Last month, I decided to start sharing insights gleaned from the book Founders at Work by Jessica Livingston. The interviews (with founders of technology companies from 37 Signals to Trip Advisor) provide an educational, behind-the-scenes look at how start-ups grew into huge companies. Because I like to learn from others, I’ve decided to turn this into a monthly series.
First, a little background on Yahoo and Tim Brady:
Yahoo started out in 1994 as a bunch of links to research papers. One of the two founders, Jerry Yang, was roommates with Tim Brady during their undergrad days at Stanford. Jerry and David Filo, Yahoo’s other founder, asked Tim to write a business plan for Yahoo while he was getting his MBA at Harvard. Once the business plan was finished, David and Jerry asked Tim to join Yahoo.
What you can learn from Tim Brady (2nd from left in photo), Senior VP of Network and Commerce Services at Yahoo, launch date 1994:
Advertising as business model. From the very beginning, they knew they were a media company first and a web portal/search engine second. As a result, their business plan was based on advertising to generate revenue. HotWired, Wired Magazine’s online site, sold ads on their site, so the Yahoo team adopted the strategy for themselves.
Smart partnerships. Netscape was the only browser back then, and they were only in the game so they could sell space on their servers. They happily added Yahoo to their directory button, which sent Yahoo’s traffic through the roof.
Branding via graphics. To build their brand, Yahoo added graphics. I know, today it sounds so obvious, but in 1994 adding graphics to a website was a new concept. Internet connections via slow-as-a-snail-stuck-in-molasses dial-up modems caused web pages tricked out with graphics to download even slower. Yahoo knew that great graphics were integral to their branding, so they launched both graphics and ads at the same time to make a big impact.
Do what it takes to help your customers. Unlike AOL, Yahoo understood that the Internet was (and still is) an open system and erecting walls was not the smartest operating plan. If you couldn’t find something using Yahoo’s search capability, you were given the option to try searching on a competitor’s site, like Excite. (I actually remember this feature!) By helping their customers, Yahoo clearly conveyed that they had their users’ best interests in mind.
Seize new opportunities. Yahoo is now known for its news, but they stumbled upon the business opportunity by accident. Their first foray into News came the day Prime Minister Rabin of Israel was assassinated in 1995. They placed the assassination on their front page, got great feedback, and pursued the opportunity to become a news outlet.
Web.com is now offering forums designed to support small businesses in cities throughout the US. Learn more about these forums here: http://Businessforum.web.com/
Tags: Founders at Work, Tim Brady, Yahoo
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