Lessons from a Garage

Henry Fonda of SHR

(originally published Feb 16, 2007 - published again, today, as a rememberance of Mr. Johnson)

An English friend was always eager to explain sarcasm to me - like I didn't get it.  He would say something sarcastic, and then explain, "Oh - you yanks don't understand sarcasm.  See, when I said it was bloody good that the software crashed just then - I meant it wasn't actually very good at all. Don't you see?  That's called S A R C A S M.  Get it?"  He was like a waiter with a dessert tray explaining the vanilla pudding in excruciating detail.  Yeah, I get it.

Actually, my friend had no idea who he was dealing with.  He couldn't understand my dead-pan responses to his "jokes".  After all, I knew he was trying to be funny, it's just that he wasn't funny enough.  And, I really can't fake amusement. 

Worse yet, this guy never understood my sarcasm.

My sarcasm is Boston-style.

If you're from Boston, then the only other people who will truly know when you are being sarcastic are other Bostonians.  And furthermore, you'll never tell!  You'll use dead-pan methods to plead sincerity until the bitter end.  And then, when you're at the bitter end and you confess your sins of sarcasm to Father O'Flaherty, he'll just smirk and say, "Oh I'm SURE God will have no problem with that AT ALL!"

When Bostonians listen to other Bostonians every word is measured against a secret Sarcasm-o-meter.  As a Bostonian, it takes years and years to tune your Sarcasm-o-meter.  You can start tuning it as early as Kindergarten.  "Sure Barry, eat more paste -- that's great"!  I also found that frequent trips to Fenway Park were helpful as I got older.

The sarcasm thing goes hand-in-hand with the deadpan thing.  If you're not really sure if someone is being sarcastic, deadpan is like a defense mechanism. It can be interpreted as "This is funny, I'll go with it", or "of course you're being sincere - I feel so bad for your sister.  Is schnecktolitus always fatal?".

With this in mind, imagine my surprise when I discovered that the master of deadpan and the prince of sarcasm were embodied in a single person. That person was Craig Johnson.  He was the founder of Venture Law Group (aka VLG), and shockingly, he wasn't from Boston.

Worse yet, he looked just like Henry Fonda.  In fact, not only did he look like Henry Fonda, but he had the mannerisms of Henry Fonda too.  Henry Fonda; an icon of sincerity.  Craig's DNA was sneaky.  Very sneaky.

------------------

Craig and I had just driven back from Quadrus Cafe on Sand Hill Road in Menlo Park.  He was very excited about Reality Fusion, and he wanted to help make it successful.  Besides being the founder of VLG, Craig was one of the founders of Garage.com.  He was one of the most influential people on Sand Hill Road.  Besides all that, he was also a really nice man.

Craig and I were strolling across the parking lot outside VLG, returning to his office.  He was telling me his views on startup companies, and Garage.com in particular.  He was super optimistic that Reality Fusion was going to hit a major home run.  But he had also been playing a little hard to get.  Like something was on his mind.

Suddenly, he paused and said, "Barry, I want you to promise me something".

I said, "Well, what is it"?

He looked down, and then peered out to the horizon. "Barry, you're going to be wildly successful with Reality Fusion - and you're going to make a lot of money - you know that, right"?

"Sure, Craig,  I know that".

He shifted his feet a little bit, and then he put his hand on my shoulder and said, "I want you to promise me that you'll do some good things with the money.  I want you to donate some of it to a worthy cause.  Maybe start a philanthropic foundation for needy children or something.  You can name it the "Spencer Fund", or whatever you like.  Okay?  Will you promise me that?"

"Of course, Craig.  Sure."

He continued, "...because with great success comes great responsibility. Try to remember that - okay?"

Talk about putting the cart before the horse! Like other people I've met, Craig was a master at painting a beautifully tantalizing picture, and then hanging this picture in front of you like a carrot on a stick.  But that's not a nice way to put it. Calling it "focused on success" would be a far nicer way.

Anyhow...

Here's where my story gets a little lame. I can't remember the name of the book that I was reading; I thought it was "Startup", but apparently not. It was a very popular book at the time - especially in Silicon Valley. In fact, I think it was on the NY Times Best Seller list.  Anyhow, the book was an autobiographical account of a "regular guy" that started a high tech company - the company skyrocketed and then I think it tanked.  Anyway, after a few years, the guy ended up with nothing more than an interesting story to tell.

In the book, there was a scene between the protagonist and his VC, where the VC delivered basically the exact same speech that Craig had just delivered to me. The crazy thing is that I had read the passage in the book only a few days before this meeting with Craig.

I didn't know what to think.  How could Henry Fonda be delivering the same speech as the VC in the book?   In fact, it Craig that recommended that book to me in the first place!  DIdn't he know that I'd figure it out?

Of course he did.   He was being funny, of course.   But, duh, I didn't get it.

Now that I know Craig better, I can't help but see the humor.  Maybe I had even told him I was reading the book.  I'm not sure I did, but I like to think so.

------------------

Garage.com was big on adding value to its startup companies.  A huge part of Garage.com's added value was Craig. He had a rare combination of helpfulness and non-meddlesomeness. He was a little bit like a chemist.  He'd mix different people together and see what happened. "Barry, meet Larry.  Larry does this. Barry does that. Okay, now let's see if we can figure out some way that you guys can help each other out".

One such chemistry experiment took place after a meeting in Craig's office.

Even though Craig was the head honcho at VLG, his office was totally understated. It was the same office as the rest of the 70 or so other lawyers at VLG - with one key difference. Craig's desk was extremely organized.

Craig also had a collection of interesting little widgets in his desk.  He had one in particular that he would take out and play with while he talked to me.

