Anything Could Happen
What is Evan Williams doing?
I ask myself this as I consume a second cup of strong coffee in a quiet San Francisco café. It is early in the morning on the first workday of the new year, and Williams is apparently blowing me off. For the past two weeks he has ignored my e-mails, phone calls, and text messages. We were supposed to meet this morning to discuss his next move; instead we have radio silence.
This is odd. Williams is the sort of person who can't seem to do anything, no matter how trivial, without blogging, photo-sharing, or text-messaging the news. He founded Blogger, the website that introduced the world to blogging and now attracts some 163 million visitors each month. He has maintained a detailed personal blog for more than a decade--posting pictures, explaining his latest theories on business, and huffing about the cable company. His new business, called Twitter, takes it a step further: It lets exhibitionists, techies, and--a hint of things to come--marketers blast their latest doings to cell phones. So he's not just a practitioner of hyperconnectedness; he practically invented the concept.
Eventually, Williams sends me an apologetic text message--we resolve to push back the meeting slightly--and then he does something else: He uses Twitter to send a text message to, oh, a few thousand people: "Late for my first meeting of the year and in need of a shave."
Like so many technology entrepreneurs, Williams, whose friends call him Ev, is a software engineer. But unlike many of the most successful, he's no genius when it comes to programming. His specialty is taking a tiny, almost nonsensical idea and turning it into a cultural phenomenon. "He's like a master craftsman," says Naval Ravikant, a serial entrepreneur who is an angel investor in Twitter. "There are entrepreneurs who are financial geniuses, and there are raw coders. Evan is the master of creating a product where there wasn't one before." If Williams's art is the conception of inconceivable products, then Twitter is his chef-d'oeuvre.
What is Twitter? It's hard to explain--Williams and his co-founders have wrestled with this--but it helps to begin in familiar territory: blogging. A blog is an online diary, in which someone holds forth on a topic, like vacation itineraries or the case against Roger Clemens. Now strip this to the core. A typical entry--say, a couple of paragraphs, some links, pictures, or maybe a funny YouTube video--becomes a 140-character plain text comment. (That's the maximum length of a Twitter message--also known as a tweet--and the exact length of the previous sentence.) Instead of sitting down in front of a screen and typing a couple of paragraphs into a form, you compose your message quickly on your phone's keypad. Instead of having readers come to your website to check out your latest, you blast it directly to their cell phone inboxes. A recent selection of Williams's tweets includes: "Considering making February external-meeting free," "Relaxing my shoulders. Writing a little code. Drinking Guayaki," and "Packing my warmest clothes for Chicago." Each snippet is sent to his 5,644 (and counting) "followers," as they're called in Twitter-speak: the friends, acquaintances, and stalkers who have elected to keep tabs on his every move.
This is Twitter, in all its wildly popular, ridiculous glory. The service, which had a few thousand users at the beginning of last year, had close to 800,000 at the beginning of this one. Because Twitter allows anyone to send messages to thousands of cell phones at once and for free, new uses are popping up. JetBlue (NASDAQ:JBLU) and Dell (NASDAQ:DELL) use it as a kind of mailing list; presidential candidates use it to contact supporters; the Los Angeles fire department uses it as a de facto emergency broadcast system. As with all movements, there's a backlash. The United Arab Emirates recently banned the service, and there are lots of cautionary tales about Twittering gone bad. (I had such an experience when, en route to an unfortunately named barbecue restaurant, I Twittered, and then hastily deleted, this gem: "Walking to Smoke Joint.")
As a cultural phenomenon, Twitter is a comer--having been featured in an episode of CSI, on MTV, and in nearly every major newspaper--but its status as a business is nebulous. The 14-person company is unprofitable (its single largest source of revenue last year was the subleasing of half a dozen desks to three small start-ups at $200 a desk a month), and there are no immediate plans for it to be anything otherwise. Although some technologists think Twitter could one day be a billion-dollar company, many others say it represents the worst of Web 2.0: a company that is built to flip, that does little of value and has no long-term prospects as a standalone enterprise. Williams and his collaborators don't entirely dispute this notion. Co-founder Jack Dorsey, the service's inventor, freely admits that Twitter is "useless, in a sense" and that many people are "violently turned off" by the idea of constant communications. But, he adds, "there's a lot of value in seemingly useless things."
