I had big dreams. I expected greatness from myself. And, most important, I believed in myself.
The following week, Taj and I raced around town buying furniture. Again I was Mr. McFrugal. I got used, run-of-the-mill stuff from various places, and I went to Office Depot for cheap filing cabinets and equally cheap modular units. My office wasn’t being designed to impress anyone. No one would ever come to the office. My business took place on the phone and on the Internet. The office was strictly for me and for the staff I would try to put together in the months ahead. I had 1,200 square feet of space, enough room for half a dozen people, and I was looking for salespeople. At that point, more than anything else, I needed more commitments from the ad agencies and from the Web site owners. It was all about volume.
Gurbaksh with siblings (from left) Taj, Nirmal, and Kamal at Click Agents’ first office (1999).
When we settled into the new office, I realized that in my correspondence with my clients I could create the illusion of power. My return address didn’t mention Suite 312; instead, it directed all correspondence to the Third Floor. I wanted them to think I had 50,000 square feet of space, with commanding city views in every direction. That is the stereotype of a successful business, and the lesson here is basically this: Stereotypes make people comfortable. I decided to try to come across as the stereotypical businessman, no matter what it took. And stereotypes can be defined both by the way you look and by the way you present yourself and your company. It’s all about making the other guy comfortable. Once you get to that stage, you’re in a position to actually do business.
I don’t know if my brother was impressed by what I was doing, but he was sufficiently impressed to leave college without his bachelor’s degree. He came to work for me as head of Human Resources.
Since we couldn’t afford to hire experienced personnel, we put ads on monster.com and in the San Jose Mercury-News, and before long Taj was lining up interviews with prospective employees. We were looking for anyone who was hungry and motivated, and we were willing to take risks on promising, untested candidates. The most important thing for me was to decide if a person was the right fit, and both Taj and I turned out to be pretty good judges of character. Before long, we had a dozen employees squeezed into that tiny space, and all of them worked out. Their lack of experience also helped, since we were able to train them to do things exactly the way we wanted them done.
I also hired my sister Kamal. She was working as a nurse, and though she found the work rewarding, she was interested in exploring new things.
“What would I do?” she asked.
“Your job will be to manage relationships with the publishers—the Web site owners. They need to know that the ads are up. If we have a contract for a given number of ads, it’ll be your job to see that we deliver on those numbers.”
“How much are you paying?” she asked, smiling.
“Not much,” I said. “But there will be dividends down the road.”
As we got down to the business of business, it became immediately clear that I was the boss. I was strict, and I expected results, and I believe the employees respected that. I was approachable as a boss, certainly, but not terribly approachable as a person, because I focused solely on the business. If some guy thought he could come into my office to tell me he’d just been dumped by his girlfriend, he thought wrong. I wasn’t heartless, but I didn’t care about the girlfriend. Everyone was there to work. They were getting paid for it, and I expected them to leave their personal lives at home. I didn’t whine to them about not having a girlfriend, or about never having had a girlfriend, or about the fact that I didn’t even know how to go about getting a girlfriend, and I was pretty sure they weren’t interested. The lack of interest didn’t make them bad people; it made them good workers. And that’s what I wanted to focus on: work. This was my first venture as a businessman, and I was determined to succeed. My goal was to turn us into an army, and an army won’t function well if people lose sight of the goal. The goal is simple: winning (in both business and war). My job was to keep the soldiers focused on that goal, but that didn’t mean I had to be heartless and uninvolved. Despite my desire to keep personal issues out of the office, some of my colleagues became like family to me. Throughout this period I learned that—at the end of the day—it’s about finding the right balance between humanity and relentlessness in reaching your bottom-line goals.
With two of my employees, however, there was a brief period of adjustment: My brother, Taj, and my sister, Kamal. I had gone from being the little brother to being the boss, and it must have been odd for them to see me running the show. But when they realized that I knew what I was doing, and that I was committed to the company, they never questioned me.
I practically lived in the office. I’d get there early, grab a fast-food lunch, and work well into the night, and half the time I crashed on my fake-leather couch. I was not in the best shape of my life, and I had absolutely no social life (which wasn’t such a big deal, since I’d never had a social life). All I really wanted was to succeed, and while I was more reasonable when it came to others, I sacrificed everything to make it happen: health, family, balance, and—most of all—my youth.
On the rare occasions when I made it home for a meal, I always heard the same refrain: You don’t look well. You need to take a break from time to time. It’s not healthy to think only about work. Yet my family understood that sacrifices were necessary, that everything we had, modest as it was, was a result of their hard work, so they weren’t about to stop me from pursuing my own dream.
I remember coming home for dinner the day I closed a deal with Providian Bank, which at $200,000 was the single biggest deal in the company’s brief history. We had a month to fulfill our obligations, which meant that we’d be turning $100,000 profit on that account alone. My father said, “It would take your mom and me three years of work to make that money.”
“And that’s only one account,” Taj said.
It seemed unreal to them, and in many ways it was beyond their understanding, but I loved this brave new world of Internet advertising, and I felt very much at home in it.
