Before John could respond, Frank Caufield, a partner known for his outspoken manner, pointed at him. “Storage won’t matter with John’s handwriting—it’s completely illegible!” This was the break I needed.
“Then you won’t mind if I use his writing as a benchmark of our progress,” I shot back. The rest of the group fell silent and looked toward Doerr and Byers, to gauge their reaction to my impertinence.
They both chuckled, signaling their approval. Then the entire room exploded with laughter. “At least I know how to type,” John said.
From that point on, I hardly had to speak. The partners and associates traded good-natured barbs and insights as we fleshed out this new business opportunity. The single conversation split into two threads, then split again, as everyone offered a question or an opinion. It was beginning to sound like a lively cocktail party. Periodically someone reached out to touch or examine my portfolio, which was bouncing back and forth among the participants. It had been magically transformed from a stationery-store accessory into a symbol of the future of technology.
This din continued for several more minutes, after which Brook Byers called the meeting back to order.
“One last question,” Byers said. “What are your personal goals for this project?”
I spoke slowly. “Well, I’m not in it to prove that I’m smart, or to prove that I can run a big company.” I knew these to be two of the most common mistakes that would-be entrepreneurs make in starting a company. “I guess I have four goals. First, to produce a product that delivers real value to real people. Second, to provide an aboveaverage rate of return for the investors. Third, to create a healthy and challenging work environment for the employees.” I paused.
“And fourth?” Byers said, raising his eyebrows.
I couldn’t think of a final point. I glanced around and noticed a plate of sandwiches and cookies left over from their working lunch. “To never pay for a meal for four years.”
He laughed. “Have some. We’re a full-service venture capital firm.”
“Thanks.” I picked up a cookie.
Then they took a break. Several people scrambled for control of the conference room telephone. The losers bolted out the door in search of another line. John Doerr turned to me and said, “Good job. I’ll talk this over with the partners and let you know where we stand.”
I thanked him, recovered my portfolio from two associates who were inspecting it closely, and left.
On my next visit to Cambridge, to do some final consulting work on Lotus Agenda, I was abruptly awakened by the phone in my hotel room. It was John Doerr. How he tracked me down I don’t know, but it was all the more strange because of the time difference—he was calling from San Francisco at four-thirty in the morning. Before I could get my bearings, John got down to business. “On behalf of the partnership, I’m pleased to tell you that we’ve decided to back you.”
Now I was totally confused. I hadn’t given him a business plan yet, nor asked him directly for any money. “John, I’m very happy to hear it, but don’t you want to see some financial projections?”
“We’re backing you and the idea.” That seemed pretty straightforward, but at that hour of the morning, I’m never quite sure of things no matter how obvious they seem.
“We should get together right away to close the deal,” John said. “When will you be back?”
“I’ll be leaving for San Francisco tonight.”
“Too bad, that’s a problem. I’m leaving for New York first thing in the morning.”
“When will you be returning to San Francisco?” I asked.
“Not for a week, and that’s too long.”
I didn’t know John well at that point. He was a slender man with thin, sandy hair and a deep voice. He often wore khaki pants and a white button-down shirt, and always lugged around several canvas bags full of papers and electronic gadgets. When excited about an idea—which was most of the time—he would jump up and pace around like a whippet in a cage. I had never before known anyone so passionately committed to devoting every ounce of energy to his life’s work. Once he had set a course of action, he pursued it with the intensity of a laser and the impatience of a speed freak. His style was to cut through problems with dramatic solutions of grand proportions, as I was about to discover.
“What airline are you on?” he asked.
“TWA.”
“OK, they have a hub in St. Louis. I’ve got an ‘OAG’ here, just a minute.” He was referring to the pocket-sized “Official Airline Guide,” a standard accessory for executives with a heavy travel schedule. “Change your flight to the nine A.M. tomorrow from Logan. That will arrive in St. Louis around ten fifty-five. There’s a flight to San Francisco at twelve. That will give us an hour. I’ll arrange a connection through there as well, and meet you at the gate.”
“Will do,” I said.
The next morning, I was just starting to perk up as the flight pulled into the gate in St. Louis. As promised, John was there to meet me. We soon agreed on a deal: the backers would get 33 percent of the company in Series A preferred stock in return for $1.5 million, which would be split among Kleiner Perkins, Mitchell Kapor, and a few smaller individual investors including Vinod Khosla, who had taken a keen interest in the project. John would be chairman of the board, I would be CEO. The board of directors would consist of John, Mitchell, Vinod, and me. Of the remaining equity, I would personally get 25 percent, and two other people—a VP of software and a VP of hardware, who were not yet identified—would each get one third of that amount (8.3 percent). The rest would be reserved for future employees.
With the business settled, we headed back to the gate for my flight.
“What do you want to call the company?” John asked.
I thought for a moment. ON was taken—Mitchell and Peter Miller were talking about some other ideas and were likely to use this name for whatever they decided to do. My second choice had been GO.
