The next month, they watched a little uptick to around six grand. In October, after Glavine had it set up so customers could sign up and use accounts immediately—no more delays—finally there was a significant jump, up to around thirty grand. In November, revenue more than doubled to over seventy grand, and by December it almost trebled, to just under $200,000. After all the near-death experiences, the money started to roll and the desperation began to fade. Lawrence and Lefebvre could now afford to pay themselves—$2,000 a month.
Still, it was a hectic first couple of months. The chaos started to abate for Glavine about when Neteller hired a new full-timer, Meranda Glesby, who was trained to shoulder his customer service load. Glesby was twenty-three, five years younger than Glavine and yet older in some ways. She’d been on her own since she was sixteen. When she didn’t get along with her dad’s new girlfriend—“A woman from hell!”—they kicked her out of the house. She had to grow up fast. She had to get herself to school on her own and to work at various jobs to pay the rent, and, free to do as she pleased, she got a fake ID to hit the bars underage. She started getting drunk at a place called Cowboys. She noticed the bartender sold cigars for four bucks a pop. She wanted to try one. She still smokes them.
But for all the partying and sixteen-going-on-twenty-five behavior, Glesby had instilled in herself a formidable work ethic. She always had a job, sometimes two, and she got that high school diploma. But in summer 2000, she quit a long-term job and, uncharacteristically, hadn’t lined up another one. “I had been on my own since I was sixteen, and you just don’t do that.”
Glesby went three months without work, burning up savings. She joined Neteller by fluke. In university, Steve Lawrence and his roommate had become fast friends, and they remained so afterward. Lawrence’s roommate married a woman with a sister named Danielle, and Glesby’s brother had married Danielle. That’s how she heard about a job opening for something called “FedExing.” She had no idea. “I just knew that I’d be helping them because it’s family, and family is friends, and friends need help, so maybe we can help each other out.”
On Glesby’s first day, October 23, 2000, she was half an hour early and self-conscious about looking desperate for work. “Hi, Meranda Glesby. I’m supposed to have an interview with Steve Lawrence?”
“Well, come on down!” said Lefebvre. “Have a seat with me.”
Glesby went behind Lefebvre’s desk and pulled up a chair. Lawrence had mentioned the family connection to him.
“So ya wanna work here?”
“Yes.”
“Well, when can ya start?”
“Anytime.”
“What about right now?”
That was Lefebvre’s interview. If you’re good enough for Steve you’re good enough for me, so let’s get to work. Glesby became the first Neteller employee to receive a payroll check. She worked long hours and could take it. She could dish it out, too. She was tough enough to hang out with the boys. They let her hang out with them most of the time after hours. Sometimes they left her behind, but not often.
Glesby says, “I guess there were a few questions. I don’t even think John looked at my résumé. My first impression was that he had a playful side to him but was also at peace. I felt an instant closeness, like, This is one cool boss! This is going to be a great gig! It was like a friendship.”
Lefebvre showed Glesby the website before passing her on to another woman in the office who could teach her the system for sending out FedEx checks. Two shifts later, that woman moved on and Glesby was in charge of FedExing. “That was a big difference for me, working there. It was like a loft. In the office, they had snowshoes on the wall, patched walls, and open brick. We played Hacky Sack for breaks. I got in there and played a few times. Steve was known for having good tunes and he’d pass them along to John. Back then Napster was popular in the office, so we’d get the music going.”
Lawrence, about a decade younger than Lefebvre, was the boss—straight-looking, a bit pudgy, balding on top, a business guy, serious—but he had a dark sense of humor. Lefebvre says:
Steve’s fortieth birthday party, you know how they sometimes make a binder of historical photographs for birthdays, and there was this one picture of him when he was sixteen. You know how you see pictures of Homer Simpson in the Bachman-Turner Overdrive days, when they show Homer going back to those days, and it looks so weird because he has hair, like he’s wearing a wig. That’s what this picture of Steve looked like. He looked like himself in every way except that he had this mop of hair sitting on top of his head and he was sitting at this little table with stacks of coins piling them up and counting them, probably from doing gardening or selling lemonade, who knows?
