“Huh? How’s that possible?” Robert knew that software is the essence of intangibility. It is a pure expression of thought, like poetry and music, with no discernible physical form.
Kevin pointed his finger in the air, as though about to recite a passage from the Bible. “Software takes memory, and memory takes power.” He glanced at Robert with eyebrows raised.
“Cost is the other problem,” Kevin continued. “SRAM is expensive, about six hundred dollars a megabyte today. But I’m willing to bet that it will drop to around a hundred fifty bucks by the end of next year. So we can build the product for about a thousand dollars if we keep it to two megs. If it stays at six hundred bucks, or God forbid it goes up, we’re hosed.”
In contrast to software people like Robert, who are artists and craftsmen, hardware people are tinkerers and gamblers. Their challenge is to assemble things out of standard manufactured parts, as reliably and cheaply as possible. The problem is that these parts are constantly changing—in configuration, price, and availability. Hardware people must spend their leisure time poring over catalogs, price lists, and specification sheets, like professional handicappers with their racing forms. A short supply of parts instantly creates a black market, with skyrocketing prices. Brilliantly designed circuits become doomed products if a single component is unavailable. In this nerve-racking environment, hardware engineers tend to hang out together, in fear of missing the one critical word-of-mouth factoid that might save them their jobs.
Software people are a different breed. Creating software is a form of expository writing—that’s why some of the best programmers have studied English or philosophy rather than math or science. Each program is like a specially crafted series of nested Chinese dolls, built out of ideas. Programmers start by carefully structuring their thoughts into tightly reasoned abstract arguments, then packaging these into simple, reusable concepts, to which they assign descriptive names. They then tower these concepts higher and higher, defining each new one in terms of the last, until they have described a complete solution—from the shuffling of bits up to familiar human operations.
“I think we should shoot for the software being one meg, which will leave one meg for the user’s data,” Robert offered, putting his first design stake in the ground. He turned the discussion to software.
“You know, this is a chance for us to really rethink how the user interacts with the computer. The pen interface has to be simple—you just touch the pen where you want, and do what you want to do. I think we should design the software around a physical metaphor that people can easily understand. Like a notebook, where you turn pages to go from one document to another.” The volume and pitch of Robert’s voice began to rise, which happened whenever he got really excited. “The cool thing about the notebook metaphor is that the user doesn’t need to think about programs and files. They just turn pages to move from one task to another.”
The phone rang, and the three of us looked at one another in embarrassment. We had spent the last half hour in an animated discussion, enthusiastically designing the future of computing, while crowded into the bathroom.
But the tone had been set, and now we knew we could work together. This was the last critical aspect of the deal, and everything fit together. With the idea, the money, and the executive staff lined up, all the basic resources required to start the company were now in place. We formally incorporated GO on August 14, 1987, a date we celebrated each year by drinking cheap champagne out of tiny Dixie cups.
3
The Company
COMPANIES ARE NOT conscious in the human sense, but each one nonetheless has its own personality. A company develops attitudes, even emotions, that are expressed through the actions of its people. It creates goodwill, establishes trust, and forms relationships with customers, employees, government agencies, and other institutions. This personality is captured in the corporate culture—the values and beliefs that the people in the company are expected to live and work by. The culture may be explicitly acknowledged as a credo or mission statement, but more often it exists as an unexpressed set of accepted procedures, practices, and behavior that may at times be at variance with the professed goals. This underlying code is not visible in inventories or income statements, but it is the soul of the company.
A corporation can perform acts of good and evil. It may improve the skills and knowledge of its workers, contribute to local communities, enhance the lives of its customers, advance human knowledge or international understanding. It may also stage sneak attacks on the customers or suppliers of other companies, steal trade secrets or key employees, pollute natural resources, betray the trust of partners, exploit its workers, or form alliances to gang up on a common foe. Corporate law seeks to guide corporate behavior just as criminal law seeks to guide individual behavior, with a comparable degree of success.
These characteristics are not created by fiat. They are not mandated, manufactured, or bought. They arise out of a natural process that reflects the personalities and desires of the founders, economic conditions, the available labor pool, and cultural attitudes. And that’s why the first few hires are so critical.
While I looked for office space to rent, we worked out of a spare bedroom in the lower level of my condominium, overlooking the cobblestones and gardens. This was our war room, where we began the task of assembling a staff. It proved easier than we had expected. We soon developed a simple technique for selecting candidates: check their credentials, tell them about the project, and then observe their immediate reaction. We judged their suitability by gauging their level of enthusiasm.
The first person we hired was Todd Agulnick, a talented software engineer who by a remarkable coincidence had also been the first employee Mitchell Kapor had hired at Lotus—when he was only thirteen years old. Todd was now an undergraduate at Yale, but had spent the summer of 1987 working part time for me, investigating handwriting-recognition algorithms while in summer school at Stanford. He found the easygoing life in Palo Alto to be quite a contrast to dreary inner-city New Haven. It also helped that he shared a dormitory with a high school girls’ cheerleading camp. There was no way he was going back east, and so he took a leave of absence from Yale to work at GO. A sensitive and fastidious young man, he was easily derailed by minor annoyances, like a disagreement with a coworker or the rumor of an organizational change.
