How to Turn Down a Billion Dollars

by Billy Gallagher

  Unfortunately, someone had to do the work of aggregating all of that data, which involved manually pulling it from college websites and inputting it into Future Freshman. That’s where the pledges came in. They’d each have to dig up a whole host of information on the colleges like population, location, Greek Life: Yes/No, and much more and add it to a shared Google spreadsheet.

  Wrapping up his short pitch, Evan handed each pledge a slip of paper with 25 colleges on it, and told them get to work. Then he turned and exited the room.

  “Fuck this,” Stuart blurted out.

  Some of them argued that they should just get up and leave immediately. Evan was totally abusing the pledging process—it wasn’t the sophomores’ job to get his startup off the ground by doing mind-numbing data entry. They had their own homework and student groups to deal with. Cole had soccer practice early the next morning. Chris had rehearsal for his a cappella group. Sam was trying to get into Harvard Law School. Jeremy was struggling with the pre-med core classes. Others argued that alternative pledging events would suck more.

  The room was split—some of the guys were good friends with Evan and looked up to him. His ease with girls, ability to throw great parties, and flair for the absurd bought him significant social capital. Others thought he was an obnoxious clown who spent too much time and energy on impassioned speeches at house meetings about inconsequential things like party themes.

  They huddled around a leftover keg, half of them drinking and bitching about Evan and pledging, the other half drinking while doing the work, all inhaling a scent equal parts stale weed and beer. A few of the guys had come right from the gym, and it really would have been great if they’d found some time to shower. Some of them sat around texting their girlfriends on BlackBerrys or checking to see if anyone had sent anything funny to the fraternity email list. Others typed away diligently, some even buying into Evan’s dream, wondering if Future Freshman would change the way their younger siblings looked at colleges.

  The sophomores sat in the crowded End for hours. Evan anxiously checked in on them periodically. In the end, only about a quarter of the work got done. Evan was pissed, but one of the other older brothers pulled him aside and told him to let the pledges go.

  A few days after the pledging event, Evan gave a few of the sophomores who had contributed a full tour of the site. They had to admit it looked very professional with its striking background and intertwined “FF” logo. In Evan’s hands, it could be something huge. A few were sufficiently convinced of its promise to keep helping Evan get all the college information into the database. They sat together in the fraternity’s single small study room and entered the data for two or three hours at a time. In a few weeks, Future Freshman was packed with information about colleges across the country.

  Evan and Bobby Murphy got ready to launch the site. Bobby was two years older than Evan and had grown up in El Cerrito, California, near Berkeley. His parents were California state employees, one of whom had emigrated from the Philippines. Like Evan and Reggie, he had also been placed on the third floor of Donner1 when he was a freshman in 2006–7. He rushed and joined Kappa Sig with his Donner buddies as well, living in the Mid like Evan. He was almost exactly the same height as Evan, but Bobby’s face was rounder than Evan’s angular facial structure, and he had black hair that he typically styled up and to the side.

  When Evan was first learning computer science, he would frequently bound into Bobby’s room at two in the morning, interrupting Bobby’s Starcraft sessions to ask for coding help. While Evan and Bobby were just two years apart in school, Evan’s class had already started to shift from favoring more traditional career paths toward studying computer science and working at startups after graduation; this drift would accelerate in the coming years. Before Future Freshman, Bobby recruited Evan to work with him on a new social network that was a different spin on Google Circles. It went nowhere.

  Bobby was quiet, introverted, and unassuming to the point that most of his fraternity brothers didn’t know he was a part of Future Freshman until Evan told them. Bobby was more than happy to let Evan run the show and take meetings with Teach for America, tell customers about the service, and make pledges input data, while Bobby quietly worked on the company’s technical backbone. Evan could sometimes get on his nerves, but they worked well together, and Evan respected Bobby’s opinion.

  At the end of the fall quarter, Evan left to spend the winter studying abroad in Cape Town, while Reggie headed off to study for a quarter at Oxford. Evan was pulled toward new ideas and projects in South Africa as Future Freshman found itself battling for mindshare and dollars with well-established companies that had deep pockets and large sales teams.

  And there were signs all too close to home that the product wasn’t connecting with its intended users. “Both of [Bobby’s and my] siblings were applying to college at the time and neither of them used it,” Evan later said. “So that was a sign that that was probably not the right way to go.” Eventually, they pulled the plug on Future Freshman. While the outcome was disappointing, Evan learned a valuable lesson: in order to avoid getting destroyed by better-funded competition, his next idea had to be more original.

  As if the startup’s failure wasn’t enough, in the middle of the winter quarter of their junior year, while Evan and Reggie were still abroad, the University completed its review of Kappa Sigma’s probation. University administrators said the fraternity had a toxic drinking culture causing incidents that went “beyond shenanigans,” an admonishment that became something of a catch phrase for the group. In order to be reinstated, the members would have to prove that the organization had changed. The fraternity would be kicked out of their house for the 2011–12 school year, Evan and Reggie’s senior year. They would be allowed to stay in the fraternity house through June 2011, but they could not throw any parties.

