Fishbowl

by Matthew Glass

  As user numbers rose, advertising revenues continued to surge, and investment interest in Fishbowl intensified. Valuations of the business were now heading north of a billion dollars. At its core, the advertising model was that which had been developed by Andrei in the early days of the 4Site contract, continuously improved and refined by a team overseen by Kevin. Andrei himself took little interest in it now. As far as he was concerned, the advertising operation merely provided the funds for server space and salaries to drive the development of all the other functionalities that his programmers were working on. None of the other meta-networks that had been set up to try to capitalize on Fishbowl’s success came close in their capabilities.

  Eventually, Andrei got a call from Mike Sweetman

  For the second time in Fishbowl’s short history, Sweetman asked if Andrei wanted to sell. This time the offer was for $1.5 billion, raised immediately to $2 billion when Andrei’s response was negative.

  Andrei had no interest in selling. Fishbowl was in the almost unprecedented situation of being a start-up that had reached mega proportions without recourse to venture capital. Chris Hamer’s investment of $1 million aside, and excepting the few tens of thousands that each of the founders had put in, Fishbowl had financed its own growth.

  When Andrei said he wasn’t going to sell, Sweetman asked if Andrei wanted to explore a partnership, offering to discontinue Openreach as part of any deal. It wasn’t as big a concession as it sounded – it was an open secret that Openreach had failed, and its continued existence was something of an embarrassment for Homeplace. A series of meetings ensued. Andrei, Chris and James sat on one side of the table, Sweetman and his chief financial officer on the other side. But although there were many potential synergies, no matter how Sweetman pitched it, at the core of the partnership there always seemed to be some kind of preferential ranking or treatment for Homeplace users. Andrei couldn’t see how that was going to enhance Deep Connectedness in general, or the experience of Fishbowl’s users specifically, and he couldn’t see how a partnership that didn’t privilege Homeplace in some way could be in Sweetman’s interest. The negotiations came to an end without agreement.

  After the final meeting, Chris sat down with Andrei and told him that the time had come to deal with Homeplace. Mike Sweetman had thrown everything he could at them – now it was time for Fishbowl to turn the tables.

  Andrei thought about it. Fishbowl was already capable of offering most of the functionality that Homeplace offered for people who wanted to network with their friends and acquaintances, and with a dedicated development programme it could relatively swiftly fill in the gaps and offer everything Homeplace had. Beyond that, it already provided the Deep Connectedness that Sweetman had tried and failed to replicate. It was thus a relatively small step to merge the meta-networking capabilities that were the core of Fishbowl with the services of a home network for those who chose to use it in this way with friends and family. The difficulty would be getting people to switch – at present, if you left Homeplace, you would lose everything – text, photo, video, audio – you had ever posted or received there. If Fishbowl could develop a seamless protocol for importing data from Homeplace – and if that protocol could get access to Homeplace’s user data – they could make it as simple as a single click for a user to cut links with Homeplace and transfer everything to Fishbowl. But the second ‘if’ was a big one. Sweetman would fight tooth and nail to prevent any such protocol having access to his users, yet that didn’t mean there wasn’t a way to force him, if one was prepared to work at it. Scrutiny of Homeplace’s behaviour by the Department of Justice hadn’t gone away, and the locking-in of user data was often cited as an example of its anti-competitive approach. Sweetman had already been forced to make a number of minor concessions. With smart lobbying and a concerted, persistent campaign – over years, if necessary – it wasn’t beyond the realm of possibility that Homeplace could be forced to open up entirely to data transfers.

  James agreed with Chris. As he had shown over Denver, James’s Christianity was of a muscular, if not bruising type and didn’t mean limitless compassion – certainly not in business. And as long as Homeplace continued to be a force, he said, it would always be scheming against Fishbowl.

  Discussion continued over a period of weeks. Andrei wasn’t persuaded. He hadn’t started Fishbowl in order to put other people out of business. And what they were talking about was simply reproducing what Homeplace already offered.

