in Business

The bee’s knees

I am reading Founders At Work and read this gem today. It’s for the interview with Arthur van Hoff, the CTO of Marimba.

Another story I remember from our first round of funding was when they gave us the checks – the lawyers were there, Kleiner was there, and I said, “Oh great, now I can buy that espresso machine!” and they all jumped me and said, “No, you’re not going to buy an espresso machine with this money. This is to start the company.”

And it became a sticking point. We were very frugal and we didn’t spend money on frilles, but after the IPO there was a really bad time for Marimba when it was very difficult to hire people, and all the early people that had been there 3 to 4 years were starting to leave. Morale was very low, and so I went to the CFO and said, “Look, I want to buy an espresso machine.” And he said, “No, we can’t do that, it’s too expensive.”

A few weeks later, when another senior engineer quit, I said, “Screw it, let’s go buy an espresso machine.” So Jonathan and I went online and bought this super-duper Italian, fully automatic, $15,000 espresso machine on his credit card and submitted the expense form. The CFO almost had a baby. It was unbelievable.

This was a beautiful piece of work, and they came and installed the espresso machine and it was the best money ever spent. Every morning, people would meet and crowd around it. This thing was just it, the bee’s knees, people loved it, they couldn’t stop talking about it. A month later, the CFO came and said, “I’m sorry, we should have done this years ago.” And it tells you something about where you spend your money and what you spend your money on. It’s not just business-related expenses. You also have to create an environment that you like so that people are happy and feel they are valued.

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  1. Interestingly I blogged about the same topic today–there’s no such as a free lunch–and took the other side.

    I’m all for morale, but you can get an espresso machine or employees to talk to each other for less than $15,000.

  2. 15K is a bunch of cash to spill on a machine that no doubt needs a trained barista to manage and run smoothly so that more expensive expenses are not created to maintain the thing.

    but over all, it is a valuable point to make. morale is an important part of psychology that needs to be maintained in a stressful environment in order for success to be achieved.

    great gem, thanks a lot!
    (bs.)

  3. I like it. $15k for a coffee machine is nothing compared to recruitment costs.

    There is an advertising guy down here in Australia named John “Singo” Singleton that has always had an in-house bar at their main agency which staff and clients frequent post 6pm most work days. Singo has been in the ad game 30+ years and is now worth $200 million, he says the $100,000 a year it costs to stock the bar is the best money he spends as it allows his staff to talk shop in a more relaxed environment.