Startup

by S. Jerrold Kaplan

  As members of the press shuffled past silver coffee urns, I met nearby with the senior executives of Phoenix to discuss last-minute details of our presentations. So as not to make it too obvious that we were still preparing our remarks, I sat directly in front of them on the corner of a wrought-iron end table with a glass top. They seemed strangely uncomfortable, which I assumed was because they were unaccustomed to public attention for their craft. But that wasn’t it at all.

  “Jerry, I think you should know that we had to disclose our discussions to Microsoft,” said the dignified CEO of Phoenix, Ron Fisher, who was South African.

  I smelled a rat. “Why?”

  “You know we work with them closely and have a number of licensing arrangements with them,” Fisher said. “On their DOS documentation, for instance.”

  A big rat. “So?”

  “Well, they asked if we would create a dual-boot BIOS that would accommodate both Pen Windows and Penpoint, not just one for Penpoint.”

  In principle, I didn’t have a problem with this. Our agreement didn’t prevent Phoenix from offering the same sort of product for Pen Windows, though it wasn’t quite our original intent. “That’s OK,” I said. “But this isn’t Microsoft’s announcement. The purpose of today’s event is to show that there’s momentum behind Penpoint, right?”

  Before Fisher could answer, there was an explosive crash, as though someone had thrown a rock through a plate-glass window. I instinctively looked around before realizing that the sound had come from underneath me: the glass top of the end table had shattered into razor-sharp shards, and I was helplessly falling into them.

  Thinking quickly, Lance Hansche, Phoenix’s senior vice president of corporate strategies, grabbed my arm and pulled me out of harm’s way before I could sink in.

  “You all right?” Fisher shouted, losing his usual British reserve.

  “Yeah, I think so.” I turned around, and it was obvious that I wasn’t. A thick stripe of blood was rapidly growing down my pant leg. The entire Phoenix executive team escorted me to the men’s room, where they bent me over the marble sink counter and pulled down my pants to inspect. I had a large gash, which pooled with blood as fast as it could be swabbed. Someone who looked like a tourist entered the bathroom, took in the scene, and immediately stepped out, perhaps assuming he had stumbled upon some bizarre San Francisco cult ritual. By this time, the audience in the hotel’s ballroom was mostly seated, waiting for the show to begin.

  “Do you think we should cancel it?” asked Hansche. At that moment, a uniformed guard arrived with a first-aid kit. I looked over its meager assortment of remedies. A plastic spool of white adhesive tape caught my eye.

  “Here,” I said to Hansche. “Take this and tape up the cut.” This was easier for me to say than for him to do, since I didn’t have to look at the wound. After glancing uncertainly at the others, Hansche did the deed, and I hobbled out to the line of chairs on the podium. Realizing that I couldn’t sit down, the other speakers stood as well, to camouflage the accident.

  I went first. Spurred on by pain, I gave an impassioned speech about the burgeoning demand for Penpoint, as evidenced by the need for Phoenix to offer a Penpoint-related product line. Then it was Ron Fisher’s turn.

  “As the leader in the systems-engineering business, I’m pleased to be here today to make an important announcement that will help accelerate our customers’ entry into the pen-computing business. Phoenix has agreed with GO and Microsoft to develop a special dual-boot BIOS that will support either Penpoint or Pen Windows. This way, hardware manufacturers can get started on their projects right away, without taking a risk today on choosing one or another of these fine systems.”

  Microsoft had browbeaten them into watering down the announcement. Fisher was apparently about to tell me this when I fell through the table. I was getting pretty tired of it all. Surely there was somebody who wasn’t afraid of Microsoft.

  A few weeks later, at yet another conference where GO went nose-to-nose with Microsoft, I ran into the director of portable marketing for Phoenix. He looked dazed, as though he had just been mugged.

  “I think I need a psychiatrist,” he said to me.

  “My rates are reasonable, have a seat.” I gestured to a folding chair in a corner of our exhibit booth.

  “I just talked to Microsoft. They’ve decided to withdraw support for our dual-boot pen BIOS.” He stared down at his shoes. “All that hard work to set this up, announce it, and brief our customers—and they pull the rug out from under us without warning.”

  After what Phoenix had done, I wasn’t very sympathetic. “You’ve got to watch it when you work with them,” I said. “Why do you think they did it?”

  “I guess they figure that backing out now will hurt you more than it hurts them.”

  Since the dueling demos at the PC Forum, I had faced off about every two weeks, at one conference or another, with a speaker from Microsoft. Each time, we played the same cat-and-mouse game. I would try to distance Penpoint from Pen Windows—“maximize our product differentiation,” as the marketing folks would say—and Microsoft would try to cozy up as close as possible, knowing that the more similar we appeared, the more likely that customers would choose its product. GO had long since abandoned the slogan “The Pen Is the Point”—which was intended to educate people about the overall potential of pen computing—and developed more focused, Penpoint-specific messages. At each event, I would emphasize a new element of difference. Between events, Microsoft would work to modify its demos and slides to copy GO’s points in time for the next confrontation.

