As usual, Clark felt he had to move quickly. This time he didn’t even have a drawing on a piece of paper, just a vague idea in his head. He wanted myCFO to be a multibillion-dollar public company within a year, so that it might be better positioned to gobble up the inevitable competition. He thought its market value should exceed Healtheon’s, which now exceeded fifteen billion dollars. In late April he visited a few Silicon Valley opinion leaders, whose commercial success gave them a great deal of influence with the wealthy masses. John Chambers, the CEO of Cisco, the maker of hardware for the Internet, was himself a billionaire. He was also an engineer. He also had long admired Clark’s ability to change with the times. The Valley was filled with people who had created a couple of successful companies of the same type. Clark alone moved from one ruling concept to the next. After hearing Clark out, Chambers had said, “You control 80 percent of the wealth, and everything else follows. This thing has the potential to change financial services, forever.” Saying that “this could be a breakaway situation,” he asked to buy a 5 percent stake in myCFO, and said he intended to be the company’s first customer. Tom Jermoluk, the CEO of @Home, had the same reaction. “Jim’s changed the deals people get from venture capitalists,” T. J. said, “There’s no reason he can’t take it a step further.” T. J. also bought 5 percent of myCFO.
In the Valley equivalent of noblesse oblige, Clark offered smaller stakes in myCFO to the captains who had served him well, Jim Barksdale and Mike Long. Long bought 2.5 percent of the company; Barksdale called and asked to see “the business plan.” “I don’t have a business plan,” Clark said. Barskdale, too, said he wanted a stake.
In early June, Clark drove up Sand Hill Road to Benchmark Capital, the venture capitalists who’d just made a name for themselves by backing eBay. A few more glamorous deals like that, and Benchmark could offer the same sort of imprimatur as Kleiner Perkins—which was perhaps the biggest reason that people like Clark sought Kleiner Perkins’ money. The Kleiner halo, as it was called. The trouble with the Kleiner halo is that it was as up for grabs as everything else in the Valley. Out of fear of losing yet another very public success to Benchmark, Kleiner Perkins had just paid $25 million for a 33 percent stake in a new company called Google.com. Google.com consisted of a pair of Stanford graduate students who had a piece of software that might or might not make it easier to search the Internet.
In short, Kleiner Perkins was already feeling a bit of the pressure on capitalists that Clark, with myCFO, wanted to create a lot more of. He did not seriously think he’d allow Benchmark to invest in his new company. He hoped only that word of his trip to Benchmark would reach John Doerr at Kleiner Perkins.
A week or so after he visited Benchmark Capital, Clark drove back up Sand Hill Road to Kleiner Perkins. John Doerr had gathered his partners in the conference room. Outside of Jim Clark’s soul, the Kleiner conference room was the closest thing to ground zero of the Internet boom. Sitting in their conference room, Kleiner partners had backed half a dozen of the most sensational new enterprises: Netscape, Amazon.com, Excite, @Home, Healtheon. The firm claimed, plausibly, to have funded companies worth more than half a trillion dollars. The conference room seemed an unlikely place to create such a pile. The walls were made of glass, the wood was a light bird’s eye maple, and the sunlight streamed in from every direction. You could scour the room for weeks and, unless you could enter the minds of the men inside the place, would never find a shadow. The space in which the most important financial decisions of the 1990s had been made was as light and airy as a ski lodge. The iconology of financial power had changed.
Clark took his seat in the sun and explained all about the wealthy masses, and his plans to organize them into a fighting unit. One of the Kleiner partners asked about his business model. “Business model” is one of those terms of art that were central to the Internet boom: it glorified all manner of half-baked plans. All it really meant was how you planned to make money. The “business model” for Microsoft, for instance, was to sell software for 120 bucks a pop that cost fifty cents to manufacture. The “business model” for Healtheon was to add a few pennies to every bill or order or request that emanated from a doctor’s office. The “business model” for Netscape was a work in progress; no one ever did really figure out how to make money from Netscape; in its brief life Netscape had lost money. The “business model” of most Internet companies was to attract huge crowds of people to a Web site, and then sell others the chance to advertise products to the crowds. It was still not clear that the model made sense.
The “business model” for myCFO, such as it was, was curiously old-fashioned. Indeed, it marked a departure from the now common approach to creating a business on the Internet. Rather than maximizing the number of people who viewed his Web site, Clark would set out to maximize the number of dollars. myCFO would charge the wealthy masses, on the average, fifty thousand dollars a year each to use the service. They’d pay it because the service would save them at least as much again. Clark figured he might ultimately attract 100,000 wealthy customers; right there you had five billion a year in revenues. He put it another way: an accountant with an established practice who demanded a salary of about two hundred thousand dollars a year brought in nearly two million a year in revenues. Within a year, Clark figured, he’d have hired 400 accountants, mainly from the big accounting firms, who already advised rich people. In exchange for leaving their stable jobs with their big companies, the accountants would receive stock options. They’d come because, like everyone else in America, they were frantically eager to participate in the Internet boom. “How often do accountants have the chance to get rich?” Clark asked the Kleiner partners, rhetorically.