“GO, all caps,” I said. “As in GO forth, GO for it, GO for the gold.”
“As in GO public,” John added.
When I boarded the noon flight, I realized that when the deal closed, the idea was worth $3 million (the total valuation of the company minus the invested cash), more than $1 million of which was mine—if I could ever convert that value into cash. And, of course, the investors were counting on its being worth a lot more.
Having assembled the idea and the money, the missing resource was people. I knew two engineers who I thought might be suitable and interested. One was Robert Carr, the bookish, articulate chief scientist of Ashton-Tate, which was then the third-largest PC software company (after Lotus and Microsoft). The other person was Kevin Doren, a brilliant and practical hardware designer whom I had worked with several years earlier, on a project to develop the first all-digital keyboard music synthesizer, before he founded his own company in Miami.
I called Robert and made an appointment to meet him for lunch at a small bistro in the western part of San Francisco. I had met him only once before, and didn’t quite remember what he looked like: young, a bit short and muscular, with brown hair and eyes. He resembled an earnest high school honor student who went out for middleweight wrestling. What I did remember was how hard he was to read. You could never tell what he was thinking by looking at him.
We picked a table in the back of an outdoor courtyard, surrounded by concrete and shrubbery. As soon as we ordered, the coastal fog began to roll in and the temperature dropped precipitously, providing us some privacy when the damp chill drove most of the other diners indoors. We buttoned up our jackets and I explained the concept once again. Repeating the act that had worked at Kleiner Perkins, I brought the same leather portfolio and used it as a prop. Robert was strangely quiet during my presentation, mostly looking down at the case. His brown eyes stared through his round wire-frame glasses as I explained the technical challenges and the business opportunity. As I finished up my pitch, I was consumed by curiosity.
“Any
questions?”
He sat there silently, staring at my portfolio.
I waited, becoming impatient with his unresponsiveness. Finally I asked, “So, what do you think? Any chance you might want to do this?”
He slowly looked up, and I saw that his eyes were watery. I had mistaken his silence for lack of interest, when in fact he was struggling to keep his feelings in check. He was experiencing the same epiphany that had overcome Mitchell and me on that first flight.
Then he spoke. “Jerry, it’s not a question of whether I want to do this. I have to do this. This is important. This is profound.” He picked up the portfolio and lofted it up and down for emphasis. “You know, I’m happy at Ashton-Tate, but it’s not very often that opportunities like this come along—something really big, a chance to really make a difference. Maybe once a decade or so. I think you’ve got one here.”
“Robert, we’re going to get one chance to make a point, that pen computers are a better way to manage information. If we succeed, we can change the way people work and think. If we fail, people will be lugging around keyboards from now until eternity. It’s risky, but we have a shot at the brass ring.”
He shook my hand and left. I felt close to him, despite our short time together. We had managed to share a very private moment. It took a lot of courage to do what he did—immediately choose to disrupt his life, quit his job, accept a position as a vice president when he had once run his own company, before selling it to Ashton-Tate. I knew right then that he was a class act, the sort of person I could rely on under pressure—a trait that would be severely tested over the coming years.
Recruiting Kevin Doren proved a somewhat more complex task. He was, after all, a cofounder of his company, lived across the country, and had recently been married. After several lengthy phone conversations, it was clear that he was interested. Persuading him was the easy part; his wife, Melanie, proved considerably more difficult.
From the outset, it was obvious that she didn’t like this prospect at all. A Virginia girl in her mid-twenties, Melanie had become accustomed to Miami weather and didn’t want to move so far away from her family. Kevin’s strategy for dealing with her was to exhibit a high degree of patience. I followed his lead.
When she first entered my condominium on crooked Lombard Street atop Russian Hill, my fifteen-year-old cat Critter lumbered over to rub up against her. He was colored black and white in a bovine pattern, which meant that he could shed on anything and have it show. To entertain myself, I would occasionally take a black marker and alter his patterns.
“I’m not terribly fond of cats . . .” Melanie said as she sized him up. “Besides, I think he looks a bit sick.”
In fact he was. His kidneys were failing, making him underweight and unsteady. I didn’t expect him to last much longer.
“I hope he doesn’t die while I’m here,” she said.
Critter seemed to respond to this remark by staring disapprovingly into Melanie’s eyes.
We spent several days driving all over town, looking at places to live—apartments, townhouses, walkups, tract houses, whatever we could find that might spark her interest. Kevin, a lanky man with a large nose and straight brown hair, was shoehorned into the back seat of my compact yellow station wagon. By the end of the second day, Kevin and I had become expert in the neighborhoods of San Francisco and the surrounding areas, having visited virtually all of them. Melanie was paying less attention to matters of geography, and after we ran out of new places to see, we discovered that we could take her back to the same ones again and get a somewhat different reaction. Little by little, Kevin softened her opposition. Maybe they didn’t need a big back yard; maybe it would be easier for her to make friends if they lived in town; maybe they didn’t need immediate access to a swimming pool.