This strange statement encapsulates Williams's business philosophy. He believes that small ideas are almost always better than grand visions. That Twitter's main function--telling you what your friends are doing--is included as a feature in Facebook, MySpace, and most instant messaging programs doesn't bother him in the slightest. "I think features can make great companies," he says. "You just have to choose them right." Moreover, he argues, a product can succeed by doing less than a competitive product. Case in point: Google (NASDAQ:GOOG), which rocketed to popularity because of a single feature--the search box--while its chief competitor, Yahoo (NASDAQ:YHOO), offered dozens of services, from search to stock quotes to horoscopes. Google operated for years without a business model before it figured out that it could throw off billions in cash by serving little text ads next to its search results. "Applying constraints can help your company and your customers in unexpected ways," says Williams. "The default thing we do is ask how we can add something to make it better. Instead we should say, What can we take away to create something new?"
That an entrepreneur can look at something as silly as Twitter and say, Yes, this is the future, is remarkable. Technology inventors have a horrible track record of turning new behaviors into long-term financial successes--social networking pioneer Friendster was long ago lapped by MySpace and Facebook; the first search engines, Web browsers, and video game systems met similar fates. And it's not as if Williams doesn't have the money (he made a reported $50 million selling Blogger to Google) or the connections (Twitter's angel investors read like a who's who of Silicon Valley) to attempt something more ambitious.
But he doesn't care to. And he probably doesn't need to. Mass adoption of broadband and social networking have made finding customers cheaper, and a booming online advertising market has made it easier to turn a profit once you attract them. Moreover, a handful of acquisition-happy tech companies have shown a willingness to add services by buying tiny, money-losing start-ups for tens of millions of dollars. These may be signs of yet another technology bubble, but there are smart people, like start-up financier Paul Graham, who argue that technology start-ups are undergoing a fundamental change, becoming smaller, cheaper to start, and more numerous--in short, commoditized. We may be entering an era of the little idea, a time tailor-made for Evan Williams.
Williams grew up on a corn farm in Clarks, Nebraska (population 379). He's a self-taught coder, having dropped out of college after only a year to start a company. But this wasn't Bill Gates dropping out of Harvard to start Microsoft (NASDAQ:MSFT). The college was the University of Nebraska-Lincoln, and the companies--there were three failures in five years--were unambitious, money losing, and admittedly dopey. Williams's most successful product was a CD-ROM for fans of the Cornhuskers football team. Finally, convinced he still knew little about how to run a business, he cut his losses, took a Web development job in California, and started writing about it.
Today, Williams is 35 years in age and unassuming in appearance. He talks quietly in the soft, flat tones of a Midwesterner. He's handsome, but ordinarily so. In person, wearing a nice pair of jeans, a gray T-shirt, and a cashmere cardigan, he is subdued and guarded. When his bagel with peanut butter and banana is brought to our table sans banana, he seems to struggle mightily as he weighs what to do about it. Williams often speaks tentatively, revising, disclaiming, and qualifying his thoughts in a manner that most businesspeople would take as a sign of weakness. When I ask him a question on start-up finance, he starts with a disclaimer. "I was thinking a little differently before," he says, pausing. "I wonder why that is?" A conversation with Williams can quickly devolve into an inscrutable merry-go-round of ideas.
But to meet him online is a different story. Many of the qualities that make Williams awkward in real life play beautifully on Evhead.com, the online journal he has maintained since 1996. Williams's honesty, his tendency toward frankness, and his willingness to admit not knowing everything make him different from most business bloggers. They make him interesting.
As the name suggests, Evhead is a record of Williams's thoughts, profound and otherwise. In the past months he has posted a picture of himself and his wife, Sara, with a stuffed black bear--as well as a thoughtful essay on how to evaluate a new software product and an untitled post that reads, "I'm awake at 5:37 (for two hours now). Thinking about so many things." Even 15 years ago, an entrepreneur who did this would have seemed creepy or ridiculous. But to members of the Facebook generation, who meticulously groom their online profiles--posting photos while sharing everything from their political preferences to what's currently in their Netflix queue--Williams comes off as likable, even humble.
