No Better Time

by Molly Knight Raskin

  Success in a speculative bubble is a funny thing. It was thrilling and intoxicating in ways the country hadn’t seen since the 1980s, or, some might argue, ever. But almost as soon as the bulk of that wealth was accumulated, speculation began as to when it would all end.

  By the close of July, shares of Akamai fell twenty-one percent on concerns over an increase in marketing spending. Investors became concerned because the company, which by then had a global network of four thousand servers, said, during a conference call with analysts, that it planned to increase spending on marketing and hiring. Nitsan Hargil, an analyst at Kaufman Brothers, replied, “People are afraid that Akamai is about to turn into another one of these Internet companies that spends its way into oblivion.”{70}

  Few customers joined, but the markets were tanking too fast to respond. At the start of September, CNNFN’s Digital Jam featured guest Andrew Barret, an analyst from Salomon Smith Barney, to talk about the “high anxiety” in the tech sector. A caller phoned in a few minutes into the show with a question, to which Barret responded.

  Caller: “Hi. Thank you for taking my call. My question is Akamai. What do you see in three to six months?”

  Barrett: “Well, the Akamai situation in terms of the streaming side of the equation is really, really positive. Unfortunately, nobody wants to own: a) a web based stock, and b) a name they can’t pronounce half the time. So this is really been one that’s taken a beating.”{71}

  To steer the media away from their stock price, Akamai’s executives issued positive news releases. One of Greenberg’s last stories for Akamai, before leaving the company to focus on his own business, was about Akamai’s creation of Akamai Foundation, a math foundation tailored for kids and aimed at making math more interesting and fun with a “Magic of Math” program. The story noted that employees donated amounts ranging from several hundred to more than a million dollars of their own money. Leighton served as the foundation’s director.

  Akamai also began preparing for the launch of EdgeSuite, its new flagship product that would enable Web sites to deliver entire pages to customers across Akamai’s network of servers.{72} EdgeSuite improved on the FreeFlow service, which mostly facilitated the delivery of large, static objects such as photos, ad banners and video. With Edgesuite, customers would have guaranteed delivery of constantly changing data such as weather and stock quotes as well as blocks of news stories. EdgeSuite was scheduled for launch in December 2000, and was already in use with beta customers including Apple, Coca-Cola, Novartis, Ticketmaster, and Victoria’s Secret. As soon as news of EdgeSuite got out, market watchers started speculating as to whether it could revitalize Akamai’s stock market presence. Conrades told reporters the company expected the service to generate $30 million in revenue in 2001, with customers paying $40,000 a month for EdgeSuite versus $8,000 a month for the FreeFlow service.

  Unfortunately, no amount of fighting could prevent the continuing stream of bad news. To close out the year 2000, Internet stocks fell 75 percent after more than doubling in 1999. And, after a record-breaking 160 percent return in 1999, shares of Akamai sank 94 percent to $21.06 in 2000. The company had lost more than 150 dot-com customers, approximately 10 percent of its base, with more losses on the horizon. “We were burning cash like mad,” explained Leighton. “Our stock was clearly headed south, and the markets were tanking.”{73}

  Chapter 10

  B’SIYATA DISHMAYA

  (With the Help of Heaven)

  “Time is too precious. A life is a moment in a season. A life is one snowfall. A life is one autumn day. A life is the delicate, rapid edge of a closing door’s shadow…”

  —ALAN LIGHTMAN,

  Einstein’s Dreams

  DESPITE THE FACT that the markets were no longer betting on Akamai, company executives chose Las Vegas for their 2001 sales kickoff. To mark the official launch of EdgeSuite, they flew several dozen employees and advisors out to Sin City for a few days at the Mandalay Bay Hotel & Casino.

  As VP of sales, John Sconyers said that, despite the market downturn, the mood was celebratory. Akamai had a new service, and with it the promise of new customers. They were in Vegas, and for a time, they felt like big winners. “We were just pinching ourselves,” Sconyers recalled. “It was an unbelievable experience.”