  ‘We won’t be offering anything new,’ he said. ‘Why would I want to do it? Out of some kind of grudge?’

  ‘You’re not sure what he might try next to hurt us,’ said James.

  ‘I’m not worried. I think Sweetman’s the one who’s worried about us.’ Andrei didn’t fear Mike Sweetman any more. He felt that Fishbowl had seen Homeplace off, and saw Sweetman’s desire to partner with him when he couldn’t buy him out as a sign of weakness. ‘Guys, honestly. Let’s forget about it. Why would we bother?’

  ‘Efficiency,’ said Chris. He paused to let the word sink in. ‘Sweetman’s never cared about his users, Andrei. Everything they’ve developed over there, they’ve developed so they can gather data and sell advertising. Every single thing they do, we can do more efficiently. We can give users more efficiency and more connectedness. We won’t be offering the same service – we’ll be offering something better.’

  Andrei watched him thoughtfully, then glanced at his watch.

  ‘Take a look at Homeplace,’ said Chris. ‘A good look. And don’t tell me we can’t do things better.’

  Chris had no particular aspect of Homeplace in mind when he said that, but he thought, if Andrei Koss couldn’t take a look at a website – any website – and find ways to do things more efficiently, then that website probably didn’t exist.

  Andrei looked. A few days later he sat down with Chris and James again.

  ‘OK,’ he said. ‘Let’s do it.’

  Additional programmers were employed and a cohort of publicity consultants and lobbyists contracted. Fishbowl began a long fight to force Homeplace to open up to a transfer protocol that would spirit its users away with a single tap on a screen.

  As it approached its second anniversary, Fishbowl had entered a new phase of its existence It was no longer one of a myriad startups jostling and bumping in the primordial soup at the foot of the internet ladder where companies surfaced and sank with remarkable rapidity. It had definitively exited that morass and risen to the rungs of companies that were seen as fixtures of the space.

  Andrei had started to live less like a student unexpectedly let loose from the dorm, if not quite in the style of a tech baron. He had left the house in La Calle Court, having to pay a hefty five-figure sum to undo the damage that had been inflicted during almost a year and a half of frat-house occupation, and moved into a condo off University Avenue. He had gone online and ordered a bed, a sofa, a table, chairs and a desk for his computer, which he thought pretty much filled his needs. Anything else in the place had been put there by Sandy, who was in her senior year at Stanford and spent about half of her time in the condo and half in the dorm. She got him cutlery, plates, mugs and other kitchen basics. She bought towels and bed linen, and most of his clothes as well.

  Andrei was now increasingly visible as the face of Fishbowl and more accessible to the media, albeit in small and controlled doses. He had been dissatisfied with his performance in the interview with Deborah Handel and, as a result, he undertook a serious programme of coaching in order to improve. He tried to define what aspects of himself he was prepared to expose and to find ways of being comfortable in talking about them.

  As the months passed, he began selectively to accept invitations to speak at conferences and his utterances were listened to and reported. His confidence grew. He was mixing with heavyweight internet entrepreneurs in whose company he was increasingly seen to be a natural member. As a result of the McKenrick campaign, he had been invited into their upper circle and found that
he was not only able to hold his own but that he was taken seriously. He had worked closely with a number of fellow CEOs in the Defence of Freedom campaign and had, in particular, struck up a friendship with Jerry Glick during that intense, hectic fortnight. Now he and Sandy went to Jerry’s for the barbecues that Glick liked to hold on the weekends at his big house in Palo Alto Hills, where Andrei met more of the aristocracy of Silicon Valley.

  Fishbowl now employed almost four hundred people and had moved to a new space on Embarcadero Road, this time taking three floors of a regular glass-and-concrete office block. There were no individual offices but, for the first time, there were meeting rooms where people could have private conversations. As always, an aquarium stood opposite the entrance, this one larger and stocked with more fish than the one in the Ramona Street office. In Ramona Street, anyone who felt like it had cleaned the tank and fed its occupants, resulting in an informal roster, murky water and a high turnover of fish. Now a man from a professional agency came in three times a week to see to the aquarium and the water was always sparklingly clear. The fish also had a noticeably longer life span.

