*
The first roadshow Andrei attended was in London. He sat at a table with Jenn McGrealy and Didier Broule on the podium in a huge room in the Grosvenor Hotel, facing 500 fund managers, investment managers and a select group of high-net-worth investors. He had avoided the media scrum that had gathered outside the hotel in expectation of snapping shots of him as he arrived by the simple expedient of staying there the night before the presentation.
The plan was for Didier to introduce him, then Andrei would outline his vision for the business, Jenn McGrealy would give the presentation on the company’s operations that she had been giving for two weeks already, and Didier would then give his presentation on Fishbowl from an investment perspective, which was more finely tuned to the interests and concerns of fund managers and investors. Then there would be questions from the floor.
Andrei’s presentation had been drafted by the bankers and modified over a few rounds of to and fro revisions. It took around twenty minutes and went off without incident. He even tried a couple of the apparent ad lib jokes the bankers had scripted for him and got laughs from the audience. Then Jenn stood up.
Andrei watched her as she outlined the operational strengths of the business, its commercial effectiveness, its technological development pipeline, its risk management, its resilience. He had never heard the capabilities of the business outlined in this way, and he was impressed. More than impressed – awestruck. At one point he found himself listening to the pitch, and suddenly thinking, as if he were someone who was completely outside it: This is a hell of a business! His next thought was: Did I build this thing? He knew that the answer was no. He could never have built what Jenn had built. He didn’t think James Langan could have built it, either. Jenn was far superior. He had got one thing right, he thought. Listening to Jenn speaking, it struck him that hiring her had been one of the best decisions he had ever made.
Didier Broule took his place at the lectern when Jenn had finished. The banker was smooth, practised, credible, utterly at home in front of a crowd of investors. Careful to avoid saying anything that strayed outside the realms of permissible future projection, he put up numbers and sliced and diced them with ease, converting them to price to earnings ratios and earnings per share and other metrics that were grist to an investor’s mill. For fifteen minutes he steered slickly through a stream of figures. Then he unexpectedly shut down the slides on the wall behind him and paused for effect.
‘Now, here’s the thing,’ he said. ‘Let’s think about risk. I bet a lot of you are saying, fundamentally, this is a network. Networks come, networks go. Does anyone remember Homeplace?’ He waited for the laugh he always got when he said that, whether it was in Chicago or Sao Paolo or Frankfurt. ‘No, but, seriously, they come and go. People are fickle. They join one network today, they switch tomorrow – not that I think that’s going to happen to Fishbowl, I hasten to add. Not with one point five billion users – that’s a quarter of the human beings on the planet – and a growth trajectory after eight years that’s still heading up. No, personally, I don’t think Fishbowl’s going anywhere in a hurry. By the way, that’s not a forward-looking statement.’ He paused for the laugh again. ‘But I’m serious. You’re investing for the long term. You should be asking yourself one important question. What makes Fishbowl different from the others?’ He paused again. ‘Here’s the answer. Fishbowl is not a network. What do I mean by this? We’ve heard Andrei speak about Deep Connectedness. Fishbowl offers that. That’s been the vision from day one. But let’s say someone offers a better form of Deep Connectedness. Let’s say one point five billion people run off there. Andrei,’ he said, glancing at him, ‘I’m not going to say it’s going to happen, but let’s say it does.’ He looked back at the audience. ‘Worst case.’ He shrugged. ‘Who cares? Fishbowl … is not …a network. Fishbowl is a program. That’s the core of this business. The intelligent adaption program – or Farming, to you or me. Let’s look at what one interested party had to say about it.’
Didier pressed a button. The screen came alive again. Andrei turned to watch.
It was a clip from the Senate hearing. McKenrick’s face was on the screen.
‘Let me help you, Mr Koss. Your Farming program, or IAP, or whatever you want to call it, is an immensely powerful program. Would you agree?’
‘I think it is a major advance. I said that before.’
‘Immensely powerful in selling products. Almost unimaginably powerful.’