  Employees, customers and members of the company’s board were put up in swank suites and handed substantial wads of cash to gamble. Ironically, it was the only time Dwight Gibbs of the Motley Fool recalled any sort of dispute with Lewin, who insisted that Gibbs, a member of the company’s customer advisory board, stay in an upscale suite. “I said I didn’t like the optics . . . Danny would hear none of it,” Gibbs explained. “It was a mild kerfuffle, and eventually Danny won. I should have given in immediately. It would have saved us both a lot of time.”

  The featured event of the sales kickoff was a speech by Lewin, who announced the official launch of EdgeSuite with much fanfare. Notwithstanding the reality of the plunging markets, he was ebullient and optimistic. “Isn’t EdgeSuite a crappy name?” he asked, pausing for a laugh. “Luckily, we use it to our advantage. Microsoft also told me EdgeSuite was a crappy name, but they said we also have a crappy name so [they] respect companies with crappy names. So we should keep it even though it sucks.”

  Lewin acknowledged the company’s losses, but pumped up the mood with a reminder of how far they had come. “When markets go down, they also go up, and when the upturn comes, we can be a hundred billion dollar company. Seriously, we can be.

  “Our attitude, which has been true since the beginning, is that we set these massive goals. Going out a year ago and saying we’ll deploy thousands of servers at the edges of the Internet and sign up thousands of customers was kind of a crazy thing for a few people sitting in an office at MIT. We had to work like maniacs and pull all kinds of crazy stunts to make that work, but that’s how we work—we set huge goals.” With his boyish smile, eyes ablaze with excitement, Lewin declared, “No matter what happens, we will not lose. We refuse to lose.”

  Although none of Akamai’s executives, including Lewin, were the type to go out on the town, Las Vegas beckoned. Many enjoyed a few late nights, and two employees eloped. Then they all flew home and the work started all over again. And in the new climate of uncertainty, this meant working harder than ever before. It meant more business trips, more hours at the office. In short, it meant a lot of Akamai’s employees were almost never at home. “I got sucked in, Danny got sucked in, and we both sucked each other in, and you never escape that,” recalled Leighton. For some who had families, the absence of work-life balance began to take a toll. Spouses complained, relationships outside work fractured, and some couples split. “It’s hard to stay married when you’re in that life because you’re working all the time, and when you’re home you’re still in work mode,” said Earl Galleher, who left Akamai in early 2000. “But it was also so exciting, and we knew we were in this time that wouldn’t last forever. Even in the moment, we’d say this may never happen again in our lifetimes, and we’d just go [on working].”

  They could rationalize the grueling schedule with the promise of a big payout. But even life-altering economics wasn’t enough to make some marriages work, including Lewin’s. As a result, he and Anne separated temporarily, and he moved out of the family home. To many co-workers and friends, the fracturing of his relationship with Anne didn’t come as a surprise. While he always counted her and the boys as his top priority, Lewin’s primary commitment—for the better part of two years—had been Akamai. “No one was spending a ton of time with anyone outside the office—this was all we did,” said Jonathan Seelig. “The company had an impact on everyone’s personal lives.”

  In some ways, Lewin’s flirtation with freedom could have been the result of losing his adolescence in an unwanted move to Israel. Friends say that, with no time to enjoy young adulthood—like summers spent at the beach or parties in college dorms—Lewin had an unsatisfied need to cut loose and enjoy his st
atus as a high roller at the top of the boom. In July 2001, Enterprise Systems named him to its list of top ten leaders in technology, writing: “Lewin has the power to determine his company’s future in what will likely be one of the most fiercely competitive IT markets over the next two years—content delivery. While a down economy has made companies reluctant to take on the expense of innovative technologies, analysts still see a huge market for solutions that speed the transmission of data over the Internet. If Lewin continues to drive innovation at Akamai, the Cambridge, Mass.-based firm could be in position to reap the profits when demand starts to pick up in this space.”{74}

