Zero to Tesla
Page 7
I smiled. “Oh, okay, then I guess I don’t have it.”
He continued. “I made my ‘F U’ money selling PBXs, do you know what a PBX is?”
I nodded.
“You know what I hate about Phoenix?” he went on. “It’s so damn boring. All that red rock. San Diego is pretty.”
I didn’t know what to say, but he saved me by continuing. “I flew Southwest to get here. I like how they seat by zone. Very smart.” He was speaking quickly, and I was getting confused. “I sold Rolm PBXs. Ugly as shit. I couldn’t sell one to save my life. One day a customer bought one before I had a chance to take it out of the box. I never took another one out of the box. Became their best salesman ever. That’s how I got my ‘F U’ money.” I started to say something, and he cut me off, “I own twelve Fridays restaurants.”
I looked around for a Fridays, thinking he must have seen one, but we were passing a parking lot. Talking with Scott meant always having three conversations going at a time, and you had to keep pace. He was a strict type A personality, and he impressed the hell out of me, even though it gave me a headache talking to him.
The next thing he said was, “I like you. I think you should run Novatel Wireless.”
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Scott offered to move the company headquarters from Phoenix to San Diego so I wouldn’t have to move. He said I could build my own marketing, sales, and product management teams. He offered me $50,000 for the technology, plus a good salary, and he gave me a significant number of stock options. He told me he thought that mobile data was going to take Novatel to great heights, that it would be “my” division that did it, and that as a result, he would eventually make me CEO of the company. I’d get the control I wanted as well as the funding to make the product real.
It wasn’t exactly what I was looking for, but I knew a great plan B when I saw it, so I accepted. The funding run had taken its toll on me, and I was ready to lean on someone else for a change. Soon, in February 1997, I was set up in a small executive office where I planned out the launch of the new wireless mobile device, now called “Minstrel.”
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In the first week after moving into my new office, I got a phone call from Mike, who had been a salesman at Qualcomm while I was there and was now a sales manager. “Hey, Sanjay, I just got a resume from a guy named Yong who worked at Uniden and got laid off.”
I leaned forward and waited to hear what came next.
“I know you went to work at Uniden after Qualcomm. Any chance you ran into him while you were there?”
“I didn’t run into him so much as he was my boss,” I replied. “Why do you ask?”
“Well, how was he? Should I bring him in for an interview?”
“Mike,” I said calmly, “I think it would be a good idea for you to throw that resume in the trash bin.”
Mike said he’d comply, adding, “Well, I’m glad I called you first. Is there a story you want to tell me?”
“No, but I’m glad you called me, too.”
I hung up thinking, “This is a good omen. Things are really starting to go right.”
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My first order of business was to compile a budget as well as a list of expenses I’d incurred that would be written off against the $50,000 Scott was giving me. The budget parameters were very tight, and I wasn’t going to have any money to do some of the fun things I’d imagined I could do when I was running my own company. It was turning into drudgework, and I wasn’t particularly enthusiastic about it.
After a few weeks of paperwork and moping around, I got my act together, hired a good group of people (mostly people I knew from Qualcomm days), and rented real office space. Our time was spent almost entirely in product development, with engineering in Calgary providing the hardware, while a software team I’d hired provided the e-mail integration.
An engineer, Adrian*, who was the operating head of Novatel, ran the Calgary operation. Sure, Scott was the owner, but he was just a figurehead. Scott wanted to make the point, though, that it was his company, and that was one of the reasons he had deliberately moved “headquarters” to Phoenix. On a couple of visits to Calgary to meet with engineering staff, Scott whispered to me, “Don’t worry, I’m going to make sure the real power is in the United States, where you’ll be running things.”
I was able to bring some key people from my virtual company with me, but not anyone from engineering. I also didn’t have a sales organization (I did the sales legwork myself), so I set out to hire a couple of good salespeople.
