How 50 Startups Started – Part 5
This is Part 5 of “How 50 Startups Started”. You can read Part 4 here.
- Uber. Frustrated with being left on the side of the road one Friday night waiting for a taxi, co-founder Garrett Camp came up with the idea of an on-demand car pickup service. Unable to commit the time required, Camp handed the project off to friend and fellow co-founder Travis Kalanick. What was a side-project has become a multi-billion dollar business.
- Square. Co-founder Jack Dorsey (of Twitter fame) relates a story of fellow co-founder and glass artist, Jim McKelvey losing a $2,000 sale of a glass tap because neither he nor the customer could accept the card payment. Both founders set out to see if there was a way to turn the advanced mobile phones we carry around with us everywhere into payment devices. The result was Square, recently valued at $6bn.
- Snapchat. Co-founder Evan Spiegel created an app that allows users to take “self-destructing” images and videos. The idea was an immediate hit, attracting 700 million snaps per day. It’s popularity led Facebook to offer $3bn to buy out the startup. The offer was declined. Today, Snapchat is on the verge of an estimated $25bn flotation which will make Spiegel a multi-billionaire.
- Tinder. Co-founder Sean Rad set out the solve the problem of feeling rejected or overwhelmed, all too common with traditional dating services. He saw a lot of pressure and friction in the dating websites and wanted to break down a lot of the barriers to meeting new people. The solution was a “double opt-in” where you would already know someone was interested in you before you met them. Solving this pain point has made Tinder a tremendous success with over 9.6m active daily users and a valuation in excess of $1bn.
- Goodreads. Founder Otis Chandler loved to read. He quit a job at a Silicon Valley startup to work on his project, Goodreads, a social network for books which began in his living room. He believed social networking was the best mechanism for online discovery than anything else and a genuine desire to see what others were reading and to share his passion was what drove the project. Goodreads was acquired by Amazon for $150m.
- TOMS. Whilst holidaying in Argentina, founder Blake Mycoskie was moved to see a charity drive where people donated used shoes to children who had none. Mycoskie however did not believe the charity model to be sustainable and so he set out to create a for-profit shoe company. He used a now well-known promotion: buy one pair of shoes and TOMS would give another pair to a child in need. It was a promotion that was easy to understand and captured customers’ imagination. In 2014, Bain Capital acquired half of TOMS for $625m.
- AngelList. Founder Naval Ravikant created a private mailing list to inform fellow investors of new startups and promising ideas. What began as a few emails snowballed and AngelList is now a go-to resource for bringing together startups with potential investors and those who want to know the latest deals and movers and shakers in the tech world. AngelList is valued at $150m.
- Evernote. CEO Phil Libin says Evernote was the result of “wanting to build something for us” that the founding team would find useful in their everyday lives. They brainstormed various ideas – video gaming, social media – but felt those areas were already well served. It was then that they hit on the area of productivity tools which they found to be dated, clunky, and a pain to use. From that, grew Evernote – an example of “don’t think of a business, solve a problem”.
- Vine. Co-founder Dom Hofmann talked about his enthusiasm for making video as a child. It was an interest that he enjoyed but sadly fell by the wayside as he grew up: there was too much needed to make video – hardware, lighting, editing software. Hofmann and his colleagues revisited the idea of video with the rise of smart phones. What if they could just simplify video, put it in the hands of everyone? What could be easier than allowing people to make point-and-shoot six-second videos and sharing those with others? Hofmann said the first version crashed a lot but friends and family liked it. Vine was acquired by Twitter for $30m. In a surprise move, given Vine’s popularity, Twitter announced in 2016 that it would be shutting Vine down in the coming months.
- Zillow. Co-founder Richard Barton said the motivation behind founding Zillow was to empower consumers – to give them better tools, information and access to professional services for the buying and selling homes and mortgages. The result is an ecosystem for buying and renting properties and all the satellite services that involves. It’s a win-win for consumers an service-providers.