‘That’s Senator Diane McKenrick, Chair of the US Senate Committee on Homeland Security. Not known for exaggeration.’
Didier played another clip.
‘I understand you’ll license it, won’t you? Of course you will. Everyone knows you stand to earn an enormous amount of money if you do.’
‘Now,’ said Didier, ‘imagine Fishbowl without its network, if you will. Take away the network, take away Deep Connectedness. What have you got left? That’s right. The IAP. The most sophisticated, most targeted, most influential, most effective way of reaching a consumer ever – ever – developed. A program Fishbowl can use on its network, sure, but, more importantly, a program it can license to every network, every search engine, every chat room, every online publication, every place where people go on the net and reveal their needs. Which is everywhere. That’s what you’re buying, ladies and gentleman. You’re buying Fishbowl. Great. You’re buying a network of one point five billion people and rising, with all the opportunities that gives to direct advertising at them and all the revenue that brings. Great. But that’s just the icing on the cake. What you’re buying – what you’re really buying – is a universal advertising application. Think about that. Do the math. Global advertising spend is 600 billion dollars. How much of that spend will a universal advertising application capture? The figures I showed you before, the projections, the cash flow – they’re before that. Do the math.’
He waited, as if really expecting everyone in the room to be doing some kind of calculation. ‘What you’re thinking about now, the number in your head – that’s all upside.’ He paused, nodding. ‘Upside. A universal advertising application. Not an IAP – a UAP. That’s what you and your investors will be buying on Friday.’ He paused again. ‘And another thing. People say a company where the share structure gives one man a majority vote, even if he’s holding only ten per cent of the shares outstanding, holds a risk. I agree. And that is effectively the structure we’re talking about, let no one be in doubt. That’s why we’ve assembled a board with some of the world’s most exceptional business leaders to help steward the business. Even so, some people say it’s risky to buy into a company with a voting structure like that. Maybe. Normally I’d agree. But there are exceptions.’ He gestured to Andrei. ‘That’s the man with the vote. The man who gave us what we’re talking about today, who built it in eight short years out of a dorm in Stanford, who’s giving us the opportunity, with this IPO, to be part of one of the greatest examples of value creation that any of us have ever seen. It’s this man sitting right here that we have to thank for all this – Andrei Koss.’
There was silence for a moment, then applause broke out in the audience. At first Andrei didn’t even hear it. He was still watching Didier Broule, too absorbed in what he had said to be aware of anything else. People were on their feet, clapping, before he realized what was happening.
Didier motioned to him to stand up. Andrei stood, facing the applauding investors, not knowing what to do.
After the presentation, as they sat in the back of the car that was taking them to the private jet that would fly them to Shanghai, Andrei said to the banker that maybe he shouldn’t focus so much on licensing.
Didier laughed. ‘Andrei, that’s what the investors are buying. No one trusts network stocks any more, not after what you did to Homeplace. But this they get.’
Andrei hesitated. The truth was, Broule and his team from Mann Lever intimidated him somewhat. Since the day they had been appointed, they had swept in and tak
en over the IPO process – the planning, the execution, the communications. They exuded energy and certainty. Everyone on the Fishbowl side – Leib, Chris, Jenn – thought they were doing a superb job. And they were. Andrei felt as if he was on a pounding, thumping juggernaut and there was no way of stopping it, or even diverting it slightly from its chosen course. And not even Andrei was totally immune to the fever generated by the juggernaut, the excitement of the ride. No one was.
Broule grinned. ‘Andrei, trust me. I’m going to get you a market cap of one hundred and ninety billion dollars on Friday. That’s what it’s looking like. A hundred and ninety. The biggest IPO the world has ever seen.’
Andrei heard it all again, in Shanghai, in Palo Alto, then in New York City. The same speech from Didier Broule, the same words. The same applause from the investors, lapping it up.
And now the IPO was only two days away.
44
THE IPO OF Fishbowl Inc. took place on 21 July, seven years and eight months after Andrei Koss launched the second version of Fishbowll.com, which was destined to become one of the world’s great internet companies.
