Burn Your Plan A

Tl;Dr — The story of two men who tried to sell their company, but nobody wanted to buy it, so they had to turn to Plan B.

Dear Reader,

The two graduate students couldn’t believe their luck.

They had created new software, and now a larger company with an inferior technology was considering buying it for $1M.

Other developers were selling their tech to larger companies for tens of millions of dollars.

But the grads were only asking for a million. Their plan was to take the money, buy houses, and then get back to doing research.

The phone rang. It was a call from their attorney who was helping them sell their software.

“Bad news. The CEO rejected $1M. But I think we can get him to bite if you reduce the price to $750,000.”

The two students muted the phone and argued for a moment. 750K?! They were sure it was worth more, but what else could they do? They reluctantly agreed.

A few days later their attorney responded. The larger company had passed.

The grad students were bummed. In order to make any money, they would need to turn to their Plan B: build the software into a real business.

Plan B wasn’t what they wanted, but they were both familiar with making sacrifices.

The younger grad student was from a family of immigrants who had escaped to America from the Soviet Union. Before his family fled, he faced anti-Semitic prejudice every day. Receiving a higher education was nearly impossible. Both his parents lost their jobs for daring to even express interest in leaving the country. He and his family went without income or adequate for eight months while waiting for clearance to move to the United States.

When they finally made it to safety, the student’s life turned around. Moving was a struggle, but he was able to embrace his natural talents, excelling at school.

He set his sights on MIT… but was promptly rejected.

MIT’s rejection letter stung, and he had to move onto Plan B: Stanford.

While at Stanford he got assigned to work on a project with another grad student. They tried to work together, but both found the other cocky, assertive, and annoying.

Why did they both annoy each other so much?

Working side-by-side, they realized that they were nearly clones of each other — similar interests, schooling, and intelligence. They annoyed each other because they were so similar.

All of a sudden they understood each other and how to work together. They turned their energies away from disliking each other and towards a software project.

They were working on a tool for professors and students to quickly find the information they needed across thousands of documents.

They developed a cutting-edge algorithm that worked like a charm. Stanford loved it and, since it was a school project, filed for a patent.

Inspired by their software’s initial reception, the graduates came up with two plans. Plan A: sell the technology and return to research. Or Plan B: start a company around the technology.

Plan A failed. Nobody wanted to buy at $1m. And nobody wanted to buy for $750,000.

Onto Plan B.

Plan B meant permanently dropping out of the doctorate program and pursuing their business fulltime. The students approached a professor-turned-entrepreneur for advice. As they spoke to him, he picked up the phone and invited another investor to join the conversation.

The following week, they were sitting across from their professor and two investors demoing their product. Ten minutes into the demo, one stopped them. “I’ve seen enough.”

They glanced nervously at each other. What did he mean?

The man fumbled through his coat pocket. “You’re onto something.” He pulled out a checkbook. The professor-turned-entrepreneur did the same thing.

Both men scribbled out checks and slid them across the table.

The two students couldn’t believe their eyes. It was more than enough to get their business off the ground. They committed to dropping out of school and went full steam ahead with their company.

Their first office was a friend’s garage — complete with blue carpet, a ping pong table, and tiki lamps in the corner. As the years passed, their offices evolved, but that “have fun and get it done” attitude never left.

They eventually raised a $12.5 million funding round. From there, the company exploded and today, it’s more than just a household name, it is its own verb.

The founders had originally named the company BackRub. Luckily, they went with Plan B (again) and renamed it to… Google.

The younger student in this story is Sergey Brin. The older student? Larry Page. The two would go on to build Google to become the third most valuable company in the world.

A fun aside: Google is a play on a word spelled G-O-O-G-O-L. It’s a mathematical term meaning 1 followed by 100 zeroes. It hints at the amount of information that the search engine can quickly sort through. But that domain name was taken, so the founders just changed the spelling.

Sometimes we treat Plan B like it’s an inferior option. Like it’s a consolation for missing the big opportunity.

Larry and Sergey had a Plan A that didn’t pan out. But because they were able to take Plan B as seriously, Google is the enduring tech goliath it is today.

Sergey and Larry didn’t let any of their “failures” discourage them. They knew they had something of value. Something better than anything else. They jumped into Plan B… and made it pay.

That’s their story. What’s yours going to be?