It was a business model even a Graham and Dodd investor could love—which meant it was relatively immune to stock market reversals. It would have profits, lots of them. With companies called Google going for $75 million, Clark did not see much point in selling air: everyone else was already doing that. The revolution had consumed the revolutionary. The revolutionary responded by setting out to consume the revolution. “Old Internet thinking” is how he dismissed the hundreds of companies modeled on Netscape. He then went on to explain what did not need explaining to partners at Kleiner Perkins: the power of a trillion or so dollars pooled into a kind of cartel. There was no end to what might be done with it, once it was collected. He concluded by saying what the Kleiner partners had already figured out: that he had “a much, much better idea how I’m going to make money than I did when I sat here five years ago and told you about Netscape.” He called it “one of the biggest opportunities I’ve ever seen.”
When Clark finished, John Doerr took over the meeting. Doerr was wonderful, in the literal sense of the word: he was full of wonder. In Silicon Valley, as in every highly strung status culture, there was a tendency for people to know it all. Doerr retained an almost childlike capacity for curiosity and awe. His feelings for Clark were a case in point. Even in the dark periods of their relationship, he spoke of Clark, behind his back, as “a national treasure.” That’s what he told his fellow Kleiner partners, who sometimes wondered why Doerr took so much trouble to keep Clark sweet—Jim Clark was a national treasure. He understood exactly how deep and mysterious was this force seated on the other side of the Kleiner Perkins conference room table.
Normally, Kleiner partners deliberated for a few days before deciding whether to invest in a new company. They didn’t do that with Netscape, Doerr now reminded Clark. He’d called Clark an hour and a half after he had explained that particular new new thing and agreed to the most onerous terms ever demanded from venture capitalists. The terms were even more onerous this time, but Doerr wanted to move even faster. He turned to Clark and said, “Would you like us to have a show of hands right now?” Clark said that wasn’t necessary; in any case, the decision was a formality. An hour and a half later Doerr called him and said that Kleiner wanted to buy as much of myCFO as Clark was willing to sell and that he would like to
sit on its board of directors.
For the next few weeks Clark went back and forth on how much Kleiner should be permitted to invest, or whether they should be permitted to invest at all. “I don’t need them,” he said one day; the next day he said, “If I don’t let them invest, they’ll start a competitor.” Finally, he decided to let Doerr buy a 12 percent stake in myCFO. At the same time he leaked word of the new venture to the press. He’d once told me that he didn’t understand why business journalists thought that businessmen would tell them the truth about their affairs. A good businessman was obliged to manipulate public opinion, especially now that public opinion was so important to the future of the business. In the summer of 1999 he demonstrated the point. He presented to reporters a distorted, slimmed-down version of his ambition. The idea was to get the word out to the accountants he wanted to hire and to create a buzz about the company, without alerting the competition. Once again, he was fairly clear in his mind who the competition was. “I want to avoid waving a red flag to Microsoft,” he explained to me, “so instead of ‘the wealthy masses’ I’ve been saying ‘high net worth individuals,’ and instead of laying out the whole idea I just say we’ll be doing tax planning.”
Sure enough, not long after Clark leaked his new story to the press, the accountants began to call. In just a few weeks several hundred people Clark had never heard of came looking to be a part of the new enterprise. The sheer volume of the calls suggested that the accountants at the big accounting firms were spreading the word among themselves. Like everyone else, they’d become attuned to the frequency of the new new thing. A financial adviser at the accounting firm of Price/Waterhouse/Coopers, for instance, called Harvey, whom Clark had installed temporarily as CEO of myCFO, and asked if what he’d read in some business publication was accurate. Harvey said it was. “You guys will control all the financial data,” said the accountant, “and if you control the data, you can control everything else. Can I come work for you?” The accountant was making half a million dollars a year, and he was calling to inquire about a job with a start-up. In his voice Clark was able to detect the creaking sound of the American professional class capitulating to a new order.
One evening as we sat in his kitchen I reminded Clark that he had said that once he became a real after-tax billionaire he’d retire. He said, without missing a beat, “I just want to make more money than Larry Ellison. Then I’ll stop.”
This was news. I pointed out that he’d never before mentioned this ambition. “I just want to have more money than Larry Ellison,” he said again. “I don’t know why. But once I have more money than Larry Ellison, I’ll be satisfied.” Larry Ellison, the CEO of Oracle, the biggest software company in the Valley, was worth about nine billion dollars; Clark was worth a bit more than three billion. On the other hand, Ellison’s wealth was completely tied up in Oracle stock, which had mostly missed out on the boom. At the rate Clark’s wealth was growing, he’d pass Ellison within six months. I pointed this out and asked the obvious question: “What happens after you have more than Larry Ellison? Would you want to have more money than, say, Bill Gates? “Oh, no,” Clark said, waving my question to the side of the room where the ridiculous ideas gather to commiserate with each other. “That’ll never happen.” A few minutes later, after the conversation had turned to other matters, he came clean. “You know,” he said, “just for one moment, I would kind of like to have the most. Just for one tiny moment.”