The target market and skill set were similar for anybody that made a similar product, and there was only one company out there that had a similar product—that company in Ontario with the weird name, Research in Motion (RIM). I had met one of their sales guys, Dave, at a conference and had his business card, so I called him up. He said he’d be willing to chat, and we made plans to meet up in Toronto a few days later.
Dave was more loyal to RIM than I thought, because the next day, I got a call from Mike Lazaridis, the CEO of RIM. “I understand you’ve been trying to poach our sales staff,” he said.
I was caught off guard. I was surprised that Dave had been deceptive and that I was getting called on the poaching. I gave what I thought was a clever response. “Well, you guys have a great sales staff, so they’re worth poaching.” I was nervous. I wasn’t clear on any laws regarding this sort of thing and didn’t know if I was in trouble or not.
“Why don’t you come up here to Waterloo, and let’s have a chat?” Mike had a deep voice, and it sounded a bit like the Mob had just ordered me to come visit the family so the patriarch could hit me upside the head with a baseball bat.
“Why? What’s there to talk about?”
“Well, we want to make sure you stop poaching our staff, he said, “and a face-to-face meeting is the best way. We have lots to talk about.”
The resistance to forewarning me seemed odd, but I didn’t want to slink off either, so I said “Sure!” as I thought, “What’s the worst that could happen?”
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I booked a flight to Toronto for the next day, and Lazaridis told me I should come out to see them right away. I said I wasn’t arriving till evening, but after he gave me their address, he said, “Don’t worry, we’ll be here. Just go to the front desk whatever time you get in.”
I arrived in Toronto the next evening, rented a car, and drove an hour and a half to RIM headquarters in Waterloo, Ontario. By the time I got there, it was 9:00 p.m., and most of the lights in the building were turned off. Someone working late at a desk near the front door ushered me to a room at the back of the building where Lazaridis and another man were leaning over a desk. It was dark outside, and the room was dimly lit with just a couple of desk lamps.
Mike asked me to sit at a table in the corner and introduced me to Jim Balsillie. Jim did most of the talking, opening with, “So you’re the guy who’s been going after our sales guys, eh?” He didn’t have an Italian accent, but I still did a quick scan of the office for a baseball bat.
“Um, yes, I guess I am. Sorry about that—friendly competition and whatnot. Why did you ask me to come all the way out here to meet with you?”
“So, what is it you’re developing that’s worth selling?” Balsillie asked me. I didn’t think it was a secret since lots of people knew about Nikean, and I was proud of the original invention, so I bragged a little. I showed them the palm cradle and how we used a CDPD modem to send and receive e-mail to a mobile device. As I finished bragging about the product, Mike asked me if he could take a look and I handed it to him. Turning it over in his hands, he exchanged a look with Jim. They were either nervous or inspired. I couldn’t tell.
The meeting wasn’t long. Balsillie offered to sell me wireless modems under favorable terms, and they told me they wouldn’t pursue any action from the tampering. Given that my employer made their own modems, I told them it was unlikely I’d take them up on their offer, but that I’d think about it.
I fle
w back to San Diego the next day, relieved that there wasn’t going to be any further action from RIM. It wasn’t the end of problems stemming from my hiring activity, though.
One of the brilliant people who’d helped me as part of the Nikean virtual staff was a consultant named Kevin, who had worked for me as a co-op student at Nortel. In October of 1997, Kevin became available for a full-time position after having consulted for the past year, and we negotiated an agreement for him to join me at Novatel. When I made him an offer, I had it approved by Scott, but Adrian somehow found out about the hire and asked for a copy of his resume.
The next day, after I’d already extended an offer to Kevin, Adrian sent me an e-mail saying that he didn’t think Kevin was qualified for the product management position I was hiring him for and that he didn’t approve of the offer. I didn’t get it; Kevin had a telecom background and a business degree. He was in the wheelhouse of qualified.
It turned out Adrian was becoming alarmed at the rate of hiring in the San Diego office, seeing the organization there as a threat to his own dominance in Novatel. I ran the only group that didn’t report to him, and it was becoming apparent that he was losing power, being relegated to “running engineering” as opposed to running the entire company.
