Alpha Girls

by Julian Guthrie

  In his work as an investor and an entrepreneur, Shlomo was proud of his ability to identify talent. And that was what he saw in Theresia. He knew of only one other woman VC, the Israeli Sharon Gelbaum-Shpan, who was doing cybersecurity investing, including in ForeScout. But at the end of the day, Theresia’s gender was irrelevant to him. What he liked about her was that she was smart and ambitious.

  It wasn’t long before news spread that Shlomo Kramer was launching a new cybersecurity company. News stories reported that his first and only VC investor—he was investing his own money—was Theresia Gouw Ranzetta, who was investing $5 million for Accel and would take a seat on the company’s board of directors.

  News of the deal upset some denizens of the Valley. Irwin Federman at USVP unleashed a flurry of un-rabbi-like expletives. Similar responses echoed at Venrock, which like USVP had backed Check Point and had expected to be involved in whatever Shlomo Kramer did next. Federman was a board member of Check Point. Shlomo’s decision to go with Theresia on the WebCohort deal—to the exclusion of other Sand Hill investors—caught insiders by surprise. Suddenly everyone was asking, “Who is Theresia Gouw Ranzetta?”

  But Theresia had spent years ramping up her knowledge of cybersecurity, first at Release Software, where she negotiated the company’s encryption technology licensing deal; then in the network security and intrusion detection courses and seminars she took; and now working in lockstep with the industry-leading ForeScout team. She understood the various methods of analyzing network traffic for a range of risks, from signatures to behavioral techniques. And she had great respect for Shlomo. She had no doubt that WebCohort—soon to be renamed Imperva—would be a success.

  Not long after landing her deal with Shlomo, Theresia was working in her office in Palo Alto when Jim Goetz walked in and closed the door. Jim had always been a straight shooter as well as a trusted friend. There was a serious look on his face this morning. He wasn’t here to shoot the breeze. He got right to the point and told her that some of the guys in the Valley were suggesting Theresia was flirting or sleeping her way to important deals.

  Theresia closed her eyes. She couldn’t say she was surprised by what Jim was telling her. She’d heard rumors like this before, mostly snippets passed along by her assistant. She was surrounded by ambitious, high-energy guys—an occupational hazard—so there was always talk, she knew. She went out to dinner with entrepreneurs all the time, and there was talk. She went to conferences, and sometimes, again, she heard talk. That was one of many reasons she appreciated Goetz so much: He’d tell her what the other guys in the locker room were saying. Theresia felt every woman in business needed a Jim Goetz in her life, particularly in a high-testosterone environment like Silicon Valley.

  She had to network with the guys, or she’d miss out on some of the biggest, most important deals and opportunities. Yet when she did network, she inevitably stirred up rumors. Even when she was nearing the end of her pregnancy, “waddling and pregnant,” as she put it, there was still, unbelievably, talk.

  She had a term for these kinds of rumors: manslaying. Some of the men, she felt, were actively trying to cut her accomplishments down to size. She knew some women complained of being undermined by other women in the race to get ahead. But in Theresia’s world, the jabs came from men—specifically, men who were less successful.

  She’d spent enough time in the tech industry to know that successful women disturbed the natural male hierarchy. In the male-dominated world of video games, men were rattled by winning girl gamers. And those with the most to lose were not the most successful male gamers. The ones who attacked the females on the leader’s board were the male players who were struggling to make the cut, who thought they could raise themselves up by taking the women ahead of them down. These poorer performers were not threatened by losing to successful male gamers; that was the natural order. But losing to a woman was embarrassing in some way. It made them feel socially inferior.

  At the end of the day, Theresia realized manslaying was a problem in the minds of men; it was their problem, not hers. She was not going to let some insecure VC rumormongers stop her from landing big deals.

  MAGDALENA

  Magdalena was ready to take her idea—improving the cash flow of Salesforce—to Marc Benioff. She had crunched the numbers repeatedly, as well as sought feedback from the sales team leader, Frank van Veenendaal. Veenendaal had done his own analysis and had come to the same conclusion as Magdalena—her plan was the right way forward.

