• Causal Engines

Founder stories: how entrepreneurs came up with their company ideas and what we can learn from them

Many entrepreneurs begin their journey of turning a novel idea into a successful business differently. Some make a concerted effort to generate ideas using market trends. Others happen to fall upon an idea by chance. Whether it's for passion or solely general interest, great founders share a common thread.

Every year, hundreds-of-thousands of ambitious Americans will launch their own businesses-- twenty percent of whom will close their doors in their first year. Moreover, the chances of making it to a billion-dollar market cap are fairly slim, at about 0.0006%.

How did modern-day behemoths like Microsoft, Dropbox, and Slack beat the odds and surpass unicorn status? The answer may not be formulaic, but it is certainly worthwhile to study the best exemplars.

Bill Gates & Microsoft

Born and raised near Seattle, Washington, Gates had a deep interest in computers starting early on.

Gates attended Lakeside Prep School, where he wrote his first computer program on a Teletype Model 33 ASR Terminal. He quickly developed an intense interest in programming in BASIC, and frequented the Computer Center Corporation, a Washington-based computer time-share company, with his buddies (including Paul Allen, of course).

Soon enough, the youngsters were banned for exploiting CCC's systems to gain extra computing time. Rather than set his passion aside, Gates arranged a deal with the company to help them identify bugs in exchange for additional time.

While attending Harvard University, Gates and Allen pitched a BASIC interpreter for the Altair 8800 to MITS's president, Ed Roberts. Roberts agreed to distribute the interpreter, thus marking the genesis of Microsoft.

In the early 1980s, IBM approached Microsoft to write an operating system for its new product, the IBM PC. Although initially hesitant, Gates eventually agreed to supply an operating system, which he purchased and modified from Seattle Computer Products. For its troubles, Microsoft earned a small fee of $50,000 from IBM.

Nevertheless, the IBM deal was a truly pivotal moment for Microsoft as it gained new, widespread attention from the industry. In essence, it was the match that lit the flame.

Drew Houston & Dropbox

Drew Houston grew up programming in BASIC. After attending high school, he went to study computer science at MIT, where he honed his passion for programming. Before he started Dropbox, his first business venture was an SAT Prep program that he co-founded with a highschool teacher he knew.

A few years later, while riding the bus from Boston to New York, Drew Houston ran into a frustrating problem: he had forgotten his flash drive at home.

Evidently, it hadn't been the first time he had been so careless. In a spout of frustration, Houston opened his laptop and got to work on a software solution.

When Houston decided to apply to the prestigious YCombinator, he needed to recruit a co-founder in order to satisfy the accelerator's application requirements. He quickly decided on fellow MIT student, Arash Ferdowsi, to help launch the company.

Once accepted by YCombinator, Dropbox received a hefty $1.2 million investment from Sequoia's Michael Moritz.

Nearly a year later, Dropbox had released a working version of its product to the public.

Stewart Butterfield & Slack

Stewart Butterfield had a somewhat unconventional upbringing: he grew up in an off-the-grid log cabin near Lund, British Columbia.

While in university, Butterfield practiced his passion for developing websites. Through his early career, he launched a slew of companies, some of which were quite successful. While Butterfield enjoyed a great deal of success around his Flickr venture, other ventures like Tiny Speck (creator of Glitch, a massively multiplayer game) were an utter flop.

But not all was lost: while Tiny Speck worked toward releasing its failed game, Glitch, it also developed a pretty good instant messaging system for teams.

In the summer of 2013, Stewart Butterfield spun this creation off, calling it Slack. Within months, Slack was growing rapidly, increasing its user base by 5-10% weekly. In April of 2019, the company went public.

Notably, Slack was recently acquired by Salesforce for $28 billion.

Albeit dramatically different beginnings, Gates, Houston, and Butterfield each defied the odds and achieved tremendous success. The road there was certainly not an easy nor foreseeable one, and it required constant dedication from its founders.

While some might describe it as passion, we think it's far more than that.

These founders cared about a problem to a nearly irrational extent. Their obsessions fueled their drive to create revolutionary products that drove deep into a particular use-case that was likely previously overlooked.

What's the takeaway for the founders out there looking to build the next Microsoft? When confronted with an annoyance, many people tend to turn a blind eye. It's often the most comfortable choice in the moment. What made these founders stand out was their resolve to find a working solution and continually improve it.

We believe that legendary founders can channel their problem-based obsessions to imagine novel solutions that are meant to be shared with the world.

So, let your obsession lead you along the windy road to an unlikely place.

This article is a collaboration between Archit Bhise and Grant Sobczak.

We would like to thank Denis Metev, Zoe Bernard, and Shannon Fitzgerald for their inspiration.