The Education of Bill Maris: How One Entrepreneur’s History Shaped Google Ventures

9/1/11Follow @wroush

Fade in on a paper-strewn office in Manhattan. It’s the North American headquarters of Investor AB, a giant Swedish holding company with investments across the healthcare, telecommunications, manufacturing, and financial industries. Two recent college graduates, a man and a woman, share a small office; they are the only Americans at the firm. One is trained in neuroscience, the other in molecular biology. Their job is to go to scientific conferences and translate the presentations into something the firm’s investment analysts can work with. They’re good at it, and they’re rapidly gaining influence over Investor AB’s U.S. portfolio. But they’re poorly paid—$40,000 a year isn’t enough to make ends meet in New York in 1997. They need to get out. They often talk about what kinds of companies they might start someday.

The neuroscientist is named Bill Maris. The molecular biologist is named Anne Wojcicki.

*  *  *

When you consider that Google is a 29,000-employee company (not counting Motorola) with revenues on the order of $9 billion per quarter, it’s surprising what a small family of early players runs the place. Founders Larry Page and Sergey Brin started the company in a Menlo Park garage that they rented from Susan Wojcicki, the daughter of the former chair of Stanford’s physics department. Page and Brin’s first employee in that garage was Craig Silverstein, a fellow computer science graduate student from Stanford; he’s still with the company today, as technology director. Their former landlord, Wojcicki, is now a senior vice president at Google and oversees the company’s advertising products, including its principal revenue engine, AdSense.

Brin, who now directs special projects, married Susan Wojcicki’s youngest sister Anne in 2007. The year before that, Anne Wojcicki co-founded a personal genetics startup in Mountain View, CA, called 23andMe. One of the principal backers of 23andMe is Google’s investing arm, Google Ventures. And Google Ventures is run by none other than Bill Maris.

The lesson here isn’t about family connections or favoritism; it’s about understanding and trust. Two-year-old Google Ventures is virtually unique in the venture world in that its pockets are, for all practical purposes, bottomless. Whatever amount the partners want to put into their portfolio companies, Google (NASDAQ: GOOG) will write the check. “The fund size in any given year is exactly what we invested that year,” says Maris, who is the fund’s managing partner and its principal architect. “It could be $72 million, or $182 million, or zero.” To get that kind of freedom, you need buy-in.

And that’s what Maris has. At the invitation of David Drummond, Google’s senior vice president for corporate development, Maris spent much of 2007 and 2008 thinking about how a Google-style venture firm ought to work, and what kind of operation he’d want to run. He decided, for one thing, that the fund should be industry-agnostic, investing without regard to Google’s strategic interests. This alone was a radical departure from the tradition in corporate venture investing—but Maris also insisted on other kinds of freedoms, of which more below. When he finally laid out his plan to Drummond, Page, Brin, and then-CEO Eric Schmidt, however, “They were like, ‘Okay, sounds like you’ve thought this through, go ahead and do it. Projects that are successful get funded and get more head count, and those that are not, do not. So do a good job.’ Basically, I was given the latitude I needed.”

It was an extraordinary vote of confidence—but perhaps an understandable one, given Maris’s status as both a longtime friend of the company and a battle-tested outsider. In a long interview last week at Google Ventures’ headquarters—which occupies the lower half of a building at the eastern edge of the Googleplex, and is about to take over the top half, displacing Brin’s super-secret special projects operation—Maris told me that he came to Google “somewhat reluctantly,” and only after years of watching the company’s growth from afar.

For one thing, he was a committed East Coaster, with an ingrained skepticism toward California. More importantly, he had his own business to attend to. After leaving Investor AB in 1997, Maris had started a Burlington, VT-based Web hosting company called Burlee, and it had taken off spectacularly. When Anne Wojcicki informed her old office mate a year or two later that a couple of guys had moved into her sister’s garage and were building a search engine, Maris says his first reaction was “Oh, that’s interesting. But they have no business model, no revenue, and no funding, and I have this business doing millions a year in sales.”

Today, of course, the tables have turned. The Burlee name isn’t around anymore—Maris sold the company in 2002 to Interland, which is now known as Web.com—while Google is the nation’s 19th most profitable company.

But it may be just as well that Maris was available, since it’s not clear that anyone inside Google could have come up with a plausible plan for investing the firm’s riches. What Google really needed was someone who knew Google and could think like a Googler, but would bring a different set of experiences.

Which is how Burlee actually lives on today—in Maris’s design for Google Ventures. Maris hopscotched across a dozen topics during our interview, but this was the one he kept returning to, providing example after example of Google Ventures’ founder-friendly philosophy and its roots in the lessons he learned as a young Internet entrepreneur in Vermont. “Most of the things that we are trying to do to help entrepreneurs here at Google Ventures go to address personal experiences we have had as entrepreneurs,” he says. “There are big problems that we can help them solve, because we have felt that pain.”

