>If you took the finances first approach, you would have missed Google.
Google Inc is a very interesting situation. I wasn't there as a fly on the wall during the first investment rounds but based on reading multiple sources of Google's history, it seems like there's been a little bit of mythology built up around Google's ascent -- some of which is perpetuated by very persuasive personalities like Ron Conway.
For example in the interview[1], Paul Graham asks Ron Conway if Google knew how they would make money and Ron says "no". So just based on that, it seems like investors such as VC firms Sequoia and KPCB made a blind leap of faith based on the sheer force of Larry and Sergei's brilliance.
However, other sources say there's actually more to that story. You have to split apart the "monetization" into 2 different strategies: (1) licensing the search engine to others like Yahoo and (2) AdWords.
When people say "Google didn't know how it was going to make money", they're likely talking about AdWords. However, Larry did have the idea of "licensing income" from the very beginning. The potential to sell a search engine license to Yahoo was why he was enlisting Ron Conway's help to connect him to the VC firms in the first place. With benefit of hindsight, we now know that Google pivoted from licenses to AdWords and it became the massive cash cow nobody predicted when the company was initially founded.
So VCs like Sequoia and KPCB did have "finances first" because they invested with the idea that licenses was a realistic revenue model. Contradicting Ron Conway, the VCs didn't necessarily need a 10th slide that showed the business model -- because they already bought into the licensing idea. Because of the strange way that mythology works backwards from the present, if you ask Sequoia today if they invested in Google without a business model, they will emphatically answer "yes" which reinforces the idealization that they "believe in their founders". It's an interesting feedback loop.
If there were Google investors that prioritized the idea over finances, it might have been the very first angel investors such as David Cheriton and Andy Bechtolsheim. Possibly Jeff Bezos as well.
If anyone close to the early Google days can correct the story, that would be helpful.
I am well aware of Google and I have said nowhere that it's either or. My point is that there are a lot of people who ask for funding who don't need it because they aren't actually solving anything fundamental.
I was specifically replying to poster askafriend about how "finances first" didn't apply to Google Inc. I'm saying that it probably did but the popular narrative has hidden that fact. (I doublechecked to see that I did reply to askafriend instead of ThomPete so there shouldn't be confusion.)
An example company that might fit askafriend's argument better would be Craigslist. That started as a shared email list which grew organically into something bigger. Craig also turned down VC money.
Google Inc is a very interesting situation. I wasn't there as a fly on the wall during the first investment rounds but based on reading multiple sources of Google's history, it seems like there's been a little bit of mythology built up around Google's ascent -- some of which is perpetuated by very persuasive personalities like Ron Conway.
For example in the interview[1], Paul Graham asks Ron Conway if Google knew how they would make money and Ron says "no". So just based on that, it seems like investors such as VC firms Sequoia and KPCB made a blind leap of faith based on the sheer force of Larry and Sergei's brilliance.
However, other sources say there's actually more to that story. You have to split apart the "monetization" into 2 different strategies: (1) licensing the search engine to others like Yahoo and (2) AdWords.
When people say "Google didn't know how it was going to make money", they're likely talking about AdWords. However, Larry did have the idea of "licensing income" from the very beginning. The potential to sell a search engine license to Yahoo was why he was enlisting Ron Conway's help to connect him to the VC firms in the first place. With benefit of hindsight, we now know that Google pivoted from licenses to AdWords and it became the massive cash cow nobody predicted when the company was initially founded.
So VCs like Sequoia and KPCB did have "finances first" because they invested with the idea that licenses was a realistic revenue model. Contradicting Ron Conway, the VCs didn't necessarily need a 10th slide that showed the business model -- because they already bought into the licensing idea. Because of the strange way that mythology works backwards from the present, if you ask Sequoia today if they invested in Google without a business model, they will emphatically answer "yes" which reinforces the idealization that they "believe in their founders". It's an interesting feedback loop.
If there were Google investors that prioritized the idea over finances, it might have been the very first angel investors such as David Cheriton and Andy Bechtolsheim. Possibly Jeff Bezos as well.
If anyone close to the early Google days can correct the story, that would be helpful.
[1] deep linked at 16m20s and "Google didn't have idea about monetization" is at 17m04s: https://www.youtube.com/watch?v=1z87RGFGuxQ&feature=youtu.be...