6 ms·

I created a $350M software company knowing nothing about software (2015)

131 points by himoacs 5y ago

ReFruity 5y ago
This resonates well with Paul's "How not to die" [1] [1] http://www.paulgraham.com/die.html http://www.paulgraham.com/die.html
ksaxena 5y ago
This company was just acquired by Zoom for ~$15B
- sam_dal 5y ago
  Yeah, and I have been thinking good job of them sucking from Zoom a la Autonomy or Qualtrics.
- plumeria 5y ago
  Caveat: all-stock transaction.
  - bradhe 5y ago
    Turned out to be a great get thanks to COVID.
  - France_is_bacon 5y ago
    $15B in all stock = $15B in collateral = as much cash as you can conceivably wish for in your wildest dreams. "Hey, bank manager, I have $15B in stocks, will you loan me $150 million to buy this really, really nice home in Malibu?" Bank manager: "Yesyesyesyesyesyesyesyesyesyesyesyesyesyesyesyesyesyesyesyesyesyesyes"
    - nickpp 5y ago
      The stock may very well crater in value all the way to 0, but the loan must still be paid, with interest and all.
      - Seanambers 5y ago
        I would assume that over time the property will have a better total return profile than the cost of the bank loan. Short term this might not be true, but over longer time frames it usually is. So its just a question of the company staying afloat for long enough..
      - vijayr02 5y ago
        Not necessarily true. The loan (especially if you're borrowing 1% of the collateral value) could be non recourse [0]. In such a case the bank can only depend on the stock value for recovery. [0] https://www.investopedia.com/ask/answers/08/nonrecourse-loan-vs-recourse-loan.asp https://www.investopedia.com/ask/answers/08/nonrecourse-loan...
      - France_is_bacon 5y ago
        The stock may go to zero. Or it may to to $20 billion, or it may to to $5 billion, or it may go to $5.1487 billion. My point remains the same. The whole "has it in paper" as if that has no relation to cash, is not correct. Having stock is the exact same as having cash. Actually, it is way better. Because if you get cash, you have to pay taxes on it, so on $15 billion, that would be $5 billion in taxes, let's say. But if you get stock, then there's no taxes, but you get to borrow against it and get the cash anyways, as much as you need. Sure, it might go to zero, but that's a pretty lame argument.
pmoriarty 5y ago
It's not clear what this person actually did. It sounds like it's his employees/partners did all the work.
- paulcole 5y ago
  From my reading of the article it sounds like sales and product vision — both as essential as coding.
- CyberRabbi 5y ago
  The others were diggers, he told them where to dig.
  - ThePadawan 5y ago
    That is a delightful expression. I think if you told this to 5 people, there would be 5 different attitudes arising from it. I'm going to have to steal that!
  - IG_Semmelweiss 5y ago
    And he went and bought the shovels for all. Abd he got the money for the permits and the bureaucracy. And he actually motivated everyone to dig in the exact place they did.
- sriram_sun 5y ago
  2000 phone calls. Count me out after two. I somehow still manage to pay the bills consulting :).
- Rastonbury 5y ago
  Yeah he admits as much, he didn't do any software work. He 'just' a sales guy Got 150k seed, landed a 40k contract without a product. As for team, he convinced a potential cofounder to sell his house and move across the country and hired his ex-boss, just to start
jakequade 5y ago
> Knowing nothing about software. A few lines in: > I created a horse-racing simulation game in Applesoft BASIC in Manhattan Beach Middle School’s computer classroom and ran a small gambling operation. ... Ok.
- nobodyknowsyoda 5y ago
  Yeah that was hilarious. Also: > Many of my friends who are founders of their own companies tell me how they exhibited the entrepreneurial spirit as a kid… But that wasn’t me. Literally next sentence: > I ran a small gambling operation
- vsareto 5y ago
  Compared to the engineers, it does sound accurate. I couldn't claim to know anything serious about medicine by reading Wikipedia compared to a practicing doctor. Disingenuous title? Well yeah. The author does sales.
  - lazyasciiart 5y ago
    No, but you could claim it if you'd worked as a volunteer EMT for a year.
  - 908B64B197 5y ago
    > I couldn't claim to know anything serious about medicine by reading Wikipedia compared to a practicing doctor. A basic understanding of biology beyond high school level will get you further than you think. Keep in mind the medical industry has a lot of artificial barriers and gatekeeping.
- lmilcin 5y ago