  The original advertising deal with 4Site had come to an end and was not renewed. Ed Standish, who had come across to join as Senior Vice President for Advertising, was constantly expanding the team. Eighteen of them occupied a section of the second floor on Embarcadero, with another twenty-plus based in an office in New York.

  As always, the original tight core of programmers who had been with Fishbowl since the early days resented the arrival of what seemed to be ever-increasing cohorts of business types, as did the other programmers, who were joining in growing numbers. One of the benefits of Fishbowl’s rising profile was that it could attract software engineers of the highest calibre, often luring them away from jobs in the iconic companies of Silicon Valley. The cult of us-the-programmers-who-are-the-only-ones-who-know-what-this-website-can-really-do versus them-the-business-guys-who-dumb-everything-down-and-don’t-get-the-point-of-anything was strong. Kevin was mischievously guilty of propagating it and this caused considerable friction with James, who was trying to hold everyone together.

  Andrei, whose natural inclination was to side with the cult, knew that he had to rise above it, yet everyone knew where his sympathies lay. Theoretically, he wasn’t supposed to be programming any more, but at least a couple of times a month he couldn’t stop himself heading over to Geek’s Grotto, as the programmers had proudly named the fifth floor, and taking in a wheelspin that often turned into an all-nighter. It would end with high fives and yells of ‘Stakhanovite!’ and then a bunch of them would go out and invade Yao’s.

  Andrei’s forays into programming were only one thing that made his relationship with James tricky. By themselves, James probably would have overlooked them, but trust between the two men had been badly eroded by the Mea Culpa statement, as Andrei’s message to the Grotto after the Denver bombing had come to be known. James believed that Andrei had reneged on an agreement they had reached the night they had met at La Calle Court, according to which he would not say or do anything until they met again with the lawyer the following morning. Andrei accepted that he had ignored James’s request not to do anything before speaking to a lawyer, but didn’t believe he had ever explicitly agreed to it. The issue had lain dormant during the turbulence and extraordinary intensity of the weeks that preceded the Defence of Freedom marches, when they had forced themselves to work together for the sake of the company. But it was only dormant – not resolved. Eventually, during a stormy meeting, James demanded that Kevin, Ben and Chris say in front of Andrei whether Andrei had actually agreed to say nothing that night in La Calle Court. James claimed that he had asked and Andrei had said yes. The actual word: yes. No one else was sure if he had said it, or at least wasn’t prepared to say that they were, but they agreed that the general understanding, when they had broken up that night, had been that Andrei would accede to James’s request.

  Andrei accepted that he might have given that impression, even while being undecided at the time about what he would do. He apologized for that.

  For his part, Andrei was aggrieved at the things James had said to him the following morning and the anger he had shown. James had called him stupid. He knew for a fact that people in the office had heard James blow up at him on the phone. James accepted that he shouldn’t have said certain things, and even without those things, that he shouldn’t have let people hear the conversation and promised not to allow it to happen again. Andrei didn’t think it sounded like a very genuine apology.

  Andrei was beginning to wonder whether James was the right man for the job. He was supposed to be the adult in the room, and Andrei knew it couldn’t be easy for him to play that role, part of which meant controlling Andrei himself. Andrei was still his boss and by a large margin the majority shareholder. Yet some of the things that had come out of his mouth the morning of the Mea Culpa statement had suggested that he wasn’t really comfortable in the chaos of Fishbowl, and Andrei didn’t know if that was going to change. James had managed to put some order into the place, but Andrei wondered if he would be satisfied only when he had put in more order than Andrei wanted, stifling the unpredictability and somewhat uncontrolled creativity that Andrei felt was at the heart of Fishbowl. On the other hand, Andrei valued James’s judgement. Maybe yet more order was needed, and Andrei was just going to have to learn to live with it.

