MJ
MJ watched her mother sift the flour, aerating it for lightness, breaking up clumps, and eliminating unwanted particles. Flour compresses in bags and boxes, and humidity makes it denser. There was something soothing about the sifting, something old world, connecting MJ to her family kitchen in Terre Haute, where a cloud of flour had looked magical in the slanted beams of the afternoon sun.
MJ’s mother, Dorothy Hanna, had used this cake recipe a hundred times, but today she kept looking at the bowl and back again, confused. She couldn’t remember whether she had added the salt and baking soda. MJ and her sisters shared worried looks. MJ’s daughter Kate, now seventeen, stepped in to help. When Kate was little, her grandmother had babysat her every Saturday night. MJ and Bill would return from their date night to find them giggling in the kitchen, baking cookies, with flour scattered everywhere.
For the Fourth of July, Dorothy offered to bring homemade cookies to the family get-together. But when she showed up with packaged, store-bought cookies, MJ knew something was wrong. After seeing several specialists, the family learned that her mother had Alzheimer’s. The woman who had never had a bad word for anyone, the kindest person MJ knew, was becoming argumentative and agitated. Her descent was rapid. It was as if her mother’s personality changed overnight. MJ and her siblings huddled to figure out options for care.
MJ had successfully navigated major crises at IVP, but her family’s dilemma was on a completely different level. At first, her dad had insisted on keeping his wife at home. But he was slightly built, and Dorothy was a bigger woman. He simply couldn’t help her with physical things. So MJ and her siblings were forced to relocate their parents to an assisted care facility. But before long, MJ started getting calls in the night that her mother had wandered or fallen. Eventually Dorothy was moved to the “memory section” of the care facility. MJ admired her father for being there with her; after all, he had all his faculties. But when MJ visited, she would find bruises on her mother’s arms—the staff claimed Dorothy resisted them. At that point, MJ realized she needed to find a better solution for her mom.
MJ, who was approaching her fiftieth birthday, wondered whether her mom had ever been truly happy. Was this horrible disease exposing a latent anger in her for not having achieved her full potential? Eventually her thoughts shifted to the choices she had made in her own life, when things were supposed to be better for women of her generation. MJ had never really asked herself the big questions. Was she happy?
MJ had always figured that her mom would outlive her dad, given that she was five years younger and women statistically live longer than men. MJ had envisioned her widowed mother one day in a cute little apartment of her own. In addition to cooking and sewing, Dorothy loved art and poetry and was a talented painter. But she never had time for these things with all her household responsibilities.
One day in early 2004, while cleaning up Kate’s room, MJ sat on her bed to look at Kate’s pictures. Kate had been an easy baby, and MJ had had an easy pregnancy. She smiled thinking of the night her water broke. It had happened right after her baby shower and five weeks before her due date. She and Bill went to the hospital the next morning and were told to go home and come back a few hours later. While Bill worked, MJ cleaned the house, made calls to IVP, then decided the lawn needed mowing. There she was mowing the lawn while she was in labor. MJ shook her head at the memory. Then she scooped up an armload of laundry and thought, How much has really changed for women?
PART
SEVEN
Life, Death, and Picassos
2005–2009
THERESIA
Theresia was in a board meeting for a company called Glam Media when she heard a juicy bit of news from fellow venture capitalist Tim Draper. Like a trader with a hot stock tip, she quickly fished her BlackBerry out of her purse and messaged Kevin Efrusy at Accel.
“Tim Draper just said he met with the Facebook guys yesterday,” Theresia wrote to Kevin, who had been rebuffed in his efforts to meet with the founders of the year-old networking platform for college students called Thefacebook.com.
Kevin had been at Accel for two years now as a principal but had yet to land a major deal of his own. In early spring 2005, he had been chasing Facebook but getting nowhere. His calls and e-mails had been ignored; he was told the Facebook team wasn’t meeting with venture capitalists.
