Alpha Girls

by Julian Guthrie

  Theresia, thirty-one, did her best to engage Brin and Page, who were five years younger, by talking about Stanford, start-ups, and Accel, founded in 1983 by Patterson and Swartz. Brin and Page, in jeans and T-shirts, were friendly but restless, reminding her of the many socially awkward, burrito-eating, computer-loving grad students she’d met at Stanford.

  She had done research on the duo. Sergey was known to have a wild sense of humor, an obsession with exercise, and a way with women. He used to Rollerblade around Stanford’s computer science building, and now he played full-contact roller hockey with Google employees at lunch. Larry communicated more through gestures and body language, unsettling employees with a raised eyebrow, a lowered tone, or lack of eye contact. The two were known to fight like brothers, but they were more similar than dissimilar. Both were the sons of high-powered intellects steeped in computer science. Sergey was interested in data mining—analyzing large amounts of data to discover patterns—and Larry was interested in downloading the Web, which Sergey considered the most interesting data to be mined.

  Theresia had also done her homework on Google. Brin and Page had originally called their company BackRub. The process of ranking Web pages based on how many other Web pages linked back to them was called PageRank. But neither name lasted long. They decided that a googol, the number one with a hundred zeroes after it, better reflected the amount of data they were trying to sift through. From googol, they landed on the more user-friendly Google.

  Brin and Page, while working on their doctorates, had taken the Web crawler they developed and figured out how to calculate the tendency of Web-browsing people to congregate on specific pages, returning the most relevant page rather than a relevant page. Other search engines defined the concept of relevance as the relationship between a page and a query. The page would be relevant to the question if the terms of the query appeared more often than average on that page. PageRank, by contrast—named after Larry Page and with a patent pending—was a property of the page itself. PageRank didn’t just crawl the web; it returned the most popular things first. Theresia loved the geeky aspect of it: that the measure of the importance of Web pages was computed by solving an equation of 500 million variables and two billion terms. She knew that most other search engines, like Yahoo!, were still using humans to help build the ontologies.

  Before the Google guys began making the rounds looking for financing, they had followed a well-trodden path to the offices of attorney Larry Sonsini, who had helped incorporate, build, and take public just about every major tech company, from ROLM and Apple to Netscape, Pixar, and hundreds more. Brin and Page had visited Sonsini on a Saturday in 1998 to talk about incorporating Google and raising money. They told him their goal was to “make information ubiquitous,” and they discussed how much money Google would need to grow. The three concluded that Google would need about $20 million. Sonsini made suggestions on which venture firms to visit.

  Years earlier Brin and Page had considered selling their technology to a search company for less than $1 million. But with the exception of Excite, no one had been interested in their approach to search.

  When the time came, Theresia led them to the fourth floor, where pitch meetings were held. Accel had had its share of hits, including RealNetworks, Macromedia, Portal Software, Polycom, and UUNet. Returns in 1999 were more than one hundred times investments. But Accel didn’t have a superstar start-up in its portfolio—Apple, Netscape, Yahoo!, or Amazon, the logos to end all logos. Jim Breyer likened the unicorn hunt to the art world, where a curator at the San Francisco Museum of Modern Art said, “Of every ten artists I pick, nine of them will end up failing. But that one out of ten becomes the next Picasso.” The Accel team hoped Google would be their Picasso.

  After a few minutes of chitchat outside Accel’s fourth-floor conference room, Theresia handed Brin and Page over to the partners. The door closed, and Theresia took a seat at the back of the room. She had been at Accel for less than six months and was sprinting to land a seat at that white marble table. It wasn’t so different from her teenage days flipping burgers at the back of Burger King and setting her sights on working the cash register.

  She was doing deal flow triage for the partners, meeting with entrepreneurs offline to learn more, and calling on her contacts at Stanford and from her days at Release Software to see who was doing something interesting. She had zeroed in on cybersecurity as an area of specialty, given what she’d already learned about encryption from her time at Release. She shadowed Arthur Patterson at board meetings for his cybersecurity companies Counterpane and Arcot Systems. She enrolled in security networking training certification classes, where she was always the only woman. She chased down her own hot deals, including Sameday, an online delivery service seed-funded by engineer-turned-entrepreneur Bill Gross of Idealab in Pasadena, and PeopleSupport, which provided outsourced Web-based customer management services to dot-coms via chat and e-mail. The company was growing fast, with more than one hundred clients and four hundred employees.

  Later, after the Google meeting, Theresia had to laugh when she walked through Accel’s reception area and heard a familiar request: “Miss, can you check on our meeting time?” A decade out of college, four years at Bain, two years of graduate school, and three years at a start-up, and Theresia was still mistaken for an assistant or an intern, being asked for coffee, for directions to the bathroom, for the time of a meeting.

