The formation of Excite

The year is 1993, the internet is in its infancy, venture capital is hard to come by and the spirit of risk and adventure hardly figures on investors' radar screens. For Joe Kraus, it is a defining moment. Unlike his colleagues, he is a political scientist, while they are technologists. They have the bright technical know-how, he brings… well, it's not exactly clear what he brings, but he's happy to be there for the ride.

Kraus says he never had any interest in business until he went to Stanford University, the famous Californian college that has spawned a myriad net ventures. Once there, he was struck by the heady atmosphere of entrepreneurism and the general clamor for success:

'I think college was very formative. Stanford has an amazing position as a university in the sense that it's in the heart of Silicon valley. You're constantly introduced to role models who have made it.

'In Silicon Valley, through Stanford, you're given a sense that the coolest thing to be doing is to be starting your own company, or working for a very small company.

'If you go to other parts of the US, the middle of Ohio for example, and you say, I'm going to start my own company, or work with five or six other people in a very small company, you are looked at as what's wrong with you? What happened, you're not good enough to get a job with a big firm?

'And I credit Stanford, by showing role models in Silicon Valley, with bringing out and encouraging a lot of the entrepreneurial tendencies.'

Kraus's early business experience started during the summer vacations. Even here, in part-time work just to make some extra cash, his desire to be self-employed was strong:

'I didn't even want to work for anybody else in the summers. So a friend of mine and I started a design T-shirt company in Los Angeles where I had grown up. And that was definitely the first taste of - wow, it's good not to work for anyone else!

'I had friends who were working 9–5 jobs for $5 an hour, whereas my friend and I were working longer hours but the ones we wanted. It was flexible time and we were earning a lot more than $5 an hour, and that was the first experience of - wow, it's actually great not to have a boss.

'More important than that, we were completely determining our own ability to succeed - we succeeded or failed based on nothing more than our ability to do the job effectively, and that becomes very addictive.'

That was not the only influence on the young Kraus's ambitions. A negative experience while he was still a high school student also left its mark:

'My parents returned home from an auction and they said they'd bought me something - a summer job! This was in my senior year at high school and I said what, you've bought me a job? And they said, yeah it's in an architectural and engineering firm. I said this is terrible, I don't want this!

'But I went to work for this firm and my job was duplicating microfiche, and I don't know if you have been around microfiche or duplicated microfiche, but it's a miserable process.

'It involves taking a piece of film and the original microfiche and exposing it to ultra violet light. So you get a sunburn right there, and then you put it in the development tray which sprays ammonia on it which chokes you. I did this for six weeks, working with three 65-year-old women. I went bananas, it was the end of me. I basically said to myself: I am never ever, ever doing this again.

'In many ways it was a defining moment in the sense that I said, I cannot do this, and ended up quitting and working in a grocery store as a bag packer. And my parents at that point realized, well, perhaps Joe's not cut out for the microfiche role.'

But Kraus has nothing but praise for his family after that:

'When I was selling T-shirts, I think my parents probably thought, oh boy now we are going to have to support him over the summer.

'But then they saw me actually pulling down some reasonable contracts and making a go of it and they were very supportive. It was the same way when we started Excite, they were really nervous at first, but once it started getting some momentum, they were great.'

The T-shirt business certainly sharpened Kraus's business technique. He recalls:

'There were four major T-shirt printing houses in Los Angeles and all of them that we visited would say, your order is too small. So I said, just humor us and take us on a tour of your facility.

5 ways… Joe Kraus broke the rules As the only non-technologist among the founders, Kraus could have been intimidated into taking a subordinate role. He was not. Recognized early on the need for good vibrant marketing - a factor that transformed Excite into one of the most exciting brands on the net. His and his colleagues' honesty in admitting that they did not know how to make money from their venture was more than brave, it bordered on the suicidal. But it worked. Admitting also that they needed senior experienced management to help them. Brave and boring but essential. Merging with @Home. The jury's still out, but it was the first deal of its kind - marrying broadband cable with net content.

'Here we'd meet the foreman, who was the person who ran all the machines - and invariably had an operation in the backyard where he would be making T-shirts at a fraction of the cost of what the T-shirt house was.

'So we would go into these big manufacturing plants and meet the foreman and do business on the side out of their backyards and beat everyone's prices as a result.'

Excite was born in a Mexican food bar called Roseda's. I ask Kraus what the internet buzz was like at that time:

'Well remember when we got together at Roseda's, in February 1993, none of us had seen the web. We had all been playing with the internet for four years while we were at school, but it was primarily through very primitive text interfaces, using text-based e-mail and things like that.

'So we had no idea the internet was going to be the thing. The only conclusion we came to was that more information was going to be made available electronically and it needed better tools for searching through it. That was our only insight.'

The concept of starting a company around a group of individuals, rather than a concept or idea, still strikes Kraus as almost unique:

'It didn't really matter what we did, we just wanted to be working together. And not work for anybody else - that was the other aspect of it. So, one day at Roseda's, we each came with different business ideas. Unfortunately, they all sucked. They were things like applications for the Newton (Apple's hand-held computer), remember the Newton? Yeah a really good idea!

Excite was born in a Mexican food bar called Roseda's

'Translation software, which never goes anywhere. And it was when we were depressed at the end of this meal, Graham said, "Let's build tools for searching through large databases - there's going to be more and more information around".'

It was the start of Excite. By the summer of 1994, the team had built a working demo of the technology behind the fledgling search engine. Kraus recalls:

'We needed to put an interface on it and I remember Graham saying we could put one on a programme called Supercard, which you will remember if you were a Mac user. Or, we could do it in this new thing called mosaic and it's on this thing called the web.

'So, I said let's try it on the web. So we built a web-based interface on our technology, not because we knew it was the future and not because we knew it was going to be huge, but because it was convenient. It looked like there was an emerging standard that was going on and we suddenly got associated with being a web company as a result of that.'

Kraus feigns amnesia as to what was the business idea he proposed at the meeting, 'I think it was something for lawyers or something like that. Thank god, I've decided to completely erase that from my mind,' he laughs.