Robert Carr turned up a promising candidate named Mike Ouye, an amiable senior software engineer who had worked at VisiCorp and later at a number of other startups. He grew up in the small farming town of Lodi, California, the son of Japanese-American parents. Mike had a moon-shaped face with Oriental features, but otherwise was as American as MTV. His Japanese heritage was to him what my Jewish heritage was to me—a remote cultural artifact whose main relevance was to add a bit of color to our personas. Mike was the quintessential computer nerd. He hung out at Fry’s—the enormous Palo Alto computer superstore where techies could buy parts, software, and Jolt Cola at any hour of the day or night—and spent hours checking the ads in those thick computer tabloids available for free on street corners throughout the area.
On the day Mike was scheduled to come by the condo for an interview, he had phoned and asked if he could bring his fiancée with him, since they were going to dinner afterward in the city.
Robert had told him it wouldn’t be a problem. A couple of hours later, Mike, Robert, and I were on my living room couch reviewing Mike’s résumé while his fiancée, Celeste Baranski, sat quietly reading a magazine on the loveseat. Completing the review, we turned our attention to technical matters.
“Mike, what CPU do you think we should use for the product?” Robert asked.
“Well, that depends on whether you want to stick with the Intel line or go with something else, like the Motorola 68000. As far as software development goes, the tools for the 68000 are probably more mature.”
“On the Intel line, though, the problem is power consumption on the chip, which can drain the battery
very fast,” Robert said. “The 286 is state of the art, and it’s available in a static CMOS version, which draws very little power. But the 386 will probably be available soon.” At that time, the power of today’s 486 and Pentium chips existed only in an engineer’s dreams.
“That’s true,” Mike said. “But there aren’t any good 32-bit compilers out yet for the 386, so you can’t really take full advantage of its power. And anyway, it’s probably not going to be available in a CMOS version for a long time.”
“That’s bullshit!” Celeste said. Robert and I swung around to look at her. “The die size of the 386 is so large that it’s only available in CMOS, in order to reduce heat dissipation problems.”
Mike felt compelled to explain this outburst. “Celeste is a hardware engineer,” he said sheepishly.
She chuckled. “Damn right. And you software guys better watch it when you talk about CPUs.”
It turned out that not only was she a hardware engineer, she was an excellent one, and her skills were in great demand in Silicon Valley. Apparently, she was here to check us out before deciding whether to let us know that she, too, might be interested in working with us. Within a few days, Kevin had interviewed her extensively, and quickly offered her a job.
Mike and Celeste formed the core of the technical team—he on the software side, working with Robert, and she on the hardware side, working with Kevin. They were soon married. New single employees were surprised to learn that they were husband and wife, because they continually bickered and hurled professional insults at each other during meetings. Married employees found it easier to believe.
Celeste, in turn, knew a laconic, earnest engineer named Phil Ydens, with whom she had worked at Grid Corporation, a manufacturer of portable computers. He was a specialist in the arcane area of operating systems software, the fundamental programs that move data in and out of computers and manage the allocation of resources to applications. Phil was the type of person who in previous ages would have volunteered for crusades. Tall, rugged, and steady, he lived an ascetic existence—drawn to the purity and hardship of struggling against impossible odds. He was immediately enchanted by the project, and soon signed on.
The next priority was to hire a director of documentation, who would be responsible for the instruction manuals for customers and software engineers. Robert had worked previously with an experienced writer named John Zussman, who was just finishing up a major project for Oracle, a relational-database company. He arrived for the interview impeccably dressed in a gray and blue tweed jacket, a tastefully matching tie, and polished Italian shoes. His hair was neatly cropped, his posture beyond reproach. John spoke softly and precisely, giving him a prissy air. And there we were, in our blue jeans and work shirts, looking like armchair lumberjacks by comparison.
Over the next few years, John would bring a touch of class to the organization. He arranged company excursions to the symphony, where he and his wife sang in the chorus; I organized field trips to professional wrestling matches and the racetrack. At late-night work sessions, John would dine on takeout sushi, meticulously packaged with ginger, wasabi, and a sprig of greens; the rest of us would wolf down meatball submarines.
This incongruous assortment of engineers, reminiscent of the diverse characters of a Passion play, had one thing that bound them together: a deep, almost spiritual conviction that a good idea and some hard work can make a difference. They believed in the power of a concept to change people’s lives for the better, and felt a moral imperative to make it happen. GO was a vehicle for each of them to put this feeling into action, to prove to themselves that their faith was justified. Perhaps, in the end, this will be the startup game’s most valuable contribution: to rekindle a sense of purpose, a sense of empowerment in a Big Brother world.