  She had learned that being a woman could be both advantage and disadvantage. As an intern at General Motors’ Harrison Radiator Division outside her hometown of Middleport, she had found that sometimes the novelty of being a woman in the all-male machine shop was a positive. Her job had been to test out a new air-conditioning compressor that didn’t use Freon. Many of the men treated her like a daughter, letting her operate the simple machines and tools and moving her prototyping projects on alternative refrigerants to the front of the queue. By contrast, male interns who used the shop on their own—picking up so much as a wrench—would likely have been slapped with a grievance by the UAW labor union.

  When she was a junior at Brown working as a research assistant in the scanning electron microscope lab, Theresia had encountered one of the more challenging sides of being a woman. Her research job had been to prepare silicon composite samples to be studied under a million-dollar-plus microscope. Older female students had warned her early on about a certain “handsy technician.” The women of the whisper network told her, “Always wear pants, and always wear running shoes. If it gets bad, you gotta be able to bolt.” They assured Theresia that the technician was otherwise harmless and backed off when rebuffed. So she wore pants and running shoes. As predicted, the technician made a move, placing his hand on her thigh. She stared him down, moved his hand away, and returned to her job. If he tried again, she would do the same thing. She wasn’t going to lose her internship because of an opportunistic, middle-aged lab manager.

  Theresia learned to take the good with the bad. Not long into her job at Accel, she was invited to join a panel of VCs to discuss the best parts of the Internet. She was seated onstage next to a male venture capitalist. The moderator asked him, “What are your favorite technology websites?” When he posed the question to Theresia, he said, “Tell me, Theresia, what’s your favorite cooking website?” She weighed the question and told herself, Don’t be thin-skinned or bitchy. Smiling, she answered, “You clearly don’t know me, as I don’t cook at all.”

  Theresia, surrounded all day, every day by type A guys, had adopted some of their habits. She interrupted often and spoke loudly to be heard. But she had also gleaned tips from successful women. One female executive had told her to speak up early in meetings: “If you wait too long to speak up in a meeting as a woman, you’ll become invisible. It’ll be too late.” Bain executive Orit Gadiesh (who would go on to become chair of Bain & Co.) advised Theresia, “Don’t take notes. Others will think you’re t
here to take notes. Your memory will have to suffice.” Gadiesh also shared her strategy for what to do when male clients directed questions only at other men, even those who were her junior. “I told my associates before meetings started that when that happens, they should look to me and ask what I think. Your male team can be your ally.”

  Theresia believed that women had to work twice as hard to convince men they were quantitative. If someone asked, “What’s the CAC? What’s the LTV? What are the margins?” she always knew the numbers on customer acquisition costs; lifetime value ratios; and profit figures as a percentage of the company’s net revenues.

  In the days that followed the meeting with Page and Brin, Accel put together a term sheet for Google. But Google soon announced that it had taken a $25 million round of equity funding from two firms, Kleiner Perkins Caufield & Byers and Sequoia Capital. VC stars Michael Moritz of Sequoia and John Doerr of Kleiner would join Google’s board of directors. Sequoia, started by Don Valentine, had made early investments in Atari, Apple, Cisco Systems, LSI Logic, Oracle, Electronic Arts, and Yahoo! Doerr, who early in his career had made a name for himself as an engineer at Intel—working Operation Crush when MJ was there—had since coming to Kleiner backed Amazon, WebMD, Intuit, and Sun Microsystems.

  Larry Page said in the funding announcement, “We are delighted to have venture capitalists of this caliber help us build the company.” Brin added, “A perfect search engine will process and understand all the information in the world. That is where Google is headed.” Moritz said, “Google should become the gold standard for search on the Internet….The company has the power to turn Internet users everywhere into devoted and life-long Googlers.”

  Although no one at Accel liked to lose—and this was a biggie—the partners had too many deals in the works to mourn for long. The hunt for Picasso continued. Accel had finished raising $480 million for its Fund VII just after Theresia was hired. Remarkably, the entire fund was invested in less than ten months—a frenzied pace. In normal times, it would take two to three years to invest that much. Accel did thirty-nine new deals in eleven months, all driven by a handful of people, including Theresia.

  Theresia would soon be named an investing partner, becoming the first woman with the title in the firm’s seventeen-year history. Accel co-founder Arthur Patterson gave her a watch with the Accel logo, Breyer congratulated her, and she shared the news with her husband Tim, and family and friends. As usual, her mother worried she was working too hard, while her father worried she wasn’t working hard enough. But Theresia knew her father was proud when she heard him tell his friends that she worked with all men.

  MJ

  IVP announced an in-house contest to see who at the venture capital firm could return $100 million or more on a single investment. The winner would get the car of his or her dreams, paid for by the other partners. MJ was determined to win.

  Her competitive streak had been born in deprivation rather than sports. It had been nurtured in junior high, when she saw for the first time how the other half lived. When the middle school in the wealthy part of Terre Haute burned down, students who lived near the school were sent to MJ’s junior high. MJ made friends with the new students and began to see their homes and way of life. She would never forget the day she was invited to drive all the way to Indianapolis just to go to lunch and see Gone with the Wind. MJ’s family never went out to a restaurant for a single meal.