Then reality reared its ugly head. The guy who had sold me his software for $30,000, and who was being paid $10,000 a month to keep the technology running, called from London to tell me that he wasn’t happy with the deal we’d made.
This is my recollection of how the conversation went:
“I believe I’m entitled to one-third of the company,” he said.
“This company is successful because I made it successful,” I said. “And I’m using your software, yes, but I own it.”
“That’s not the way I see it,” he said.
“Then please explain it to me,” I said. “When we met, you were on the verge of bankruptcy, so I don’t know what you’re complaining about. The fact that this company is more successful than you ever thought it would be doesn’t mean you’re entitled to a penny more than the $30,000 we agreed to. We had a deal, and we both signed it.”
“I don’t give a damn about that deal,” he replied. “You owe me.”
“I don’t owe you anything. If you want to come to work for me, full time, I’ll bump your salary and we can talk about the future. But I created this company.”
“I don’t want a bleeding salary. I want a third of the company.”
“That’s not going to happen,” I said.
“If you’re going to be greedy about it, I’ll shut you down.”
“You’re threatening me?”
“You just watch.”
The next day, as threatened, he shut me down. The servers were located at a company called Frontier Global Center, located in Santa Clara, not far from San Jose, and the account was still in his name. So all he had to do was make a call and take the servers off-line. It was devastating. He shut me down and I was powerless to do anything about it. When I contacted the people at Frontier Global, they were polite and apologetic, but they couldn’t help because he
controlled the account. Worse still, he owed them money, and Frontier Global had been after him about that for several months.
I went so far as to call the San Jose branch of the Federal Bureau of Investigation, but they weren’t any help either. This wasn’t the type of case they handled, they told me. My father called and reached another officer, and he was told the same thing. The FBI only handled much bigger cases, and it was already backlogged, so the chances of getting around to my case were slim to none. “So my son is paying taxes, but the government can’t help him because he’s one of the little guys?” my father asked.
“If that’s the way you want to look at it, I can’t do anything about it,” the officer replied. “I am just describing the reality of the situation.”
We considered filing a police complaint, but computer crimes weren’t within their jurisdiction, and we couldn’t find the guy anywhere because he’d moved out of his apartment and had left no forwarding address. For all I knew, he might have been living in San Jose.
At that point I realized that this was the rainy day I’d been expecting. I again called Frontier Global, the company that ran the servers, and asked how much he owed them. It turned out to be in excess of $100,000, and they had considered shutting him down, but if they had done that they would have never seen their money. The Mafia has a similar approach: Don’t kill a guy who owes you or you’ll never collect.
“I can pay off that debt,” I said. “But I want to take over the account.”
“Fine,” they said.
Then I told my brother to find someone with enough technical expertise to run the software for us. “I need him now!” I wailed. “Today!”
We were off-line for an entire week. Can you imagine a week without e-mail? A week without the Web? Well, that was the lifeblood of my business, and that week almost put me under. The ads weren’t appearing on the Web sites, and the advertisers weren’t getting any traffic. They couldn’t even log on to view their own accounts! It was a complete disaster. Time on the Internet is measured in dog years. For that entire week, Click Agents had ceased to exist.
All week I refused to answer my phone. I didn’t know what to say. What was I supposed to tell my customers: We’ll be back next week?
That wasn’t going to do anything for them, especially if I wasn’t up and running. My goal was to get back online, and that was my only goal.
On the seventh day, we were back, and that’s when I began trying to make amends. It had been a hellacious week, and I had avoided absolutely everyone, even at the risk of pissing them off, because I knew that nothing I could have said or done would have made them happy. I could have told them “My programmer screwed me,” which was the truth, but it wasn’t exactly confidence inspiring. What kind of fool was I, that I had let a greedy programmer bring me to my knees? The experience taught me another valuable lesson: Never put yourself in a position of vulnerability.
And that wasn’t the only lesson I learned. I also learned that damage control can happen only once you’ve got the situation in hand. At that point I could get on the phone to my clients and make my apologies: “Sorry. We had serious technological issues. I know it’s unacceptable, but you have my word that it won’t happen again. Please let me know how I can make it up to you.”
I gave them credit, I gave them free advertising, and—for a period—I even gave the publishers a slightly larger percentage than they’d contracted for. And you know what? It worked.
I didn’t lose a single customer. The following month we did $200,000 in business and we began to work our way back toward record levels. In the meantime, I took steps to make sure nothing like that disaster ever happened again. I spoke to Frontier Global, who recommended a technological whiz kid, and I had him make sure our program was secure. Often a programmer leaves a “back door” open that allows him to sneak inside and fiddle with the software; this new whiz kid found three such portals and quickly shut them down. I was back in control, and I intended to be in total control. To that end, I hired a chief technology officer (CTO) and several engineers and put them on the Click Agents’ payroll—at generous salaries. I was trying to unlearn some of the lessons I’d picked up from the many years of shopping at McFrugal’s. Everyone likes a good deal, but you can’t cut corners where it counts.
