Bill invited me in, and I flopped into a chair. “Bill, we have to talk about the competitive situation with Microsoft.” He could see that I was demoralized. This brought out the best in him. He had gained a reputation in the company as “the coach,” someone you could always rely upon for emotional support and practical advice.
He put his hand on my shoulder in consolation. “Tough time in New York, huh? Jerry, this is a group issue. Let’s discuss it at estaff.”
For the past several months, Bill had been weeding out the weaker members of my executive team and bringing in his own hand-picked replacements. First on his list of recruits was Randy Komisar, GO’s chief financial officer and vice president of business operations. Randy was a walking human contradiction. On the one hand, he was a shaved-headed former rock promoter from Pittsford, New York, who biked to work on his BMW motorcycle dressed from head to toe in leather, except for brightly colored socks and Day-Glo sneakers that had pictures of naked women, ghosts, or whatever else might strike his fancy. Weekends, he would take off for the all-night club scene south of Market, to do God knows what amid a crowd of transvestites and bohemian performance artists. On the other hand, he was a graduate of Harvard Law School who had worked for a blueblood Boston law firm. An accomplished, hard-nosed negotiator, manager, and administrator, Randy had all the skills of a high-powered lawyer and CPA rolled into one. He was a scrupulously honest and self-aware individual and could converse knowledgeably about psychedelic drugs or accelerated depreciation schedules, depending on the person he was with. Working with him was pure pleasure.
Another of Bill’s recruits was Mike Homer, formerly director of marketing at Apple USA and Sculley’s personal technical consultant. A brilliant tactician with an encyclopedic grasp of all aspects of computer technology, Mike had a round face and a high-pitched voice. His lumpish body was thoroughly discordant with his razor-sharp mind, as if a wicked witch had condemned a brilliant scientist to living out his time trapped in the body of a cherub.
When I entered the main conference room for the estaff meeting, Mike, Robert Carr, and Kevin Doren were discussing the various methods of shooting paper clips by rubber band into the wastebasket. Randy was fine-tuning the position of his chair so that he could safely lean his head against the windowsill while putting his feet up on the table.
“Hey, did you hear the news?” Randy barked as I sat down. “Microsoft just took a lease on the entire ninth floor of the building—four floors below us!”
“What the hell are they going to do there?” I asked.
“Probably set up a listening station,” Robert said. He was only half joking.
“I found out when I rode up in the elevator with Bill Gates for the office dedication,” Randy said.
“This is great, this is really great,” I said sarcastically.
Bill called the meeting to order. “Jerry, why don’t you start us out.”
I gave a brief report of the NCR announcement and my other experiences in New York. “Look, guys, this situation is ridiculous. We aren’t on a level playing field. We aren’t even on a tilted one. First Microsoft copies our stuff. Then they charge a ‘tax’ on sales of our products. And then they call the shots in forums where we should, at the very least, be on an equal footing. Our customers are afraid to speak out in our support. What the hell should we do?”
Bill looked around the table for ideas. Seeing that there weren’t any, he said, “It’s simple. We should go where they aren’t.”
I was exasperated. “Like where? They’re everywhere! I check for Bill Gates under my bed in the morning.”
Just then, Kevin pointed out that two window washers had just hoisted their platform into view outside the conference room window. “I suppose they work for Microsoft too,” he said in jest. Nonetheless, Randy got up and closed the blinds.
Mike Homer had been thinking quietly. Then he said, “They’re tied to the Intel architecture, we aren’t.”
“You’re seriously suggesting we port the whole goddamn system to another processor?” I asked.
Robert lit up. “Why not? Look, Microsoft has to deal with all the baggage of DOS and the installed base. We’ve been talking for years about how portable Penpoint is. Let’s pick one of the RISC processors and build a machine they can’t touch.”
It was a bold move, fraught with peril, but it just might work. “Intel will have a cow,” I said.
Randy was ready with an answer. “Our contract with them says we have to offer Penpoint on Intel, but they can’t force us to support it if no one wants it.”
“They’re unlikely to come after us in any case,” Bill said. Then, “Anyone have a better idea?” Everyone was silent. “OK, let’s spend the week looking into this, and finalize it before the comm meeting on Friday. Mike, you figure out which chips are realistic options. I’ll get the KP guys to saddle up their horses. Randy, you check our contracts with Intel and IBM for pitfalls. Robert, get your managers to size up the project. Jerry, you quietly test the waters with some of our most trusted ISVs.”
The news raced through the company as Robert fired up his team to work on a plan. It was as though Bill had sounded a wakeup alarm that rallied everyone from the receptionist to our Japanese product testers. By Friday, it was a foregone conclusion that somehow we were going to do it. When Bill announced the strategy to the entire company, there was enthusiastic cheering and applause.
At the beer bust I found myself face to face with Robert and Kevin. “Jesus, almost four years into this and were still trying to find a workable strategy,” I said. “I can’t believe we’re going to roll the dice again.”
“Hey, as long as someone’s willing to stake us, what the hell,” Kevin said.
“Are you really prepared for another year or more of balls-to-the-wall development?” I asked Robert.