  The New York air was uncharacteristically cool and sweet on Sunday evening, June 23, the night before the NCR announcement. A considerate breeze had blown the litter on West Forty-fourth Street into a neat ridge flanking one of the curbs, in preparation for its Monday morning street sweeping. The Hudson Theater, lovingly restored during a renovation of the neighboring Macklowe Hotel, occupied a prime Broadway location, but had a seating capacity more suited to an off-Broadway play. As a result, in 1991 it was mainly used for one-shot affairs such as concerts and private corporate events.

  The production company hired for the NCR 3125 announcement was all too happy to have a virtually limitless budget. The NCR marketing department had given the producers a number of scenarios to illustrate the use of pen computers—in an office, an auto repair shop, a hospital. The production company designed a magnificent multilevel stage set as a backdrop for their live, dramatic interpretations, in the style of a Broadway show. The centerpiece was a sleek lectern mounted on Plexiglas legs so that it appeared to hover in midair, flanked by twin glass TelePrompTer screens.

  Because of the tight schedule and the complicated staging, all visuals and speeches were carefully prepared and synchronized in advance. The director wasn’t about to have the show loused up by some computer executive fussing with his slides or changing his talk at the last minute. To assure a smooth performance, all demos had been videotaped, edited to look their best, and transferred in sequence onto a laserdisk, from which they would be projected onto various movable screens during the show. Since we were scheduled to do a dress rehearsal that evening, at least I knew there wouldn’t be any surprises this time.

  “Jesus, this looks like the Academy Awards,” Marcia Mason said as we entered the theater.

  “It’s more like Jerry Falwell preaching about the Second Coming,” I said. “The 3125 won’t be available for another six to nine months at least.” In fact, there were only about half a dozen working 3125 prototypes in existence, and none of them were in the theater.

  As I waited for the rehearsal to begin, the actors practiced their lines, attempting to portray people engaged in activities that they didn’t fully comprehend. Once the director’s assistant had rounded up all the participants, we ran through the show one segment at a time.

  When my turn came to rehearse, Jeff Raikes, once again the designated Microsoft representative, leaned nonchalantly against a
pillar in the dimly lit theater with his arms folded, paying close attention. For this event, I had selected three words as my theme: “Simple, Familiar, Consistent.” I would illustrate each of these in Penpoint, as a subtle contrast to the vagaries of Pen Windows. “Grafting a pen onto an existing system makes it more complex, not simpler,” I would say.

  Then Raikes and I switched places. “Compelling and Compatible” was his theme. Apparently, Microsoft had decided to adopt this phrase in an attempt to turn around a stinging rebuke that had appeared in the press following the PC Forum presentation: PenPoint was “compelling but not compatible,” while Pen Windows was “compatible but not compelling.” Raikes’s meaning was plain: you can get it all from us; don’t bother with Penpoint.

  Next up was Vern Raburn, the CEO of Slate Corporation. On his way to the podium, he paused to give a warm hello to Jeff Raikes. Marcia whispered to me, “Did you know they were friends? I overheard Vern talking about playing golf with Raikes.”

  Since Raburn was also on the conference circuit, I already knew that I could no longer count on him to take a strong pro-Penpoint stand, as he could plainly see that Microsoft was creating a credible alternative. At each event, he had gradually changed his position from staunch GO support to a more neutral tone. As far as anyone at GO knew, his entire development team was working on only Penpoint applications, yet he was publicly positioning his company to become the Switzerland of pen computing. “You can do pen-centric applications on any operating system,” he had said on a recent panel in Atlanta, to my dismay. But his real strategy was about to emerge.

  First he ran through a few examples of PenApps, the Penpoint application he’d built out of the forms software I turned over to him just twelve months earlier. Then, to my horror, he showed a version of the same product running under Pen Windows. “Now customers’ investments in development today are protected no matter which operating environment they ultimately choose to implement,” Raburn said. He was making a play to put a common layer over both systems and thereby take control of both Microsoft’s and GO’s customers. Raikes was beaming. He knew that Raburn was bulldozing over the best parts of Penpoint and the worst of Pen Windows, leaving a flat, undifferentiated plain behind.

  As soon as he was done, I cornered him. “Vern, old buddy, if I remember correctly, our forms-software deal says that you can’t release a product based on GO’s original code on another operating system.”

  “Check the fine print,” Vern said. “That restriction only lasted for ninety days after we released under Penpoint. Besides, it’s not a product yet, it’s only a demo.”

  By nine o’clock the next morning, a large crowd was packed into the sloping theater lobby. Despite the early hour, there was the distinct electricity of an opening night. NCR had persuaded several hundred attendees of PC Expo to come to New York a day early, promising them nothing less than a chance to witness the birth of the next computing revolution.

  The ushers assigned to the doors opened them simultaneously, and the crowd poured in. Each person wore a color-coded name tag: white for customers, red for press, blue for NCR personnel. VIPs had a small orange dot on their badges, and were escorted to a roped-off section in front. The audience settled down when the lights dimmed and a loud disco rhythm filled the air.

  After bland introductory remarks by a few NCR executives, it was my turn to speak. As a counterpoint, I used the dramatic gestures and pacing of a TV evangelist, which played better in this theatrical setting. I returned to my front-row seat, and the announcer called Jeff Raikes to the podium.