On the third night, I unexpectedly had one of the most difficult experiences of my life. At about three A.M., Critter crept out of the closet where he normally slept and intentionally woke me up, which he had never done before. I opened my eyes and saw his thin, whiskered face right in front of mine. Then he went over to a particular sheltered spot under my platform bed and lay down. I got on my hands and knees to see what was under there, thinking it might be a dead mouse or some other feline treasure. He put his paw on one of my fingers, closed his eyes, and began a labored, steady pattern of deep breathing. At first he would slowly open his eyes if I called his name, but soon he appeared to be unaware of my presence. After several minutes he would abruptly stop breathing, then convulse as though slapped on the back, and begin again, like the engine of an old car that stalled, backfired, then turned over a few more times after the ignition had been turned off. Eventually he stopped altogether, and the skin on his face pulled back into a kind of grimace.
No one close to me had ever died before, much less in such a dramatic fashion. On television, people would be snagged by a bullet, then clutch their chest and collapse in a heap, but there was always a clear demarcation between being alive and being dead. This was different. The cat simply wound down, like a mechanical clock whose key was lost. To my immense surprise, I was devastated. I felt helpless and utterly alone. For a long time, home for me had been defined by where the cat was. From now on, I thought, I might as well be living in a hotel.
I felt all the worse for the cat’s last act of kindness. The reason that cats seem more at peace with themselves than human beings do is that they know when they are going to die. What drives people crazy is not the fact that they will die, but that they don’t know when it will happen. Furthermore, a cat’s instinct when its time is up is to run away, find a quiet spot, and die alone, probably to avoid spoiling the communal den for their brethren. For some reason—perhaps the mountain of Tender Vittles I fed him over the years, perhaps those chilly days when I would let him stay warm in my lap as I worked—he decided to share his final moments with me.
When Melanie emerged from the guest room in the early morning, she immediately sensed a problem.
“Where’s the cat?”
“He’s gone.” I wasn’t interested in discussing it with her.
“For good?”
“Yep.”
She walked over and awkwardly put her arm around me. “I’m so sorry,” she said.
“Thanks. Sorry it had to happen while you were here.”
“I know what it’s like to lose someone close to you. But just remember, eventually you will feel better.”
This opportunity to set aside her own concerns and connect with me somehow won her over. She soon acceded to Kevin’s wishes and supported his taking the new job.
Eager to get started, Kevin stayed with me while Melanie returned to Miami to arrange for the move. We got together for our first working session on a bright fall morning in my condo. Because the hill was so steep, the condo layout was strictly Alice in Wonderland: parking on the top level right next to the living room, a spiral staircase down to three bedrooms, a formal entry yet one more floor below. Robert arrived with characteristic punctuality, banging loudly on the garage door, not realizing we were sitting only a few steps away.
“Nice weather,” I said as I opened the door.
“Cut the small talk, let’s get down to work,” Robert said in mock seriousness. He was poking fun at my own urgency to begin, even before Kevin had had time to move. As a peace offering, Robert extended a hand holding a waxed paper bag of bagels and cream cheese.
“Great, let’s eat,” I said as Kevin peered into the bag.
I pulled an open package of bacon out of the fridge and laid the five remaining strips on a paper towel in the microwave. “Who wants bacon?”
Kevin, always the engineer, began considering how we could divide five pieces fairly among three people.
“I know,” said Robert. “That’s three for Jerry and one for each of us.” Kevin and I looked at each other quizzically, until we understood that Robert was referring to the founders’ equity split: 3–1–1. We dived right into the discussion.
“I’ve done some research on components,” Kevin said as he rifled through his overstuffed briefcase, finally pulling out some dog-eared papers. Robert and I had already concluded that Kevin was not the most organized person, but when it came to wild ideas, he was willing to consider anything. He smoothed out some hand drawings on the table depicting a flat, nine-by-eleven-inch tablet, perhaps an inch thick, with no distinguishing features other than a screen and a single on-off button.
“We have a balancing act to do,” he continued. “Weight, battery life, screen size, and memory are all intimately related. The larger the screen, or the more memory, the more power is required. Which means more battery, which translates to either more weight or shorter life. You can take your pick.”
“Well, let’s look at some options,” Robert said.
“I figure we can bring the product in at about four pounds, with one pound each for the display, battery, circuit board, and case.”
Robert began stuffing everything in sight into my maroon portfolio, which was sitting on the table, in order to bring it up to four pounds. “Got a scale, Jerry?” he asked.
“In the bathroom, follow me.” I stood and bounded down the narrow spiral staircase, which vibrated loudly. Robert and Kevin were close on my heels. We stopped abruptly and stared at the scale, realizing that it wasn’t going to give a reading for something that light.
Kevin stepped on the scale and read his own weight. “Now give me the case.” He took a second reading, dropping out pages until the scale read precisely four pounds more, then handed the portfolio to Robert.
Robert hefted it. “Feels heavy. I don’t know if people will want to lug this much around.”
Startup: A Silicon Valley Adventure Page 4