Some 25,000 people, mostly techies and entrepreneurs, look at Evhead each month. (Many of these readers also follow his Twitterings.) Dorsey had followed Williams's blog for years. He knew it so well that when he spotted Williams on the street in San Francisco, he recognized him immediately and decided to apply for a job. "It was the first time I'd seen him in person," Dorsey says, as if he were talking about a celebrity he had never considered a real person. "I took it as a sign." In the online world, Williams is seen as a truth teller, an engineer who's not afraid to stick it to the suits and the venture capitalists. He's someone who actually understands the process of invention and who values it more than he does the bottom line. To read his blog is to watch the growth of a human being: You see Ev nearly lose his company, bring it back from the dead, strike it big, struggle with the tech support for his new cell phone, and get married. In Williams, a new generation of entrepreneurs has a mascot.
It's January 31, 2001, and Evan Williams is alone in his apartment, writing a blog post for Evhead. It's a big one. His company, Pyra Labs, is on life support, and Williams has just laid off the entire staff. (His co-founder and ex-girlfriend, Meg Hourihan, quit rather than be laid off.) The trouble is partly the result of the Internet bust--the Nasdaq has been tanking for months, and Williams's investors have told him he must make do with what he's got--but it's also, in a strange way, a result of his company's unlikely popularity.
Williams and Hourihan started Pyra, in 1998, with a plan to develop and sell project management software. They did contract Web programming for Hewlett-Packard to pay the bills while they developed their product. So they could keep track of each other's progress, Williams created a piece of software he called Stuff, which, it turned out, was a far simpler and more useful collaboration tool than the one he was building for Pyra. Stuff allowed him to quickly upload text to a webpage by filling out a simple form, and it organized the text by date. He and Hourihan joked that it worked better than their actual product. Only Williams wasn't joking. While Hourihan was on vacation, in August 2000, he put it online as Blogger.com.
Blogger took off. Online diaries had existed since the birth of the Internet, but they had been difficult to maintain and organize and were therefore limited to serious techies. Blogger made communicating your thoughts to the world much easier and more satisfying: Fill out a simple form, click a button, and--bang--you're a published writer. By 2001, Blogger had attracted 100,000 users and the beginnings of what seemed like a healthy buzz, even though it made no money and had no model for changing that.
So as he sits in his apartment and blogs, Williams finds himself in an odd place. He's running a company that's more popular and growing faster than he could have possibly imagined. It's also flat broke. Several weeks earlier, Williams had written a post that begged users to donate money to keep the servers running. It worked: He raised more than $10,000 in $10 and $20 money transfers made through PayPal. Now he's got to figure out how to save the company. Writing the blog post, which he titles "And Then There Was One," he describes the layoff, wishes his former employees well--"Hopefully our friendships will survive"--and then finally addresses his customers: "I'm still fighting the good fight," he writes. "The product, user base, brand, and vision are still somewhat intact. Amazingly. Thankfully. In fact, I'm actually in surprisingly good shape. I'm optimistic. (I'm always optimistic.) And I have many, many ideas. (I always have many ideas.)"
With no personnel costs, Blogger hung on. In March, there was a $40,000 licensing deal with Trellix, a business software start-up whose founder, a Blogger admirer, read about Williams's plight on his blog and decided he wanted to help save the company. By the late summer, Williams had a business model. He had been making next to nothing placing banner ads on people's blogs. Now he would charge those people $12 a year to remove the ads. Meanwhile, Pyra--and the phenomenon of blogging--grew like gangbusters through 2001. By the middle of 2002, there were 600,000 registered users. In late 2002, Google came calling. Sergey Brin and Larry Page offered to buy Williams's little company and let him run it inside their highflying (and still private) search start-up. Williams blogged the news of his acceptance while delivering a speech at a technology conference. "Holy Crap," he wrote, linking the words to a minutes-old article on the sale. "Note to self: When you get off this panel, you should probably comment on this."