The offering was priced at $48 a share, valuing Fishbowl at $192 billion dollars. Andrei rang the bell by videolink to open the trading session of the NASDAQ, standing in front of the aquarium in the main Fishbowl atrium, flanked by Jenn McGrealy, Chris Hamer, Bob Leib and the two dozen most senior executives in the company. Ten minutes later, the stock price had gone through $50, putting the company at $200 billion. A cheer rang across the fifth floor of Fishbowl’s headquarters where a huge screen above the aquarium showed the stock price. The stock ended the day at $57.40 – almost a 20 per cent premium on the launch price. Andrei now held 44.7 per cent of a company valued at $228 billion dollars. Chris Hamer’s $1 million stake had been parlayed into $11 billion, while 182 paper millionaires were made that day in the offices on University Avenue, with many more employees owning shares and options in the hundreds of thousands, and every employee, even the most recent, having at least some stock. Jenn McGrealy was worth in excess of $9 billion; Ed Standish, the advertising executive who had sold the original advertising deal to Andrei and then joined the company twelve months later with a grant of half a per cent of the shares, was worth $1 billion. A good number of millionaires were made outside University Avenue as well: Eric Baumer, the infrastructure guy who had kept Fishbowl alive in the first summer on La Calle Court, had 1 per cent of the company. James Langan, now an evangelist pastor in Denton, Texas, still held the 2 per cent that he had accumulated in his year at Fishbowl, and was a multi-billionaire.
That night, Fishbowl took over the Grey Warehouse in San Francisco. Every employee was invited to the party, as well as other people who had been involved with Fishbowl over the years. Ben Marks flew in from New York. Kevin Embley made it all the way from his office on Emerson Road off University Avenue, where his own start-up was finally picking up speed in social gaming.
At ten o’clock, Alan Mendes ushered Andrei to a balcony looking down on the central lobby of the warehouse from six storeys up. A sea of faces gazed back at him from the balconies and the lobby below. Seventeen screens hanging off the walls at various heights showed the parties happening simultaneously in each of the cities around the world where Fishbowl had an office, whether it was morning, noon or night. It was an awe-inspiring sight and, for a moment Andrei, with Sandy beside him, just soaked it up. Then he took the microphone that Alan was holding for him and raised his hand.
There was a roar.
When he finally got silence, Andrei put the microphone to his mouth and said, ‘You did it. You guys did it!’ The warehouse erupted around him again. When he had silence once more, he gave a short speech. He said that what had happened that day on the stock market was testament to all the work they had collectively done in building Fishbowl. It was nothing more than they all deserved. Then he told them not to focus on the stock price, but to keep doing the things that had made Fishbowl what it was. As long as they did that, the stock price would take care of itself. The first eight years were just the beginning, he said. They had changed the world a little. ‘Stick around,’ he concluded. ‘In the next eight years, we’re going to change the world a lot.’
He handed the microphone back to Alan and, as the warehouse was filled with roaring and whooping, made his way with Sandy off the balcony.
He went through the crowd. Most people in the company never got to see him, let alone talk to him, and they crowded around him. At some point he got separated from Sandy. He glimpsed Ben and headed towards him. Later they found Kevin. Young Fishbowlers acclaimed Andrei as he walked past. They had no idea who Ben and Kevin were.
At around midnight they ended up on the roof. The three men who had founded Fishbowl stopped by the glass balustrade at its edge. The lights of the Bay glittered below them.
Kevin had a fat cigar in his hand. ‘Billionaires’ club,’ he said with a grin.
‘I don’t know what I’m doing here,’ said Ben. ‘You two guys … you built this thing. I was just there for the ride.’
‘Dude, that’s why you only got nine per cent.’
‘He only got nine per cent,’ said Andrei, ‘because he couldn’t find another twenty thousand. And you weren’t just along for the ride, OK? It was way more than that. I still miss you. I still want you back.’
Ben shook his head, smiling.
