The man who would be Sergey
As the Web enters its second round of building men up and then taking them down, a man who went through it all now offers some sage advice.
But you probably don't recall Gary Culliss.
As co-founder of Direct Hit, Culliss was the crown prince of search for two years. In 1998, Forbes said "the marketplace doesn't offer any comparable technology." Google got lumped in with "non-household name" sites like Metacrawler.
The Washington Post ranked Culliss with Andreessen, Yang and Filo in a sort of Mount Rushmore of the Internet.
In the interest of complete disclosure, the first time CNET News.com mentioned Google in a bylined article was way down in the middle of a story about Direct Hit.
Is he bitter about being an also-ran? Not at all.
"Ah. So you're writing one of those 'where are they now' articles," Culliss said, laughing, from his offices at August Capital, an incubator he founded in New York City. He's still got that unflappable polish of a guy making a pitch for funding.
With the Web 2.0 orgy in full swing, it's time to look back on what happened the last time. Some individuals--Sergey, Larry, Bezos--achieved tremendous wealth and worldwide name recognition. Some entrepreneurs, such as Flooz founder Robert Levitan are in the process of launching comebacks. Most did not end up on episodes of "Cops."
Still, with a few changed circumstances, there are a lot of people--particularly in the Bay Area--who might be lording over the rest of us with their wacky visions of the future at upscale conferences. Instead, they're waiting in line for a table at the Outback Steakhouse.
The same thing will happen again when Web 2.0 has had its day--so who better to get advice from than someone who went through the wringer the first time? Here are some nuggets I picked up after speaking with Culliss recently:
1. Being smart helps
Simply put, people who start companies that succeed, even for a brief period, are at least fairly intelligent and driven.
Culliss began to conduct patent searches around the Internet in the mid-'90s. (Before anyone gets on his or her "software patents are evil" high horse, recall that both Google and Yahoo rely extensively on patents). He then attended Harvard Law School and founded Direct Hit right after graduation. His mom had a fit, but he and his co-founder quickly won $30,000 at the MIT Entrepreneurship Contest.
During that same period, I managed to switch jobs once and learned how to clean the deck with a power washer. My experience is far closer to the mean.
2. Pick your friends well
Success continued with funding from venture capital firm Draper Fisher Jurvetson, among others. Direct Hit then signed deals to be the undercover technology for HotBot, Apple Computer (for its Sherlock product), Lycos and LookSmart. No home runs there. Google got a technology deal with Yahoo.
3. Have a good name
"The first time I heard the name (Google), I stepped back. It was such a wacky name. People fell in love with the name," he said.
Of course, a lot of other companies with dopey names just hit the skids. Teoma got swallowed by Ask Jeeves while Dogpile became part of InfoSpace. Wisenut went to LookSmart, and Atomz got bought by Web Side Story. Yep.com, meanwhile, got dropped by Web Side Story and picked up by a Latvian concern.
"Yep.com isn't part of our product line anymore," said a Web Side Story representative. "I don't even remember it now. I'm not sure I want to go into it."
4. The public is a mystery
Direct Hit ranked Web sites by how many people clicked on them and how much time they spent there. Google initially ranked them by how many other sites linked to them. From a gut level, the Direct Hit approach seems destined for larger greatness.
"Think of the Dell FAQ. No one links to it, but people read it," Culliss said. Still, history came out the other way.
The same thing goes for paid search. In the mid-'90s, consumers scorned it, claiming it violated the code of the Internet. Six years later, it was hailed.
5. Be cheap
The only real regret Culliss has is basing the infrastructure for his company around Sun E10K servers. Direct Hit spent millions of dollars on Sun boxes.
"We spent our entire hardware budget for the year, and we quickly reached its limits," he said. "You are much better off networking a lot of small, inexpensive boxes."
By contrast, Google built its infrastructure around x86 servers and could continue to expand its reach to billions of Web pages. "They were able to focus on other things," Culliss said.
6. Money is money
Direct Hit was still growing strong in 1999 and filed to go public. It had also begun the process of swapping out its Sun servers for Intel-based ones. But the company still did not have the brand recognition of other search outfits, so it opted in January 2000 to sell itself to Ask Jeeves for 12 percent of the stock, or about $500 million.
After the dot-com bust, Ask Jeeves rebounded and was bought in 2005 by Interactive Corp. for $1.85 billion. That still puts Direct Hit at $222 million. That wouldn't pay for all the lava lamps on the Google campus, but it's still a bunch of cash.
"Everyone made money on the deal," Culliss said.
7. It beats working
After Direct Hit was sold, Culliss started SoundBite Communications, which raised $7 million. He sold his share and moved to California. When his wife had a child, they moved back to the East Coast. Culliss then got an MBA at Wharton and started August Ventures. "It's a research and development vehicle. We aren't buying patents," he said.
In all, the whole adventure transpired in just under eight years. Some of his former Harvard Law classmates have likely spent the same time combing through swimming pools of documents propounded in discovery, in an effort to stay on the partnership track.
Life could be worse.