"Barry, we need to find an investor for you.  I don't know if you read the Mercury News or not, but they published a list of the top-compensated Silicon Valley executives last year.  Right on the top of the list is a fellow named Joe Costello. Have you ever heard of him"?

"Actually, no -- never heard of him, Craig".

"Well, since you need money, and the Mercury News says that Joe has money, perhaps we should try to speak with him".

To me, this sounded like a good idea.  I figured that Craig would set wheels in motion, perhaps in time we could locate this Costello person - or maybe some other people from the list. Craig might spend a week or two on it - with the help from an assistant or two.  Maybe I could help, but I doubted it.

I replied with, "Sure Craig, sounds great.  How do we do that"?

Craig said, "How about I give him a call".  And with that, Craig picked up the phone and asked his assistant to get Joe on the phone. Craig hung up and waited. He spoke with me some more, and played with his widget.

Then, perhaps 30 seconds later, the phone rang.  Craig said, "Okay, put him on". Craig put the phone on speaker, and put the handset back in the cradle.

"Joe? This is Craig Johnson at VLG.  We haven't met. I have Barry Spencer here in my office.  Barry started a very interesting new company which looks like it's right up your alley.  I think you should meet with him".

It turns out that Joe had just read about Reality Fusion on a recent flight back from Italy.  Fortune Magazine had done an article on the company, Joe read it on the plane, and he was already interested. (This is another case of serendipity.)

A few days later, I met with Joe at the Garage.com headquarters.  He loved what we were doing, and within 10 minutes of meeting he said he'd invest.  (Someday I'll write about Joe. For now, I'll practice my writing skills and wait for the day that I'll be able to reach the level of eloquence necessary to express my deep gratitude for his 9 years of supporting Reality Fusion. For now, I'll simply say that Joe is "super fantastic".)

This introduction to Joe was typical of the assistance that Craig provided.  Some of the introductions we asked for, others times we were introduced simply because Craig saw a good fit.

Footnote: Craig was also the lawyer that helped me out of a jam with "Feebix".

Zorap

Harriet Smith Windsor is my best friend.    Harriet is the Secretary of State of Delaware.  A few weeks ago she certified the Certificate of Incorporation for "Zorap Inc.".   Zorap is my new venture.

Zorap, the company, is purely virtual.   The company headquarters is a rack at the Internap Data Center in San Jose.   It is chock-full of servers, switches, power supplies, wires and other stuff.

Employees use VPN connections to commute to work in the morning.   The data center holds our precious source files, a build machine, as well as our production web servers.

We use a Google business account for e-mail and hosting our homepage.

Payroll is done through Paychex.

We have a wonderful and insightful angel investor who invested in our seed round.

So, what does Zorap do?   Zorap, the technology, is the next step in online presence.   It is the first technology that actually lets you "be on the web".

Web experiences, by and large, involve a person (you) interacting with content that was created at some point in the past (a website).  Zorap, on the other hand, allows a person (you) to interact with your friends or colleagues on the web.   It's just that simple.

When it comes right down to it, there are few choices for live human-to-human communication on the web.   Here is a list:

• Tools like Skype or AIM which let you communicate over the Internet - but these tools aren't actually part of the web, they are stand-alone programs.   You have to sign up, download them, install them, run them, and then "call people" (telephone style) to see them or hear them.   You can send instant messages, but text is a limited form of communication.
• There are chat sites, but anonymity makes these pretty chaotic and adult-oriented.
• There are conferencing products, like WebEx.   
• There are plenty of games, but games don't offer the ability to express yourself - they just let you play the game.

What if you just want to get together with your friends online?   THAT'S what Zorap is all about.

I don't want to say too much more at this point; I have intentionally cloaked the project in an air of mystery.  It is not a good idea to spill too many beans until we are up and running.  (by the way, you should beware of paragraphs which include the words "air" and "beans")

As you could probably tell by my hyper-sparse entries on GarageEntrepreneur, I have been pretty busy with Zorap.    We have written a lot of software, and soon, we should have a beta sign-up form on our homepage.

Stay tuned!

Attention VCs!

When I was in high school, I worked as a part-time bagger/janitor/deli clerk at the Star Market in Wellesley, Massachusetts. On slow weeknights I would get bored and practice my comedic talents by telling jokes over the public address system. If I didn't have any jokes, I would read weekly specials using a subtle amount of "exaggerated exuberance". Other times, I announced random newspaper articles or excerpts from the manual for the Hobart deli slicer.

Attention Star Shoppers. If the meat grip is not needed, it may be stored out of the way by sliding it to the top of it's travel, rotating it under the carriage tray and allowing it to rest on the retaining clip. Thank you for shopping Star Market.

The customers were the best audience ever. 20 to 30 people scattered throughout the store, each in their own world, each weighing important purchasing decisions; jarred peaches, canned peaches, or half-price dented can of peaches? Is this cantaloupe ripe? Should I buy more Space Food Sticks? The humor blind-sided them - I loved to interrupt their "focus" and watch them laugh.

(by the way, here is a great old commercial for Space Food Sticks)

My experience on the microphone at Star Market helped me later in life, when I started to give presentations. Most audiences - particularly VC audiences, need to be shaken up in order to get their attention. They need to be taken out of their "safe place", challenged by something unexpected, captivated early, and filled with curious anticipation.

Here are some tips on presentations:

Have a goal. Think about what you want as a result of your presentation. Avoid passive goals. Do you really want to inform, present, show or demonstrate? Probably not. You probably want to SELL, ENROLL, GET, BUILD or INFLUENCE. Your presentation shouldn't be a crap-shoot. It isn't a chemistry experiment either. It's your opportunity to influence others.

