by Rob Reid
A long, thoughtful pause, then Ellie says, “I guess I wouldn’t rule it out. The glitch in your wiring connects to both emotions and consciousness, right?”
It’s a mighty basic question, but Ellie knows little about Falkenberg’s disease. In fact, they haven’t even discussed it since she referred him to Dr. Martha. Her seeming lack of interest stung at first—but Mitchell since learned that she’s a researcher and not a clinician because she couldn’t bear to treat and bond with neurological patients doomed to suffer awful deaths. Engaging with a lifelong friend over a condition as dreadful as Falkenberg’s is therefore a struggle. “Yeah,” he says. “There’s a connection in that sometimes a strong emotional event can shut my consciousness right off. As in, I pass out. But the interesting thing? One of the two trigger emotions is frustration.”
That sure gets her attention. “Seriously? What’s the other one?”
“Embarrassment.”
There’s a long silence as Ellie parses this. Make that a really long one. Then, “No WAY!” She belts this out like a granny crying “BINGO” at casino night, and the room explodes into a chaos of hugs, wags, high fives, barks, more hugs, more wags, and clinking glasses. Then, “Embarrassment is the inverse of frustration! Not as an experience, but in terms of mote patterns!”
Kuba’s nodding. “Both have six surprise components. Frustration also has four anger and two sadness. Whereas embarrassment has four sadness and two anger.”
“And it’s complicated,” Ellie adds, “but these twelve components basically pulse in mirror-image ways!”
Mitchell’s feeling real hope for the first time since his diagnosis. “So what does that mean?”
“I have no idea!” Said with gleeful ambition and not despair, this triggers more barks, hugs, and wags. Ellie’s now so giddy, she’s literally pacing. It’s adorable, and the first time Mitchell’s seen her do this since high school. “I’m just starting to identify complementary emotions, and decode what they mean. But this definitely doesn’t seem random to me. Motes could easily be connected to Falkenberg’s!”
Equally giddy, Kuba is thinking very, very big. “So for her next trick, Ellie will help Dr. Martha cure Falkenberg’s disease. Using motes!”
“Why not?” Ellie trumpets! She turns to Mitchell. “Let’s get you in for a scan, pronto! Put you into our fancy machine! Then trigger one of your attacks and see what your motes get up to!”
“Yes!” Kuba echoes. “And if Phluttr does actually buy us, I’ll fight to keep Animotion alive! There’s something to this. I can feel it! And I’ll turn Phluttr into a sea of digital motes to figure it out!”
Yup, he really said those exact words. “Turn Phluttr into a sea of digital motes.” I could not make that up (OK, fine—I could. But in this case, I didn’t). Big idea, that. And then, he goes ahead and does it! As you’ll see. And viewing things a certain way, that’s where it all started.
I view things a bit differently, though. And I’ve given this issue ample thought. Not because the answer particularly matters (because whatever it is, here we are). But because intractable questions have—to my own astonishment—started to interest me lately. Now, don’t worry. This isn’t a lead-in to a lecture about quantum mechanics, neuromorphic programming, or superasymmetrical field theory (because that shit bores me, too). I’ll just say that to me, the “when” began quite a bit earlier—when certain core parties first got inextricably entangled with one another.
Now, that entanglement was itself a process. And it had a start date of its own, which we could debate about. But in my mind, it all traces back to a certain long-ago, midwinter afternoon in San Francisco.
It was January of 2002, and nothing stank of startup excess and doom quite like a small herd of Aeron chairs huddled around a conference table in an opulent CEO suite. Especially if the entire wall behind them was an immense whiteboard, expensively rigged to print its contents onto poster-sized sheets at the touch of a button. Or if the adjoining wall was a vast, triple-glazed plate overlooking San Francisco’s South Park—a onetime industrial slum which by then housed more failed startups than entire zip codes down in Silicon Valley. Adjoining that was a floor-to-ceiling glass sheet surveying the interior of a poshly converted warehouse full of hip youngsters perched on ergonomic roosts. Only a fourth wall of blank red brick hadn’t been resurfaced with untold thousands of investor dollars when this once healthy metal-bending shop decayed into doomed corporate digs.