  While Lewin never let his money inflate his ego, he did have a lot of it. In April 2001, Forbes magazine ranked him number 72 out of its “The 100 Highest Rollers”—an annual list of top-earning titans in high-tech, topped that year by Bill Gates. At age 30, Lewin’s net worth was $285.9 million. Just below him was Leighton, 44, worth $284.3 million. The text read, “These guys [Leighton and Lewin] can freestyle algorithms in their sleep. Plus, Lewin’s experience in the Israel Defense Forces should come in hand as the battle for Internet content delivery gets bloodier…”{75}

  Lewin used some of his money to buy a new home, which he lived in for some time without Anne. It was a bachelor pad, outfitted with a hot tub and a Sony sound system. But Lewin also set up a room for Eitan and Itamar, his commitment to his sons unwavering. He hosted a few parties and bought a few more motorcycles—BMWs and Harleys. And, for a time, Lewin also started dating other women. The fact that Lewin strayed from Anne wasn’t talked about much at Akamai. There was the occasional whisper; people had a sense of what was happening almost as soon as Anne stopped coming by. But there was too much pressure for anyone to really stop and judge. They were worried about their stock equity, their countless hours at the office, even the future of their jobs at Akamai.

  Saving Akamai from the crash became so labor-intensive that Lewin didn’t even have much time to enjoy his flirtation with a single life—or even a life of great wealth. By the spring of 2001, friends and family were having a hard time connecting with Lewin by cell or e-mail—he was always too busy. For the first time in years, Greenberg and Lewin went months without speaking. Sometime that spring, Lewin sent Greenberg a brief note saying he was sorry. “I’ve been a bad friend,” he wrote. Greenberg didn’t need an apology. He knew Lewin was fighting to keep Akamai, and his personal life, afloat.

  By April, no measure of confidence could keep the feeble markets from taking a toll. The company carried out its first layoff, eliminating more than 180 jobs, or 14 percent of its work force. At the same time, Akamai warned that its revenue for the first quarter and the full year would fall well short of earlier expectations. In an official statement, the company said its business suffered because of general economic weakness as well as “continuing fallout among dot-com customers.”{76}

  Lewin was beginning to feel the strain, and upped the pressure on his staff. On May 8, at 10:30 p.m., he sent a four-page e-mail to his project management team. In it, he hammered home the belief that they needed to reassess their “leadership” roles for the company to make its goals of 150 new customers and an average $20K in monthly recurring revenue.

  FROM: danny@akamai.com

  Talking about how to lead people can be a little “cheesy” at times; however, in my experience you need to get over the discomfort and create a plan to lead—just like you would create any plan of action…There are a zillion things a great leader does to create and lead a team…I want to focus on the ones I believe are the most important. There are only three:

  1. Lead by example

  2. Suffer together

  3. Hold people accountable and get rid of non-performers

  If a team needs to work weekends to be successful—the leader will work weekends, holidays and nights.

  In July, Forbes ran a story under the headline “Akamai’s new Internet turbocharger saves Web sites money. Can it save Akamai, too?” It summed up Akamai’s predicament well:

  With Akamai stock down from $327 just 18 months ago to $7.60, Conrades badly needs this bet to pay off. Last quarter the company lost 150 dot-com customers, more than 10% of its base, with another 50 expected to drop away this quarter. Conrades has no margin for error. If EdgeSuite doesn’t catch on, his firm will become yet another footnote in the history of dot-com madness.{77}

  By summer 2001, Akamai’s stock was so low (at $5) that Leighton recalled a conversation with Lewin in which they both thought how great it would be for it to go back up to at least $20. “Neither of us ever got really down. And the one percent of the time one of us did, the other would smack the other around a bit,” said Leighton. “But the reality at that time was that things looked rough and we weren’t going to escape it.”

  It might have been the fight to keep Akamai alive, or maybe it was just some strange, inexplicable combination of circumstances that collided sometime late that summer, but Lewin gained a much greater perspective on his life outside Akamai. First came a visit from his mother and father, the first one Charles had made since Danny, Anne, and the boys left Israel five years earlier. When asked why he didn’t visit more often, Charles Lewin said very little, noting his decision was rooted in “principle.” Friends of Danny’s speculated that to leave Israel, to him, would be to leave the life he created for his family when he made the bold decision to make aliyah. He didn’t want to endorse a life for Danny of some big-moneyed businessman, trapped in the culture of wealth that exploded in the dot-com boom. Of course, Peggy Lewin, who often visited Cambridge, disagreed, calling Charles’ decision one made “out of stubbornness.”