  I see nothing conflicting. "Software" is much more than just ability to write a small BASIC program. I have "been in software" for quarter of century and I am still constantly learning as if I was beginner. Though having been able to write even a small BASIC program may have had an effect of you appreciating the work of a developer just a tiny little bit. And this is not given -- I have seen in the past many CEOs having no appreciation whatsoever and this leads typically to disrupting developer work and underutilizing their abilities. Then when everything starts to fall apart management blames problems on developers rather than try to understand what caused these developers to fail.
spoonjim 5y ago
The guy knew about multi-tenant SaaS and Voice over IP and built a company around that before his competitors, I would not say he “knew nothing about software” any more than Steve Jobs.
mkmk 5y ago
(2015)
- dang 5y ago
  Added. Thanks!
anonymouse008 5y ago
F me — I didn’t need to read this tonight. My ‘sewer pipe’ feels light years in length, and I’m in a row boat. Much love to all those burning the candle at both ends with a blowtorch, may you make it out alive
- smoldesu 5y ago
  Yeah, articles like these read as psychopath porn to me. Not interested in subjecting myself to any of this on my own time.
  - pauldickwin 5y ago
    There is undoubtedly some survivorship bias, however, it sounds like you have already taken the blue pill and succumbed to corporate slavery.
bsder 5y ago
Someone always hits the lottery. The probability that it will be you is zero. Most people are much better served working for a company and punching the 9-to-5 clock--especially since startups nowadays rarely give contributors sufficient stock to make the risks worthwhile.
- ornornor 5y ago
  Not sure why you’re being downvoted, this is a very valid point for most people by definition.
- barrkel 5y ago
  I spent nearly 8 years at a fintech startup in London, leaving late last year. It just recently had a liquidity event (private capital) which means that my options will net me a bank deposit worth several times my after-tax annual salary. And yet, my current total comp at Google is worth more than my final salary + (pre-tax option value at liquidity event / 8). And I reckon I was the highest paid engineer in the company. I did forgo the options from my most recent grant when I left, but even with them, it wouldn't have exceeded Google's TC, especially considering $GOOG's recent appreciation. Since you only make money on options if the value rises, you need quite a lot late in the day for it to add up. And the 10 year expiration for the initial options was starting to come into view. I consider myself lucky to have come out of it so well, but in retrospect, I would have been better off joining Google earlier, though it would have been at a lower level.
  - deleted 5y ago
    [deleted]
  - fma 5y ago
    The less sexy way of "making it big" is get a well paying, interesting but low stress job, live below your means, dollar cost average your way into an index fund. Instead of spending nights and weekends hacking away, spend it with your family or a hobby...become a guaranteed millionaire. $20k invested per year, 8% average yearly return, 30 year growth = $2.5mill. YMMV based on tweaking those numbers
bitcoinGod88 5y ago
Awesome story.
deleted 5y ago
[deleted]
egypturnash 5y ago
I sure do love a good dose of survivor bias.
high_byte 5y ago
amazing story. I love the way he writes, as if he's still that 20 year old entrepreneur.
throwaway4good 5y ago
“ After what must have been more than 2,000 cold calls, I finally reached a receptive voice on the other line.” Sounds like he is a solid sales person. That stuff is worth a lot ... probably more than knowing a lot about software ... even in a software business.
imvetri 5y ago
Less you know, easy to solve.
pikseladam 5y ago
It looks like a paid content for advertising.
- alanbernstein 5y ago
  If that's the case then someone screwed up, because I had to actually read the article just to find the name of the company.
vessenes 5y ago
@dang, would be nice to add the year (2015?) to the title.
- dang 5y ago
  Added now. Thanks!
vessenes 5y ago
This is a kind of writing I think of as Silicon Valley mythos - in it, a plucky entrepreneur, a lucky angel investor and a hacker get together, and fail their way into an IPO. At the end they tell the reader he just needs to believe in himself more, and the SV myth will come true for him. There’s a lot of hate in the comments here, but I am personally more equivocal - it is definitely true that absolutely no centimillion or billion dollar companies get founded by people that refuse to found companies. And, I think the real moral of the story - persist and get lucky with a good team and a good market angle at the right time - is a very potent moral. But, I prefer the grittier SV myth stories a-la Ben Horowitz which mention all the times you’re vomiting in your bathroom worried about making payroll and fighting with your co-founders while your spouse is like “so, about that day job..” - I’m not sure there’s any company that gets truly valuable without some very difficult times.