I went to a Christmas party at his place around the same time. It might have been the first time I met Jeff Natland, probably around 1997–98. Jeff would have been sixteen. I remember it was the eve of Christmas Eve, a December 23 party at Steve’s house, and his parents were there and a lot of their friends, and Steve’s friends and some of their kids were there. Steve had six Frank Zappa CDs on the changer. That’s what they listened to for Christmas music, Zappa on random.
Lawrence loved Zappa’s satire and the Onion, the small satirical paper out of the University of Wisconsin, Madison. By this point the paper had been around for a decade, but going live on the web in 1996 boosted its national exposure. Lefebvre thought the business side and the satirical side of his partner weren’t irreconcilable: “You could be a Frank Zappa fan or an Onion fan and come to the point of view that nothing really matters. It’s all bullshit. I don’t think Zappa felt that way about stuff, but if you’re an it’s-all-bullshit kind of guy, that humor is attractive. Steve was quick to call bullshit on stuff.”
During the initial hiring period, October 2000 to February 2001, Neteller turned itself into a small, tight-knit, dedicated group. They worked long hours but didn’t take themselves too seriously. Glesby recalls:
We would be playing Hacky Sack, and here’s Steve’s little desk—so tiny, so modest—and he had the worst chair in the office. So many times the Hacky Sack hit his computer, or hit him, or hit his paperwork. You could definitely tell in his face and in his behavior when it was time, you know, “Uh-oh, I’m going back to work.” Steve didn’t mind the Hacky Sack, but for him it was, “Hey, don’t take advantage of the situation—get your work done.” We’d always go down and meet at the Keg or get our coffee at Mac’s or the 7-Eleven. Or my cigars. Every day we’d walk to the Royal Bank downtown on Eighth Avenue and pick up money and send checks and do FedExes. Everything was manual then.
The girl in charge of the Neteller account was super-nice to us, and she told me she was going to quit the bank. I said to her, “Oh my goodness, we totally need you!” And so I went back to the office and told them Cindy was quitting and they hired her for Neteller. That’s kind of how it went, a lot of referrals. I referred a friend, who worked there for a little bit. Then Steve Glavine referred Mel—Melanie Robinson—so she was there in the first three months. Rob was the only real interview.
Rob Eltom answered an actual want ad he’d noticed in the Calgary Herald, making him what he described as the first hire “outside nepotism.” It was the cheapest want ad money could buy: E-commerce. Great remuneration. Call Steve.
Eltom had been pouring concrete at bowling alleys and other mid-sized work sites and was looking for something a little less backbreaking. He’d done some oil field surveying “up in Bumfuck, Alberta.” He’d done landscape construction. He’d been a pizza chef. He’d worked since he was twelve years old, starting with a paper route. He’d just always worked. That was what you did. You want money, kid? Get a job. He bought his first car, a 1980 Toyota Celica, at age sixteen. He had the car in his parents’ driveway before he had the insurance, which cost another $700. He put twelve miles on the car—backing it out of the driveway, driving it back in—until he could afford the insurance to ma
ke the car street legal.
E-commerce? Eltom didn’t know anything about e-commerce. Never heard of it. Never even used email. He’d used and understood computers well enough, so he called “Steve.” Instead, he got Lefebvre. He tried again later. Lefebvre again. Always Lefebvre. “Steve,” whoever he was, never seemed to be around to do interviews.
Finally, Lefebvre said, “Hey, why not just swing by?” Good idea. Off he went. Neteller was situated directly above a bar/restaurant, he noticed. Hey, that’s cool. Upstairs he met Lefebvre, who started running through the essentials of signing up accounts. “There’s the phone,” he said, nodding to an empty desk.
“What about the interview?”
“Don’t worry about it, just start calling,” said Lefebvre.