Know your audience. If your audience is a VC, you should understand that VCs see hundreds of presentations every year. If you know who you are meeting with, do some research in advance. Understand who they are, and what they are interested in.

Subtly mention something that demonstrates that you know your audience. "Larry - I know that you invested in XYZ corp - this startup is similar to that because...". You will win some important bonus points by doing so.

Flatter your audience, if possible. You don't want to be a sycophant, but if you come up with a compliment of some sort, you will gain additional points. Limit the flattery to either before or after the formal part of your presentation so it appears to be genuine.

Preparation is everything. Not only will your presentation be more effective, but you will feel more confident and prepared. This confidence will show-through during your presentation.

Highly structured presentations can give you a false sense of security. You will think, "with this level of organization, even a monkey could get through it". But be careful - if you build a presentation with the idea that you have a nice "safe place" to present from, you will lose touch with your audience. Also, many potential investors intentionally disrupt structured presentations to see how the presenter will react. Instead of finding comfort through a structured presentation, find comfort by knowing your audience, anticipating objections, and having a clear purpose.

Be slightly irrational - let your passion show through. Don't go overboard though. Ideally, you want to come across as insanely enthusiastic but capable of respectful restraint. Act like your "meds" happen to be working really well at that particular time. Better yet, act like you took your meds just before the meeting - out of respect for the audience.

Don't just talk about your feelings unless asked. Never say, "I love this because..." Demonstrate love. Make it obvious.

Know your stuff. You're not an actor, you're an expert. Anticipate objections and make a list of answers in advance.

Don't preface your presentation by saying that you aren't good at presentations. People want to see presentations from people who ARE good at presentations, not people who AREN'T good at presentations.

Practice, practice, practice. Find an audience to practice in front of. Give the presentation to other people on your team, your kids, your wife, your mother-in-law. Tweak your presentation as necessary. Take notes during these practice sessions so that you remember what you want to tweak.

Show graphs, not tables of numbers.

Use "show and tell" style to keep your audience's attention. Boil your presentation down to 10 slides. Make a PowerPoint file for each slide. Name them with simple names like "Overview", "Marketing Plan", "Product Plan", etc. Put them in a folder and sort them alphabetically (so they are NOT in any logical presentation order). When you arrive at the presentation, open up the folder and put it on the screen. One big empty folder with 10 icons. Open up slides as you need them. When you are done with a slide, regain eye contact by closing the slide and returning to the blank screen for a while. By doing this, your audience will not be able to anticipate your next move - and you will remain in the forefront of their minds.

Your goal is to avoid "the squint". The squint occurs when your audience starts to fixate on the screen rather than you. "The squint" is a clear sign that you've lost their attention. It's a tricky move on their part. They look like they are thinking about your value proposition, but in reality, they are trying to remember their shopping list for an upcoming trip to Star Market.

Reality Wrist Fusion

Dr. Samuel Scott of Portland, Maine rebuilt my left wrist last Thursday.  Doctor Scott called it "4 corner fusion".   I call it by a bunch of shorter names, like "oww", "YOW", "DAMN", "crap", "Ooooo", "umph", and "sheeee-it".  My wrist throbs under a few layers of bandages, while I struggle to type at a pace no faster than a typical a CEO.

The procedure involved removing the cashew sized scaphoid bone (labeled "A" in the diagram) using expensive bone-crunching pliers called rongeurs. 

After the scaphoid was removed, the remaining bones were stabilized by fusing the Lunate, Triquetrum, Capitate, and Hamate bones together.  (labeled B, C, G and H respectively).  This fusion (also known as arthrodesis) takes a while.  But once it's complete, I will be able to ride my bike and swim without annoying grinding and pinching.

I'll let you know how it goes.   

Get Out!

When I started Reality Fusion a colleague from Borland named Song Huang came to the garage for a demo. I showed him our super-cool video interaction software. He was impressed. Then, we sat down outside and talked about the business plan.  Song was vibrant, practical, hard working and experienced. I wanted to hire him as VP of marketing. Everything was going along great until he asked me about the "exit strategy" for the company.  I was totally confused.  Exit strategy?  Talk about putting the cart before the horse! The ladder to the 2nd floor office was falling apart, risking the ankles of prized engineers. Why should I care about exit strategy? We didn't even have a company coffee maker and yet Song was asking about exit strategy?  What-the-heck?

(see garage ladder after repairs and reinforcement in picture to the right)

Why didn't I care about exit strategy?  Quite simply, I didn't want to exit!  I was building an exciting workplace with great technology, great products, great customers, and great employees.  If I worked at a place like that, then why would I want to exit?

Furthermore, I actually didn't want to focus on a specific outcome.  I wanted to focus on the company itself.  I thought success simply comes to those who are trustworthy, hard working, passionate, loyal, outspoken, smart, adaptable, and innovative. Man, I was such an idiot!

Furthermore, I considered my lack of a clearly-identified exit strategy an admirable trait - it showed that I was committed. It showed that I was in it for the long haul. It showed that I wasn't just there to make a fast buck and move on. I remember feeding this idea to investors.  They ate it up like Krispy Cremes at a Raiders game.

Reality Fusion was actually the second company that I started with no discernible exit strategy.  The first company was an outsourcing business named Cool Software.  Damn!  Fool myself once, shame on me. Fool myself twice, well, shame on me... again.  OUCH!

However, through the miracle of hindsight, the blessing of capitalism, and the curse of future college tuitions, I have come to see the error in my ways.  I also see how the forces around me conspired to keep me distracted from the importance of a sound exit strategy.

My mistake was rooted in the subtle but important differences between Building-a-Great-Company vs. Actually-Succeeding.