Tony Jepson swished into his cavernous domain twenty minutes late, his board of directors having long since assembled. Startup founder though he was, no one thought of this guy as a visionary. Not then. Not yet. Yes, he did have a big idea, that one time. But it was god-awful! At least according to certain stodgy old-school standards (like profitability, logistical sanity, and even originality, as no fewer than six startups were founded upon the same daft notion within months of each other). It involved peddling pet food over the Internet—a concept so flawed it became a punch line for a half generation of future entrepreneurs. As for investors, they flocked to Jepson’s company and its five doppelgangers like flies to a shit-wagon. It was 1999, and the bar for that sort of validation was very, very low.
Three years on, the unhappy proxies of those investors were convening yet again. Each of their recent board meetings had been more rancorous than the last. But today’s was sure to make history. That is, if anyone ever bothered to tell the story of yet another dot.bomb Internet flop and its also-ran CEO, which even Jepson strenuously doubted at that point. Which is to say: how little he knew! The Zegna-to-riches arc he’d been tracing since b-school was indeed a quotidian yawner. But the riches-to-rags plunge that would later follow would be Page Six material. His subsequent rags-back-to-riches jaunt, an Oprah-worthy redemption! And then? To cap it all off by getting his ass murdered? And so brutally? Over that? Seriously, none of us will ever forget the guy!
But before any of this could be set in motion, ePetStore.com had to survive this summit. Jepson kicked it off by leaning over a bulbous triangular shell on the conference table. “Are you in there, Nathan?” he asked, rapping on the glorified speakerphone. Every board meeting began with this ritual. Three years before, the most celebrated partner at the Venture Law Group won the company’s business by promising to personally attend each of these powwows without charge. He had since shown up twice and dialed in once.
“Uh…sorry, but no,” came the dweeby, nasal reply. “Nathan can’t make it today. It’s just…uh, Tyler.” Uh, Tyler. Nathan’s timid understudy couldn’t even announce himself without stammering. That, or his parents had the wit and foresight to name him Uh.
“Oh, Uh. I see, Uh. So, let the record show that Nathan had another extremely pressing and entirely unexpected last-second engagement.” This was part two of the opening ritual. But testy as he sounded, Jepson didn’t resent the snub for once. Today, he just needed a mute noncombatant taking legally salient notes. And for this, Uh Tyler was just perfect.
Jepson turned from the speakerphone to the attendees. “Mornin’, J-Dog,” he said, nodding at a guy the rest of the world called Jason Potter. With a résumé consisting solely of an MBA and some years of management consulting, J-Dog had little to offer this, or any, board of directors. He was here because shortly after incorporating, Jepson learned that the law required him to have at least one board member other than himself. So he put the word out to some old fraternity brothers, and J-Dog stepped in as a temporary measure. Soon after, it occurred to Jepson that the closest thing an entrepreneur has to a boss is his board—where J-Dog’s vote would be as reliable as a Cuban ¡Si! on an old Soviet UN resolution. So J-Dog stayed put and became everything that Jepson could ever hope for in a board member and not a smidgen more.
Jepson adjusted the collar on his crisply pressed shirt. It came from the looms of a storied designer who had clad generations of buttoned-down professionals, and was now hawking an exorbitant “sport” line to suit-shunning moderns like him. He left it breezi
ly untucked over black jeans that cost more than most of his employees paid in rent. Hand-stitched loafers fit for a squire unwinding over drams of ancient Laphroaig completed the high-bred casual look that pre-Zuckerberg tech execs hewed to like cadets following a dress code. The look suited him. At thirty-one (which still passed for young among tech entrepreneurs in 2002), Jepson had hints of gray amidst his wavy thickets of dark hair. He could almost pass for six feet (if holding a teeteringly erect posture) and pegged himself at a 7.5 on the ten-point scale of hotness. Which was just perfect! Because although the cult of the geek was still in its infancy, entrepreneurs were already expected to embody it at least somewhat. This was bad news for founders who looked like they’d spent their youths getting laid. So Jepson figured he was right on the brink of being maladaptively gorgeous.
