“Look, let’s skip the fluff and get to the substance,” she said, pointing to the plastic mockup I had laid on the table.
I closed the booklet and placed it back in my briefcase. “I can see that you’re way ahead of me. You don’t need the whole dog-and-pony.” Instead, I picked up the plastic mockup, relieved that she had focused her attention away from me and toward the model.
“Ernie needs to see this,” she said.
“Who?”
“Ernie von Simson, my associate.”
I pictured a deposed count of the Austro-Hungarian Empire with Naomi Seligman on his arm, and suppressed the urge to laugh.
She walked over to a side table and hit a button. “Ernie needs to see this.”
“He’s out,” said a meek voice at the other end. “But I think I can track him down.”
“Please do.” She returned to her chair. “Do you know about the Research Board?” She didn’t wait for an answer. “The Board is probably the lowest-profile oraganization in the computer industry, as you can probably tell from the office. We avoid all publicity. The members individually control the computer budgets for some of the largest businesses in the world. We have a limit of forty members, strictly the heavy hitters. We meet three times a year. If they miss two meetings, they’re out; if they change jobs, they’re out. The information is strictly for the use of the members, and they keep it that way, so you don’t have to worry about telling them things. Most of the meetings are closed discussion sessions, but occasionally we invite executives from the outside to present. I’m not talking about salesmen, I’m talking about CEOs—like John Akers of IBM, Ken Olsen of Digital. Once in a great while, we let young entrepreneurs in to present their ideas. Steve Jobs of Apple, Danny Hillis of Thinking Machines.” She paused, then said emphatically, “I’d like you to present at our next meeting, in March.” She gave me the look of a prizefight promoter signing a newcomer for his first big bout.
“Thank you, Mrs. Seligman.”
“Naomi.”
“Naomi, I appreciate the opportunity very much.”
“When you present, just skip the bull. These are very smart guys, they’ll get it.”
“No problem.”
“And no sales pitches. They hate that.”
“No sales pitches,” I repeated, as though taking orders. “Got it.”
“And remember, they are all required to read our briefing book before the meeting, so they’ll already know a lot about you.”
The door opened and a pleasant-faced man walked in. He had dark thinning hair, a modest gray suit, and the demeanor of an English valet.
“Ah, Ernie, good,” she said. “Take a look at this. We should show this at the next meeting. I’m sorry, but I have to go.” She thanked me for coming, and walked out.
After introducing myself, I dove right in with a tour of the mockup.
Von Simson looked uncomfortable. “Excuse me,” he said, “but do you have any background materials that we might review first? It really helps me to understand the context of what you are trying to accomplish.”
The savvy business traveler knows that the advantage of flying United out of San Francisco airport is that you can park on top of the short-term lot and take a motorized walkway to the Red Carpet Club on the mezzanine, avoiding the mayhem of the levels below. The door to this private club is identified only by a small, discreet sign, so as not to incite an uprising among the hapless souls waiting in long lines at the public counters.
March 3, 1989, was one of those days when this knowledge made a difference. I was scheduled to take a noon flight out of SFO to the Orange County airport, a short drive from the Four Seasons Hotel in Newport Beach, where the Research Board was holding its meeting. Because of a sudden storm, air traffic was in disarray. Adding to the confusion, the Orange County field was in the final stages of a major expansion, so all cars were detoured to a muddy, overcrowded hangar with too few gates.
As I entered the Red Carpet lounge, the departure display was urgently flashing the numbers of canceled flights, including mine. The two United attendants in the lounge anxiously tussled with their computer terminals, attempting to reroute the worried travelers surrounding them. Sizing up the crowd, I headed for a phone booth and dialed my travel agent, who I knew had access to United’s computers.
“Julie, I’m screwed,” I said into the phone. “My flight’s canceled, the airport is a disaster, and I’ve got to get to L.A. for an important presentation.”
“Hang on,” Julie said. I could hear computer keys clicking as we spoke. “Everything’s booked, but there’s one seat not yet claimed in first class at eleven thirty-five, a possible no-show . . . But there’s a waiting list.”
“Who’s on it?”
“Let me check . . . Looks like three gate upgrades, one Premier, and one Premier Executive.”
I checked my watch. It was exactly 11:24. “Great, we can beat that. Put me in as a full-fare standby for first. The seat should be released within a minute, unless it’s on gate hold.” I waited, watching the seconds on my watch. I could hear her taking short, choppy breaths as she scanned her screen.
“Got it!” she said. As I hurried past the gate, I looked around and wondered which of the disappointed faces I had bumped to the next flight—if he was that lucky.
Since I had caught an earlier flight, I arrived at the hotel in Newport Beach a half hour before I was expected. This created a bit of a problem for the Board’s gatekeepers, who parked me in a makeshift hallway purgatory with a specially bound copy of their briefing book, containing only the pages that pertained to my presentation. When my time arrived, the door opened and I was invited into the meeting room. They were just finishing up a break.