Business as an Abstract Art-form / Layoff Rants

Creating the business was an artistic endeavor.  It was a perfect application of my creative talents. It was a more lasting goal than simply selling out ASAP.  As such, the company became a work of art.  There was an inner beauty to Reality Fusion that could be seen in our innovative technology, and by the passion of our "core team".

We had powerful building blocks that could be used to create amazing next-generation video applications. We had versatility.  We could do "anything with video".  We had talent.  We had the expertise to make real products.  We had committed and loyal employees.

(Popova: Two Figures)

It probably sounds hokey, but people loved Reality Fusion.  Especially employees.  As the founder, it broke my heart to lay people off. They weren't just losing their jobs. They were losing a dream.

Did I ever write about layoffs? Layoffs really, really, really suck. Like clockwork, once a new CEO started, one of his profound revelations would be the urgency of immediate staff reductions. It didn't matter that the previous CEO had just laid off 40% of the staff a few months earlier. New CEO means New Wrath.  That's the deal.

Since I hired most of these people myself, I would usually volunteer to do the nasty deed myself.  So, there I was.  I was talking to a kid who had been working in QA. I told him that we had to lay him off.  I gave him the papers and thanked him for a job well done.  This process usually took 3 or 4 minutes.  Now that the deed was done, it was "door time".

But this kid just sat there.  Speechless.  An awkward amount of time passed.  He tried to figure it out.  A sad, deflated kid.  He started asking questions - not confrontational questions mind you, but probing questions - about the company. What were we going to do? What was going to happen to the company?  What about the other people?  He wasn't nearly as sad about losing his job, as he was sad that he would no longer be part of the company.

This was a reaction that I often witnessed just prior to "door time"; shock, paralysis, idealism destroyed, misguided wisps of determination, frustration, tears and sad fare-wells. Sometimes there was anger, but usually it was short lived.  People know that lay offs are not negotiable.

All the time I'm thinking; WHAT UTTER BULLSHIT.  Why am I doing this?

Anyway, back to that whole artistic thing.  We created an amazing company.  It was a work of art.  Like a work of art, it was uniquely judged in the context of the beholder's mind.  Our beholders were investors, other board members, and officers of the company.  Each found their own value, by looking at the company in different ways.

As an abstract beautiful thing, Reality Fusion had universal appeal.

Reality conFusion

Inevitably however, when the concrete started to set, detractors surfaced.  One investor thought we were a floor wax.  Another investor thought we were a desert topping.  But when a new CEO took the initiative and decided we were an industrial lubricant - the art started to take form.  The unfortunate consequence of the incarnation of any specific form, was that it would be judged wrong by a majority of our investors. Bad CEO!  No bonus!

As long as Reality Fusion's mutual vision was undefined - people were free to fall in love with their own unique visions.  The board of directors and the management team wanted the company to succeed.  Naturally most people's visions were painted with optimistic tones.

We had vehement agreement on two points; (a) the software is great and (b) we are all success-minded optimistic people.  Maybe one other thing; (c) collectively, we are smart enough to "figure it out".

Sadly though, we were wrong about that last point.  We had some of the biggest brains in Silicon Valley, and yet we weren't able to figure it out.  The result was a 9 year dance of ever changing business plans.  Kid's Video Games one day, Adult Web Site the next, Enterprise Software the day after that, Hardware Appliances, Plug-in Applications, Screen Savers, Resalable ASP Services, you name it, we did it... well.. for a little while at least.

ADD - Achievement Destruction Disorder

Once I had mountains in the palm of my hand,
And rivers that ran through ev'ry day.
I must have been mad,
I never knew what I had,
Until I threw it all away.
  -Bob Dylan

Whenever we finished something, its lack of instant success fed the detractors and gave birth to new doubts in the minds of the supporters. "See, it wasn't an industrial lubricant after-all!"  These snap judgments would occur within weeks or days of a product's release - long before we had the attention of most early adopters.

I know that Microsoft is an extreme example, but look at the success that they attained with Microsoft Word.  MS Word release 1.0 was a total piece of shit. It was ugly, slow, hard to use, and unreliable. If any venture funded high tech company produced a product like this, their doors would be locked and the keys would be handed over to auctioneers the very next morning.

Microsoft succeeded with MS Word because they had a long term commitment to its success. When things were screwed up, they'd fix them. If someone couldn't do something, they'd find someone else to do it. As it is, I doubt that MS Word is the best word processor out there, but it is certainly the most successful.

This long term commitment isn't overlooked by users.  MS Word users are secure in the knowledge that the product will be supported by Microsoft for the long run.

At one point, Reality Fusion had a little business named CameraCafe. CameraCafe was a pay-for video chat service with a very loyal following of 2000 users. These users didn't fit the "dream profile" for any of us. It seemed that many of them didn't own pants. However, truth-be-told, these were loyal users who loved the software. These people were early adopters.

The company failed to add substantial improvements to CameraCafe and never attempted to "cross the chasm" as we should have. CameraCafe was relegated the status of "back-burner business" while we focused on other art projects instead.

The "art factor" was just one of the problems that we faced when we were focused on Building-a-Great-Company.

I brought my own baggage too.

CODE GUY Unleashed

I like to invent things. I come from a long prestigious line of inventors. But unlike my ancestors, I haven't invented anything as significant as the Microwave Oven, the Thermostat Switch, or the Spencer Carbine. I invent software instead. Software is a little squishier than Carbines. With software, it is hard to define where one idea ends and another begins.  Furthermore, software changes more rapidly.  But that doesn't stop me from inventing cool things.

