The YouTube Gurus

How a couple of regular guys built a company that changed the way we see ourselves

By John Cloud Monday, Dec. 25, 2006
    • MICHAEL GRECCO FOR TIME

    Chad Hurley, Steve Chen and hundreds of the videos that helped turn YouTube into a sensation.

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    But things always seem to work out for Steve, who carries an aura of mischief with him like a cloud of cigarette smoke. He drinks cappuccino well into the night and doesn't get to work until noon approaches. Levchin says that when Steve was an engineer at PayPal, he quickly established himself as the guy who could find the "shortest, cleverest path instead of hammering your head against the wall ... He'd be like, 'Yeah, I can get this feature done fast.' And the QA [quality assurance] team would be like, 'Oh, man, Chen wrote this. Great. I'm going to be QAing this for a while.' Because he would definitely take short cuts. But most people wouldn't really notice, and the product would be out faster."

    As YouTube developed, Chad and Steve's complementary skills began to mesh. After Chad left PayPal in 2003, it seemed possible he would do something more artistic than be a CEO; he designed messenger bags, and he did a bit of work on a film Levchin helped fund, Thank You for Smoking. "He is sort of an anomaly," says Donahue, his former roommate and the founder of HourTown.com "Because if you look at the successful start-up stories, the formulaic founders' team is usually an engineer and a business person, or two engineers. It's rarely a designer or a truly creative person." But YouTube's success owes partly to its retro name, simple logo and alternative feel, all of which Chad contributed while Steve was making sure the videos played quickly and easily.

    A mentor had also arrived with the Sequoia financing: Pierre Lamond, 76. In terms of Silicon Valley stature, Lamond approaches Chad's father-in-law Jim Clark. A founder of National Semiconductor, Lamond started at Sequoia in 1981. He monitors his investments closely, and he enjoyed receiving daily e-mails from Chad and Steve (many sent late at night) on various site metrics. He was pleasantly surprised to discover that Chad and Steve were great listeners--a rare quality in the genius culture of the valley--and that they spent money very carefully. Whenever site growth would plateau, Lamond would call them and say, "'What happened?' And they would tell me, 'We're running out of storage capacity.'" Lamond sometimes had to push them to buy more.

    Early on, Chad and Steve made a crucial good decision: despite pressure from advertisers, they would not force users to sit through ads before videos played. Pre-roll ads would have helped their bottom line in the struggling months, but the site would never have gained its mythological community-driven status. It would have seemed simply like another Big Media site.

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