For a moment there was silence as they watched the lights of the Bay twinkling below them. It was over four years since they had physically been together in the same place – not since Ben had left Fishbowl, before the Manhattan Project had even started. That was more than half the company’s existence. Ben and Kevin had gone on to other things. Whatever tensions had existed with Andrei around their departures were long in the past, and paled in comparison with what they had achieved together. Their thoughts went back to Embarcadero, to Ramona Street, to La Calle Court, to Robinson House, places that were the stuff of myth now, so far away in the life journey that each of them had taken, if not in distance from where they stood.
‘Remember all those hours at Yao’s?’ said Ben nostalgically. ‘Man, we practically lived at that place. Is it still there?’
‘Sure,’ said Andrei.
‘You ever go back?’
Andrei shook his head. ‘Not much. Occasionally. We actually have a couple of meeting rooms in the office now.’
Ben laughed.
‘I gave him shares, though.’
‘Who?’
‘Yao. I gave him two million dollars’ worth. And I gave two million each to the guys. Lopez and Marina and Feliciano and Wong. I gave them two million each.’
‘Dude,’ said Kevin, ‘that’s cool. Stakhanovite.’
Andrei shrugged.
‘You know, everyone thinks you’re there all the time,’ said Ben. ‘Whenever anyone finds out I was connected with Fishbowl, it’s like, “Aren’t you guys at that noodle place all the time?”’
Kevin nodded. ‘There’s like a legend of Yao’s out there.’
‘It was that interview I did after Denver,’ said Andrei. ‘I have never done an interview since where they don’t ask me about Yao’s.’
‘You’ve never done an interview since, period.’
‘Actually, that’s not quite true.’
‘Dude, that journalist should just have called that article “Yao’s”. I don’t even know why you were in it. And there were monkeys, right? Something about monkeys.’
‘Orangutans.’
‘Stuff really happened at that place,’ said Ben. ‘Do you remember the napkin?’
Kevin grinned. ‘Who can forget the napkin?’
‘Have you still got it?’ said Ben to Andrei.
He nodded.
‘Is that where we first met Chris?’
Andrei thought briefly. ‘No. We went to that Vietnamese place. What was it called?’
‘It’s closed,’ said Kevin. ‘Closed about a year ago.’
‘I met Chr
is at Yao’s when I asked him back up.’
‘Without us,’ said Kevin. ‘That’s when you sold us out, I believe.’
Andrei looked at him.
‘Dude, I’m joking.’
‘Is he here?’ said Ben.
‘He’s down there somewhere with some Fishettes,’ said Kevin. ‘I saw him before.’
‘So he hasn’t changed. Follow the Fishettes and you’ll find Chris.’
‘Yeah,’ said Andrei. ‘That’s Chris, all right.’ He stared down at the Bay. Then he glanced at them again. ‘It’s good to see you guys. It’s just … it’s been too long.’
Kevin took a deep draw on his cigar.
‘We should do this more.’
‘What?’ said Kevin. ‘An IPO? Sure. I’ll take another thirty billion dollars any day.’
Ben was silent, watching Andrei.
‘You guys sell any shares today?’ said Andrei.
‘No,’ said Kevin.
‘You, Ben?’
Ben shook his head.
Andrei nodded. ‘Well, you should think about it,’ he said quietly.
‘Why?’ said Kevin.
‘You know what it says in the prospectus. There are risks and uncertainties. Anything can happen.’
‘Dude, it says that in every prospectus.’
Andrei looked at them. ‘I think the stock’s peaked.’
‘Why?’
‘Trust me, I think it’s peaked.’
Kevin saw someone come out onto the roof. He looked briefly at Andrei and Ben. ‘I’ll be back,’ he said, and headed off.
‘Don’t poach my engineers!’ called out Andrei.
‘Is that what he’s going to do?’ asked Ben.
‘Probably.’ Andrei glanced thoughtfully at Ben. ‘You around tomorrow?’
Ben shook his head. ‘I’m on the six-thirty flight back to New York. I’ve got clients tomorrow.’
‘Why are you taking a commercial flight? Buy a jet, for Christ’s sake.’
Fishbowl Page 41