He paused thoughtfully. “Not really.” Then he chugged down the last of his beer in several loud gulps. “OK, now I am.” The three of us laughed nervously.
“John, why don’t you rest a minute while we review what you’ve got on the board already?” Bill Campbell had invited the outside board members over to discuss the RISC issue with himself, Randy Komisar, and me. John Doerr had a habit of popping up at board meetings and writing lists of potential global partners on the whiteboard. On this occasion, his ideas for alliances were so broad that they resembled a tutorial on World War II.
Since the company had just about outgrown the entire fourteenth floor—with 130 people on the payroll—we were once again out of space. To commandeer a small corner office that had recently been converted to a makeshift conference room, Bill had to barter with a group of documentation editors who were eager to formulate their final recommendation on the optimal size of margins on a page. Bill offered to pay for their dinner if they would delay their meeting until six o’clock. Still fresh from lunch, they reluctantly accepted the bribe.
Only Vinod Khosla and John Doerr could make the meeting. David Liddle was in the middle of a behind-the-scenes battle to save his company, Metaphor, from being sold out as part of a deal IBM’s Jim Cannavino was making with John Sculley of Apple. But David had much more than his company at stake. At Cannavino’s urging, he had put his personal reputation on the line with a very public project called Patriot Partners, backed by IBM’s promise of $80 million in funding. Their ambitious goal was to place a universal “object-oriented” applications software development environment on top of all the major operating systems. This was an attempt to bring order to the chaotic operating-systems API wars and, not incidentally, to break Microsoft’s stranglehold on the market. After learning of the deal, Sculley had offered Cannavino a chance to buy into a similar technology that Apple had been quietly developing for years, thereby defraying Apple’s heavy expenses on the project. Cannavino was intrigued by the possibility of making a huge splash by forming an alliance between Apple and IBM, two former archenemies. As a consolation to David, IBM had offered to buy Metaphor outright, but only for
about one half of what the company was previously worth. Faced with the likelihood that the new alliance would badly damage Metaphor’s prospects, David had stoically accepted the inevitable, but was valiantly negotiating for a more reasonable price.
Ignoring Bill’s request to slow down, John began drawing lines on the whiteboard between three columns of names, one representing European companies, one for the United States, and one for Asia. Since there was no eraser in sight, he had to use the heel of his hand, which by now was a mass of black, red, and green splotches from rubbing out and rewiring the connections. “We’re going to need global partners to be successful,” he said. Randy winced at me.
Vinod was concentrating on the board. “It looks to me as though there are two stable camps,” he said coolly, hands folded just beneath his chin. “And they hinge around two basic RISC-chip technologies, the ARM chip and the Hobbit chip. The ARM chip has the broadest reach. We could join forces with Active Book in England—who is just about ready to release their ARM-based pen computer in Europe and has approached KP for money—and Matsushita in Japan, who I believe has taken a license to manufacture the chips. Since Larry Tesler is also using ARM for Apple’s Newton project, there’s a lot of momentum behind the chip now. The Hobbit is more of a stretch. Right now it’s an orphan, but with AT&T behind it, we could easily get their usual partners—Olivetti in Europe and NEC in Japan—behind it pretty quick.”
Randy hadn’t been around long enough to be comfortable with John’s aggressive style and Vinod’s bold strategies. He leaned back and folded his arms behind his head, as a counterpoint to John’s and Vinod’s growing intensity. “I’m all for international cooperation, gentlemen,” Randy said, “but we’re bleeding cash, and bad. So let’s let the air out of our shoes. At our current rate, we’ll be broke in late August. The Hobbit may be an orphan, but AT&T is one hell of a rich uncle.” He put his feet up on the table, revealing on the bottom of his sneakers a psychotic array of wavy ridges with the words “Air Mowabb” in the center.
“You’re one to talk,” John said, pointing to Randy’s soles.
“Check out his socks,” Bill said, then returned to the topic. “IBM is beating us senseless to stop competing with them in the hardware business. Maybe what we can do is spin out our engineering group—maybe even sell it to AT&T—and agree to port Penpoint to the Hobbit. This way, we can save the jobs of our hardware team and get the new financing we need.”
“Don’t forget,” I added, “that Tesler ditched the Hobbit chip in favor of the ARM, leaving AT&T high and dry. We could be just the ticket to save AT&T’s project.”
Vinod wasn’t going to give up on the ARM so easily. “But if we convince AT&T to switch to the ARM chip, we could hit a home run. We could get Active Book, Matsushita, and AT&T.”
John rubbed the heel of his hand with a handkerchief. “Bob Kavner, a group executive at AT&T, has a keen interest in communication devices. He’s worked closely with Bernie Lacroute, who has just joined Kleiner Perkins from Sun. Let’s ask Bernie if he would be interested in starting such a venture with Kavner and AT&T based on the ARM chip.”
It turned out that KP had been in discussions with Active Book for some time, just as we had been quietly sounding out AT&T on developing some sort of partnership. Nonetheless, Bill, Randy, and I were stunned into silence. It seemed implausible that AT&T would ditch tens of millions of investment dollars at the urging of one of the KP partners. Yet John seemed quite serious, and Vinod was nodding his head in approval.