Google Ventures is hardly one man’s dream: other key players in the fund’s creation include Rich Miner, the co-founder of Android; David Krane, Google’s longtime communications director; and Joe Kraus, the co-founder of dot-com-era high flyer Excite.com. There are seven investing partners altogether, who have brought 40 announced companies into the portfolio, in areas ranging from antibody discovery to tools for Android and iOS developers to weather insurance. The operation’s total staff just passed 30, and is set to grow significantly over the next year; as Maris puts it, “Google is about scale.” But it’s Maris who sets the fund’s agenda and is, for now, its public face.

The words that follow are Maris’s own. I’ve abbreviated the material and rearranged it for chronological clarity. And to dramatize the parallels, I’ve put passages about Maris’s experiences at Burlee in italics. But in all other respects, this is Maris’s story.

I needed to get out of there [Investor AB] so I started a company. I thought about a lot of different ideas. There was so much growth in this Internet thing, I said that even if I am average at this, growth will be pretty good. So I used my savings and ordered some servers from Dell. I knew I was going to start a Web hosting and Web design business, because I knew there would be more websites in the future, and those would need to live somewhere. That was my moment of clarity.

I had gone to Middlebury College in Vermont, so I moved up to Burlington and rented an apartment. I had a bed, some Ikea furniture, and three servers—one small, one medium, and one refrigerator-sized, with three 9-gigabyte hard drives. And I brought in the first T1 lines in Burlington. But there was no software that you could buy off the shelf for hosting a website. I remember sitting on the floor with these manuals, on the verge of just breaking down. I didn’t know what to do.

They say necessity is the mother of invention, but I say that desperation not to move back in with your parents is the mother of invention. I had to do some scrappy things. To call Microsoft for tech support was $100 a call, but if your problem was not resolved, you could call back and not be charged again. So I became a master of choosing a macro problem like ‘I don’t know how to build a website.’ I was pretty good at convincing them every time I called that ‘This is the same problem, you have to help me for free.’ I didn’t have a lot to lose. But I recognized shortly thereafter how lonely it can be to start a business in Burlington in December.

I don’t care if it’s an app company and you’re a programmer—it’s still lonely and hard. If you are not the only one doing the icebreaking, that keeps you sane. That is why we have this thing called Startup Labs. We got a lot of calls from entrepreneurs who say, ‘Can I have a conference room,’ ‘Can I have some space.’ Google has a lot of space. So I said, let’s grab a building and use some recycled furniture from AdMob and make it available for $5 a month in the coffee can, and that will address the issue of trying to do things on your own, in isolation.

We also use the Startup Lab facility for Startup University. We have all done things in our careers, and there are 28,000 people at Google and some days it feels like all of them are eager to talk to startups. How does AdSense work? What are the Android developer tools? How do I recruit engineers? What are good questions to ask in an interview? How many interviews are useful before you’re wasting time? How much should I pay this kind of engineer? We have all kinds of data on that. We do a class every week or two, and office hours randomly.

We learn a lot from this as well, about the real issues these companies are facing right now. If you isolate yourself up on Sand Hill Road and entrepreneurs have to come to the temple to ask you questions, you might not get the same boots-on-the-ground feedback.

I had one angel investor, a really good friend of mine now, named Ray Pecor, who ran the Lake Champlain ferry company with his son. They were very prominent businesspeople in the community. He invested $1 million in the business, which was our only investment outside friends and family. When I first explained the business to him, he said ‘How much do you need?’ I wasn’t prepared for the question, so I made up a number. ‘A million dollars.’ ‘Okay, pick up the check on Wednesday, but you have to shake on it. No paperwork.’ I walked out of the office thinking, ‘This guy is crazy, there will be no check.’ But I called my attorney, and he said, ‘No, I know this guy, there will be a check,’ and there was. We did the paperwork afterward—how much of the company he got. He made money and all that, but that was the way I was doing business, the way I learned to treat people. I was not in it looking for an uncapped note. I was not in it for an ‘optimized price.’

Don’t tell me how much you want. Tell me whether you want me to invest in your company. Do you want me on the board? When things go wrong, do you want me to be there to take your call? If the answer is yes, then let’s shake on the deal. I’m not going to take the last nickel and get the lowest price—so you shouldn’t try to get the highest price from me. If you do that, the expectations will be so high for the next round that you will never meet them.

So that is how we try to do business. Not terms first and ‘What’s the price,’ but more ‘Who are you, and what are you working on, and if you want us in, what can we do for you?’ These relationships last for a long time.

I couldn’t convince any local businesses to pay me to build and host their sites. So I said, ‘What if I build your website and host it for free, and just tell other folks you are a customer?’ The first 20 or so agreed, and it worked great. It really kicked off through referrals. But it became clear that building a website is really hard, and people don’t know what they want, or they want many revisions. That whole idea got put aside [in favor of pure Web hosting]. So I know what it’s like to pivot. I had jumped into the business, and now I needed to jump again.

I went to Burlington and marched into the local attorneys and accountants and said ‘I’m starting this hosting business.’ They stifled their laughter long enough to take me seriously and give me some advice. These things are always part luck, part being in the right place at the right time, part hiring the right people. It’s not genius, it’s just persistence. Not that you keep banging your head on the same door, but that you go knock on other doors. The business started to take off, and we had 100 sites and then 1,000 sites and then 10,000.

