“How can I succeed?” Certainly every day something had to be done, and we
needed to have a focus on a lot of priorities at the same time.
We always needed to focus on hiring good people. People are the foundation
of any company. Machiavelli said you judge a leader by the strength of his
generals, and it’s so true. The team that we put in place would determine how
successful Lycos would become over time, so we tried to hire very well. And
there hadn’t been the Internet industry, which made it harder to assess people’s
skills.
So we focused on hiring. We focused on building customers, going out and
developing customer relationships, and of course that meant hiring a sales team
to go out and find advertisers for us. We focused on putting infrastructure in
place. Bear in mind we had none. We needed computers to operate the equipment,
and that was difficult. Early on we had no money to pay for computers, or
very little, so we worked on arrangements with companies like Sun Microsystems
and others where they’d give us hardware at a hugely discounted rate
and in return we would put on our site “Powered by Sun.” And eventually it
became “Powered by Digital Equipment.” We didn’t call it that at the time, but
in reality, that was a form of advertising. People were trading us product in
return for impressions.
Livingston: Did you ever get any other money except from the original deal?
Davis: No. We had, I think, in total, a couple of million dollars of venture capital
money.
As part of the purchase agreement, we were also obligated to pay Carnegie
Mellon 50 percent of our first $1.5 million in revenues. So from cash flow,
another $750,000 went to Carnegie Mellon. For real working capital, we had a
million and a quarter, and that was all we ever had.
So we focused on building our infrastructure, which was difficult. We were
always nomads in the sense that we were outgrowing our facility and moving
from space to space, trying to stay one step ahead in the urgent need to move.
We were also constantly working at integrating the product. Keeping up
with the Joneses, or staying ahead of the Joneses, was always a tricky thing to
do. There was massive copying in the industry. Not in the legal sense of taking
someone’s intellectual property, but in the sense that when we would put a new
service online, it generally wouldn’t take more than a week for a competitor to
do the same thing. For example, when we added the ability to search images
online (which is now common, but we were the first to do it), two months later