  Dressed in a flashy double-breasted suit, he stood casually at the podium and spoke with a slight smirk, giving him the faint aspect of a car salesman. When he got to the part of his speech about industry support, his eyes turned fiery. “Today we are excited to announce that over one hundred and twenty independent software vendors have committed to building exciting pen applications for Microsoft Windows.” He paused as a daunting Who’s Who of applications software scrolled by on a screen behind him.

  I leaned over to Marcia. “Where the hell did this come from? It wasn’t in the dress rehearsal. ‘No changes’ my ass.”

  Without a word, she raced off down the aisle to find the NCR person in charge of the show. I noticed that virtually all of our developers were listed on the slide, including Pensoft—which, I was confident, was building applications only for us. As Raikes returned to his seat, he glanced at me with his chin thrust out.

  Marcia soon returned, and she was fuming. “She stonewalled me! Said that she was just following orders, there was nothing she could do. See if I trust her again!”

  After the show, I called Michael Baum of Pensoft. If in fact his company had deserted us, I would be convinced that we were losing momentum.

  “No way, Jerry,” he said. “Pen Windows is seriously lame. It’s mostly a demo.”

  “Then why the hell would your name be on the slide?”

  Baum paused for a moment, then said, “The only thing I can imagine is that they listed everyone that showed up for their briefing in February or has requested a Pen Windows developer kit. I’ll tell them to take my name off their list.”

  For some unknown reason, it was never removed.

  10

  The Spinout

  IN THE SIX MONTHS since I had begun working with Bill Campbell, I learned by watching him what leadership was all about. The key skill is not in convincing people of your point of view with rational arguments, but, when circumstances require, in building a feeling of consensus in the face of uncertainty or adversity. Bill’s strength was his ability to select a straight course through the swirling darkness, then create a deep emotional reserve in his team that drives them to victory, even when defeat seems inevitable. He metered out sufficient time for open discussion, then closed debate with a fatherly decision that all were expected to accept as their own, in the service of the greater good. His moral authority to work this miracle sprang from a simple fact: he was passionate about whatever he was doing, and he placed the welfare of his employees above all else, including his own.

  Bill and I were like opposite poles of a magnet. I was cerebral, solitary, and analytical; he was gregarious, intuitive, and decisive. I did my best work in writing; he worked only face to face or on the phone. I was uncomfortable expressing my feelings around other people; Bill’s trademark was to give people who wandered by his office a big bear hug. As our working relationship developed, we were joined together like yin and yang, each of us providing an essential component of the whole that could not properly exist without the other.

  One of Bill’s first acts as CEO was to establish a kind of corporate rhythm, a weekly sequence of meetings by which the company shared information and made decisions. This organizational pulse started on Monday morning at nine-thirty with “estaff”—a meeting of the executive staff, where large issues and strategic initiatives were discussed—and ended on Friday at four-thirty with the “comm” meeting, where the entire company gathered to communicate news, make announcements, and give demos and awards. Estaff started as “late” as nine-thirty because Bill, who usually arrived at the office around six, liked to spend the early morning talking to the East Coast, before people there went to lunch, and meeting privately with any employee who had a problem that couldn’t be solved through normal channels. Following the comm meeting was a “beer bust,” with drinks and munchies, a Silicon Valley tradition that Bill had followed since his Apple days.

  For a man pushing fifty, Bill was in remarkable mental and physical shape. He worked out for an hour every morning before coming to the office while he read the trades, newspapers, and analysts’ reports. Each evening when he was in town, he would plan a dinner with a business associate or visiting customer. But most of the time, he’d leave for the airport following estaff, often returning from Japan or Europe just in time for comm. He took great delight in his ability to outlast whomever he was traveling with, staying out late with customers and getting up ea
rly for pre-breakfast briefings. He thought it hilarious that I had to sack out at nine o’clock whenever we traveled to New York together. He’d head up to Columbia University for a night of carousing with old football buddies he had known since his days as the college team’s coach. Wherever we went, Bill seemed to know everyone, and everyone considered him a personal friend. His family rarely saw him during the week.

  After a harrowing several days of panels, presentations, and customer visits in the wake of the NCR announcement, I returned to San Francisco exhausted and discouraged. First thing Monday, I stopped by Bill’s office. It was decorated like a cross between a Big Ten dorm room and a boys’ clubhouse. Trophies and pictures were everywhere—mementos of sales club meetings, awards, snapshots of Bill and his freckle-faced son with sports celebrities. There were Nerf basketballs and a pyramid of baseball caps embroidered with the names of big league teams.

  By contrast, my office was spare and sterile. A fraying gray futon served as a couch, a reminder of the company’s humble beginnings south of Market Street. The main decoration was a picture frame I had purchased on a lark at a nearby drugstore. It came with a snapshot of a generic wife and kid, put there for those unable to imagine what it would look like with their own family in the frame. I took perverse pleasure when people admired the picture, only to realize that I had never removed the promotional insert. For me, it had been a symbol of the loneliness of my life. Now that I was engaged, I crossed out the woman in the picture and added a caption: “One down, one to go.”