Sauntering around the conference table, he manfully locked eyes with each member of his small and shrinking board. “Like all of our gatherings, this one is top secret, and so…” He came to a stop and lifted his right hand over his head like a flamenco grandee—then paused and snapped his raised fingers. The window overseeing the outer-office proletariat instantly became an opaque, milky-white pane. Jepson activated this effect by clicking a small remote concealed in his other hand. There was no need for the theatrics. Everyone knew about his billboard-sized magic window, which cost more than a year of Stanford tuition. But today’s gathering was less a meeting than a performance. And its star had honed his every word and gesture to outrage one very special audience member. Ideally, to the point of provoking an actual physical assault (unlikely, yes; but like most entrepreneurs, Jepson was an optimist).
Jepson turned to his chairman. “Conrad,” he said. His chairman nodded. Steven Conrad (just Conrad to everyone) was patrician by tech standards. Fiftysomething and stout, he’d been the chief financial officer of a second-tier workstation maker during the client/server boom of the nineties. Old-school venture capitalists then tapped him to run an ad-serving outfit, back when the earliest Internet startups viewed aging CEOs as useful accoutrements (a brief and forgotten fad). He ran it for less than a year before gulling Yahoo into buying the company for a downright moronic sum (even for Yahoo—which is saying so much). He sold the Yahoo shares that he personally gained from the sale as fast as he legally could (very wise), then plowed most of his winnings into a fledgling venture capital firm that bore his name. Conrad was known for spouting wizened homilies reaped from the backwoods of his youth, in a self-consciously magnified Alabama twang. But beneath the homespun façade, Jepson could tell the guy was as sly and corrupt as a Vegas cabbie. Conrad controlled a second seat on the board as well. His junior associate was down with the flu, but should a tie-breaking vote become necessary, he’d dial in and follow Conrad’s instructions precisely.
“And last but certainly not least, Mishhhh-ter Kielholz!” Jepson enunciated this like a madcap German scientist in a Warner Bros. cartoon. This was a bit low, even for him. But Damien Kielholz was a cold fish, and it would take a lot of goading to get him to blow his stack as thoroughly as Jepson intended before the meeting was over.
Kielholz replied with a witheringly neutral nod.
“Jet lag not so bad this time?” Jepson snipped. Kielholz had drifted off briefly during their last board meeting, which started an hour after his nonstop arrived from Frankfurt.
You preening dolt, Kielholz thought, and deflected the jab by glancing detachedly around Jepson’s throne room. He had come to fully loathe this place. There was a time when its brash fittings made him feel like a renegade gambler on the wild digital frontier—a nice change after years of helping his family invest its wealth in cautious instruments like German debt and telecom bonds. Persuading his father to kick in $14 million of the $15 million raised in ePetStore’s second financing two and a half years back took hours of filial charm and cajoling. He prevailed by pointing to the jackpots their Austrian cousins had struck by backing the shameless European knockoffs of several American Internet successes. Though relentlessly polite to one another, the German and Austrian Kielholzes got on like Hatfields and McCoys. One-upping the Viennese branch with an audacious bet on “an actual Silicone Valley Web-Site innovator” (Damien’s precise words, spelling, and punctuation in a family memorandum, as he now cringed to recall) was too tempting a prospect for his father to pass up. So Papa wrote the check, while sternly warning the youngest Kielholz that his inheritance would hinge on the outcome of all this.
Scarcely a year later, some true dullards invested $60 million in ePetStore at a far higher price. There was Hanwha, a Korean telco blowing a full decade of cash flows on late-bubble Internet fads. And there was XrossHatch, an LBO group with a history of railroad takeovers and smokestack consolidations repositioning itself as a “Crossover Digital Mezzanine” fund. Kielholz’s idol, Warren Buffett, famously said that if you don’t know who the patsy is at the poker table, it’s probably you—and these dim newcomers long conveyed the soothing impression that ePetStore’s patsies hailed from Seoul and Wall Street. But today, both were abandoning the table. And it seemed that the game was still on.