Here are some fun names for software objects that I invented while working at Reality Fusion:

• MultimediaDemultiplexingStreamReceiver
• SmoothBYTEArray3x3
• AutoSnapshotMatteCompositor

I figured that a super-cool company should have super-cool technology.  My team and I created a vast library of amazing software objects that could do all sorts of things.  The library was created over time. It was a byproduct of work we had done along various product paths.  The pieces were very modular, and nicely reusable.

Unfortunately, my compulsive tendencies towards building stuff and our ability to quickly change courses didn't help us focus on a specific path.  We could be a floor wax, a desert topping, an industrial lubricant, or a leave-in conditioner - it didn't matter. We were usually only 6 months away from being almost anything.

I was too eager to prove the company's worth by embarking on the business plan du jour.  With hindsight, I believe that too much flexibility, especially by the company's founder, is bad in the long run. Somebody has to take a stand and put their job on the line. I was too busy playing the part of the obsequious servant to take a stand.

I had one feeble moment in the sun though...

SHOOT ME NOW, PLEASE

At one point, I took over as CEO. In fact, I insisted that I become CEO. The board relented.  It was a complicated situation.  Several CEOs had already failed.  We had 3 "heavyweights" on the board. I was determined to figure out the secret formula that would make them all happy.  I tried, but I couldn't do it.  It didn't occur to me to say, "fuck it, I'll just do what I want god damn it!". Again with hindsight - that's exactly what I should have done.

Adding to my difficulties as CEO was the simple fact that 1/2 of the board thought I was unqualified to run the company. I was the tech guy, not the business guy.  They might have been right, of course.  But one thing was clear; I didn't have a snowball's chance in hell of figuring out the right business plan if they weren't going to support me.

Actually, this really pissed me off. Every CEO that we hired had the unrelenting support of the board.  Except me.  Every CEO that we hired had a great severance package. Except me.  Bffffttt!  (naturally slipped out of my mouth just now...)  This shouldn't have surprised me. After all, the board's job is to find a CEO to replace the founder, not allow the founder to replace the CEO.

No support from the board makes it hard to make the board happy.  No severance package makes it hard to take a stand.  (Incidentally, severance packages are where CEOs get their balls from. You won't be afraid to get fired if "fired" means "nice vacation" and time to regroup.  I've spent a year regrouping so far, on my own freakin' dime.  Hey, do I sound pissed off?  Good.  You bet I am!)

OKAY, THEN SQUISH ME INSTEAD

For most of the company's history, I wasn't the CEO, I was the CTO.  I've come to believe that investors think CTOs are like bugs in bottles.  Put them in the bright sun for too long and they dry out.  Forget to feed 'em and they "go to sleep".  Shake the bottle too often and their legs fall off.  Leave the cover off and they flitter away.

Sure enough, there are a lot of bad things which can happen to a bug.  Investors know that.

Investors want us to protect us.  They want us to focus on technical jobs like digging tunnels, collecting nectar and building hives. At Reality Fusion, the board believed that technical people (myself especially) should stay out of business decisions and simply do what they are told.

I made far more money for the company than the total money made by all five hired-in CEOs. But that didn't matter.  I wasn't the CEO.  I was the founder - the worst kind of "bug" there is.

One day I was rolling dung-balls during a board meeting, when an investor announced that we were changing course. He and the CEO had discussed it in advance. I asked some questions. The investor was quite perturbed. While I hadn't actually voiced any specific objections to the new plan, my questions were not well-received. The investor refused to answer questions and said that I was "too attached" to our prior product plan.  Shit! I had just worked around the clock to finish the prior product plan - of course I was attached. That's how we finished it - BY BEING ATTACHED!

Here I go on another rampage.  Total non sequitur - should be a different post... anyway we were working on the aforementioned product plan. It was a huge project. We had from April to September 15th to complete it.  As we got closer and closer to September 15th, people started working around the clock. People slept in their offices. Stacks of empty pizza boxes collected downstairs. We were DETERMINED to complete it on time.  Our CEO didn't think we could do it. In fact, he told me over and over again that we couldn't do it.  I ignored him and pushed through. We delivered it on September 15th. It turned out that the CEO had promised the product to our distribution partner for September 29th. He padded the date by two weeks and never told us.  Phhhfffttt!

Anyhow, (calming down), that was a typical scene. "Barry - back in your jar, right now!"!

I can almost understand the jar scenario.  Take care of the CTO; keep him focused on the task at hand. That's not such a bad thing. It becomes a bad thing when exit strategy doesn't make it from the minds of the investors to the head of the CTO. If I don't understand the exit strategy, then I am going to make crazy decisions. I don't know if the board ever had an explicit exit strategy. If we did, I never heard about it.

I think that investors are conditioned to treat the CTO and other key developers as assets and keep them out of potential exit strategy discussions until the very last second.  If an acquisition wasn't an established exit plan, people are going to react in unpredictable ways. They might be happy, they might be angry; they might feel insecure about their jobs.  They might take a "wait and see" attitude. They might wonder if they have to relocate. All these distractions can derail an otherwise productive product team.

When a company gets acquired, the investors and the CEO typically cash out and move on.  CTOs and technical folks end up working for the acquiring company. These differing fates further compartmentalize and isolate the technical team.

Of course, you can avoid all this by having the entire company embrace a clearly defined exit strategy in advance. If the company continues to think that distraction is a factor, you could even explicitly agree that technology folks are going to be isolated from acquisition discussions. When it happens, it will be pleasant surprise for all concerned.

I Wouldn't Want to Hire a CEO that Would Actually Take the Job

We hired 5 good men as CEOs of the company.  Each was talented.  Most were likable.  Most were honest.  Unfortunately, none of them led the company to success.