- ukoki 5y ago
  > centimillion hectomillion, surely :) ? https://www.nist.gov/pml/weights-and-measures/metric-si-prefixes https://www.nist.gov/pml/weights-and-measures/metric-si-pref...
  - vessenes 5y ago
    Slip of the mind, surely! :)
- project2501a 5y ago
  Yeah, this is the bulls^H^H^H^H^Hstory that perpetuates that mythos, too. > persist and get lucky with a good team and a good market angle at the right time - is a very potent moral. What we should take away is that there is money to be wasted. A lot of money (which is not going into employees pockets). If someone was willing to give a billion dollars for a press of a bag of juice that could be squeezed by hand, a useless product, imagine what can be had if you have an actual product.
  - AbrahamParangi 5y ago
    A tangent but I think it is a useful behavior to never assume people are stupid or crazy (even if they obviously must be sometimes). The reason is that it’s at best uninformative and at worst just plain wrong. Instead I would suggest imagining that people are perfectly rational within the limits of their information and ability to reason, and consider what beliefs they could have had that motivated their behavior.
peter_d_sherman 5y ago
>"We then hired “The Machine” (Engineer #2) and I moved in with him into an apartment in the Twin Peaks neighborhood of San Francisco, mostly so I could harass him into programming day and night. And as my two engineers built a beta version of our call center software, I started dialing for dollars and calling call center owners with the pitch and promise of something cheaper. After so many rejections, I wanted to reject myself. After what must have been more than 2,000 cold calls, I finally reached a receptive voice on the other line. Joe owned a small but successful call center in Provo, Utah. He called my bluff and said that he knew we didn’t have anything solid yet, but he trusted we could get it built — but it had to be half the price I quoted him. And that’s the early lesson I learned about entrepreneurship, or maybe it was a lesson in America itself. That after so many rejections, I wanted to reject myself, but then found someone who would mail me a check for $40,000, even during a recession, because they were risk-taking business owners themselves. It made me realize that America was a magical place for entrepreneurs." [...] >"I’m not sure if I have any sage advice for other entrepreneurs, but out of this experience I did learn one important truth. Namely, you don’t have to be an Ivy League graduate (I’m not) or have a lot of money (we didn’t). You just have to believe in yourself against all reasonable logic, as trite as that sounds." PDS: What a great piece of writing about Entrepreneurship! Worth reading and re-reading in the future!
ngc248 5y ago
This reads like the pilot episode of a quirky netflix show.
dang 5y ago
Discussed at the time (of the article): How I Created a $350M Software Company Knowing Nothing About Software - https://news.ycombinator.com/item?id=10802194 https://news.ycombinator.com/item?id=10802194 - Dec 2015 (108 comments) On the recent acquisition by Zoom (thanks ksaxena for pointing this out: https://news.ycombinator.com/item?id=27968224 https://news.ycombinator.com/item?id=27968224) Zoom to Acquire Five9 - https://news.ycombinator.com/item?id=27878412 https://news.ycombinator.com/item?id=27878412 - July 2021 (24 comments) https://www.bloomberg.com/news/articles/2021-07-19/zoom-to-buy-cloud-service-firm-five9-for-14-7-billion https://www.bloomberg.com/news/articles/2021-07-19/zoom-to-b...
deleted 5y ago
[deleted]
virux 5y ago
have been a client of HARRY RAYMONDS CREDIT REPAIRS for about 2weeks now. I have 6 negatives items, some collections foreclosure on my report after I contacted them concerning my problem they gave me a couple of days to wait and after then when I checked my report I couldn’t believe my eyes all negatives entries collections including the foreclosure were completely cleared and I also got an amazing scoreof 810 excellent.They are very friendly and caring about helping me in fixing my bad credit and I got approved for the mortgage I applied and got my First Home. You can contact them on Email: hraay25@gmail.com +1 (213)295-1233 Call or (Whatsapp) to get your credit fixed. I HOPE THIS HELPS OUT.
musicale 5y ago
I thought Microsoft was worth more than $350M.