The scene that greeted me was a feminist’s nightmare—equal opportunity had yet to make its presence felt this high up on the org chart. Every chair was occupied by a smiling middle-aged male with graying hair. They were all informally dressed, and from the banter I overheard were clearly comfortable with one another—discussing their golf games, politely inquiring about the family, or swapping corporate war stories. Ernie von Simson called the meeting to order and made a short non-introduction, referring the members instead to the write-up in the briefing book and their earlier discussions. I wanted to keep my talk on an informal level as well, so I began by asking about their experiences with laptops. It was a good bet they would have some horror stories.
“May I ask how many of you have tried to automate a sales force with laptops?” Several hands went up. “And how many of those projects were successful?” I guessed right: there were groans and thumbs-down around the table. “I suspect that they were too heavy, too hard to use, and most of all, your salespeople were uncomfortable whipping them out in front of important clients.” Nods around the room. “Well, I’m here to suggest a possible alternative.”
The rest of my talk was more like a discussion, punctuated with questions and comments. Little by little, the Board’s interest grew, as each member began to think of ways a pen computer could be used in their business.
“In our company, a really big issue is delivery of up-to-date equipment-maintenance information to field personnel,” said the general manager of Rockwell International’s information systems group. “I could see how an inspector could load in the latest bulletins electronically and refer to them as he walked around an aircraft or whatever, making notes directly on the computer. Then we could transmit his notes back to a central database after hours.”
“We have a different problem,” said an executive vice president at Merrill Lynch in New York. “Our people on the floor of the stock exchange make trades, which they write down on little slips of paper called trading tickets that sometimes are illegible or get lost. These errors can cost us big bucks. The runners could enter the trades on a pen computer and check for mistakes right on the spot. At the end of the trading session, we could download this information into our mainframes.”
“Or,” I added, �
�you could transmit a record of the trade immediately, through a wireless link. If the other trader had a compatible device, you could reconcile any discrepancies right on the spot.”
A senior executive of the Bank of America said, “We could put them at tellers’ stations and let the customer sign right there for a lot of transactions. Our field people could load in information about a big customer before a site visit.”
The soft-spoken VP of data processing for State Farm Mutual Automobile Insurance sat staring at my plastic mockup, deep in thought. As one of the quieter members of the group, his words seemed to carry more weight than those of his more outgoing colleagues. “This could scratch a very big itch for State Farm. Our twenty thousand claims handlers out in the field are constantly on their feet. Laptops are out of the question. They can’t sit down and type while they’re inspecting a car or a building for damage. So they carry clipboards, and we’re constantly transcribing forms that are full of errors and omissions. With this device, in principle the adjuster can complete the entire transaction and hand the customer a check right there.” His eyes were bright and wide.
I was in heaven. Not only was the meeting going well, but it was a thrill for me to hear about these applications. Until then, my faith that pen computers would prove useful for businesses was based on theoretical considerations—that they would allow people to harness the power of computing when standing up and walking around, or when face to face with others. But I was less clear about precisely what these mobile workers were going to do with the machines. Hearing about specific uses, from people with real knowledge of those needs, gave the whole concept a new life for me.
One by one, the executives took a turn explaining the relevance of pen computers to their company, like true believers testifying at a revival meeting. Each one seemed to be trying to top the previous speaker.
Although I was over my allotted time by fifteen minutes, this spirited discussion went on. Von Simson suggested that the members take a break and continue in private, politely inviting me to leave. The entire group thanked me in unison, like a Greek chorus.
On my return flight up the coast, I reflected on the day’s events. I had gotten a rare glimpse of a group of powerful movers and shakers, getting together to discuss issues of great import. By my estimate, the combined operating budgets of the forty Research Board members might be as much as $5 billion a year, more than the gross national product of many moderate-sized countries. The raw economic power of the Board’s individual members was awesome—it could drive the creation of whole new technologies and industries, mobilizing armies of researchers, technicians, and factory workers.
Now I understood what IBM executives meant when they boasted that their company was “customer driven”: they certainly weren’t talking about personal computer users, whom they ignored for the most part. Rather, they were talking about their need to please the members of the Research Board and others like them at any cost. As I glimpsed the sculpted cliffs of Big Sur through a break in the clouds, I wondered which Board members were destined to become our patron saints and what mysterious forces they might set in motion on our behalf. I had to wait several weeks to find out, which gave me an opportunity to focus on some internal matters.
By mid-March of 1989 GO had about thirty people on the payroll, so we needed to move to more spacious quarters. We selected an office complex called Metro Center, twenty miles south of San Francisco, in Foster City. This spanking-clean town was a city planner’s dream. It was built on recent landfill, with no history of family farms, no arbitrary rights-of-way, no landmarks to work around. As a result, everything was tidy and new, laid out like a theme park—but in serious danger of falling into the bay in an earthquake.