The experience of shepherding Blogger through growth, then hardship, until he finally turned it into a real company cemented Williams's philosophy of business. He would be an entrepreneur who looked for value in things that seemed worthless. Faith--in one's ability, in one's chosen path, and, above all else, in the fact that there are always opportunities ahead--was a company's greatest need. Stick to your product, forget about scrambling for deals, and good things will happen.
The belief that faith is an important business attribute goes a long way in describing how Williams is able to see opportunities. "He has a stubbornness of vision," says Tim O'Reilly, the tech luminary who runs publisher O'Reilly Media and who coined the term "Web 2.0." O'Reilly was Williams's first employer in Silicon Valley and an investor in Pyra. "There are so many me-too start-ups on the Web, so many people saying this will be the next big thing, but the successful entrepreneurs are people who see the world differently." Williams's closest collaborator, Twitter co-founder Biz Stone, says much the same. "He has a tendency to wait just a bit longer than everyone else would, to give an idea more time," Stone says. "It is patience and perseverance and hope--all those things rolled up into one."
After leaving Google at the end of 2004, with his fast-appreciating stock and a world-class education in business, Williams resolved to tread water until the right opportunity came along. "While I think I'm likely to start another company sometime," he wrote on his blog, "I'm forcing myself to be noncommittal at the moment. My goal is to develop some perspective, learn new things, rest, and explore." He promised to travel and to think about how he would change his life.
He didn't do much of either. His next-door neighbor, an entrepreneur named Noah Glass, was starting a podcasting company, and Williams began advising him in the weeks following his departure from Google. Advising turned into full-time work, and full-time work turned into being co-founder, seed investor, and, eventually, CEO. By February 2005, he had invested $170,000 and personally launched the company, now called Odeo, with a demonstration at TED, the invitation-only tech conference held in Monterey, California. That same day, a front-page article in the business section of The New York Times profiled Odeo and its famous founder. Williams, it seemed, was on his way to turning another weird technology phenomenon into the next big thing.
But Odeo had no real product--only a sense that podcasting was somehow going to be popular. The website that Williams unveiled at TED, an audio directory and a few simple tools for recording one's own podcasts, wasn't ready for the public until a few months later, and by then it had been overshadowed by Apple's release of podcasting features for iTunes. Odeo's strategy, if there was one, was to be a one-stop shop for Internet audio, offering a number of tools for podcasters and casual listeners. Being all things to all people required money, and there were plenty of eager investors who wanted in on Ev's next big thing. He raised $5 million from the venture capitalists Charles River Ventures and a number of high-profile angels, including O'Reilly, Google backer Ron Conway, and Lotus founder Mitch Kapor. The company quickly started hiring, and by the end of the year, it employed 14 people.
While he was trying to come up with a strategy for Odeo, Williams was processing the lessons of the past few years. In the fall of 2005, he wrote what he calls "my best blog post ever." It was called "Ten Rules for Web Startups," and it has since become something of an Internet classic. (Google the title and you'll get more than a thousand results, nearly all of which point to Williams's post.) The lessons were lifted from his experience at Blogger, particularly the first one, "Be Narrow," which urged entrepreneurs to "Focus on the smallest possible problem you could solve that would be potentially useful." Other lessons were "Be Tiny," "Be Picky," and "Be Self-Centered," which discussed the importance of company founders using their own products.
Even as he wrote his rules, he was ignoring them. He wasn't even podcasting. As Odeo sputtered, struggling to gain new users, Williams began to see his problem as one of corporate structure. He had accepted millions of dollars in investment capital, built a team, and worked the media before he knew what his company was. Odeo needed to experiment--to play, even. "If we were just two guys in a garage, we could say, 'I don't know about that idea, but let's see where it goes,' " he says. His solution was to organize what he called a "hack day." He broke the company into small groups and told them to spend a day experimenting--not just with podcasting, but with anything that struck their fancy. It was Dorsey's project that struck Williams's. Dorsey had long been fascinated by the status function on instant message programs: the short, pithy postings that allow you to tell your online friends what you are doing. He built a prototype of Twitter in two weeks.