  With rent in Palo Alto exorbitant, 96 percent of undergraduates lived on campus, making it a heavy blow to the fraternity Evan had worked so hard to build up. Several guys questioned whether the fraternity should even go on. A number of the fraternity’s members, focused on their own startup dreams, job prospects, and academic careers, seemed ready to give up on the house. The fraternity’s leadership did a membership review, interviewing every member and weeding out any brothers who were deemed unfit to be a part of the house. Evan and Reggie were picked as two bad apples and kicked out of the fraternity.

  Reggie’s expulsion came as no surprise to anyone who’d been paying attention.

  He was known principally for getting wasted, breaking things, and leaving a mess in the kitchen. His room, which reeked of weed and tobacco, was filled with cups and plates from the house’s kitchen that he hadn’t bothered to return. He never showed up for house meetings or lent a hand on house cleans or party setups. Although he was very book smart and super friendly to everyone, he was a downright nuisance to live with.

  Evan’s case was not so clear-cut—ask ten people why he got kicked out and you’ll get ten different answers. Some say he was a willing scapegoat, volunteering to be kicked out because he knew he wouldn’t have the house for his senior year anyway. Others say he was scapegoated because he had angered younger guys by pushing for parties while the house was on probation. Others say Evan deserved to be kicked out because he didn’t want to fight hard enough get the house back, and he had been taking too cavalier an attitude toward the trouble the fraternity faced.

  No matter the reason, Evan was out. Guys in the fraternity blamed him for their house being taken away. Friends who he thought would have his back didn’t.

  Bad news came in threes for Evan. He had already lost Future Freshman. He lost the fraternity. Then, his girlfriend Lily told him she’d had enough and dumped him after two-plus years of dating.

  CHAPTER THREE

  MILLION-DOLLAR IDEA

  SPRING QUARTER

  APRIL 2011

  STANFORD, CA

  Reggie carefully ran his fingers over the blunt, admiring
its tightly rolled perfection. It was almost a shame to smoke such a work of art. He leaned back on the couch in his Kimball Hall dorm room as he discussed the weekend’s social events with two of his former fraternity brothers, David and Zach.

  Reggie, now in the spring of his junior year, had plateaued—academically and socially.

  What’s more, he didn’t seem bothered by it—he didn’t really have any sort of a plan beyond enjoying himself and going to classes. Most students at Stanford throw themselves into academics, student organizations, athletics, and part-time jobs and generally continue their overachieving habits that got them into the school in the first place. Reggie didn’t do much of that. He seemed to many of his friends like a more subdued Van Wilder, just a regular guy who wanted to hang out and have a good time without worrying about the future.

  The subject of the conversation moved on to the girls. A dreamy expression appeared on Reggie’s face.

  “I wish I could send disappearing photos,” he mused, almost absentmindedly.

  David and Zach laughed and agreed that it would be useful if photos disappeared, then turned to who was coming to their party that weekend. Reggie withdrew. He was thinking.

  Through the haze of smoke, David and Zach’s chatter faded. Reggie focused on the usefulness of this new idea. A way to send disappearing pictures. He wouldn’t have to worry about sending a hookup a picture of his junk! And girls would be way more likely to send him racy photos if they disappeared.

  Suddenly, he jumped up, and rushed down the hall to see if Evan was around. Having both recently returned from studying abroad, and with their Kappa Sig lives now over, Evan and Reggie had moved into Kimball Hall, a dorm not far from Donner, where they had lived freshman year. Mulling his disappearing photos idea—how would he best explain it to Evan—Reggie’s topsiders barely touched the worn dark blue carpet as he surged down the hall in a half run/half walk.

  Bursting into Evan’s room, Reggie exclaimed, “Dude, I have an awesome idea!” Even before Reggie finished explaining his idea, Evan lit up. He was immediately energized—almost intoxicated. It was just like all those nights of partying together, except they were drinking in Reggie’s idea.

  “That’s a million-dollar idea!” Evan finally exclaimed.

  Reggie felt relief and validation; more importantly, he felt hope. Even though Future Freshman had failed, Evan hadn’t given up his dream of starting the next transcendent tech company. He was the best operator Reggie knew, capable of taking this stroke of inspiration and making it a reality. And now they had an idea that actually seemed fresh and new. Unique.

  The two friends excitedly discussed all of the celebrities whose nude photos had been leaked to the press. Their app would solve this problem! Evan gesticulated quickly and animatedly as he explained to Reggie how he could see people sending disappearing pictures back and forth. Most of us had barely moved past flip phones and BlackBerrys to iPhones at this point. And just as we moved from talking to texting to apps for everything else, people were starting to make the app transition for sex. Tinder would come out a year later, followed by a whole host of copycats. With this early photo-sharing idea, Reggie and Evan imagined a walled garden for couples to share intimate photos.

  They would split the company 50/50, vote on everything, and divide equally any losses or gains they might see. Since Evan had more experience from running Future Freshman and other projects, he would be the CEO. Reggie would be the chief marketing officer.