131 points by himoacs 5y ago

This resonates well with Paul's "How not to die" [1] [1] http://www.paulgraham.com/die.html http://www.paulgraham.com/die.html

ksaxena 5y ago

This company was just acquired by Zoom for ~$15B

sam_dal 5y ago
Yeah, and I have been thinking good job of them sucking from Zoom a la Autonomy or Qualtrics.
plumeria 5y ago
Caveat: all-stock transaction.
- bradhe 5y ago
  Turned out to be a great get thanks to COVID.
- France_is_bacon 5y ago
  $15B in all stock = $15B in collateral = as much cash as you can conceivably wish for in your wildest dreams. "Hey, bank manager, I have $15B in stocks, will you loan me $150 million to buy this really, really nice home in Malibu?" Bank manager: "Yesyesyesyesyesyesyesyesyesyesyesyesyesyesyesyesyesyesyesyesyesyesyes"
  - nickpp 5y ago
    The stock may very well crater in value all the way to 0, but the loan must still be paid, with interest and all.
    - Seanambers 5y ago
      I would assume that over time the property will have a better total return profile than the cost of the bank loan. Short term this might not be true, but over longer time frames it usually is. So its just a question of the company staying afloat for long enough..
    - vijayr02 5y ago
      Not necessarily true. The loan (especially if you're borrowing 1% of the collateral value) could be non recourse [0]. In such a case the bank can only depend on the stock value for recovery. [0] https://www.investopedia.com/ask/answers/08/nonrecourse-loan-vs-recourse-loan.asp https://www.investopedia.com/ask/answers/08/nonrecourse-loan...
    - France_is_bacon 5y ago
      The stock may go to zero. Or it may to to $20 billion, or it may to to $5 billion, or it may go to $5.1487 billion. My point remains the same. The whole "has it in paper" as if that has no relation to cash, is not correct. Having stock is the exact same as having cash. Actually, it is way better. Because if you get cash, you have to pay taxes on it, so on $15 billion, that would be $5 billion in taxes, let's say. But if you get stock, then there's no taxes, but you get to borrow against it and get the cash anyways, as much as you need. Sure, it might go to zero, but that's a pretty lame argument.

pmoriarty 5y ago

It's not clear what this person actually did. It sounds like it's his employees/partners did all the work.

paulcole 5y ago
From my reading of the article it sounds like sales and product vision — both as essential as coding.
CyberRabbi 5y ago
The others were diggers, he told them where to dig.
- ThePadawan 5y ago
  That is a delightful expression. I think if you told this to 5 people, there would be 5 different attitudes arising from it. I'm going to have to steal that!
- IG_Semmelweiss 5y ago
  And he went and bought the shovels for all. Abd he got the money for the permits and the bureaucracy. And he actually motivated everyone to dig in the exact place they did.
sriram_sun 5y ago
2000 phone calls. Count me out after two. I somehow still manage to pay the bills consulting :).
Rastonbury 5y ago
Yeah he admits as much, he didn't do any software work. He 'just' a sales guy Got 150k seed, landed a 40k contract without a product. As for team, he convinced a potential cofounder to sell his house and move across the country and hired his ex-boss, just to start

jakequade 5y ago

> Knowing nothing about software. A few lines in: > I created a horse-racing simulation game in Applesoft BASIC in Manhattan Beach Middle School’s computer classroom and ran a small gambling operation. ... Ok.

nobodyknowsyoda 5y ago
Yeah that was hilarious. Also: > Many of my friends who are founders of their own companies tell me how they exhibited the entrepreneurial spirit as a kid… But that wasn’t me. Literally next sentence: > I ran a small gambling operation
vsareto 5y ago
Compared to the engineers, it does sound accurate. I couldn't claim to know anything serious about medicine by reading Wikipedia compared to a practicing doctor. Disingenuous title? Well yeah. The author does sales.
- lazyasciiart 5y ago
  No, but you could claim it if you'd worked as a volunteer EMT for a year.
- 908B64B197 5y ago
  > I couldn't claim to know anything serious about medicine by reading Wikipedia compared to a practicing doctor. A basic understanding of biology beyond high school level will get you further than you think. Keep in mind the medical industry has a lot of artificial barriers and gatekeeping.
lmilcin 5y ago
I see nothing conflicting. "Software" is much more than just ability to write a small BASIC program. I have "been in software" for quarter of century and I am still constantly learning as if I was beginner. Though having been able to write even a small BASIC program may have had an effect of you appreciating the work of a developer just a tiny little bit. And this is not given -- I have seen in the past many CEOs having no appreciation whatsoever and this leads typically to disrupting developer work and underutilizing their abilities. Then when everything starts to fall apart management blames problems on developers rather than try to understand what caused these developers to fail.