  When she was confident her proposal was thoroughly vetted and cogent, she drove to San Francisco to meet Marc. They usually met at Salesforce’s office at One Market Street or a restaurant nearby. Occasionally they’d sit in Magdalena’s car, when she found a rare downtown parking spot where they could sit and talk without getting ticketed or towed.

  Arriving early, Magdalena found a parking spot. She thought about how her life had always centered on solving problems. Even her name had once been a problem to solve. When she was born, her father had gone to the town center to register her birth. In Turkey, only the father could do this, and only the father’s name appeared on the registry.

  As her father filled out the paperwork and wrote “Magdalena Yeşil,” the scribe at the registry stopped him. “Too long,” he said. “The name doesn’t fit. You need to come up with a different name.”

  Her father knew the real reason the clerk insisted on a new name—Magdalena was too Christian, and Turkey was a Muslim country. “I can’t come up with another name,” her father protested. “This is the name my wife wants. She will take my head off.”

  “Sir, you have to come up with something else,” the scribe insisted. “Mag-da-le-na. No one will even be able to say it.” Her father had to think fast, and decided: “Lena. It will be Lena.”

  Her father begrudgingly signed the form and returned home. His wife listened to the story of what had happened, and set her face in a determined scowl. Forever after, she would tell Magdalena, “Your name is not Lena. It is Magdalena.”

  When Magdalena was old enough, she figured out how to apply for college in the United States. So many good things seemed to originate from America—the Apollo space program, Levi’s, Coca-Cola. When she learned she needed to take the SAT, she found it was offered early in the morning in only one location across the Bosporus. So she talked a fisherman into taking her across in the dead of night, to make sure she got there on time.

  Magdalena had an intuitive grasp at figuring out what people wanted from her, without their asking. She had learned from childhood that no one was going to solve her problems for her.

  Parked just off Market Street in San Francisco, Magdalena watched Marc approach her car. They’d had their laughs over the years, but they’d also faced many difficult moments together. Building a company was stressful during the best of times. And Marc was a first-time entrepreneur with everything to prove. He would show the tech world that he could be his own boss, forever banishing the “Larry Ellison Mini Me” moniker he’d picked up at Oracle, or else he would join the ranks of failed founders. She rolled her eyes as Marc stepped into the car holding a water bottle filled with an oddly colored liquid. One day a little while back, as the two were about to go into a conference room to pitch Salesforce to an investor, Marc had grabbed Magdalena’s bottle of water and poured some yellow powder into it. She thought the powdered vitamin mixture looked gross and protested, “It looks like we’re drinking pee!”

  Marc, dressed in his Hawaiian shirt, was not a spreadsheet type of guy. So Magdalena wasted no time in telling him she had a solution to Salesforce’s cash flow problem.

  “This may be our best—maybe our only—solution,” Magdalena said. She shared her findings on the need for up-front commitments, contracts, discounts for long-term deals, and a reorganized sales commission structure. Finally, she said, “Marc, I believe this is a great solution. I
t will solve your cash flow problem. It’s what we need to do to save the company.”

  Marc stared at Magdalena as if she’d suggested euthanizing his dog. “We can’t do this!” he exclaimed. “This is against everything we stand for.”

  To Marc, the “End of Software” mission statement and the NO SOFTWARE logo were how the company differentiated itself. Salesforce was committed to providing every company—small, medium, and large—with the same affordable and easy-to-access software, with no contracts or up-front commitment.

  “I’ve been putting my neck out there saying no contracts, no discounts since we started the company,” he said. “This goes against our whole marketing campaign.”

  Magdalena had anticipated the conversation wasn’t going to be easy. Salesforce ran ads showing an F-16 fighter jet shooting down a World War I biplane: The jet represented Salesforce with the most advanced technology, and the biplane was a symbol of the antiquated and slow-performance software too many companies used. They hired actors to parade in front of competitors’ conferences with antisoftware signs. They placed antisoftware posters in their office windows, figuring it was free advertising. Marc ventured outside several times a week to check the positioning of the posters.