We leased the entire fourteenth floor of the highest office tower, which had a spectacular view in all directions. I selected a modestsized corner office with a broad floor-to-ceiling window, framing a panorama of the bay and the San Mateo Bridge. As a bonus, families of California turkey vultures circled just outside my window in the afternoon, using the building’s warm updrafts to gain sufficient altitude to glide back to their nests in the western hills.
Once we had settled in, I called the company together for a staff meeting to discuss milestones. The team leaders had just decided to push back the prototype milestone from June to July, and I needed to ensure that they understood the cost of such delays.
“OK, let’s get started,” I said. “How do you like our new offices?” The room broke out in cheers and applause. “Now we look like a real company. We have a nice reception area, new furniture, a real phone system, computers . . . But we’re missing one thing. Do you know what it is?”
“A company masseuse!” Todd Agulnick yelled.
“No—revenues,” I said. The room went silent. “We look like a company, but we are only a venture. Ventures have investors, while companies have revenues. Every month we delay a revenue stream, we have to sell off more equity to stay alive. If we delay too long, the price of the equity goes down. So we have to sell off even more, and then eventually no one wants to buy. And you know what that means?”
“Burger-flipping time,” said Mike Ouye.
“That’s right, Mike. And like they teach you in Catholic school, time is money.”
“Which Catholic school did you go to?” Celeste called out.
“Our Lady of the Almighty Dollar,” I shot back.
“Funny, you don’t look Catholic!” she said.
I forged ahead. “But I bet you never knew just how much time equals how much money. We spend about half a million dollars a month right now, about half of it on hardware development. At our current rate, we have enough money to last through the end of the year. At our last valuation, that means that every month we delay, we have to sell nearly seven hundred thousand shares of stock to stay afloat. Think about that. That’s an average of twenty thousand shares for every man, woman, and child among us.”
“Mostly children, if you ask me,” said John Zussman, looking around the room.
“That’s a lot. And it comes right out of our pockets. That’s why our schedules are so important. It’s as if we jumped out that window with the parts we need to sew a parachute.” Everyone looked outside when I pointed. “From one point of view, it’s a glorious ride until we hit the ground. That’s when our paychecks bounce. But our plan calls for deploying the parachute by the third floor, for a soft landing. The first thing we notice as we fall is that there isn’t a thirteenth floor to the building, so we’re already behind. Then we discover that it takes longer to sew than we thought. Next, we’re calculating how many bones we can afford to break when we hit. So let’s not allow any more delays.” Todd, who was leaning against a window, shivered and moved to a chair.
Mike’s hand went up. “Why don’t we just split up the five mil we have left and run for Venezuela? By my calculation, it would come to over one hundred fifty thousand a head.”
“Plus the reward I can get by turning you in,” John Zussman added.
I went on. “So, in conclusion, I have a little show-and-tell for you. Remember when you were in grade school and they had a charity fundraising drive and they would put up a big thermometer and color it in with red paint as they approached their goal? Well, guess what I’ve got.” There were groans all around as I pulled out a three-by-four-foot oaktag thermometer that the office manager had constructed. “But on our thermometer, we erase the red as the money runs out.”
We mounted the thermometer in the kitchen, and each month when the budgets were completed, the office manager would go in and mark how much money we had left. I noticed that people studied it nervously whenever they stopped in for a soda.
A few days later, I got some bad news from Mitchell Kapor. In order to reduce the potential for frivolous lawsuits, his attorneys had advised him to resign from all the boards he was on. “I’m really sorry about this,” he said. “I’m as enthusiastic as ever about the project, and I really do want to remain involved.�
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“Of course, Mitchell, I understand. No hard feelings.”
My next call was to John Doerr, to see whom he might suggest as a replacement.
“How about David Liddle?” John asked.
“The cofounder and CEO of Metaphor?”
“Yeah, I think you’d really like him, and he would add a lot of value.”
As usual, John was right. I met with David at his office in Mountain View. He was a tall, balding man with a ready smile, a slight paunch, and a love of sailing. He had a way of making you feel special, like your problems really mattered to him. It wasn’t an act; he really did care. He always had an encouraging word or some sage advice, but his most remarkable characteristic was his ability to illuminate a discussion with a metaphor of dazzling brilliance. In my experience, David was living proof of two important things: you can be honest and caring and still get ahead, and there is always someone who is smarter than you are. From our first meeting, he treated me like a close friend.
“Jerry, if you’re going to work with the kind of companies represented on the Research Board, you’ll need a big corporate partner to back you up. When push comes to shove, these customers aren’t going to buy hardware from a startup, at least not if they think they might become dependent on you. Their projects are going to require a level of support that you simply can’t provide with your resources.”
He saw the skeptical look on my face, so he called on his special skill. “When you dance with a bear, you can’t slow down if you get tired.”
“But how can I interest a partner?” I knew that Metaphor had such a relationship with IBM, and wanted advice on how to set one up.
“You won’t have to do anything. The customer is your enticement.”
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