  Danny had made several trips to Israel that year to see his family, but friends say he desperately wanted his father to come to Cambridge and see what he had built. He wanted him to be proud. Peggy didn’t know exactly why Charles changed his mind. Nor, for that matter, did Charles. In the first week of September 2001, Charles and Peggy arrived in Boston for a long weekend. They toured Akamai, walked around Cambridge, and talked over a lot of what life had thrown at them over the course of five years. Looking back on the visit, Charles said, “Things occur that we don’t understand in the usual frame of our understandings, and my going there was one of them.” He added, “It was something b’siyata dishmaya [with the help of heaven].”

  One evening during that same week, Lewin called Seelig, who was then living in the Back Bay neighborhood of Boston, and asked if he could drop by. It was late in the evening—sometime around 10:00 or 11:00 p.m.—but it had been months since Seelig had the opportunity to talk to Lewin outside of Akamai, so he welcomed him in. Over beers and a game of pool, Lewin and Seelig caught up on everything—work, life, family. Seelig recalled that Lewin seemed to have an unusual sense of peace about him. Lewin told Seelig that the visit from his parents, particularly the chance to see Charles in Cambridge, was monumental. He also told Seelig that he thought he’d figured out how to make his marriage work and that he wanted to spend more time with Anne and his sons. He stayed until past midnight, and when he left, Seelig had the distinct sense that something in Lewin had changed. “I remember him leaving and that I thought, ‘That felt really good.’” Seelig noted. “He seemed so grounded and stable.”

  With more layoffs ahead, it was a terrible week for Akamai, but Lewin approached the tumult with his usual cheer and buoyancy. He was scared—the stock had plummeted and a few of Akamai’s customers were on the verge of collapse—but he didn’t show it. On September 10, Lewin called a meeting at Akamai for more than a dozen employees. In a conference room, Lewin offered up a new vision for the company, one that was clear and well planned. “Danny was very focused,” observed Julia Austin, who was still in charge of the engineering team. “He told us that we were going to shift direction and talked about where we were going next as a company.”

  At the end of the meeting, which lasted well over eight hours, Austin and her co-workers—somewhat daunted by the task at hand—tried to
convince Lewin to change his plan to travel to Los Angeles the next day and stay in Cambridge to shepherd the layoffs and restructuring. Lewin opened his Blackberry and, for a moment, seemed to consider it, but then said he couldn’t, adding “You guys will be fine.”

  Later that evening, Leighton and Lewin got together for the grim task of eliminating approximately 500 of the company’s 1,500 employees. Both of them knew it was just the first round; by their estimates, Akamai would have to downsize at least 500 more for any chance of survival. Then they’d have to handle the issue of morale; they’d have to convince those who remained that the ship wasn’t sinking. “I remember that night distinctly. It was a horrible, horrible night,” Leighton said. “We recruited these people. They were our friends, and we’d all worked so hard together.” Leighton said Lewin was emotionally drained by the layoffs. He’d personally hired so many staffers, and he agonized over the decision of whom to let go.

  Leighton and Lewin worked through the night, and as the hours ticked by, they talked not just as business partners, but also as friends. “It had been an unusual week for Danny in some respects. A lot had transpired and he had definitely reached some closure on a bunch of issues related to his family,” said Leighton. “It was good that he had that opportunity to have his parents visit and that his Dad was here. He had a sense of peace.” Leighton also recalled Lewin talking about a motorcycle accident he’d had a few weeks earlier, when a car swerved and hit him, causing a minor injury to his shoulder. Lewin said that instead of approaching the driver and knocking him out, he realized he was in pain and that it would be better to just back off. “It was a surprising thing for him, because he was always on top as it were, and there was always this sense that no one could hurt him,” said Leighton. “He did say that he’d come to grips with his own mortality in some sense.”