  Magdalena, though, was not about to give up. “Salesforce’s no-risk, no-commitment environment for our customers is threatening our very livelihood,” she said. “We have got to the stage where we’ve proved our product’s value. We know customers love it. We’ve earned the right to ask for a contract and up-front payment. I believe our customers already know that they will use us for many years, so why not collect up front and solve our cash flow problem?”

  She told Marc she had talked with Frank van Veenendaal about it, and he believed most of their customers would stick with them.

  “We’re not changing the software or how it is delivered,” Magdalena went on. “We’re just creating a new payment model.” Customers, she said, would move from pay-as-you-go to annual or even multiyear contracts, with discounts given to longer contracts.

  But Marc shook his head determinedly. When the economy tanked, VCs and others had urged him to drop the dot-com in Salesforce.com, saying “Don’t you know dot-coms are dead?” Dot-coms were now “dot-bombs” and “dot-cons.” But Marc believed in the transformative power of the Internet.

  Benioff was a lover of nature, technology, animals, and yoga, which he was known to practice with his dog, Koa, Salesforce’s “chief love officer.” But most of all, at heart, he was a salesman—and a pragmatist. He thrived on people buying what he was selling. Running out of money would leave him with nothing to sell. And so a week later, he agreed to move forward with Magdalena’s plan.

  The changes that Magdalena outlined took several weeks to get up and running. To Marc’s surprise, half their customers had no problem with contracts. They were already sold on the software and welcomed the discounts. A handful of customers were angry and chose not to continue. The rest grumbled but were mollified by offers to be grandfathered in with the old model and price for a year before contracts would be required. The sales team had new motivations, too. They could earn double the commissions by landing long-term deals. And having contracts enabled Salesforce to start selling to larger customers. Soon, just as Magdalena predicted, cash started streaming in. In early 2003 Salesforce posted its first cash-flow-positive quarter.

  As things stabilized—for now—Magdalena continued her habit of stopping by Salesforce to talk with the team. She liked visiting with Courtney Broadus, an engineer who had joined Salesforce from Oracle. Courtney told Magdalena a funny story about arriving at Salesforce for her nine o’clock job interview the morning after the B-52’s concert sales event. Benioff had been walking around the office with a boombox blasting music. Not much of a drinker himself, Marc handed Courtney a glass of champagne. She said yes to the job offer from Salesforce because she believed that the delivery of software desperately needed to change. At this point, she had little faith in Marc as a leader and was not even sure of his ability to pay people. Nor was CRM especially sexy to her. But she wanted to be a part of a potentially revolutionary change in the way people worked. She wanted to be part of an Internet start-up.

  Still, at the end of her first week at Salesforce, when she saw everyone sitting down for a beer at midday, she cried. “This was a terrible mistake,” she told a friend. But the company grew and matured, and Courtney helped build the technology architecture behind various departments. She had been excited to meet Magdalena, as she thought boards were comprised only of “old white guys.” She confided to Magdalena when Marc was not being Mr. Nice Guy and when she was impressed. Courtney thought one of his greatest strengths was “hiring into his blind spot.” Marc also won fans with his random acts of kindness. He regularly picked up medical bills for staffers in need and had established a culture of philanthropy. She told Magdalena that the employees’ biggest fear was being acquired by Microsoft. The Salesforce team had begun to realize they had a great product, and they wanted to stay independent.

  Magdalena also got to know former Oracle employee Tien Tzuo, hired as Salesforce’s employee number eleven in 1999. Tien was responsible for building Salesforce’s first billing system. In 2003 Marc suggested he become the company’s first global chief marketing officer. Tien told Marc, “I’ve never done marketing.” Marc replied, “You’ll be fine.” Tien quickly figured out that his job was to execute Marc’s ideas. Marc had a fondness for sending chocolate to journalists and making elaborate, themed posters for events and product launches, so Tien made the vision a reality. The posters were hits until Marc landed on the idea of a poster featuring his friend the Dalai Lama meditating under the slogan “There is no software on the path to enlightenment.” Salesforce printed 650 of the posters and sent them to journalists and clients as invitations to a benefit for the Himalayan Foundation. The idea backfired, and the press weighed in with scathing stories and headlines: “On the path to enlightenment, Salesforce.com has taken a detour.” Marc issued a public apology, and Tien fielded calls from the Dalai Lama’s people warning legal action. But through it all, as controversies arose and faded, Tien appreciated Marc’s willingness to take risks.