  But neither knew how to code well enough to make the app. They would need to recruit one of their friends to join them. They started a list of their fraternity brothers who had taken computer science courses. Most of the seniors that year were still economics majors heading off to Wall Street and the major consulting shops after graduation—it would be a few more years until most sought to make their fortunes in the Valley. But they came up with a couple names and headed off to the fraternity to recruit them.

  Evan was a particularly persuasive salesman but he struggled to convince people with the initial pitches.

  Evan and Reggie walked up the concrete steps of Kappa Sigma and opened the door to the foyer. The smell of stale beer wafted through the lounge as they greeted a few of the older brothers, turned left, passed the Mid, and headed down the hallway. Entering the End, Evan and Reggie found Jack Dubie using the room’s lone desk to work on one of his assignments.

  Jack was a tall, athletic, vivacious programmer from Vermont who let his dirty blonde hair flow in a somewhat shaggy mane; sometimes he would grow a beard to accompany it. A brilliant coder, Jack would go on to complete three degrees from Stanford in mathematics and computer science over the next two years. He was one of the fraternity’s friendliest members, and when he wasn’t cracking jokes, he could often be found helping friends with their CS assignments. He eventually became the computer science department’s main student advisor. Jack frequently sported basketball shorts and t-shirts bearing the logo of his high school sports teams or his family’s Maple Syrup company.

  The three of them sat in the End, on the same couches Jack and his pledge brothers had sat on when they were inputting Future Freshman data for Evan a few months earlier. Evan dove right in. They had an idea, possibly a big one. More than one member of the frat lived in fear that photographs of their debauchery would come back to haunt them once it came time to get serious and have a career.

  What if people could send each other wild pictures of themselves partying without worrying about future consequences? Jack listened intently, nodding along as Evan spoke in fast, clipped sentences. Evan talked about how weird it was that whoever started the internet and Facebook just decided that everything should stick around forever. Reggie jumped in now and then with anecdotes about drunken pictures he had sent and how he wished he had an app like this. Evan told Jack they were going to work on it as much as they could this spring, then full time during the summer when classes, which now seemed less important than ever, were out of the way.

  Sinking back into the couch, Jack thought about the idea for a few moments. Evan was right, it did seem odd that everything was permanent, but this seemed like it was primarily a sexting app. Jack had already signed his offer letter to work at another startup that summer, at an email app called Mailbox that would later be acquired by Dropbox for $100 million. He explained that while it was an interesting project, it wasn’t right for him. But he could introduce them to classmates who could code the app for them.

  Reggie and Evan turned to Julian Okuyiga, a sophomore from Houston. Okuyiga had a flair for the ridiculous that almost rivaled Evan. Wearing pastel pants and polos, Julian frequently looked like he had just stepped out of a J.Crew catalog. He was black, had close-cropped hair, and was a bit on the short side. Okuyiga was known for writing prodigious code, and he would later go on to work for Goldman Sachs before founding his own startup.

  A few days after speaking to Jack, during the midafternoon lull between classes and dinner, Evan pulled Julian aside in the fraternity and brought him into the Mid to pitch him on the idea, this time without Reggie. Evan’s pitch was almost identical to the one he gave Jack. Julian seemed interested but was not yet ready to commit. Evan exited the Mid trying to contain his excitement and keep his big idea under wraps until it was ready for the world to see. He walked through the hallway looking like he was doing the world’s worst job of hiding the world’s best surprise party.

  But his excitement was ultimately short-lived. The next day, Julian told Evan that he, too, had too much going on with school to devote time to something else at the moment. In reality, Julian didn’t want to work with Evan, whom he found overbearing and overly intense. He also just didn’t think much of the idea and couldn’t see how it would take off socially. Couldn’t people just text each other photos? Plus, everyone was already uploading pictures to Facebook and Instagram every day. Did they really need another way to share pictures?

  Upon hearing the news, Reggie was momentarily discouraged. He
still thought the idea was sound, but if Jack and Julian thought so little of it, then maybe he was wrong. Anyway, without a coder, they’d never know.

  Fortunately, Evan was not so easily deterred. And he had the perfect person in mind—his old Future Freshman cofounder, Bobby. Evan was sure he could convince Bobby to work on the app. He called Bobby and explained Reggie’s idea. But Bobby wasn’t convinced. Would people really want to use this? Evan nervously urged him that this idea was different from anything other people were working on. It wasn’t like Future Freshman where they would run into an army of competitors. They had learned a lot from their past two projects, and this was the most unique idea yet. Bobby, at last convinced, agreed to write the code, hoping the third time would be the charm for him and Evan.

  Evan, Reggie, and Bobby’s first crack at the idea was dreadful: they created a clunky website where users uploaded a photo then set a timer for when the picture would disappear. They quickly realized it would be much easier and more private for users, and thus more widely used, if they built a mobile app instead of a website; to this day, Snapchat still does not offer a web product.

  They sat around in their dorm room, debating how users should interact with their friends and what features would make people tell their friends to download it. Evan ran the group, making sure things were coming together on time and keeping everyone focused, while boisterous Reggie offered up ideas on all the different ways people would use the app. Bobby, much quieter and more reserved than the other two, kept the group grounded and generally agreed with Evan on the app’s direction.