My ideal CEO would:

1. Decisively figure out a plan - including exit strategy.
2. Show it to the board of directors as a "read only" event.
3. Secure additional funding from lead investors as a condition of continued employment.
   -> No additional funding (i.e. runway) means no CEO.
4. Demand that the board support the plan 100%.
   -> No hold outs.  No doubters.  Work through issues up front.
5. Use the money, plus the staff to execute the plan.
6. Operate without a safety net - no severance agreement.
   -> Committed to ride the ship to the bottom.

Unfortunately, I don't believe that you can find a "hired in" CEO that matches these criteria.  I think that people of this stature start their own companies - they aren't looking to raise somebody else's baby - especially if meddling biological parents oversee their every move.  I guess I could be wrong about that. But I doubt it.

Most CEOs that would enter a situation like this are willing to take direction directly from the board, and seek explicit approval from the board. If the board isn't decisive, the CEO isn't decisive.  It is that simple.

You gotta have one person in charge of the company.  One person to take decisive action. At Reality Fusion, we never had one person.  At Reality Fusion, the board of directors ran the company.  Bad idea.

Why would Birds of Different Feathers Flock Together?

You might be wondering how we ended up with a Board of Directors with such diverse opinions.

Since we weren't committed to a particular direction, the team and the technology were like a Rorschach test; you see what you want to see.  Investors invested because of their own vision of the company. This vision was not necessarily shared by the rest of the investors.

For the existing investors - they didn't really care about the vision of the new investor - they cared about the terms of their investment.

There was a harsh example of this.  One of our rounds of investment came from a guy who was misinformed of the company's product plans.  The strategy for the company changed while we were in discussions with the new investor.  Our CEO thought about it, and decided it would be best if we didn't clue him in.  The investor loved the old vision. The guy thought he was investing in a floor-wax company, but he invested in a toothpaste company instead.

So there you have a few factors that led to Reality Fusion's demise.

Focus on Actual Success

Let's shift gears and look at what might have happened if we focused on Actually-Succeeding instead.

First you'll notice that succeeding implies that you're actually going to do something in particular.  Your goal is not to be a great athlete; instead, your goal is to win the high-jump.  In high tech, this victory is an exit strategy.

Let's say your exit strategy was to sell a business to Google, Microsoft or IBM.  Here are some things that you might do to succeed at this venture:

First, get everyone marching to the same beat.  Start with a leader who is willing to emotionally and financially attach to the success of the venture. Look for investors who agree with the strategy.  Look for employees who believe in the strategy. Look for technical folks who believe in the strategy, and who wouldn't mind eventually working for Google, Microsoft or IBM.

Next, understand the value proposition. Your product or technology must increase the market share for the acquiring company.  If you aren't giving them users, you are giving them the ability to get users.  Be clear about that.

Primp.  Do things that make you attractive to an acquiring company. Make your user interface match the UI guidelines of the target companies.  Join their development programs. Join their partnership programs.  Suck up!  Publicly praise their accomplishments. Go further - ask them about their values. What would they consider important attributes of a successful application?

Think long and hard about integration. How could you integrate your technology without needing the acquiring company to "engineer" anything? Use APIs from the target companies whenever possible.

Watch out for the "little company gotchas". If you don't run on all the platforms that the acquiring companies consider important, then have a clearly defined porting strategy.  If your software is English-only, then build a localization strategy.

Don't build things that an acquiring company might already have. ESPECIALLY, if the potential overlap represents a complicated integration challenge.

Incorporate standards whenever possible.  The only time you should avoid a standard, is if your core business is an improvement over the standard.

Create barriers to entry.  Facilitate viral adoption. Amplify switching costs.

Define yourself clearly.  Do this through explicit actions.  Patent your technology. Document your intellectual property. Bottle the secret sauce. Identify the demographics of your end users. Create a road-map for your product.

When your company gets acquired, celebrate!  Give everyone a gold medal. If you've done a good job, everyone wins. You won't end up with mopey developers who believe they got screwed, while the investors are chowing down on Crispy PakaPaka at the Wakaya Club in Fiji.

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Lotus Footnote

Lotus was an example of a large scale identity crisis.

It was 1986 or so.  Lotus had 1200 employees.  100% of revenue was coming from the 1-2-3 code base. The company had 10 to 20 diverse, albeit amazing, projects in development.  But, no one was working on Lotus 1-2-3.  In fact, when Jim Manzi (CEO) finally decided that the company should resume working on Lotus 1-2-3, the source files could not be found.

What happened? Lotus 1-2-3 was magic.  Its success led to a huge influx of brilliant artistic minds.  But none of them believed that a product as mundane as a 2 dimensional spreadsheet could be a recipe for long term success.  In fact, most of these brilliant minds believed that 1-2-3 was going to fail at any minute.  They thought it was a fluke.  So, everyone scrambled to create something better than 1-2-3. It was an art studio for a wide array of projects.  Instead of being a small company that couldn't make up its mind, it was a big company that couldn't make up its mind. One of the biggest accomplishments at Lotus, during that time, was corporate child care. They were a pioneer in employee benefits. They didn't, however, win the battle for the desktop; 1-2-3 was beaten by Excel,  Ami was beaten by MS-WORD, etc.

The company also exhibited signs of ADD - Achievement Destruction Disorder. Lotus Symphony, for example, was considered by most people in the company to be a failure because its sales didn't exceed the sales of 1-2-3.  It didn't matter that it was the 4th biggest revenue generator in the industry at the time.

Eventually, out of the chaos, emerged Lotus Notes. Lotus Notes saved Lotus. Lotus Notes, however, wasn't actually developed by Lotus. It wasn't one of those 10 to 20 projects.  It was developed by Ray Ozzie's team at Iris Associates.

