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Garage to Gorilla logo

Why Are These Men Smiling?

Because Their Businesses Grew From Garage To
Gorilla During "A Great Time To Be Alive"

(Washington, DC - June 8, 1999) Marc Andreessen says he doesn't remember everything about his early days developing the technology that would become Netscape Navigator, the browser that arguably made the World Wide Web the popular and accessible medium that it is today.

Marc Andreessen's
Five Rules For
Internet Startups

1. Ride the right horse
Understand the market and be in front of the right parade. According to Andreessen, it's more important than anything else a company does, and it means being adaptive to rapidly changing Internet markets. Don't stay on a dead horse just because it's your original business plan.

2. Know why you're in business
Understand viscerally what you are in business to do, even if you don't know exactly what you are going to do. Managing a start-up is so much easier if you know why you exist and how you are going to change the world. "There are start-ups in the Valley right now that are just absolutely adrift," Andreessen said, "They don't have that sense of mission. They don't know what to do."

3. Focus ruthlessly on just one thing
"At a ham and egg breakfast," said Andreessen, "the chicken is involved, but the pig is committed. Be the pig." Most companies, regardless of size, can really only handle one or two things well, but many startups let themselves be dragged off into tangential efforts. Stay focused on your core business.

4. Beware the technological imperative
Just because something is technologically possible doesn't mean people want or need it. Focus on people, how they live and work, and provide them with solutions they can use. Andreessen compared some technological ventures, especially so-called convergence ideas like interactive TV, to a houseboat which, "in theory is kind of cool, but it turns out it's not a very good house and it's also not a very good boat."

5. The N3 Rule— No one kNows Nothing
"It has consistently been the case," says Andreessen, "that when major changes are about to happen, no one predicts them ahead of time." That's what makes this such an exciting time for netpreneurs, and one rich with so many opportunities. Ignore the pundits and follow your dream.

"It was a handful of us in a little office in Mountain View, California," he recalls and, "not only was that 35 Internet years ago, but, like all of you, we were pretty much surviving on Skittles and Mountain Dew, so the resulting sugar-induced haze pretty much determined our lives."

The crowd at this evening's Morino Institute Netpreneur Program event, "Garage To Gorilla," plainly knew the feeling. Of the over 1100 people attending in person (another 400 watched through a live webcast), more than 750 were from Internet companies, and more than half of those from startups. They also seemed to be on their own sugar highs, tossing beach balls and showing the kind of energy and enthusiasm so characteristic of entrepreneurs. Blaring music and even a cavorting man in a gorilla suit set the tone for an evening of stories and camaraderie, topped off with practical advice from Andreessen and fellow speaker Ted Leonsis.

Both men are pioneers and Internet entrepreneurs—netpreneurs—and both had their companies bought by America Online ( Though both started out in their garages, figuratively if not literally, they are now senior executives at AOL, the "800-pound gorilla" of the Internet. Andreesen is the company's CTO; Leonsis, who founded Redgate Communications, has played a leadership role in many areas of AOL's phenomenal growth. He is now President of AOL Interactive Properties Group, responsible for a range of activities including local networks, Web and communications portals, small business markets and Internet telephony.

"Garage to Gorilla is about what's possible," said Netpreneur Program Executive Director Mary MacPherson, "if you have the vision, the drive, the stamina, the leadership, the timing and, yes, the luck."

And what's possible seems to be just about anything.

As moderator Kara Swisher noted, "Major industries are changing dramatically and overnight. Just recently, major companies that we once thought of as steady and in great shape are seeing troubles. Companies like Disney and Time Warner are trying to rethink how they can enter this medium while companies like AOL and Yahoo! begin to take parts of their business. Major retailers are seeing dramatic shifts, from the way they distribute things to the way they get information to their customers to establishing relationships."

Swisher, a reporter who covers Silicon Valley for the Wall Street Journal and was formerly a business reporter for The Washington Post, literally wrote the book on AOL, describing the company's growth from startup to industry dominance in " How Steve Case Beat Bill Gates, Nailed the Netheads, and Made Millions in the War for the Web."

"When I started doing my book," explained Swisher, "the editor of The Washington Post came up to me and said, 'What are you writing, the death of AOL?' and I said, 'No, I'm going to write: AOL buys The Washington Post.' "

It was a radical thought back then, but radical and ambitious thoughts are part of the mix that help netpreneurs become industry leaders—Leonsis' goal was to be bigger than "Seinfeld," and AOL's CEO, Steve Case, said the company would one day become bigger than AT&T. "It always takes longer than you think it will," said Leonsis, "but it hits bigger than you expected."

What else does it take to conquer a market in the age of the Internet? Andreessen offered five rules he would follow were he to create another startup today, and both he and Leonsis peppered the evening with nuggets of hard-won wisdom for would-be gorillas, such as:

Shut up and listen. From an early joke by Swisher, through both Andreessen's and Leonsis' presentations, one theme dominated—listen, especially to your customers. Leonsis, who recently bought the Washington Capitals hockey team, told of how he joined an email list about the Capitals. "I have learned more in three weeks from being on the (message) boards and going into some of the chat rooms than the commissioner of hockey or anyone could possibly tell me in three weeks."

Mistakes are opportunities. Leonsis recalled how he had earlier spent much of AOL's time and money establishing relationships with Hollywood, believing that the Internet would one day become a big entertainment medium. His timing was premature, however, in large part because of current bandwidth limitations. But AOL learned a lot along the way, including that "entertainment planning" is a real and large market today. AOL has since focused its Digital Cities properties around services like finding local restaurants and the company has purchased MovieFone.

Be a creative paranoid. Asked what companies and players he worries most about, Leonsis replied, "You should worry about everyone... but who I worry about most is who I don't know."

Be the biggest or the deepest. In the hyper-competitive world of the Internet, Andreessen says that only two business models may be practical: be the biggest, which means blocking out competitors, or go the deepest and offer the most in a particular niche.

Focus on winning. Don't let your ego force you into thinking that you have to be the one with all of the answers, or let it keep you on a dead end path. "If you just focus on the winning," said Leonsis," and doing the right things the right way, especially if you are in the big market, you can become the next Netscape or the next AOL. I'm optimistic because the people that I see at conferences like this are unbelievably talented."

When you put it all together, Andreesen, Leonsis and Swisher all agreed that everything depends upon addressing the real behavior of real people, not what technologists think is cool. Cautionary examples of the possible but unnecessary, such as Internet-connected toilets and PDA/telephones, contrasted sharply with Leonsis' explanation of why AOL took note of, and recently acquired, a company called NullSoft. Already interested in expanding AOL's presence in online music, he watched NullSoft's software product, Winamp, slowly but steadily rise up the list to become the second most popular piece of software at People were using that product, even though it hadn't hit the big business radar screen.

What's number one at ICQ, a product that AOL bought several months ago. At AOL, said Leonsis, "we are relentlessly pragmatic."

The discussion, including extensive questions from the audience, also touched on issues as diverse as Internet stocks, predictions for future Internet markets, branding, marketing on the Net and how to sell your company to AOL. The enthusiasm reflected the boundless sense of opportunity and optimism that seems to characterize most netpreneurs, especially Leonsis. Someone recently asked him, "Why are you always smiling?"

"I think the reasons are in this room." he told the crowd. "This is a great time to be alive. It's really a great time to be in DC."


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