It was one of those tiny moments when it was good to have a record of our conversations. Just a few months before, when he was worth a mere $600 million, Clark had said, “I just want to have a billion dollars, after taxes. Then I’ll be satisfied.” Back further, before he started Netscape, he’d told Mark Grossman, one of the young engineers who had helped him create Silicon Graphics, something similar. Grossman recalled, “Jim came into my office just before he left to start Netscape and said SGI is okay but I’d really like to have $100 million.” Back even further, before he’d started Silicon Graphics, he’d told Tom Davis “that what he really wanted was to have ten million dollars.” The numbers! They kept moving! And, yet, he was earnest about them. What Clark meant when he said, “I’d really like to have,” was “I will do what I need to do to get.” It was not exactly wishful thinking. A world in which Larry Ellison had more money than he did was suddenly unacceptable.
Why do people perpetually create for themselves the condition for their own dissatisfaction? Listening to Clark talk about how much money he needed to make was like watching the racing dog who had the wit to grab hold of the remote device that controls the mechanical rabbit. Rather than slow it down, however, he speeds it up. Clark played these little tricks on himself so that he would have an excuse, however flimsy, to keep running as fast as he could. It was the same way with his resentments. He treated those who had done him wrong in much the same way he treated those he did not like who had more money than he did. They were all motives. Plainview, the Navy, Glenn Mueller, Ed McCracken, various venture capitalists: he needed people or places to doubt him so that he could prove them wrong.
Obviously, Clark couldn’t stop using technology to change the world, and so he needed an excuse not to stop. The reasons he couldn’t stop were ultimately unknowable; but I assumed that the best and most lasting motive for wanting to change the way things are is to be unhappy with the way things are. People who are unhappy with the way things are tend to remain unhappy even after they have changed them. The nature of their unhappiness is such that change does not slake it. The difference with Clark is that he continued to believe in the endless possibilities of change, even after he’d experienced its limitations. He was the least happy optimist there ever was. No matter how well Jim Clark did for himself, it was always two in the morning in his heart, and he was lying awake.
Above all, one thing was clear: his pursuit of the new new thing depended on his curious amnesia. His ability to forget what he said he would do next, or what he’d thought would make him happy, was the mortar on which he laid his endless tiers of self-renewal. He’d made a kind of religion of keeping only those parts of his past he needed for fuel, on his journey into the future.
His escape from the past was necessarily incomplete. The drug hasn’t been invented that permits people to forget as perfectly as they would sometimes like to forget. He still had his tuba, for instance. The tarnished old instrument sat mysteriously in the corner of the guest room upstairs—the one that stored the cardboard boxes filled with the scraps of paper his former secretary had rescued from Clark’s past. It was such an odd thing to stumble across in a house that otherwise said so little about who its inhabitant was, or where he was from, that I had asked him about it. He’d played the tuba as a child, he’d said. Twenty years before, just after he’d founded Silicon Graphics, and made his first millions, he’d been seized by the desire to play again. And so he bought this tuba. He soon found he’d lost interest in it. Only the idea of playing his tuba pleased him now. So he propped it in the corner of the guest bedroom, and left it there, as a lone reminder of something he couldn’t quite explain.
19
The Past outside the Box
A large aquifer beneath the flatlands between Amarillo and Lubbock supplies Plainview with more water than any other town in West Texas. The water was discovered not long after the Civil War. By the end of the nineteenth century Plainview tilled the most fertile cotton farming land in the United States. The local economy was premised on the family farm—a premise called into doubt in Clark’s boyhood, when the modern high-tech farm moved in. Since then all news for Plainview has been bad news. Such is the economic history of Plainview, Texas.
I drove into the town one bright winter morning. Poor places are slower to change than rich places; perhaps poor people are slower to change than rich people, too. The neat brick school, the tiny house, the church, the people who, as Clark had once said, “watched the outside world as if it was a television program” were pretty much as he must have
left them back in the early 1960s. The sound at the center of town was the sound of the inside of a conch shell. The wind howled. The irredeemably beige buildings perched low across the flat yellow grass as if designed to diminish the human imagination. The skyline was unmarked either by windbreaks or by ambition; the lone exception was the water tower on the edge of town. Plainview was built on water, and the tower that held that water was painted proudly. Only it didn’t say Plainview; it said Rust Water. In 1992 Paramount Pictures used Plainview as a movie set for a comedy called Leap of Faith, about a prairie evangelist, played by Steve Martin. The Hollywood people came for a few weeks, got everyone worked up, and left behind more money than the town had seen in a long time. In the bargain they repainted the Plainview water tower with the name of the fictional town in the movie. Plainview never bothered to repaint it.
The New New Thing: A Silicon Valley Story Page 29