We rented a clean but funky industrial loft that had been converted to office space in the “south of Market” area. Here, commuting artists and engineers like us worked by day amid an invisible population of homeless people who slept in abandoned vehicles at night. These two communities formed an unspoken mutual interdependence: we provided them with cardboard and aluminum cans that could be quickly converted into cash, and they watched our cars and offices, which reduced vandalism. Despite the wretched conditions, the local residents eked out a semblance of decency—sharing blankets and celebrating birthdays together, with occasional contributions from us day folk.
Soon after we moved into our new offices, I got an unexpected call from Steve Sakoman at Apple.
“How’s it going, Jerry?”
“Fine, and you?”
We exchanged guarded pleasantries until Steve was comfortable enough to get to the point. “I understand that you went ahead with the project anyway.”
“Uh-huh.”
“Jerry, John would like to see you.”
“John who?”
“Sculley.”
“What about?”
“He just wants to talk.”
The intrigue deepened.
“Does he know what we’re working on?” I asked. This, of course, was a loaded question.
“A little, I think,” Steve said. “I’ve told him very little, but he probably knows the gist of it. After all, it’s been a while, and I don’t know what direction you’ve gone in. Is it pretty much the same?”
Now Steve was fishing. I dodged the question. “Hard to say.”
“Well, anyway, he’d like to see you.”
I consented to the meeting, and we set up a time.
On the day of the meeting, I climbed over a pile of unidentifiable soggy trash blocking my car and drove the hour down to Apple headquarters in Cupertino. The company was housed in a series of sparkling beige buildings adorned with colorful Apple logos. I parked near a particularly airy edifice of stucco and glass that had a spectacular view of an artificial pond through the main lobby. Registering with the guard at the desk, I felt as if I were checking into a spa in the Emerald City of Oz.
Steve appeared moments later to greet me. He was all sunshine and smiles.
“Hi, Jerry, how have you been?”
“Fine, and you?”
He led me through endless corridors of pastel-colored workstations, each equipped with the latest in user-friendly Macintosh technology. Smiling icons and desktop-published party invitations were pinned up everywhere.
“This is my group’s area,” he said, waving his arm vaguely over a large expanse. He walked around at a pace designed to allow me a glimpse of their project without learning anything important. Hung on a wall was a long poster from an elementary school instructing children on how to print the alphabet correctly. I glanced at one workstation long enough to see electronic ink on the screen, but little else.
He saw me pause for a closer look, and he took my arm and said, “Maybe we should get going. I don’t want to keep Sculley waiting.”
We returned to the front entrance and started toward Sculley’s office. We were barely out the door when we were nearly tackled from the rear by a rough-and-tumble, athletic-looking middle-aged man with a raspy voice.
“Sack-O-Man!” he said with the energy of a college quarterback.
Despite his years, I could tell he was someone who had always looked younger than he was. He grabbed Steve and gave him a big hug. Steve didn’t seem to object. I couldn’t imagine what would cause a grown man to exhibit this kind of exuberance. Without warning, he turned his attention to me.
“Jerry Kaplan! How are you, boy?” He looked familiar, but I couldn’t place him. I knew I must have met him somewhere before, since he knew my name.
Steve bailed me out. “Jerry, this is Bill Campbell, president of Claris.” Claris, a spinoff company created by Apple, was developing applications for the Macintosh. Campbell shook my hand vigorously while Steve finished the introduction.
“Nice to see you technical geniuses looking so fuckin’ dapper!” Campbell laughed as he vaulted off to his car.
“We’re going to see Sculley!” Steve called afte
r him, by way of explanation.
“That’s your problem!” Campbell shot back.
As he screeched out of the parking lot, Steve said, “He’s got his own style for sure, but he’s really a great guy. He’ll run this place eventually.” This was high praise coming from Steve, particularly for someone from a marketing background.
We arrived ten minutes early at Sculley’s office. The first thing I noticed was that there was not one, but two administrative assistants there to handle his affairs. The furniture was classic California hip, unpretentious but no doubt very pricey—rich light woods, polished to a warm glow, projecting a calculated blend of limitless resources and political correctness. The reception area was enormous compared with Sculley’s office—visible through a glass partition—which seemed to be built for the purpose of showing off the furniture.
“Please wait here, John is just finishing up with his personal publicist,” said the more senior assistant.
I whispered to Steve, “Personal publicist? Why the hell does he need that?”
Steve smiled bashfully and shrugged.
Jean-Louis Gassée, the fellow at Apple who had talked Steve into staying, instantaneously appeared as if out of thin air. He must have been watching me eye the place. He leaned toward me and said, “Obscene gross margins.”
“What?”
“This splendor is the happy result of Apple’s obscene gross margins. And do you know why?” He spoke with a smooth French accent. “Because we control the whole platform, both the hardware and the software. The rest of the PC manufacturers are going to the dogs, eating each other for lunch as they get squeezed by Microsoft on the software side and Intel on the hardware side.” He gestured out the window, to the world outside Apple. “Would you believe they want us to license our software to others?” He narrowed his eyes at me, as though I should know precisely what fools he might be referring to. “But we don’t have any competition. I say keep the prices high and the profits will roll in.”
Startup Page 5