Yahoo! Inc. Cheapness Pays Off

When I joined Yahoo! in 1999, back then it was still the near the peak of the bubble.  I immediately noticed something very different about Yahoo! from the company I just left, SGI (formerly Silicon Graphics)

Yahoo! was cheap with what they gave their employees.  They gave me a white box PC from a Taiwan shop in Sunnyvale.  Then when I wanted them to give me a desktop to work at home, they just gave me the name of the shop and asked me to pay for it myself.  I forked over $3000 for a PC that I used at home.  To this day I’m still using my 1999 unix desktop at work.

That week started my frugal days at Yahoo! and I have been noticing that this mentality of saving money was pervasive throughout the company and it starts from the top down.

First it starts with David Filo (employee #2).  Anyone who knows David Filo knows that he controls a very tight purse on how many machines you get to have for your property.  He is always giving you half the number of machines you ask for. Always asking you to make your software run faster.  Personally David can buy a few castles and a few small nations, but he still dresses in t-shirts, wears his shoes out, drives a normal car ( I think ).

Then I noticed that we don’t print t-shirts for every single web site launch.    We don’t get free food, we don’t get unlimited book/magazine funds.  Every expense report is scrutinized.  No one gets expensive ergo chairs without going thru the training first.

This culture of saving money has paid off big time for Yahoo!, I belive it contributed a sense of value for it’s employees.  Not wasting resources, not thinking that we are entitled to receiving benefits.  It’s a bit of a stretch, but I believe this also contributes to Yahoo! employees putting a lot of value on our customers because we know they have a choice to go elsewhere but they choose to stay with Yahoo! year after year.

The lesson here is that culture starts from the top, it can’t be faked, it can’t be bought, it seldom can be changed after the fact.

Thanks David for instilling your value system in Yahoo! early on.

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