My initial attitude was that it didn’t matter what Adrian thought; it was my organization, and I’d hire whomever I wanted as long as Scott had okayed it. Who did Adrian think he was? He wasn’t the future head of Novatel—I was, even though that had never been spoken out loud. Finance still resided in Calgary, however, and Adrian told them not to authorize the job offer.
I was embarrassed and furious. Either I admitted my lack of power in the company to Kevin, a long-time associate and friend, or I challenged Adrian. I called Scott and went on the offensive. “Scott, Adrian is being a jerk about this hiring thing. I don’t know what he’s trying to do, but Kevin is qualified, and he’s the perfect hire!”
“Don’t worry, Sanjay,” Scott assured me. “I believe you, and I’ll talk to Adrian. You’ll get your hire—just hold tight for a day.”
I held tight. Then Scott called me back and said, “Sanjay, I don’t know what you did to piss off Adrian, but he’s given me an ultimatum that if you hire Kevin, he’s going to resign. I need him right now, and I suggest you just back off and you can both cool down. Hire Kevin in a few months.”
I didn’t want to wait. I couldn’t believe Adrian would go nuclear on me over what I considered a minor hiring decision, so I said, “Scott, Kevin is a great hire. He’s not going to be available in a couple of months. Adrian is being a dick—you can’t let that guy tell you what to do. You’ve told me that I’m going to be running this company someday. You can’t let him win this.”
Scott was diplomatic. “Look, choose your battles,” he said. “Adrian is critical to this organization right now, and you’re still getting your part of the business going. I don’t want to have to choose between you. Just calm down, and this will go away.”
Then I made a huge error in judgment. With “you’ll run this someday” ringing in my head, I decided to call Adrian’s bluff and said to Scott, “Scott, it’s either him or me, but he’s not going to resign over this.” Scott said he’d call me back.
The next day Scott called me and said, “Sanjay, Adrian and I have talked, and he feels you’re bad for Novatel. He’s now saying that either you go or he goes. I’m sorry, Sanjay, but I have to go with Adrian on this decision. Engineering is critical right now, and if he goes, we’ll lose several of our key engineers as well as him. It pains me greatly, but I have to fire you.”
IF YOU CAN’T JOIN THEM
I went from designing a revolutionary product and being the heir-not-so-apparent at Novatel to being on the street, wondering what I could do next. My colleagues at Novatel, even the ones I had hired, were told not to speak with me, and there was no way to appeal Scott’s decision.
I decided that since I had developed the original technology for the Minstrel, and there was no patent, I could go ahead and restart Nikean—this time for real. I decided I would sacrifice my life savings to make Nikean happen. My wife wasn’t happy with how aggressively I was pursuing the business rather than settling down and getting a real job, especially since I didn’t have any funding source for the new business. In my own estimation, however, I had everything necessary to start a new business—$100,000 in cash from our joint checking account, several credit cards, a great product idea, and boundless enthusiasm.
I knew we were going to be successful, and with a working prototype only a few weeks away, large-scale funding would come our way; so I started spending to attract that success. The first order of business was a nice office, with an impressive TV and DVD player, so I headed off to Best Buy. I found myself staring at two DVD models when a salesman approached me, pointed to one of the DVDs, and said, “You probably think this one is better since it’s more expensive, but the other one actually has all the features you need.” He rattled off a series of technical terms like oversampling, something 5.1, and optical inputs. I didn’t know if that’s what I needed or what I didn’t, but I was impressed that the salesman wasn’t just reading the little cards in front of the players on the shelf.
I bought the cheaper DVD player and got the salesman’s business card. He said he was in university, working on an accounting degree. I suggested that, if he ever wanted a job in sales with me, he give me a call. To my surprise, he called me the next day. “Hi, this is Mark, we met at Best Buy yesterday. Were you serious about a job?” I assured him I was, and suddenly I had my first full-time hire and my right-hand man for Nikean.
