History of Famous Startups. Groove Networks

Everyone knows that

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Everyone knows that one reason you go to work and do what you do is the
hope that ultimately you’ll be compensated. But you don’t have to say it, and it
doesn’t have to come through. It should be about the mission. It should be
about changing the world. It should be about how you can impact the lives of
users, partners, and the employees themselves. It’s not just about this big payday.
The more you focus on the things that matter when you are talking to people
who want to believe in you, the more they will believe in…

difficult to hire

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difficult to hire someone on the marketing and sales side because they’re so different
than technologists and you don’t know who to trust. It takes about a year
Ray Ozzie 109
to really understand whether the people who you are partnering with trust you
and know they will rely upon you just as much as you know you will rely upon
them.
That’s where I think working for another company and building those relationships
is extremely valuable. Frequently, people think just running from
school out into doing a startup is the best thing to do. But I think that getting…

stealth and then

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stealth and then embrace them at the right time, when you believe it can be to
your advantage to embrace them. In the case of Groove, we were having distribution
challenges, we needed money, we were raising a round. One of the
biggest questions we were encountering with our enterprise customers was
“Why isn’t Microsoft just going to crush you tomorrow?”
And although I brought some credibility to the table because of my background
at IBM, having Microsoft as a backer only helped us within those enterprise
accounts.
Livingston: Back to Lotus Notes—were you already working on an application
when…

from an early

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from an early stage, what you build really has to relate to the other, larger
goals of that corporation. You may not be completely tied up, you still can
accomplish your vision, but it would make no sense to be funded by a company
and be completely aligning yourself with their competitors’ offerings.
In a startup environment, it’s much rougher in terms of making your numbers.
There’s much less patience. Once you start down the treadmill of taking
venture capital, it’s “how many rounds before people give up on you or you have
a positive exit event?” So you’re really…

competitors? And do

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competitors? And do you have to manage people’s expectations differently?
Ozzie: In a startup, you’re on this mission together. Everyone has to feel that,
and you have to hire people who are willing to believe in something they are
trying to accomplish. And in that era, it was very challenging in two dimensions.
Hiring in the dot-com era, when a lot of these people’s friends were getting
rich, was hard. But the other thing was that the type of software we were building
had many systems software elements to it. A lot of it was lower-level communications,
storage, application framework–type…

There tends to

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There tends to be some time where I’m building up a level of technological
advantage for when we get to market. With technology, there’s no such thing as
a sustainable advantage, but you can get a good running start if you concentrate
on doing something hard really well.
In Notes, it was the database and replication environment and the security
aspects. In Groove, it was the security aspects again and this transaction synchronization
and the peer-to-peer XML-based communications. Most people
find risk and uncertainty very daunting. In both Notes and Groove, there was
both technological uncertainty and market uncertainty. We…

sure we could

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sure we could build it, we decided to hire the first 15 to 20 people and just
embarked on the project.
Livingston: Masterless synchronization was a novel technology that you guys
really had to work through?
Ozzie: It had been done for years in a variety of settings—especially in an academic
setting. But the commercial PC environment is a very harsh one. People
Ray Ozzie 105
reboot PCs, they restore them from backups, they lose them. It has to be very
resilient. We wanted to make sure the algorithms we were using would scale to
what we needed.
All those…

in a secure

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in a secure manner. So we went for a desktop architecture.
Livingston: So this is a big problem that you were approaching. How did you
start?
Ozzie: Before I start a company, I typically write a couple of founding documents.
One of them is very outside-in: it’s a scenario-based document, describing
the high-level challenge that I’m trying to address and the end user
scenarios that we are trying to solve. This attempts to explain what we’re trying
to accomplish to anyone who joins the company or we might need to get financing
from.
Then I create a second, bottom-up document…

capture some window

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capture some window that will happen in the future.
In Notes, it was (and this is hard to imagine because it was a different time)
the concept that we’d all be using computers on our desktops and therefore we
might want to use them as communication tools. This was a time when PCs
were just emerging as spreadsheet tools and word processing replacements,
still available only on a subset of desks, and definitely no networks. It was ’82
when I wrote the specs for it. It had been based on a system called PLATO that
I’d been exposed to at…

At the University

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At the University of Illinois, Ray Ozzie worked on
PLATO Notes, one of the earliest collaboration applications.
Later he wanted to develop collaboration
software of his own, but couldn’t find funding. After
he led the development of Lotus Symphony, Mitch
Kapor and Jonathan Sachs decided to invest in
Ozzie’s idea, which would become Lotus Notes. Instead
of working as an employee, Ozzie founded Iris
Associates in 1984 to develop the product for Lotus.
It was an unusual form of startup, but it worked.
Lotus Notes was the first widely used collaboration
software. The first release shipped in 1989, and
Iris…