Westward Flight

When Paula and I were looking for a new place to live, we chose Santa Cruz, California.  It promised a great mix of easy-outdoors-lifestyle, with close proximity to Silicon Valley.

We moved from the Boston area - where everything seemed old and dingy.   Santa Cruz, on the other hand, was bright and new and shiny.

When we first got there, I couldn't help but compare California to Boston.   The weather was much better - Santa Cruz was sunny and clear.  On most days you could easily go for a bike ride, or play tennis, or just go exploring a trail in a nearby state park.

The people were much nicer and outgoing.  In Boston, you could buy groceries and never once be acknowledged by the cashier - except when they ask you for money.   In Santa Cruz - even the gas station attendants were friendly and helpful.

My favorite time of the day is early morning.   In Boston, I would get to work very early (InSaNeLy early, some would say) and walk through the Boston Common after parking my car in the underground parking garage.   The city would still be asleep.  Homeless people would be sleeping on benches.   Amazing super-huge rats would walk brazenly down the streets.   Trash would be piled next to overflowing trash cans.  Pigeons, pigeon feathers, and pigeon droppings were everywhere.   Man, I hated those Pigeons.

My mornings in Santa Cruz were completely different.

One morning, just after dawn, I was walking on West Cliff Drive in Santa Cruz.  "West Cliff" is a scenic oceanside road and walkway that meanders along the coastline from the Boardwalk to Natural Bridges State Park.

I had walked about 2 miles when I saw a beautiful flock of birds flying in unison.   There were perhaps a 100, maybe 200 birds in all.   They flew like a school of fish in the first rays of the morning sun.   I watched them dart to the left and swoop down low near the water.   I saw them pump their wings and rise up high above the pathway.   Their movements appeared random, except that they moved in perfect unison.   Coordinated randomness.

I am not a "bird person" - but these beautiful California seabirds were unlike anything I had seen on the east coast.   The whole scene was inspirational - the sun rising into a cloudless sky, the shimmering Pacific Ocean, and those amazing birds on the horizon. 

As I walked along the pathway, I got closer and closer to the flock.  It took about 5 minutes before  I found myself surrounded by them.  Then, ever so softly, the huge flock landed on the path in front of me.   Pigeons.

I guess we were all just California transplants after-all.

(Sunrise picture courtesy of my good friend, Geoff Gilbert at SunRiseSantaCruz  GO TIGERS!)

SexyGirlBlonde

A few days ago, I published a post entitled, Old School Books, where I discussed some of my favorite entrepreneurial books.

Notably absent from this list are some of the classic works of Mr. Guy Kawasaki.  Guy is a fantastic author - his book, Selling the Dream, occupied the precious real estate to the immediate left of my keyboard for a few years.  (By placing Guy's book to the left of my keyboard, it was within easy reach, but safely outside of the hazardous "coffee ring zone" to the right of my keyboard.  Most of my Intel and Microsoft reference books are decorated with rings of Sumatra coffee and Golden Dragon Ooolong tea from Peets).

Guy's books are great.  They are chock-full of powerful ideas and advice on sales, marketing, leadership, planning, and evangelism.  He has some cool case studies that further emphasize his teachings.  For a computer programmer hell-bent on succeeding in business, his books were exactly on target.

One day, I had the great fortune to receive a copy of Rules for Revolutionaries in the mail, sent and signed by none-other than Mr. Kawaski himself.  It was a happy day!

(Guy Kawasaki was also the first person to invest in my startup; Reality Fusion)

In a couple of his books, he talks about "Letting a Thousand Flower Bloom" - a phrase originally attributed to Chairman Mao, but recycled by Guy to apply to modern life.  I'll paraphrase (i.e. butcher) his overall point as; "Let your audience find the true value in your work".

For example, if you build a great little ladder for reaching high cabinets, but most people use it as a plant stand, then don't fight it; You've got yourself a plant stand business!

Here is a story of how I let a thousand flowers bloom, for a little while at least.

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In the fall of 1998, Reality Fusion received funding from Garage.com to market products based on our super-cool video interaction technology.  We hired a CEO and pursued a partnership deal with Logitech. The result of this partnership was a product called GameCam.

GameCam was a great product, for sure. Unfortunately though, it suffered in couple ways; first, with an MSRP of $140 - it was way too expensive. Second, we were banking on Logitech's marketing to help drive the sales of the product.  Logitech, a peripheral manufacturer, didn't have much experience marketing software products.

Sadly, GameCam found it's way to the sale racks in a hurry. (A few years later, Sony would reinvent GameCam as their product, the Sony EyeToy)

By the fall of 1999, Reality Fusion was in trouble.  GameCam was considered a failure.  At a pivotal board meeting (another story in the making) we decided to change course.

We decided to build an Internet Video Chat service.  It would eventually be called SeeSaw.

We set our sights on another company who had an audio chat service called HearMe. HearMe was on the verge of introducing video. More significantly, however, HearMe had a valuation of $1.5B.

When I was asked if we could one-up HearMe, I said something like, "no problem, it's just software".  The idea was to create an upbeat video chat experience where grown-ups, kids, friends and family could get together in "virtual rooms" with up to 100 people in each room. The rooms would be organized in a hierarchy of lobbies.

We designed the service, created a project plan and a schedule.  I was so confident in our plan that I scheduled a vacation immediately after our "proof of concept" deadline - I figured I'd need a break.

A couple of months later I demonstrated SeeSaw to the board of directors.  I was on vacation, in a room at the Bar Harbor Inn, in Bar Harbor, Maine. I was on a dial-up connection.  The rest of the board was in an meeting room at the offices of Venture Law Group in Menlo Park, California. We also had a few employees join us from the company headquarters in Santa Cruz.