spoonjim 5y ago

The guy knew about multi-tenant SaaS and Voice over IP and built a company around that before his competitors, I would not say he “knew nothing about software” any more than Steve Jobs.

mkmk 5y ago

(2015)

dang 5y ago
Added. Thanks!

anonymouse008 5y ago

F me — I didn’t need to read this tonight. My ‘sewer pipe’ feels light years in length, and I’m in a row boat. Much love to all those burning the candle at both ends with a blowtorch, may you make it out alive

smoldesu 5y ago
Yeah, articles like these read as psychopath porn to me. Not interested in subjecting myself to any of this on my own time.
- pauldickwin 5y ago
  There is undoubtedly some survivorship bias, however, it sounds like you have already taken the blue pill and succumbed to corporate slavery.

bsder 5y ago

Someone always hits the lottery. The probability that it will be you is zero. Most people are much better served working for a company and punching the 9-to-5 clock--especially since startups nowadays rarely give contributors sufficient stock to make the risks worthwhile.

ornornor 5y ago
Not sure why you’re being downvoted, this is a very valid point for most people by definition.
barrkel 5y ago
I spent nearly 8 years at a fintech startup in London, leaving late last year. It just recently had a liquidity event (private capital) which means that my options will net me a bank deposit worth several times my after-tax annual salary. And yet, my current total comp at Google is worth more than my final salary + (pre-tax option value at liquidity event / 8). And I reckon I was the highest paid engineer in the company. I did forgo the options from my most recent grant when I left, but even with them, it wouldn't have exceeded Google's TC, especially considering $GOOG's recent appreciation. Since you only make money on options if the value rises, you need quite a lot late in the day for it to add up. And the 10 year expiration for the initial options was starting to come into view. I consider myself lucky to have come out of it so well, but in retrospect, I would have been better off joining Google earlier, though it would have been at a lower level.
- deleted 5y ago
  [deleted]
- fma 5y ago
  The less sexy way of "making it big" is get a well paying, interesting but low stress job, live below your means, dollar cost average your way into an index fund. Instead of spending nights and weekends hacking away, spend it with your family or a hobby...become a guaranteed millionaire. $20k invested per year, 8% average yearly return, 30 year growth = $2.5mill. YMMV based on tweaking those numbers

bitcoinGod88 5y ago

Awesome story.

deleted 5y ago

[deleted]

egypturnash 5y ago

I sure do love a good dose of survivor bias.

high_byte 5y ago

amazing story. I love the way he writes, as if he's still that 20 year old entrepreneur.

throwaway4good 5y ago

“ After what must have been more than 2,000 cold calls, I finally reached a receptive voice on the other line.” Sounds like he is a solid sales person. That stuff is worth a lot ... probably more than knowing a lot about software ... even in a software business.

imvetri 5y ago

Less you know, easy to solve.

pikseladam 5y ago

It looks like a paid content for advertising.

alanbernstein 5y ago
If that's the case then someone screwed up, because I had to actually read the article just to find the name of the company.

vessenes 5y ago

@dang, would be nice to add the year (2015?) to the title.

dang 5y ago
Added now. Thanks!

vessenes 5y ago

This is a kind of writing I think of as Silicon Valley mythos - in it, a plucky entrepreneur, a lucky angel investor and a hacker get together, and fail their way into an IPO. At the end they tell the reader he just needs to believe in himself more, and the SV myth will come true for him. There’s a lot of hate in the comments here, but I am personally more equivocal - it is definitely true that absolutely no centimillion or billion dollar companies get founded by people that refuse to found companies. And, I think the real moral of the story - persist and get lucky with a good team and a good market angle at the right time - is a very potent moral. But, I prefer the grittier SV myth stories a-la Ben Horowitz which mention all the times you’re vomiting in your bathroom worried about making payroll and fighting with your co-founders while your spouse is like “so, about that day job..” - I’m not sure there’s any company that gets truly valuable without some very difficult times.

