Maria Lourdes C. Capilitan

Sysanal

June 5, 2008

Case Study

“Joe Kraus”

(Cofounder, Excite)

            The things that I learned is bonding is really part of success because if we are comfortable with our partner, we know that the result of our project will become good. Family would be a big help because they are the people who could help you if you are just starting a start up. Kraus started at minimal budget and just increasing as they continue working. We should remember that it is not easy to gain money. The best quote that we I learned is that Great people don’t look for jobs, Great people are sold on jobs.” Taking some risks will not lead you to harm so don’t hesitate to give some sacrifices because in the end it will be a big blast to your career.

            Joe Kraus started excite that was known as “Architext” in 1993 with Stanford classmates. They started to work together to start a company. Their idea came from a formative after freshman year of college. In summer with his friend they started a business creating T-shirts. They made $25,000. Graham Spencer is a neighborhood of Kraus. This guy was being courted by apple and Microsoft (Kraus and Spencer). They agreed to work with them but with his four friends. These friends were willing and capable. They created a slogan., “ We are unencumbered by Reality”. After graduating they set up a shop in garage for their office. They got the idea to have a VT100 terminals from their work to home. They used a substantial fraction of their capital on a copy machine. They code for 18 months. They are being introduced to IDG. They attended board meeting where they presented what they did. Charles Ventures introduces Kraus to Geoff Yang. Yang didn’t know what to do with Kraus so they were introduced to Vinod Khosla. Vinod Khosla funded the company, he said that starting a company with your friends is a bad thing. Like in a situation, said by Kraus that you can’t fire a friend but you can fire a manager. They had difficulty in disturbing money fairly.

            Kraus says the hardest part in making a start up is when you woke up every morning dealing with difficulties. He also said that he is a paranoid competitor. This feeling that they were going out on a business and anything could upset him.  The things that are always misunderstood to them are; first, when they are using a search engine, they never go back to that site again. Second, nobody knew what will happen to the business.

            In 1997 everybody was diversifying portal strategies because no one knows how to make money to the search engine. Microsoft offered $70 million to excite but they refuses. Kraus went to Netscape. They have two buttons it was Net Search that was pointing to Infoseek browser while Net Directory was pointing to the Yahoo. They bid for $3 Million. The only money that they have is the $1 Million. He said that if they win they can raise it but if not they don’t know what will happen. They loss in the bidding and they felt horrible. By Vinold statement about his past experiences Kraus and Company get inspired and continue bidding. MCI couldn’t deliver to Netscape its money so the Netscape reach Kraus and give them the chance.

            Kraus said that he saw a lot of people giving up on start up. Like in recruiting they have a lot of difficulties. The lessons that they learn are; first, hire slowly and carefully, like what they say that slowly but surely. Second, cheap, cheap, and be cheap. Third, see the business underneath before you run terribly fast. Don’t go ahead of naturally. Lastly, take time to understand the dynamics of the business.