We don’t have 40 years of venture capital experience. Kleiner Perkins, Accel, Sequoia, they have deeper benches and different experience. If you need key executive recruiting, or a VP of global sales, there are other funds better suited to help you tackle that challenge. But everyone on our team has deep technical experience or has started companies, or in the majority of cases, both of those things.

There is a lot of institutional knowledge here. We can say, ‘Here are the mistakes we made as individuals, as Google Ventures, and as Google.’ Listen, I know what it’s like to have payroll on your shoulders. I can see the gray hair coming in. It takes a toll on you. If you’re not in touch with the entrepreneurs on that level, it’s hard to advise a company or help them through trouble.

As an entrepreneur, one of the problems I had was how do I find engineers. If someone had come to me to teach me how to hire the next 30 engineers, that would have been incredibly powerful. They were hard to find in Vermont, and it can make a real difference to a company.

That is one of the reasons we put in place an engineering recruiting practice. We don’t do retainer-based searches. Google has a core strength in technical recruiting—we get millions of resumes a year. In their best year, it is hard to imagine a regular Silicon Valley venture fund getting millions of resumes. We don’t tap into that flow of resumes, but we should give them an option: ‘There isn’t a position for you at Google, but would you like to opt in to be considered by these 70 other [Google Ventures-backed] companies?’ We are working toward that, and we are doing that with a number of people in a beta test now.

I was choosing in 1999, 2000, 2001 to spend eight, 10, or 12 hours a day or more at an office with a bunch of people who could have been strangers but were friends away from friends and family. You are asking people to make a sacrifice of time, which is the most precious thing in the world. My father was really sick, and I had a girlfriend I rarely saw. Every minute I spent at work was a minute I wasn’t in New Jersey with my mom or dad.

If you are making a conscious choice to be here, as opposed to any other place you could be, let’s make sure you understand you are getting into. John Doerr [a Kleiner Perkins partner and Google board member] spent a lot of time with me as I worked through the corporate venture and regular venture models, asking what is a model that would work for Google and that would work for me. At work there are a few things that are important.

One is being paid enough that you don’t feel exploited. Google has that covered. Two is getting to pick what you work on. I knew that if we invested for Google’s strategic goals, which are always shifting anyway, that would be a bar no investor could pass except through dumb luck. So we needed to be open-minded about that. Third is getting to pick who you work with. That’s probably the most important thing. If you are at a job that’s okay but you love the people, you are probably okay. If you are doing a job that’s okay but you hate the people, you are probably going to hate the job. So I wanted to pick the people, and I wanted them to pick me. I said, if it’s going to be closely supervised and parented and micromanaged, I can’t take it. It’s not in my DNA.

I started out in this apartment on Church Street in Burlington with a bed and a dozen desks, and eventually we took over the level above, and then I had to move out. We had an experience where we were doing an interview for a new customer support role. We had just taken over the upstairs, and it was still this big empty expanse, with one desk and an African violet and a post-it note and a pen. We decided to do the interview there, because it was too distracting downstairs, and too cold with all the air conditioning running in for the servers. It was an older woman that I never actually met, because when I went upstairs, there was no one there. I looked at the desk and on the post-it note she had written ‘This just isn’t for me.’ We called her to ask what she meant, and she said ‘Are you filming porno or something?’ She didn’t know there was this whole server operation downstairs.

I can’t tell you how many ways [Google Ventures] mirrors our startup experience. We moved out of our shared space, and moved into more dedicated space in a Google building with other Googlers, and eventually into our own building here. And we are going to be renovating the upstairs and taking that over as well. The blueprints were right here on this table last week. And I keep having these déjà vu moments. Scott Davis, who was with me at Burlee, is on the team now, and we keep remarking to each other, ‘It’s so much the same. We’re having the same meetings with the blueprints and deciding who is going to sit where and what’s the cost.’ It’s silly how familiar it is. But it’s nice to have people who have been down this road, to advise you that this isn’t crazy.

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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  • Mario Albert Lopez

    ANIMEX: Mexican Animation (currently inactive with corporate Revive application), is a start-up enterprise. Animex is 20 years in the making. Bill’s History that shaped Google Ventures appears to be the same stickler that created me. I believe in going to the top to do business (find the right people). I gave NAFTA players who found this new Cartoon Character, marketing mechanism, CALABAZO, the Dwarf of Uxmal a fantastic tool to expand trade between our countries. In the early Nineties the U.S. Census Bureau had not revealed the Hispanic community as the largest minority group in the U.S. Corporate America had still not realized our new Latin American geographic community. Being born and raised in the Mexican film industry, knowing the trail, having the “Golden Age of Mexican Cinema” as my template. I still need help in finding the right animation film studio to produce Animex films for a Latin American market. It’s nice to know that I’m not the only one who’s history has endured as Google’s in shaping Google Ventures. So far it’s been 20 years and I am still looking for people with the right talent to make Animex films. After finding Google Ventures, I guess 20 years is not so crazy after all.