  Meanwhile Tom Siebel realized that Sales.com wasn’t going to work as a division within his behemoth company Siebel Systems, and he returned investors’ money. Larry Ellison eventually resigned from the Salesforce board, although he held on to his Salesforce shares. He and Magdalena were back on friendly terms, talking about the great outdoors while working out at the gym on Sand Hill Road.

  As the market finally began to pick up, the once-moribund Salesforce was soon in a race to go public with another enterprise born in the dot-com heyday—Google. Magdalena, juggling USVP, Salesforce, husband, and kids, didn’t expect any thank-you from Marc for rescuing the company; she didn’t need anyone telling her she’d done a good job. As she saw it, Salesforce was as much her baby as anyone else’s.

  SONJA

  On her third date with the otherwise charming and funny Jon Perkins, Sonja suspected something was amiss. As they were enjoying their entrees, Jon checked his watch, said he would be right back, and disappeared, only to return twenty minutes later.

  The next dinner date unfolded the same way. He told story after story that had Sonja laughing and holding her sides. He talked about his rambunctious brothers (he was the youngest of four boys), about his parents, and about his childhood friends’ fear of his loving but strict mother. He described the sailing competitions he had won and lost, and the college pranks he and his friends had pulled. And he told her about his adventures running a seafood restaurant in San Francisco’s Ferry Building, when his background was in equities trading.

  But like clockwork, in the middle of dinner and another hilarious story, Jon would check his watch, say he would be right back, and disappear, returning breathless just as Sonja was finishing her dinner.<
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  After several such dinners devolved into a Jon Perkins disappearing act, Sonja grabbed his hand and asked, “What is going on?”

  He smiled sheepishly. “Ute is very particular about the things she likes,” he began, referring to Ute Bowes, his business partner at the newly opened Ferry Plaza Seafood. Ute was married to venture capitalist and USVP founder Bill Bowes. “She bought these handmade linens for the restaurant. They’re beautiful. They’re what you see at the finest restaurants. But we are a fish market.

  “When I tried to hire someone to wash the linens,” Jon continued, “no one would wash them because they can’t be replaced. So I’ve been picking the restaurants we’ve been dining at near laundromats. I put the napkins in the wash before we sit down, and I set my timer for when they need to go in the dryer. I run over, put them in the dryer, run back, and then pick them up after dinner. That’s where I’ve been going.”

  Jon could have told her she was beautiful, or lavished her with gifts, or brought her baskets of her favorite hydrangeas. But somehow Sonja found his explanation more endearing. “Why didn’t you tell me?” she asked. “I can help you! I can show you how to take the napkins out of the dryer and run your hand over them, like an iron.”

  Sonja had met Jon at a wedding in Sun Valley in January 2003, less than a month after she broke off her engagement to the writer she had been dating. She had planned to get married on New Year’s Eve at the St. Francis Hotel in San Francisco, but the closer she got to the date, the more uneasy she’d felt. Part of her success as a venture capitalist was her ability to listen to her intuition when something about a deal didn’t feel right. And in the weeks leading up to the wedding, her doubts and unease only grew. She realized she was getting married for the wrong reasons. She was in her mid-thirties, with a dream job, family, friends, and a big house, but she felt as if everyone was wondering where the man in her life was. Did she scare potential men away because of her success? Was she married to her job? The pressure she felt to conform to societal expectations seemed to come from all directions. For women, it was more acceptable to be divorced at a certain age than never to have married. While single middle-aged men were seen as playboys or bachelors, single middle-aged women were spinsters or old maids, anomalies in the natural order.