I just finished John Battelle’s The Search.

It’s a great book.  I highly recommend it to anyone who is interested in business, technology, marketing, and the internet.

One of the things I that I enjoyed most in the book was John’s comparison of Google and Yahoo!.  I won’t quote from the book here.  If you want to read that part, get the book.

The most interesting thing about the comparison was the roles of Jerry and David at Yahoo! and Sergey and Larry at Google.  Both were Stanford grad students.  Both started the companies in their dorms.  Both are still with their respective companies.  But at Yahoo!, Jerry and David are part of the management team, but don’t run the company.  At Google, Sergey and Larry are in charge, along with the third member of the troika, Eric Schmidt.  It’s a very different model.

And it got me thinking about the role of founders in general.

Founders contribute something to companies that is very special.  It’s the core DNA of most companies.  Many founders step aside at some point from the CEO role.  Many times that happens at the urging of the VCs.  Many times they do it on their own, recognizing that they don’t enjoy actually running a company.

But the tricky part is keeping the founders engaged and involved once they’d stepped down from the CEO role.  So in that regard, I am actually more interested in Jerry and David than Sergey and Larry.  From reading John’s book, Sergey seems like Bill Gates.  I suspect he’ll be at the helm for a long time at Google.

But how do you get someone of the caliber of Jerry Yang or David Filo to stick around and keep working on moving the company forward.  I don’t think its a coincidence that Yahoo! alone out of the web 1.0 portals has made the transition to web 2.0.

In fact, Terry Semel’s talk at web 2.0 was essentially a description of how a large portal can use web 2.0 techniques to remake themsleves.  How did Terry come up with that plan?  Not alone, I am sure.

My bet is that the founders had a lot to do with this. They are still of the web. They get what’s going on and they can translate it into a strategy that Terry, Dan, and the team can execute.

That is enormously valuable. But how did Yahoo! keep them around?

Marc Andreessen moved on from Netscape.

Joe Kraus moved on from Excite.

Fuzzy Mauldin (Lycos) and Louis Mounier (Alta Vista) are long gone too.

Many web 1.0 founders left their companies and moved on to start new companies.  That’s fine and frankly expected.  But not great for the companies they founded.

I’d like to find a formula (like the one Yahoo! has found) and bottle it.  Because I believe companies that can keep their founders engaged and motivated are so much better off than those that cannot.

#VC & Technology