  MJ was betting that the poker-playing entrepreneur Dave Stamm, founder of a company called Clarify, would get her to the IVP winner’s circle. Clarify had been founded to bring customer service experiences around the world out of the Dark Ages.

  Like MJ, Stamm had gone to Purdue and worked at Intel during Operation Crush. He once demonstrated a new chip he’d co-created, the 8048, to Intel honchos Andy Grove, Gordon Moore, and Les Vadász by using his own programmed game of blackjack and a lemon as a power source. The 8048 chip, which Stamm had lived and breathed for two years, became ubiquitous in appliances and keyboards.

  After leaving Intel in 1980, Stamm co-founded Daisy Systems, a pioneering electronic design automation company. Vinod Khosla, who went on to co-found Sun Microsystems, was a founding team member. After Daisy merged with another company and was later acquired, Stamm began to look around for what to build next. Once he had that idea, he needed funding.

  * * *

  And that’s how he’d first approached IVP several years earlier. Walking into the swank IVP offices, Stamm realized it had been a while since he had seen MJ. He still remembered their first encounter at Purdue, when he was a senior and she was a levelheaded freshman surrounded by goofy eighteen-year-old frat boys. At Intel, she had been a great team player, focused and smart. When Stamm entered the IVP offices, MJ was seated in the conference room with Norm Fogelsong, another IVP partner. She looked composed, as he had remembered her. Stamm, using acetate slides and a projector, explained the idea he’d landed on to help companies manage and automate interactions with current and potential customers. He said there was nothing like it on the market.

  “You know when you call Maytag repair, or Microsoft, or FedEx, or any other company, and you have a problem with the product?” Stamm asked. “You get one person one day and another the next and there is no record of any prior conversation?” He looked at MJ and said, “I’ve solved that.”

  MJ thought about her own overworked washer and dryer and her own frustrating calls to customer support. Stamm was starting to get her attention. This sounded like a solution to a big and important problem. “Tell me more about your premise,” she said.

  Stamm explained that he had spent months in the public library, poring over company records and annual reports on microfiche (this was during the early days of Internet), looking for areas of growth within companies.

  MJ thought, Wow, he has even done market research!

  “I looked at how many people were in each department from year to year,” Stamm continued. “I saw that customer service is exploding. Cisco, for example, is on a hiring trajectory where, if the trend continues, eighty percent of their employees will be working in customer service. That is obviously not sustainable.” Stamm found similar hiring trends in customer service departments across industries.

  “When you call for tech support now, you basically get nothing,” Stamm said. He had seen firsthand the record keeping of customer service departments: yellow Post-its slapped on computer monitors. “Clarify software will allow a customer service agent to pull up a customer’s historical sales and service information when a call comes through. It also allows a company to track when something’s fixed, and to know how it was fixed. It’s managing customer relations in a very efficient way.”

  As Stamm looked at trends within companies, he thought about the various business functions of a company: finance, engineering, marketing, sales, and customer service. He asked himself, Do these divisions have software to help them do their job better? The answer was yes for all except customer service, marketing, and sales.

  MJ loved the idea but wanted to hear Stamm’s take. “Why do you think this will sell?” she asked.

  “Well, I have five people—five big companies—who say they will buy it,” Stamm replied. “I went to five VPs of customer support who I knew from Daisy and said, ‘Here’s what I’m going to build. Here’s what I plan to charge. If I build it, will you buy it?’ The answer was universally yes.”

  MJ was impressed by Stamm’s methodology. Entrepreneurs typically pitched the technology, not the market. Stamm had figured out the customers before writing a line of code. MJ got the names and phone numbers of the VPs of customer service.

  Not long after Stamm’s pitch, she invested nearly $3 million in Clarify. The start-up grew throughout the 1990s, winning a range of clients from Microsoft and Cisco to the biggest telecommunications companies. It revolutionized how companies operated. Early competi
tors included Vantive and Scopus. Siebel Systems had entered the domain in 1993 but with a focus on just sales. When Clarify went public in November 1995, the new category of software was given the name CRM, for Customer Relationship Management. And Clarify became the first public CRM company.

  When Clarify missed a quarter and the stock plummeted overnight from around $20 to $7 a share, IVP swooped in and bought about $3 million more of Clarify shares on the public market—stabilizing the company at a critical time. In late 1997, as Clarify was being threatened by Siebel Systems, MJ helped install Tony Zingale, who had worked at Intel and Daisy Systems, as Clarify’s CEO, to overhaul operations, from its products and mission statement to the executive team. MJ told Stamm, “We all want this to work. We need the strongest team possible.”

  She also ran interference between Zingale, a fiery Sicilian, and Stamm, who was soft-spoken and analytical. After one heated exchange, Zingale told MJ, “Dave is a brilliant engineer, but you hired me for a reason. It’s my way or no way. I’m fighting Tom Siebel every day” for market share; “I’m not fighting Dave Stamm every day.” Stamm eventually acknowledged that he was the idea, engineering, and start-up guy. As his company grew to more than five hundred employees, he realized he was out of his element as a manager. MJ found it refreshing to have a founder who was aware of his limitations.