Theresia’s intel suggested that the Facebook guys were indeed meeting with venture capitalists—just not those from Accel. But she saw an opening that she knew Accel needed to seize. With the economy bouncing back, after bottoming out around 2003, Accel was focusing on new projects, instead of talking about which companies to close. The resurgence of consumer Internet companies and rise of social networking was starting to change relationships, dating, and even the way people communicated. Some looked at it as a new era, a Cambrian explosion of start-ups.
The dot-com boom had brought more than its share of overhyped companies that blew up and ultimately went bankrupt, but it had also yielded game changers such as eBay, Google, Amazon, and PayPal. And now new stars were emerging: LinkedIn, MySpace, Friendster, Yelp, YouTube, and Flickr. Yahoo!’s stock was surging. Google had launched Gmail. Tesla, the electric car company founded in 2003 by Martin Eberhard and Marc Tarpenning, had a dynamic woman, Laurie Yoler, as its first seed investor and founding board member. Elon Musk had started his private space company, SpaceX, in 2002 and joined Tesla as an investor and chairman in 2004. Great deals felt possible again.
After getting the Facebook tip from Theresia, Kevin promptly went to see Peter Fenton, an Accel partner who was friends with Reid Hoffman, the former COO of PayPal, co-founder of LinkedIn, and one of the most connected people in Silicon Valley. Hoffman, an early seed investor in Facebook—he invested $37,500—wasn’t sure about making an introduction. As he saw it, about 10 percent of VCs knew their stuff and were “value added.” He believed that entrepreneurs needed to be extremely selective in who they partnered with, and Accel was not at the top of his list. But after a second call from Peter Fenton, Hoffman agreed to make an introduction.
On Friday, April 1, Kevin and Arthur Patterson, the silver-haired co-founder of Accel, walked from their offices on University Avenue in Palo Alto to Facebook’s Emerson Street headquarters. They hoped to meet with former LinkedIn employee Matt Cohler, now Facebook’s vice president of product management. Arriving at the office, Kevin and Arthur found Cohler and Dustin Moskovitz struggling to assemble Ikea furniture. The office was a mess. The men were directed to the conference room, where they were surprised a few minutes later by the appearance of Facebook’s co-founder Mark Zuckerberg and its president Sean Parker, holding burritos.
Parker was an entrepreneur with a colorful track record. He had co-founded Napster, the music file-sharing site that had had a spectacular rise before an ignominious fall at the hands of the Recording Industry Association of America on copyright infringement charges. Parker had also founded a company, Plaxo, where his own board forced him out. He joined the Facebook team in the summer of 2004, when Zuckerberg moved operations from Harvard to Palo Alto.
Parker was extremely self-assured, while Zuckerberg came across as shy. Although the meeting was quick, Kevin and Arthur were impressed by Facebook’s growth. Thefacebook.com had been launched on February 4, 2004, from Zuckerberg’s Harvard dorm room. It was open to students at a growing number of colleges and universities, and it now had more than 2 million users in its first year.
As the meeting ended, Kevin asked Parker and Zuckerberg to come to Accel’s Monday morning partners’ meeting. The Facebook duo agreed, although they looked at each other in a way that made Kevin unsure of their commitment.
On the walk back to Accel, Arthur urged Kevin to make sure the Facebook guys showed up on Monday. Kevin planned to make it his weekend’s work.
At the appointed hour on Monday morning, Zuckerberg, Parker, and Coh
ler walked into the Accel offices. The twenty-year-old Zuckerberg was dressed in pajama pants, a T-shirt, and Adidas slides. To Theresia, he looked impossibly young and like he had been up all night coding. Soon everyone took seats in the partners’ conference room. Zuckerberg casually handed Theresia and the others his business card. It read: “I’m CEO, Bitch.”
MAGDALENA
Salesforce had gone public in June 2004, and since then, the stock had been fluctuating, tempting employees to constantly track gains and losses. Marc wanted to get the employees focused back on company building rather than net worth tracking, so he called an all-hands meeting. He asked Magdalena to address the employees.
Taking inspiration from her time spent sailing off Turkey, Magdalena told the group: “The best way to avoid getting seasick in turbulent waters is to focus on the horizon. If you focus on what’s nearby, you’re going to get sick. Keep your eye on where you want to go, on the horizon as your long-term goal, and steer toward that.