  He talked to Chris, who had been closely involved in recruiting the COO. Chris thought that James had turned out a little more corporate than they had hoped, but he also thought that neither he nor Andrei could have brought the kind of order and organization to Fishbowl that James had done. Andrei didn’t dispute it.

  ‘You ask me,’ said Chris, ‘this isn’t the time to get rid of him.’

  While Andrei was considering whether James should stay, the COO was focusing himself on readying Fishbowl for an initial public offering, or IPO, in which a percentage of the shares of a company are released on a stock exchange such as the NASDAQ, raising cash to fund growth and at the same time realizing fortunes for those lucky enough to own stock. Unless Andrei chose to sell the entire company, or chunks of it to venture capital investors, this was always going to be the route to realizing the value he had created.

  Everyone more or less assumed that an IPO was on Andrei’s mind. But even if he retained majority control, it had downsides. Once the company was listed, a duty was owed to the public shareholders who held stock. Fishbowl would need to publish extensive, open accounts and be accountable to financial regulatory authorities and to the demands of the markets. This would not only take considerable time and resource but would also also constitute a significant restriction of freedom. Important decisions would need to be justified to the markets, and their results would be followed. There would be less leeway to try new things, experiment, fail. Andrei didn’t know if he was ready for that, or ever would be. Fishbowl was still funding its growth from its burgeoning advertising revenues and the company had no need for cash from a public offering. Andrei had enough trouble dealing with James and the business approach he applied to Fishbowl without having to worry about another thousand people constantly analysing the business from the outside.

  But Andrei didn’t say anything to stop James. He buried himself in the stuff that he enjoyed – ideas, projects – and the stuff that he didn’t enjoy but as CEO had to do – external representation of the company – while leaving the COO to manage the business.

  James was making sure that the cost base of the company was under control even as it expanded, that the record of advertising and revenue growth was healthy, that regulatory compliance was in order – all things that investors would scrutinize closely. For an IPO to succeed, for the shares to be taken up and the price to be high, he knew that the company had to look mature and stable enough to be taken seriously as a long-term business with sustainable sources of revenue and exciting potential for growth. He also knew that timing in an IPO was everyt
hing. The business had to look right, but the market also had to be receptive, with plenty of investment cash looking for a home. Fishbowl definitely looked a strong, sustainable business – much more so than many others that had gone public. And the market seemed to be eager for it.

  Andrei couldn’t continue to ignore the question of the IPO for ever. He turned to Chris for advice about it. In general, Chris was becoming more of a sounding board for him. Although Ben was now back at the company full time, having finished his degree at Stanford, the year in which he had been away had marked a shift in Andrei’s relationship with him. Even if Ben had sometimes been in the office, he had been much less involved than before and his grasp of what was going had been limited. His mind had been on his studies and he had seemed somehow detached from the business. Sometimes, Andrei had got the feeling that he begrudged Fishbowl the time he spent there. The long conversations that they used to have had petered out – the last one Andrei could remember had been after Denver, when he had agonized over cooperating with the investigation, and they had been a rare event for some time before that. Many of the things on Andrei’s mind now related to the business side of Fishbowl, about which Ben had no expertise, but to which Chris could bring a fund of experience.

  Chris thought the timing for an IPO was probably pretty good, but he also didn’t think there was a rush. He believed Fishbowl was going to keep rising in value and there was no sign of the market heading into one of its periodic bouts of aversion to internet stocks. He thought they should do the IPO some time in the next couple of years but it didn’t have to be right then. James was more eager, arguing that the market was hot for Fishbowl after the publicity it had attracted, and the price of the stocks would command an added premium. After the complaints he had heard from James on the morning after the Mea Culpa statement, it occurred to Andrei that James might have been so enthusiastic because he wanted to cash out and leave the company. He had 1.75 per cent of the stock. At $2 billion – the price Sweetman had offered – that would value his stock at $35 million, and by now Sweetman’s offer was probably low.