ukoki 5y ago
> centimillion hectomillion, surely :) ? https://www.nist.gov/pml/weights-and-measures/metric-si-prefixes https://www.nist.gov/pml/weights-and-measures/metric-si-pref...
- vessenes 5y ago
  Slip of the mind, surely! :)
project2501a 5y ago
Yeah, this is the bulls^H^H^H^H^Hstory that perpetuates that mythos, too. > persist and get lucky with a good team and a good market angle at the right time - is a very potent moral. What we should take away is that there is money to be wasted. A lot of money (which is not going into employees pockets). If someone was willing to give a billion dollars for a press of a bag of juice that could be squeezed by hand, a useless product, imagine what can be had if you have an actual product.
- AbrahamParangi 5y ago
  A tangent but I think it is a useful behavior to never assume people are stupid or crazy (even if they obviously must be sometimes). The reason is that it’s at best uninformative and at worst just plain wrong. Instead I would suggest imagining that people are perfectly rational within the limits of their information and ability to reason, and consider what beliefs they could have had that motivated their behavior.

peter_d_sherman 5y ago

>"We then hired “The Machine” (Engineer #2) and I moved in with him into an apartment in the Twin Peaks neighborhood of San Francisco, mostly so I could harass him into programming day and night. And as my two engineers built a beta version of our call center software, I started dialing for dollars and calling call center owners with the pitch and promise of something cheaper. After so many rejections, I wanted to reject myself. After what must have been more than 2,000 cold calls, I finally reached a receptive voice on the other line. Joe owned a small but successful call center in Provo, Utah. He called my bluff and said that he knew we didn’t have anything solid yet, but he trusted we could get it built — but it had to be half the price I quoted him. And that’s the early lesson I learned about entrepreneurship, or maybe it was a lesson in America itself. That after so many rejections, I wanted to reject myself, but then found someone who would mail me a check for $40,000, even during a recession, because they were risk-taking business owners themselves. It made me realize that America was a magical place for entrepreneurs." [...] >"I’m not sure if I have any sage advice for other entrepreneurs, but out of this experience I did learn one important truth. Namely, you don’t have to be an Ivy League graduate (I’m not) or have a lot of money (we didn’t). You just have to believe in yourself against all reasonable logic, as trite as that sounds." PDS: What a great piece of writing about Entrepreneurship! Worth reading and re-reading in the future!

ngc248 5y ago

This reads like the pilot episode of a quirky netflix show.

dang 5y ago

Discussed at the time (of the article): How I Created a $350M Software Company Knowing Nothing About Software - https://news.ycombinator.com/item?id=10802194 https://news.ycombinator.com/item?id=10802194 - Dec 2015 (108 comments) On the recent acquisition by Zoom (thanks ksaxena for pointing this out: https://news.ycombinator.com/item?id=27968224 https://news.ycombinator.com/item?id=27968224) Zoom to Acquire Five9 - https://news.ycombinator.com/item?id=27878412 https://news.ycombinator.com/item?id=27878412 - July 2021 (24 comments) https://www.bloomberg.com/news/articles/2021-07-19/zoom-to-buy-cloud-service-firm-five9-for-14-7-billion https://www.bloomberg.com/news/articles/2021-07-19/zoom-to-b...

deleted 5y ago

[deleted]

virux 5y ago

have been a client of HARRY RAYMONDS CREDIT REPAIRS for about 2weeks now. I have 6 negatives items, some collections foreclosure on my report after I contacted them concerning my problem they gave me a couple of days to wait and after then when I checked my report I couldn’t believe my eyes all negatives entries collections including the foreclosure were completely cleared and I also got an amazing scoreof 810 excellent.They are very friendly and caring about helping me in fixing my bad credit and I got approved for the mortgage I applied and got my First Home. You can contact them on Email: hraay25@gmail.com +1 (213)295-1233 Call or (Whatsapp) to get your credit fixed. I HOPE THIS HELPS OUT.

musicale 5y ago

I thought Microsoft was worth more than $350M.