John was eager to charge ahead. “I’ll get the ball rolling.” He bolted down the hall to find a phone, presumably to call Lacroute, with Vinod close behind.
Bill looked bemused by this new turn. “I guess the meeting’s over. Let’s let them give it a try, then we’ll get this thing back on track.”
Randy shot me a skeptical look. I shrugged and said, “Look, they’ve made more outlandish suggestions than this—and been right.”
Soon Lacroute was on a plane to AT&T headquarters in New Jersey, to put this proposition to Bob Kavner. It was no surprise when he returned empty-handed. John Doerr called to give us the news.
“Kavner wouldn’t go for it,” he said over the speaker phone in Bill’s office. Randy mouthed the words “Of course,” then adjusted his chair so he could balance his head against the wall. “So I called Active Book,” John said, “and asked if they would switch to the Hobbit instead, if we agree to fund them.”
Randy grabbed a corner of the desk as though someone had tried to tip his chair over. This was equally unlikely. Active Book was just about to release its own ARM-based product. Not to mention that the CEO, Hermann Hauser, was part of the team that had developed the ARM in the first place.
“And?” Bill said, as straight as he could. I was clutching my stomach, trying not to laugh out loud.
John paused, then said, “And they agreed. So Bernie’s now working with Kavner, who’s interested in funding the whole GO hardware engineering team, combining it with Active Book, and starting a global GO spinoff—if my partner Bernie will run it.”
Randy snapped his chair upright with a bang. I was so shocked that I stood straight up. None of us could speak.
“Hello?” John said. “Are you guys still there?”
Bill moved his jaw up and down several times, trying to get his mouth into gear. “Uh, yes, we’re here, John.” He couldn’t think of anything else to say.
John continued, making the matter sound entirely routine. “We need to get a proposal in front of them ASAR Randy, can you work something up?”
“We can do that,” Randy said, regaining his composure. “You’ll have it first thing Monday.”
Bill hung up the phone. Randy shook his head and said, “Gee, Toto, I don’t think we’re in Kansas anymore. Bill, if I ever question these KP guys again, kick me.”
Bill faked a practice swing with his foot.
I walked over to the window and stared out at the Pacific fog rolling in over the western hills. “I just don’t get it. Why on earth would Hauser tear up his product plans and go for such a wacky deal?”
“There’s only one reason on God’s green earth,” Bill said. “The poor guy must be even more desperate for cash than we are.”
One of the lucky breaks I had at GO was in hiring an executive assistant who cared deeply about people. Holli Maxwell would listen sympathetically to the woes of employees, investors, customers, and ISVs, then take on their problems as if they were her own. More than she could imagine, her actions helped set a tone of service and respect throughout the organization in a way that no written policy or corporate mission statement could.
One day, I walked by her desk to find her sitting quietly with tears streaming down her cheeks. “Holli, are you gonna be OK?”
Rather than answer, she handed me a letter, neatly written on lined paper torn out of a school notebook and addressed to me. She watched as I read it.
I hope this letter findes ya at a good moment. I wrote it many moths ago and am only now sending it to your company.
To Go computer . . .
I think it would be sad to just have big bussiness gain the power of this operating system. So I feel it would be a wise thing to seed your computer and operating systems to non business pepole, mostly artists and teachers, and seinor citizens, and disabled pepole. And althrough you might not choose to give me one, I would apprichiate you at least takeing this to heart and searching out these type of pepole to help, because these pepole have a lot to offer . . . may be not money but they are full of ideas and potentall . . .
I am servily learning disabled . . . My wife Lini who is a Kinder teacher and I run a play group, and I spend a lot of time designing things . . . my learning disability make it practicly imposabl to make sense or remember the cryptx and abstract think of D.O.S. . . . As it happens I believe to be compleatly taken over by your hole concept and product . . . so I think this is my dream come true . . .
School for me was, as might b
e amagend, painfull, if there was anything I could do for someone else esspically some one who is learning dissabled I would be happy. As I see it, technology for as much as it has done for bussiness it has greatly missed the opituneity to help a broard base of pepole . . . The Artist, teacher, learning disabled, sinor citizen, all these pepole have a very unique way of seeing and comuni-cating, and I think it is our responsibility as a society to provide them with the tools and then to listen to what they have to say . . . I could no way forcast great financial gains from this group but I could most certinly grantee there would be much to be learnt from them it they were to be incorparated into a longe range goal of commentment by you.
Joseph DeRuvo
Holli looked at me, wondering what I was going to do. I went directly into my office and wrote a response.
Dear Mr. DeRuvo:
Thank you for your thoughtful letter. I can see that your disability does not prevent you from thinking clearly.
While GO’s technology will help large corporations work more efficiently, its main impact will ultimately be on individuals, as you observe . . .
In the modern world, access to technology is access to information, and information is power. This new freedom can benefit individuals as well as societies. Delivering computing power in a simpler, more accessible form can empower a broad group of people beyond those that use computers today. Our society tends to leave behind people who are not “plugged in.” Perhaps our work can help a new group of people to be productive, to participate, to communicate, to belong . . .
Startup: A Silicon Valley Adventure Page 24