Hollywood celebrities have been known to deduct a few numbers when declaring their ages. Turns out Silicon Valley startups do the same thing.
In a business where everyone is searching for the next big disruptive concept, old age is rarely considered an asset. As such, some companies make their stated dates of founding subject to change.
Chris O’Neill, chief executive of Evernote Corp., uses June 24, 2008—the day the company’s note-taking iPhone app launched—as the company’s cornerstone date. But Evernote’s roots go back further: Its founder wrote the first lines of code in 2000 and then formed the company in 2002. It released its first product—a Windows PC application that it now describes as a prototype of its iPhone app—in 2004.
“There are a lot of important dates in a company’s history,” Mr. O’Neill said. “Our point of view is, ‘Let’s pick the most important date.’ ”
Evernote, which has had three chief executives, has at various times pointed to 2002, 2005 or 2007 as its founding year.
Investors say startups often reach for the youngest age possible to make it seem like they found success quickly. To justify a chosen date, some executives wax philosophical about what constitutes “founding.”
“I think there’s a lot of expectations on startups to show progress early and often in their life,” said Mr. O’Neill, though he said that wasn’t a factor in Evernote’s case.
Like Hollywood, Silicon Valley usually doesn’t bat an eye at this practice. Venture capitalists say they know some companies fudge their year of founding in the press. There is no hiding their true age from investors, who see it in official documents.
“In general, it’s pretty harmless,” said Ted Wang, a partner at Menlo Park, Calif.-based venture-capital firm Cowboy Ventures. “People take a lot of liberties with their founding stories.”
David Gurle, chief executive officer of Symphony Communication Services LLC. Photo: Simon Dawson/Bloomberg News
In an industry where companies often change their principal products and brand identities and how they define their market segment, such malleability isn’t entirely surprising.
The founders of San Francisco-based Lookout Inc. drew widespread attention in 2005, when they exposed security flaws in movie stars’ phones at the Academy Awards. A news report of the episode said the company, known at the time as a consulting firm called Flexilis, was founded two years earlier—the year the founders met in college.
California corporate filings indicate the company was incorporated in 2005. A spokesman said Lookout considers 2007 its founding year, since that is when the founders turned their business into a security-software startup. The company changed its name to Lookout in 2009.
Nevertheless, the practice sets Silicon Valley apart from mainstream corporations—and these firms are not shoestring operations. Many are “unicorns,” privately held companies that have been valued by investors at $1 billion or more.
“This is a Hollywood phenomenon that has crept up into the startup world. There is such a premium on thinking that you’re an overnight success,” said Venky Ganesan, a partner at Menlo Ventures. “I think it’s sad, and it undermines credibility for everybody.”
Logan Green, chief executive officer of Lyft Inc.Photo: David Paul Morris/Bloomberg News
Many startups that have “pivoted,” in the local idiom, benchmark their beginnings using the date a current product launched—regardless of how long it was in development, or how many abandoned products came before that. Since Redwood City, Calif.-based Evernote’s driving mission was to launch a product, marking the year it incorporated or began developing would be “kind of like celebrating your birthday on the day you were conceived,” said Shelby Busen, a senior marketing communications manager.
San Francisco-based ride-hailing app Lyft Inc. was incorporated in 2007 as Zimride, an online bulletin board for long-distance carpools. In 2012, the same founders launched a ride-hailing brand and called that Lyft. The next year it sold off the original Zimride assets and re-christened the company.
A company spokesman gives Lyft’s founding date as 2012, and says that Lyft and Zimride are “distinct businesses.”
Sometimes the story changes when a failed startup reinvents itself. Fanbase, a kind of Wikipedia for sports fans, was founded in 2007. When that idea fizzled, the founders launched Nextdoor, a neighborhood-based social network, using Fanbase’s existing capital. They consider 2010 their founding year, a spokeswoman said. The San Francisco-based company said its executives weren’t available for comment.
Some startups that spend years developing their product say the clock doesn’t start with those years. They count time from the day they came upon a solution that worked—never mind time spent looking for ideas or toiling at approaches that failed.
Rao Mulpuri, chief executive officer of View Inc.Photo: View Inc.
Milpitas, Calif.-based View Inc., which makes window glass that changes tint electronically, incorporated as Echromics and was in development as early as 2007. When its first technical approach failed, almost the entire staff turned over, said CEO Rao Mulpuri. He took over in December 2008.
A spokeswoman says the company considers 2009—the year it made breakthroughs that made its product possible—as the year it “really started its journey.” The company changed its name to View in 2012.
When it comes to the question of founding a company, Mr. Mulpuri says, “there’s a technical answer, which is the official answer. When was the company founded in the state of Delaware? But as a team, it’s not as simple as that.”
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Silicon Valley investors are used to the idea that a “pivot” or new name takes off the years like a shot of Botox—though not all are thrilled.
David Gurle, chief executive of Palo Alto, Calif.-based Symphony Communication Services LLC, isn’t amused by startups that play the age game.
He founded private-messaging startup Perzo in 2012. After Symphony, another startup, acquired it in 2014, it began targeting financial-services clients. He proudly cites 2012 as Symphony’s founding year, despite its permutations.
“If you told me that a flower only started growing when it was out of the earth, then I would say, ‘No, it’s already been growing,’” Mr. Gurle said.
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