That experience taught me three valuable lessons. The first was to expect the unexpected. Life is full of surprises, not all of them pleasant, so it’s wise to be prepared. Think about your choices, about the people you’re dealing with, and about the consequences of even the smallest decisions.
The second lesson was equally valuable: Own your mistakes. I’d been in business with a rogue who almost destroyed me, but I’d made the decision to work with him, so the mistake was mine. Click Agents was my company. I was responsible for it. When I was scrambling to control the damage, I never once suggested I was blameless. I took responsibility for the mistake, and it worked.
And the final lesson is the one I just mentioned: Be frugal, but don’t be cheap. Some corners aren’t meant to be cut, especially when it comes to hiring the right personnel.
The rogue disappeared, defeated, and immediately thereafter I started making big changes. For starters, I hired a law firm to draw up the contracts with my CTO and the two engineers. I didn’t intend to repeat the mistake I’d made with the original programmer, when I thought I understood contracts. In addition, I talked to those same lawyers about some kind of stock option plan for my employees. This wasn’t simple generosity; it was good business sense: I wanted a piece of something really big rather than 100 percent of something really small. Click Agents was growing, and it was going to keep growing—it wasn’t your basic corner liquor store, where sales don’t really change much from one year to the next—and I wanted to make sure that everybody’s interests were aligned. To that end, I was willing to give away some of the company. The goal was to make sure everyone was invested—to create an environment where people cared.
From that point on, whenever I hired someone, stock options were part of the package, which made the job that much more attractive. As to those employees who were already there, the best of them were grandfathered into the deal.
The lesson here is simple. Be generous; it works.
I got back to business and worked hard to make up for lost time. Within a year, I had twenty employees—salesmen, programmers, marketing people—and was generating north of $1 million a month. It was a real company, and I had become a real CEO, making a very modest $60,000 a year. I never gave myself a raise, though. I didn’t need it. I couldn’t have spent that $60,000 anyway, and by not giving myself a raise I was fattening the company’s coffers—and a large part of those coffers belonged to me.
There were times when I didn’t really believe all these good things were really happening. I kept taking the company to the next level, and to the next level after that, but sometimes I’d look at my reflection in the mirror—at that turbaned seventeen-year-old, staring back at me—and I’d be filled with doubt. Up until that point, I’d been operating almost exclusively on the phone, doing business with people who had no idea I was just a kid. But the company was evolving at a spectacular rate, and I knew that someday soon I would have to come out of hiding. I began to give serious thought to getting rid of the turban.
Still, it was a very tough decision. In the Sikh religion, males are required to wear turbans, and they are not permitted to cut their hair—ever. The turban didn’t mean that much to me—with or without it, I was still a Sikh—but over the years I had been ridiculed for wearing it, and this had caused me more than my fair share of anguish. I wanted to talk to my father about the possibility of removing it and of cutting my hair, but I knew he would never agree to it, and I was deeply conflicted.
For a time, I tried not to think about this. I put it out of my mind and focused on growing my business. Click Agents was becoming a force in the advertising world. We were noticed for all the right reasons: We were reliable, we produced
results, and we were beginning to separate from the pack.
Whenever I walked into the office, I would think, Here I am, where I belong. I loved work. I loved success. I would reach my desk, take a seat, and it was almost like a hit of adrenaline. How do I make today an even better day than yesterday? I would ask myself. What do I have to do to leave the competition in the dust?
Seriously, now—who could ask for anything more?
3 The First $40 Million
As 1999 got under way, Silicon Valley was still caught up in the dot-com euphoria. Wall Street was as strong as ever, and the Nasdaq was going through the roof. Venture capitalists were still spending obscene amounts of money on start-ups whose entire value was their tenuous connection to the Internet; college kids with vague ideas became instant millionaires; and companies with unproven business models were still executing IPOs, their crazy stock prices based on little more than the relative novelty of the dot-com concept. Everyone wanted to get big fast, and there was so much venture capital around that just about all of them were given a chance to do so. Lots of these new companies did get rich, but the vast majority went bust. Most of them you never heard of; some might ring a faint bell: Pets.com. Flooz.com. Kozmo.com. Etoys.com. Webvan.com. Boo.com (one of the biggest disasters in dot-com history). The list of casualties was endless.
There was one thing that set Click Agents apart from the many failures, however, and it was pretty simple: We were actually making money. We were a viable business. We had nothing to prove.
In January 2000, less than a year after my official launch, I got a call from an investment banker in New York. “I hear Click Agents is doing very well,” he said. “Have you thought about selling your company?”
He flew out from New York to meet me, and I was actually a little nervous. I was seventeen years old, and I had a beard, which made me look a little older, but I also had a turban, and I was frankly worried about the kind of impression I was going to make. He didn’t seem at all put out—or, if he was, he didn’t show it. “I’m going to put together a list of companies that might be interested in buying you, and we’ll go through the list together, and then we’ll pitch Click Agents to them for a hundred million dollars.”
The Dream: How I Learned the Risks and Rewards of Entrepreneurship and Made Millions Page 6