"Thinking twttr is the awesomest," Williams Twittered in March 2006. With little fanfare it went live in July. Like Blogger before it, Twitter was introduced as an experiment, a fun little side project. Nonetheless, Williams was excited--more excited than he'd been about anything that had happened at Odeo. This got him thinking about the hack day that had led him to Twitter--and then about the two years in which he had struggled to build anything, despite having plenty of money and all the hype in the world.
How had a single experiment succeeded where an entire company couldn't? And more important, how could he do more of them?
On October 25, 2006, Williams blogged his answer. He was buying Odeo, taking the odd--to some, almost unbelievable--step of returning his venture capitalists' money. It cost him $3 million out of pocket, plus all the cash Odeo still had. It was a lot to pay for a failing Web company and an unproven prototype.
He called the new endeavor Obvious, a nod to a lesson learned from the success at Blogger--that seemingly silly and trivial ideas often look like great ones in retrospect. Obvious would be a workshop where Williams and his cohorts could experiment with ideas in an environment free from financial distractions. If an idea worked really well, he could spin it off into an independent company using outside investment. Otherwise, he could either keep it for Obvious or throw it away. "I don't want to have to worry about getting buy-in from executives or a board, raising money, worrying about investor's perceptions, or cashing out," he blogged. The move was widely seen as heroic. "Odeo Buys Back Soul," read the headline of gossip blog Valleywag.
Shortly after buying Odeo, Williams wrote a blog post that announced his intentions to sell the podcasting part of the company--a New York start-up paid a reported $1 million for the service--and focus on Twitter. The text messaging service had its coming-out party at the South by Southwest technology festival in March, where conference attendees eagerly began Twittering one another. From there it grew rapidly, reaching a hundred thousand users in a matter of weeks and garnering nationwide media coverage. In July, Williams formally spun off the company, raising several million dollars from Union Square Ventures, a New York City VC with a hands-off reputation. (Managing partner Fred Wilson, who, judging from his Twitters, really, really loves to eat at Murray's Bagels, had been using the service for months.) Williams appointed Dorsey CEO and told him to focus exclusively on fixing Twitter's reliability problems. Though Williams remains the single largest shareholder, he has taken pains to stay out of Twitter. The business model, he says, can wait until millions of people are using it.
Beginning on the first day of this year, Williams started working in earnest on Obvious. His work area is a small nook under a lofted conference room in Twitter's San Francisco office. The building has served as a private home, a snowboard factory, and an underwear store. The soiled carpet is a sort of puke-green color, and the only natural light comes from a few skylights far overhead. To date, Williams has hired two contract engineers to build small software products; they are building an application that will allow users to write "notes to self." Obvious isn't particularly counting on this product--"It's almost not worth talking about," Williams says--but that's the point. Williams wants to make product development less risky and more prone to the kind of spontaneity that created Twitter.
At the same time, he's trying to find early-stage start-ups to roll up into Obvious. He says he would like to invest roughly $100,000 in each company. Everyone will work in the same office, which means he will eventually have to look for additional space. He's also trying to hire an assistant: The job description warns that the candidate will be paid hourly "until you set up the payroll system for the company, and then we can discuss salary and insurance (once you set that up, too)."
The goal is to separate the creative environment of the start-up process from the regular work-a-day of running a business. "It's all theory for now," Williams says. "But we're hoping that by setting up an environment with multiple projects at once, these happy accidents can occur." If this sounds unbusinesslike, then that's the point, too. Obvious is, in the broadest sense, a company founded on the idea that it's hard to predict which ideas will work and which won't. "It's almost like a theater troupe," says Stone. "The idea is to tinker around and to be willing to come up with flops."
Like most good theater, Williams's new company is at once disruptive and self-indulgent--an ambitious challenge to the Silicon Valley rule book and a test for all of those blog-worn theories. The company of little experiments is itself an experiment, and a chance for Ev to do something grand on his own terms.
Max Chafkin wrote the December cover story about Inc.'s 2007 Entrepreneur of the Year, Elon Musk.