“Just because we’re a public company now doesn’t mean we do anything differently,” she went on. “It’s business as usual. One of the most important lessons I’ve learned is, love your customers more than anyone else. Work for the customer, not the investor, or employees, or your boss.”
The IPO had made paper millionaires out of many of Salesforce’s early investors and employees. Courtney Broadus was just happy to be able to pay off her car lease. She was amused when she began seeing Marc Benioff surrounded by his own security detail. Months earlier she had seen Michael Dell, founder of Dell Technologies, arrive at Salesforce looking like the president flanked by Secret Service. Now she needed a special badge to get close to Marc at off-site events.
Salesforce’s stock, which made its debut on the New York Stock Exchange, had ended its first day of trading with a 56.4 percent gain. Salesforce raised more than $110 million and ended the regular trading session at $17.20 a share, substantially higher than the company’s IPO price of $11. Magdalena told Marc later, “We should have priced the stock way higher. If it jumps over thirty percent, you probably priced it too low. The appetite was there, and we were too conservative.”
Benioff had wanted Magdalena by his side when he rang the bell on the New York Stock Exchange. But Magdalena couldn’t make it. One of her boys was sick, and she opted to stay home in California to take care of him. She watched the proceedings from her home in Atherton.
Walking into USVP shortly after the Salesforce IPO, Magdalena was oddly melancholy. Her $500,000 personal investment was worth millions of dollars on paper—cause for a lifetime of celebrations. But she arrived at work feeling sad that USVP had missed the boat. She knew investors were calling and asking why USVP hadn’t invested in a deal brought to them by their own partner. How was it that Magdalena had made a fortune by personally investing in the company, while USVP had passed on the opportunity repeatedly? Instead, USVP had invested in Tom Siebel’s start-up, Sales.com, which went nowhere.
One reason Magdalena loved being a venture capitalist was that it gave her the chance to see an almost unfathomable range of companies in a day, to be intellectually challenged, and to test her judgment and aptitude on which companies to fund. She enjoyed working with entrepreneurs to help them make their dreams come true. The negative, as she saw it, was that venture capital firms were often comprised of lone wolves, individuals working in a partnership with no bosses. They had the appearance of cohesion, but equality was an illusion. As Magdalena saw it, there was always a pecking order, always a power dynamic. And she, as a woman, even one who became a partner, was lower in that pecking order.
At the top of the venture-entrepreneur food chain was Tom Siebel, whose company was acquired in 2005 by Oracle for $5.85 billion. As Oracle absorbed Siebel, setting up a fierce competition between former friends Larry Ellison and Marc Benioff, Salesforce continued its astounding growth. In 2005 Salesforce reported $176 million in revenue, an 84 percent increase over the year before, with 227,000 subscribers. In 2006 revenue jumped to $450 million, and the company had nearly 400,000 subscribers.
* * *
The terms SaaS (Software as a Service), cloud, and cloud computing were entering the national lexicon. In 2006 Google’s CEO, Eric Schmidt—a friend of Magdalena’s from her CyberCash days and from his time at Sun Microsystems—popularized the term cloud at an industry conference. Schmidt said, “What’s interesting is that there is an emergent new model. I don’t think people have really understood how big this opportunity really is. It starts with the premise that the data services and architecture should be on servers. We call it cloud computing—they should be in a ‘cloud’ somewhere.”
Marc Benioff’s memorable “antisoftware” campaign—coupled with his mantra that software and data should be accessible from anywhere anytime over the Internet—had been all about the cloud, before the term existed. At this point, it was clear that no one would call him Larry Ellison’s “Mini Me” again.
Magdalena had watched the gifted former salesman step into the role of founder with assurance, creativity, and persistence. Benioff had come a long way from their exploratory lunch on the country club terrace in San Mateo, when he had asked her, “Should I do this?” and “Can I do this on my own?”
Magdalena, without hesitating, had answered in the affirmative. Long before just about anyone else, she had seen the clouds gathering, pointing to the future.
