick.'
40:40 Working with musicians
- Al Jardine of The Beach Boys and Thomas Dolby who created 'She Blinded Me With Science' use CD Baby.
- Started business in Woodstock, NY.
- 'I was up in the mountains with a 56k modem.'
- 'I was about to pick San Francisco until I realized what it cost.'
- Moved to Portland, OR.