David Karp is rich. He’s 26 years old, and having just sold Tumblr to Yahoo for $1.1 billion, he’s now worth about $250 million. That makes him a lot richer than me and a lot richer than you, even though he’s probably a lot less educated than either of us. We’re not talking about someone who dropped out of Harvard or failed to complete a PhD at Stanford to monetize an idea generated in a dorm room; we’re talking about someone who didn’t even finish high school. So how come David Karp has managed to get so rich… and we didn’t?
1. He Built What He Wanted
Marco Arment, creator of Instapaper and the first person Karp hired to build Tumblr, has given a fascinating account of the early days of the company and of the way Karp works. The first point to stand out is how Tumblr started.
Karp had been working at UrbanBaby until it was sold to CNET in 2006. He then set up his own software consulting company, Davidville, and it was between projects that he created a platform that would allow the easy sharing of tumblelogs. According to the BBC, that first batch of code was written in just two weeks.
If you’re wondering what Tumblelogs are, then that may be one reason you’re not as rich as David Karp. A short form of blogging that preceded Twitter and Facebook, tumblelogs were popular with the kind of insider, early adopters who are dedicated to the Internet and live on the creative side of the Web. You can think of it as a kind of Pinterest for preformatted text and links, as well as images — particularly gifs. The service itself only really took off when Gina Trapani wrote about it on Lifehacker in a post that hit the Digg front page.
That beginning is remarkably similar to the way another successful microblogging platform started. Twitter began during a brainstorming session in a park when staff at Odeo found that they weren’t enjoying the podcasting projects they were supposed to be creating. Instead, they decided to build something they’d find useful and enjoyable.
Both Karp and Twitter’s founders had hit upon a service that they wanted and that no one else had built. So they built it themselves. If you’re not building a service that you’d want to use, you’re not going to get rich.
2. He Delegated (Eventually) and Got the Team Right
For much of Tumblr’s early days, even after Karp had decided to reject new projects and focus on the platform, the company consisted of two people — then three. (By the time of sale, Tumblr had expanded to about 175.) Marco Arment’s account describes Karp undergoing a slow process of realizing that he needed to delegate tasks. But when he did so, he didn’t hire more people like himself; he brought in people who could do the tasks that he didn’t want to do. So John Maloney, for example, was brought in to handle Tumblr’s business side.
Throughout the company’s growth, Karp always seems to have known exactly what his own job was. So much so, in fact, that while Arment doesn’t describe Tumblr as a one-person company, he does see the platform as a one-person product.
Karp’s job was always to create the product, to plan new features and to make Tumblr better. The fundraising and the capital management he was happy to leave to someone else. He still ended up delegating some tasks that he might have preferred to do himself, but the really important work — planning the product — fell solely to him. He and Arment might discuss new features but it was always Karp who made the final decision, when he and Arment disagreed, it was Karp who was usually right.
That process of delegation contains a couple of important lessons for other entrepreneurs. As you grow, you will need to delegate and you might even need to delegate the work you enjoy and are proud of. But as you delegate, you have to make sure that you’re sloughing off the work that others can do while keeping the most important tasks that must fall only to you.
Karp didn’t delegate to make his life easier; he delegated to make the product better.
3. He Committed, Then He Was Dedicated
Tumblr topped Digg in March 2007. By the summer of that year, it was a full-time job. That took some level of commitment, especially from someone who wouldn’t have been older than 20 at the time. It would have been safer and perhaps even more sensible for Karp to have continued taking on consulting work, a business which would no doubt have given him a handsome income, and to develop Tumblr on the side.
But he found the funding and once he was committed, he was absolutely dedicated. Arment describes Karp as “all Tumblr, all the time.”
That sort of commitment has a price. Karp expected his staff to show the same kind of dedication, a request that’s difficult to make of people who are developing someone else’s idea and working on someone else’s roadmap. Arment hints at the tensions this caused by noting that while Karp pushed him to do things that he didn’t think were possible, he wouldn’t want to go back to that level of stress.
For Karp himself, though, that ongoing stress doesn’t seem to be a problem. The press release he issued to announce the sale made clear that he would keep working, despite being rich enough to stop, and as if to prove that his influence over the site would remain unchanged, he signed off with a “fuck yeah.”
Put those three things together, and you have someone who spotted the absence of something he really wanted; built the early version; brought in others to help deal with all of the jobs that came with growth; kept control over the product development itself; and gave it everything he had.
If you haven’t done all of those things yet, you know why you’re not as rich as David Karp.