Funded by Google
Ex-Google employees cash in on their company stock to start businesses.
Free gourmet meals, on-site medical care, laundry facilities in the office, and a cool company culture complete with lava lamps, pets and ping pong tables, have made Google an attractive employer. But as it's grown from a small, entrepreneurial operation to a corporate entity, buying out smaller tech companies and expanding around the globe, some of its more independent-minded employees have struck out on their own.
Approximately Google's 300th employee, Dan Daugherty started in the Mountain View, California, Googleplex in 2002 working on AdWords, but soon left for Colorado, where he launched the Denver sales and operations office. He spent three years there working with Fortune 500 accounts and started investing in real estate on the side.
While trying to rent out his properties, he found he had to list them on many different sites to get the number of leads he wanted. Daugherty, 28, partnered with Dariusz Rakowicz and Lisa Ray, and developed his solution to the dilemma for about six months before leaving Google in November 2005. They launched Rent Marketer to the public in 2006, bankrolled by a portion of Daugherty's Google stock.
It's estimated that Google's August 2004 IPO created at least 900 instant millionaires of the company's 2,300 employees. And with the IPO price at $85--a bargain, since at press time a share is about $700--many other stockholders pursued their own ventures.
Dan Engel was the vice president of market development at Picasa, which was acquired by Google in July 2004, when he joined the company as about its 2,000th employee. Working in Santa Barbara, California, he was put in charge of online advertising for AdSense and AdWords.
Engel never intended to work for a large company, and he left Google just four months after he started--but not before making sure he had some stock in hand that he could use to bootstrap a new company.
Engel, 31, was already co-founder and CEO of Morpheus Software, a digital animation software company. However, with 10 employees and the company practically "running itself," he set his sights on a new venture. Engel founded FastSpring, an e-commerce engine designed to streamline online shopping, especially for digital products, with Ken White, Ryan Dewell and another partner in 2005. The company now has 10 employees and about 50 clients.
The best takeaway from Google, says Engel, is that "Mentioning Google makes people pay attention," though he also admits Google taught him about B2B marketing. He's also parlaying his experience working on AdSense and AdWords into consulting work with another company, CPC Search, launched in 2004 with a partner to do search marketing.
Though Engel may seem spread thin as a triple CEO, he sees all his Santa Barbara-based businesses working together, and he's focusing the bulk of his energy on FastSpring, which he believes will grow the fastest. Combined, Engel says his businesses are bringing in less than $20 million a year, and the serial entrepreneur doesn't rule out jumping aboard any other new ventures. "I'm an opportunist," says Engel. "I don't stick around longer than I need to."
Not everyone who has left Google has created a tech or online startup. Charlie Ayers, the first Google chef and employee No. 56, was an integral part of building the company's culture by creating food that would make employees want to come in early and stay late.
About a year before the IPO, Ayers started putting a business plan together for a new restaurant concept he came up with by looking at the market's inefficiencies and finding new solutions. He wanted to bring quick, healthy, local food to customers and also build a from-the-table Wi-Fi ordering system that would include a credit card slider for maximum efficiency.
Ayers, 40, left Google in May 2005, after opening 10 cafes at the Mountain View complex, and he has used $170,000 of his stock, as well as a few million dollars from private investors, to launch Calafia Café & Market a Go Go in Palo Alto, California, which will open this summer. He also has a cookbook, Food 2.0, coming out in April.
An in-demand company culture consultant, Ayers helps other Silicon Valley startups, like Ning and LinkedIn, by using what he learned at Google about keeping employees happy. "If you want productivity to go up and you want to have great morale," says Ayers, "food goes a long way."
In 2006, Ayers' consulting business brought in about $100,000. He spent 2007 focusing on his book and Calafia's launch and anticipates an exciting 2008. Once the restaurant is established, he plans to open five locations in the Bay Area and then start expanding nationally.
Lessons from Google
Daugherty's Denver-based Rent Marketer now has 15 employees, and the company's rental listings distribution service is being used across the country by about 10,000 property managers who create listings for $40 to $90 per property per month. In 2008, it'll add a site for renters, step up its marketing and roll out new features, like click-to-call.
Inspired by working at Google from its early days, Daugherty tries to inject what he learned there into his own company. He quantifies every piece of data he can; he pushes himself and his employees outside their comfort zones; he partners with and employs the best people he can; and he even offers perks, like bringing a massage therapist to the office every two weeks. The biggest lesson he learned from Google, though, is not to spread himself too thin. He says, " Focus on one thing and do it very well."
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