Speaking of which, Jepson foppishly snapped his fingers again, and a PowerPoint titled Proposed Buyout Terms lit up the whiteboard. “As you all know,” he began solemnly, “Hanwha and XrossHatch have been grappling with certain anxieties related to the ongoing market correction, as well as the…recent tragic events.” Plainly stated, they were flipping out in the wake of the 9/11 attacks, which had exacerbated the recession and the market meltdown over the past four months. “Being respectful of their circumstances, I resolved to provide them with partial liquidity.” In other words, Jepson established that they were desperate enough to accept pennies for each dollar that they’d poured into ePetStore in exchange for renouncing all future claims on the company. Which wasn’t news to anyone as this deal had been brewing for weeks.
The surprise came in the next slide. It featured a simple table summarizing the terms Jepson had extracted. Details he had coyly withheld from those present until now. Specifically, that the company would pay $15 million to buy back the stock the investors had purchased for $60 million. Yup—Just a quarter on the dollar! “While we regret that XrossHatch and Hanwha won’t participate in our future success,” Jepson managed with a completely straight face, “we sincerely thank them for everything they did for ePetStore.” Which, to be clear, amounted to gifting the company with $45 million. And that certainly merited a bit of thanks, even in Jepson’s book.
Conrad emitted a low, appreciative whistle. “I’d peg that as being better’n just fair to middlin,” he said, his down-home affectations dialed way up. Jepson took a bow—outwardly for Conrad and inwardly for himself. He’d not merely been scrupulously vague about the deal’s actual terms until now. He’d also strongly implied that the buyout would be far more costly. This meant the company had much more money left over than anyone had expected. Which meant everyone else in this room was recalibrating in real time. Jepson knew exactly where this would take them—and, that he had very little time to derail their inevitable train of thought.
“Why do you think he sold so cheaply?” Kielholz asked. Unlike Conrad, he seemed completely unmoved by the development. No surprise, as he normally had the emotional range of a paperweight.
“The only possible explanation…” Jepson paused, as if stumped by an imponderable. “Would be a pathological underappreciation of the Internet’s potential to disrupt and extend the multibillion-dollar market for quality pet provisions.”
Jepson quietly congratulated himself as a hoped-for glimmer of contempt crossed Kielholz’s face. The guy’s Spock-steady veneer held up remarkably well throughout the first year of the market meltdown. It then frayed steadily throughout ’01. Then finally, during November’s board meeting, he flipped his cool Teutonic wig most spectacularly while denouncing the company’s track record. Which, to be fair, was perfectly disgraceful. Even within its execrable market, ePetStore had always underperformed. Forever
dead last in market share, its trivial point of differentiation was a service that delivered kitty litter at regular intervals, so that customers need never run out. Considering what kitty litter’s made of, this was tantamount to selling subscriptions to gravel, which they fulfilled at gigantic losses via overnight mail.
So now what? If you were a money guy, getting the hell out was the obvious move. Public market investors did just this (with all the order and dignity of a meth-addled mob fleeing a burning theater) back when the tech bubble burst in early 2000. But what about investors in private disasters like ePetStore.com? Sure, they’d gladly dump their shares, too. But who would buy them?
Well, Jepson’s recent exhilarating realization was that he could buy them. Or, more accurately, the company itself could. Because—through the sheerest and dumbest of luck—ePetStore’s last giant financing concluded just nine minutes before the NASDAQ reached its mathematical peak on March 10, 2000. Landing $60 million was no small thing on any point of the globe, on that, or any other day. But for a Silicon Valley startup, the timing was sublime! Dollars remained worth a dollar apiece (more or less). But engineers, advertising, legal services—practically everything the company shelled out for on a month-to-month basis had since cheapened with every passing month. This left the company’s coffers weirdly full in an increasingly bankrupt industry—which could enable it to vacuum up its own stock from its desperate, disheartened investors with no other buyers bidding up the price.
As this would burn precious cash the company had no way of replacing, it might seem an odd move to an outside observer. But Jepson was no outsider. And when he first thought this process through to its logical conclusion, he was almost physically aroused. “So it seems that everyone’s pleased with the price I negotiated,” he pronounced. “Shall we have a vote?”