I also hired a product manager, Adam; an office manager, Maureen; and a series of consultants and agencies, including the Townsend PR agency, Four Lights software services out of Colorado, and a local industrial design studio. What bound them all together was their belief in Nikean and me—and their willingness to work for reduced or deferred salaries and fees in return for equity.
Novatel hadn’t yet introduced a fully functional Minstrel to the marketplace, and now a race was on to deliver the first mobile e-mail device. Was it going to be the Minstrel or the device we now dubbed the Nikean X-1?
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Some days it felt like the entire world was conspiring to make me succeed. Everyone’s heard about Nordstrom’s accepting returned snow tires they don’t even sell, but I have my own story. I had moved out of my house to be able to work with the team and focus fully on the business, and was staying at a San Diego hotel. I had an investor presentation the next morning at 10:00, and Mark and I worked late into the night finalizing the pitch. The next morning, I started to get dressed and realized with a shock that I didn’t have anything nice enough to wear to an investment meeting.
I had heard stories about Nordstrom’s great customer service, so I drove over to their Mission Valley store and leaped out of the car while Mark parked. I almost dislocated my shoulder as I pulled on an entrance door that wouldn’t budge and realized that the store didn’t open until 9:00 a.m. It was only 8:00 a.m., and I was never going to make the meeting if I had to wait an hour.
Inspiration suddenly struck. If they had such great customer service, then somebody must already be in the store, and if I could just get their attention, surely they’d open early for me. I looked into the window, but I couldn’t see anyone. I started to yell, but there was a coffee shop down the walk, and I felt self-conscious and stopped. Banging on the door hadn’t helped anyway. Stumped, I stood there as Mark walked up and asked me, “Maybe there’s someone you can call?” I pulled my cell phone out and dialed 411, and moments later I was on the phone with Nordstrom’s headquarters in New York, where it was 11:00 a.m. Miraculously, they called the San Diego store for me, and while I was still on the phone, the local manager, Steve, unlocked the door and ushered me in.
Mark and I high-fived each other before we explained the situation to the manager, and he took me over to the men’s section where I picked out a pair
of dress pants, a white shirt, and a tie. Steve even offered to press the pants and shirt for me. While we were waiting, 9:00 a.m. arrived, and the regular staff was on duty. I decided to add some shoes to my new outfit and was trying on black loafers, explaining to the clerk what was happening. “We have a presentation to some investors in less than an hour, and you guys have been amazing getting me ready for it!”
“Hey, I have some money saved up for an investment,” the clerk said. “Could I invest, too?” I walked out of Nordstrom’s with a great outfit and a story I’d tell for a long time. And a check for $2,000 from the clerk arrived in the mail three days later.
By this point, I had a nonfunctional model of the X-1 I could use as a prop in presentations, but without functioning software, I thought the whole thing could use some spicing up. I had bought a copy of a Star Trek video game along with a high-resolution Sony Vaio laptop. I was in love with the opening sequence of the game, which talked about making the world a better place and had soaring music and a colorful spectrum of futuristic technology. I decided to use that to close the presentation as I talked about how the X-1 was going to change the world.
The investors, however, were not impressed. They took the elaborate showmanship and lack of a functioning product as evidence that I was a dreamer and not a doer, and they asked me to come back when I had something real to show them.
I refocused my efforts in product development, and soon Adam delivered a PalmPilot cradle that had a functioning battery power assembly, and Four Lights delivered software that hacked the Palm OS to send and receive e-mail to any POP server-based e-mail account. Holding the device in my hand, I landed at San Francisco airport for another investor presentation, and the X-1 loaded my waiting e-mail as we taxied along the tarmac. I felt like doing a dance in the aisle of the plane, but I settled for grinning like an idiot at the flight attendant as she walked by making sure everyone’s cell phones were turned off. If only she knew what the other contraption in my hand was! The next day I went golfing with a potential angel investor, and after seeing the functioning device, he offered me $25,000 by the sixth hole.