Every once in a while, you meet an entrepreneur who rocks your world. I mean, most of them are impressive, but as they say on ESPN, Jonathan Sposato is ridiculous. And so is the rest of his team at Picnik, an online photo-editing startup based near Pike Place Market in Seattle.
A lot has been made of Picnik’s being bootstrapped and cash-flow positive since late last year, as well as its high-profile partnerships with companies like Facebook, MySpace, Flickr, and Seattle’s own Wetpaint. It’s one of the most talked about startups in town. But the broader story of Sposato’s tech career is full of so many insights, I’m not sure where to begin. (I won’t even get to the bars, restaurants, and other properties he owns around town, even though, for all I know, my rent check goes to him every month.)
The founders of Picnik all come from the gaming world. So that’s where this story begins, back in the mid-1980s. Growing up in the Seattle area, Sposato got to know two guys named Darrin Massena and Mike Harrington when they were all in their late teens. Massena was his officemate at Synergistic Software in Renton, and Harrington worked at another game company called Dynamix in Oregon. “Nobody thought it was going to be a career—computers?!” Sposato says.
Massena and Harrington, both self-taught hackers, went on to work at Microsoft for 10-plus years. “Back then, Bill Gates would hire old-school dudes, right out of high school,” Sposato recalls. “Darrin and Mike were one of those stories.” Meanwhile, Sposato went on to undergraduate studies—owing to his traditional Chinese-American upbringing, he says—at Whitman College in eastern Washington. But he kept track of his old buddies. “Every time I saw Darrin, he’d show up in a nicer and nicer sports car,” he says.
After college, Sposato says, he “got cold feet about being an attorney,” scrapped his plans for law school, and helped start Manley Games, which grew to 39 employees and made video games for big players like Nintendo, Sega, and Electronic Arts. “That was my business school. We grew it in three years’ time,” Sposato says. In 1992, he joined Microsoft and worked there for 12 years, becoming a senior manager in the consumer division, where he drove efforts in software applications, video games, and social communications.
He left Microsoft to pursue other business interests in the Seattle area. One of those was starting the software firm Phatbits in early 2004. Phatbits was bought by Google in 2005, and became Google Gadgets, the search giant’s desktop application. Sposato stayed on and worked from Google’s offices in Kirkland, WA, for just under a year, commuting to company headquarters in Silicon Valley almost every week.
Having worked at two tech giants and two startups, Sposato emerged with some strong lessons in corporate culture. “No two companies are the same,” he says. “Its way of doing things—designing products, business practices, employee benefits—all of that is a function of the culture. What Microsoft and Google have in common is they both hire really, really smart people. Microsoft always self-selected for more of a Type A, aggressive, competitive type of smart person. Google self-selected for an equally smart but more genteel, collegial, ‘nice’ type of person. Consequently, the corporate cultures are really, really different.” He points out that at Google, they always ask, “How do we make this an open platform?” (Though it’s something Microsoft does more of these days too.)
But he was ready for something new and different. By 2005, his old friends had long since left Microsoft and had already established their own gaming companies. Massena had started Spiffcode, makers of Warfare Incorporated (“Handheld Game of the Year” in 2003), and Harrington had co-founded Valve Software, the maker of Half-Life and Counter-Strike. (Harrington left Valve in 2000 and was pursuing other interests like sailing and working as a forest ranger.) One day, while Sposato was still at Google,