“It was just ‘Game on!’” Eltom recalls. “It was a great place to work. And, well, you can’t not like John.”
Glesby says:
I remember the day John hired Rob. John says, “Okay, hop in, let’s go,” and we drive around downtown in John’s little RAV4. We stop at his house to get something and then we stop at Staples—maybe we needed ink.
In those days, you did anything that needed doing. “Well, that was a great first day,” Rob says, “not even in the office.” You never knew what was going to happen.
Eltom, who was twenty-three, says he knew immediately this had to be what he loftily calls his “next stage of personal growth.” He became the night guy, coming in as everyone else was leaving. At that point he mostly just answered the phone and helped clients set up their accounts. Calls came in at all hours, so somebody had to be there—always. He worked fourteen-hour days and loved it. When the holiday season came along, he fell on the sword: “Guys, I’ll cover.” Eltom’s dad came down on Christmas Day to spend time with his son in the office. Eltom would get to know Lefebvre reasonably well, but he and Glesby were “two ships passing.”
In the beginning, it was work, work, work. Everyone put in extra hours, getting in early, staying late. “It was a fun environment, a big change from what I was used to, because you could still be yourself,” says Glesby. There were beer runs because they couldn’t leave. They had to bring the party to work: “Who’s going to get the beer?” was a common refrain. Glesby says, “We’d shoot the shit on the sofa. We’d start trying different beers—German beers, dark ales.”
This became the scene because Lawrence and Lefebvre had hired so many eager kids. They were in their twenties, they were working for a cool company, they were happy because their bosses treated them well, and they were paid decent money. It didn’t hurt that when it came to partying, Lefebvre, twice their age, could keep up with them no problem. Meanwhile, Lawrence and Glavine continued to fix the technical glitches and tried to keep the company one step ahead of online scammers, Edmunds supplied more and better information about their customers, and Lefebvre’s expanded service crew gained more experience and confidence.
• • •
Neteller had always wanted to be able to position itself as a reliable payment processing company specializing in electronic monetary transfers. Unlike PayPal, which became one of the first worldwide internet company brands and which people trusted with almost any kind of transaction, Neteller’s business focus was customers who gambled at offshore casinos using the internet—and most of those customers happened to be American. But there was no instant, out-of-the-box solution, like with an Apple computer. There were no IKEA-style easy-to-follow visual instructions or free hex key to guide you through how to get rid of the transactional bottleneck. The problem was not an easy one to eliminate, because there was not one bottleneck to clear but many.
In order to transfer money, Neteller in its infancy used one of the only automated methods available at that point, Western Union’s Quick Collect. It wasn’t exactly quick, but it was a useful way of moving funds from clients to bookies. According to Lefebvre,
You go into any Western Union office around town, and you put $1,000 in cash down on the counter and say, “I want this $1,000 to go to your Quick Collect customer 647443.” And they say, “Okay, here’s your receipt.” They give you a different number and then they telex your guy or you phone or fax your guy with this secret number. And when that guy in Costa Rica goes into a Western Union office and gives them the secret number, he gets the money. You pay Western Union fifteen dollars on $1,000, or 1.5 percent, for this service. That was the facility that Steve set up.
Western Union was tolerant, up to a point. When it thought its service was being abused for gambling purposes, it would bark. Neteller used Quick Collect throughout 2000–01, until they were told they couldn’t. Neteller also used credit card accumulators at this time, but the rates would have been quite high, around 9.5 percent or more. People also simply sent cash, checks, and bank wires.
Lefebvre says,
The main thing we needed was for customers to get money into Neteller. We needed their money so that they could have credit on our website to bet at poker sites. Eventually, a department, we don’t know who, leaned on Western Union. They phoned and said, “We’re not working for you anymore. We’re getting hassles from the government.” They might have made that up—as soon as they started doing Quick Collect to online gaming sites they started doing person-to-person to online gaming sites. The person-to-person fees were 7 percent, so they just increased their business from 1.5 to 7 percent—almost five times. Anyway, that was it—no more Quick Collect for online poker sites.