THERESIA
In the Monday partners’ meeting at Accel, Theresia filed away Mark Zuckerberg’s “I’m CEO, Bitch” business card without comment and got out her sequentially dated and coded notebook and mechanical pencil in preparation for the all-important sit-down with the Facebook team.
In addition to Theresia, seated around the table on the Accel side were Kevin Efrusy, Jim Breyer, Peter Wagner, Peter Fenton, and Ping Li, who had been hired as a principal six months earlier. Sean Parker took the lead in the presentation. He told the Accel group that two-thirds of Facebook users logged on at least once a day, and that the typical user spent at least twenty minutes a day on the site. Engagement rose as user numbers grew, unlike MySpace and Friendster and other big social networking sites backed in recent months by nearby VC firms. Those sites were losing user engagement as user numbers increased, Parker noted. There was clearly something different about Facebook, the second-fastest-growing site on the Internet. Only MySpace, with a population ranging from adolescents to senior citizens, was growing faster.
Theresia liked what she heard about Facebook. But she worried about who was running the company—was it Parker or Zuckerberg? She turned to Zuckerberg and asked, “How are you rolling out the business?”
Zuckerberg answered softly and articulately, explaining what he called his “velvet ropes” strategy: Colleges were “waitlisted” before they could be “admitted” to Facebook. To be waitlisted, a university had to submit an e-mail petition signed by students, and the petition had to include all the students’ .edu e-mail addresses. “Your friends at other schools are on it. You want to have it at your school too—if you’re lucky enough to get in,” Zuckerberg said. “Everyone wants to be the next college on Facebook.” Once Facebook was available, students felt compelled to join because everyone else was using it.
Theresia found Zuckerberg’s thinking shrewd. Quiet but a deep product thinker, she wrote, adding, FB the eBay or Amazon of social? As the meeting went on, she became convinced that Zuckerberg was in charge.
Jim Breyer, who had risen through the ranks of VCs to become one of the masters of the universe—he sat on the board of Wal-Mart and Dell—had been approached by Zuckerberg before the morning meeting. Zuckerberg told him that if they did any deal with Accel, he needed Breyer personally involved.
Listening to the presentation, Breyer was impressed by the numbers and by Zuckerberg’s quiet intensity. Breyer had learned that Zuckerberg, whose father was a dentist and mother a psychiatrist, wa
s a psychology major at Harvard and a computer whiz with a reputation on campus as the go-to guy for software programming. Zuckerberg made it clear to Breyer that he wanted to build a business beyond colleges and connect people worldwide. He was proud of the monthly active user numbers, the daily active users, and the amount of time users spent on the site. In the partners’ meeting, Breyer zeroed in on the small print at the bottom of one of the slides, where a footnote would be placed. It read “Thefacebook, a Mark Zuckerberg production.” Important detail, Breyer thought. The meeting lasted about an hour. Kevin promised to get back to the Facebook guys right away.
Trying to get a room full of type A personalities to agree on a deal wasn’t always easy. In this case, though, the enthusiasm from the Accel brass was unanimous and overwhelming. Patterson, not prone to superlatives, had called the Facebook numbers “spectacular” after he and Kevin met with the Facebook duo on Friday. Theresia found Zuckerberg compelling, saw the extraordinary growth of the site, and thought the demographic was golden to marketers, who looked at college as the time when brand loyalty took hold. Given its closed network, Facebook also felt different from other networks such as Friendster and MySpace, which had a reputation for fomenting a sleazy element among its users. Breyer, a student of technology and a lover of the arts, thought Zuckerberg was socially reticent but intellectually confident. Breyer intended to make some calls to VCs who had worked with Parker and gather as much information as he could.
The Accel team had been told that Zuckerberg was going to sell only 10 percent of his company, so he could retain control. He reportedly already had a $6 million offer at a $60 million valuation from Washington Post chairman and CEO Don Graham. Graham had the advantage of running a privately held company and told Zuckerberg that he would never push him to go public. Any venture firm, on the other hand, had a responsibility to eventually return liquidity to its investors with a sale or public offering. Therefore Accel would need to pay a premium over Graham’s offer.
Alpha Girls Page 19