As systems go, Quick Collect was okay. It did its job, but it was slow and stupid, and everyone at Neteller knew it wasn’t going to be the yellow brick road to the Emerald City of gambling tollbooth riches, but at least it had worked until it didn’t. Now they had to find another system. Same deal with the credit card companies. They weren’t set up to move money back and forth, over and over and over. In other words, they assigned numbers to various types of transactions. A purchase involving betting on football games could be easily identified. Even if none of those problems surfaced, there was still a confidence issue.
Lefebvre says, “If you’re a customer, you’d not know if it was somebody you could trust with your credit card information. And then, if you won, bookies would be able to put money back on your credit card once, maybe twice, but after that they can’t do it. Credit cards aren’t set up to receive money. Occasionally you can reverse a transaction. But sooner or later the credit card company is going to say, ‘Hold on, what are you guys doing here?’”
• • •
What really turned things around, aside from abandoning the Neteller SmartCard in favor of personal identification numbers, was when Neteller started to use Jeff Natland’s personal PayPal account to process transactions. “We started directing customers to his account,” says Glavine, “and it started doing millions of dollars in transactions.” Now here was an access point that actually had access. The bouncer in the tux with the washboard stomach suddenly unhooked the chain and let Neteller into the wired party. To this point, Neteller’s money access problems were akin to a baby who had no nipple and a meager formula ration. Fortunately, Neteller had developed this new angle before Western Union pulled the plug on access to Quick Collect.
The company may have devised the idea of servicing the internet gaming money transfer business through the web, but the model they used wasn’t theirs. PayPal had come up with that excellent idea—the e-wallet. And since using a PayPal account to transfer money to and from gaming sites wasn’t even a flash in the minds of PayPal executives at that point in time, Neteller didn’t need to emulate the PayPal model—they could simply use PayPal itself.
PayPal was one of the original dot-com darlings. There was serious cash behind it, tens of millions. Unlike Neteller, the founders didn’t have to worry about burn rates. In 1995, Elon Musk, now better known as the head of Tesla Motors and SpaceX, dropped out of a graduate program in applied physics and materials science at Stanfo
rd after two days. With his brother Kimbal, he founded Zip2, which aimed to provide online content software for news companies. In 1999, the brothers sold their business to AltaVista (Compaq) for $307 million in cash and $34 million in stock options.
Elon Musk then founded X.com in March 1999 as an internet financial services company. The commercial draw with X was that you could email money to your pals. Of course, the money had to move from one bank to another, which meant that the two parties had to sign up and have a bank account. In essence, X.com’s innovation was simply a variation on the ACH process for banks. That lack of real innovation didn’t matter, because it was appealing to the young: Cool, I just sent my buddy Steve fifty bucks using email!
One year after its founding, X.com merged with Confinity, which had started in December 1998 as a firm specializing in cryptography, but its more commercial aim was to provide a way to move money between the now-quaint palmtop computers, or PDAs. After the merger, in February 2001, X.com changed its name to PayPal. Less than two years later, in October 2002, eBay bought PayPal for $1.5 billion in stock. Things moved fast in the dot-com universe, and Musk owned 11.7 percent of PayPal’s shares, or $175.5 million.
Glavine believes PayPal was the “real gateway to getting money” for Neteller. Once it hooked up its own customers to PayPal, Neteller became a simple payee on each PayPal account. Glavine says,
You’d sign up to Neteller first. One of the deposit options is to use PayPal, so you’d click on that. Then you realized you’d need to sign up for a PayPal account as well. You’d use your credit card to deposit money into your PayPal account, and then you’d send money to us, and then you could send that money to a merchant. I remember one day walking a customer through that. It probably took forty minutes. The whole time he’s cursing, “This is the stupidest thing I’ve ever seen in my life … okay, what’s next?” It was cool once you got it set up.
Life Real Loud Page 17