To say the meeting went flawlessly would have been an understatement. The experience was almost perfect. The audio was great - with no hiccups, and the video windows were smooth and free of artifacts.  My son Nicky was jumping on a bed, while my other son Julian toddled around the room. The sights and sounds of "angry dad" trying to control the boys were transmitted flawlessly across the country.

This proved to be yet another serendipitous experience.  The meeting was a super-important milestone, we needed to demonstrate software that worked, and worked well.   And we did exactly that.   Afterward though, I realized that we were very lucky.    Soon after the meeting, the software simply stopped working. We discovered that some of our base assumptions were wrong. We had problems with interference between audio and video packets. This required a huge redesign.

A few more weeks passed, we regrouped and finally we were ready to launch SeeSaw.  This was a big event. Everyone in the company invited their friends and family to participate.  We sent video cameras to 50 or so close friends of the company.

We also did some grassroots promotional activities on the HearMe site - attempting to "convert" their user base.

These two groups of human beings were very different. Unfortunately, we didn't take this into consideration.  One group consisted of our fathers, mothers, uncles, sisters, close friends, wives - people that you might hang out with on Christmas day while wearing a funny holiday hat.  These people had names like Walter, Linda, Christy and Phil. The other group consisted of people who enjoyed anonymous on-line exploits.  They had names like LatinaTX, HookR, Hello78 and IWannaFUNKYou.

Back to those flowers.  I don't really know much about botany, but as it turns out, some species of flowers simply can't coexist with other species.  My wife's great uncle Giovanni tells the story of his experience on SeeSaw; "I was talking to Paul and Emma (my in-laws) and suddenly this man came into the room and took his clothes off!"

Over the course of a few hours, these naked flowers, their admirers and various other people took over the site. Over the course of the next 60 days, our membership grew from 0 to almost 95,000. At it's peak, we had 2000 users "video chatting" simultaneously.

One of our early adopters was a user named "SEXYGIRLBLONDE".  SEXYGIRLBLONDE was a "wee bit" of an exhibitionist. As such, she LOVED SeeSaw.  Click here to see a video of SGB in action. Don't worry, she keeps her clothes on.

I know that Guy Kawasaki wasn't all that happy that we let these particular flowers bloom, but I just gotta say ...  If you ever have a customer that's as happy with your product as SEXYGIRLBLONDE was with ours, then you're definitely doing something right!

If I was selling content management software for example, and my customer suddenly jumped up and starting doing a SEXYGIRLBLONDE dance - well, I'd seriously consider raising prices.

It took about 9 months to get from product conception to 95K users. We successfully absorbed most of HearMe's user base.

Sadly though, just as SeeSaw peaked, community sites were no longer in vogue and we had to change course yet again.

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Reality Fusion continued developing video conferencing services for other markets, and ended up launching 5 different video conferencing services in all. We also created the underlying technology that was used for another 4 services that were marketed by other companies.

Meyer's Perspective

John Meyer sent me this e-mail after reading my Labors of Love post a couple days ago.

Barry,

The entries in your blog made my day (no, they made my month and perhaps more). Not only are they very kind to me, but they also bring back great memories of a time when everything seemed possible, and where those possibilities had a way, more often than not, of turning into realities. Especially (pun most definitely intended) with Reality Fusion.

As for "that day," I have described it many times to many people. When I tell the story, I always point out that it was one of the most memorable days of my life, but that it was most certainly THE most memorable day of yours.

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I remember that you left the hotel room before I did, and about five minutes after you left, the phone rang and Paula was on the line with the news. Within ten seconds, my mind was filled with thoughts about how we could still make this work. Could Max do the demo? Could he and I do it together? I normally would have loved the chance to do it, but didn't know the things to avoid (as I remember, there were still ways you could crash the demo).

The DEMO facility was a five minute walk across two parking lots from where we were staying. I had to run/jog over there and, after arriving, wasn't able to find you right away. I think I found Max and Chris first and we immediately tried to get hold of a travel agent to get you on a flight. However, the storms up north were amazingly fierce, and were headed our way. All flights were either cancelled or delayed.

I can remember that Chris had set up computers in the hallway outside the conference, and they all had Internet connections. No big deal now, but this was VERY advanced stuff at the time when most computers were still using dial-up connections.(As you pointed out in your other post, your company had to resort to a satellite connection in order to get any connection faster than 56K -- T1 was available, but at $1,000/month).

Anyway, those computers were connected to the Internet, and I went over to them and was able to find a weather radar site. I couldn't believe what I saw. I have never, since that day, seen any radar image in California that was even remotely like what I saw. It was a solid band of red, stretching diagonally across the state, intersecting Santa Cruz, and marching slowly down towards us. I talked to my wife on the phone that morning, and she said that she'd never seen rain like that in California.

When we finally caught up to you outside the auditorium and gave you the news, we'd already found out that there were absolutely no flights from Palm Springs, but that we might be able to drive to L.A. and fly up from there. A few quick driving/flying time calculations showed that to be a lousy idea, especially since it seemed likely that those flights would be cancelled as well. We then talked about driving back home, and all of us figured that if you did it yourself, given the emotion and the pressure and the weather, that it might be more than a little hazardous. For both personal and professional reasons, we didn't really want you to take that risk, so we figured a companion would be a good idea. Since Max knew EVERYTHING about the company, and I was just a part-timer, I was the obvious choice to do it.

We then hustled you into the auditorium, and you immediately -- based on the change in schedule -- went up on stage.

I'm not sure I've ever seen a better demo. First of all, when Chris announced that your wife was in labor, there was an audible gasp in the audience. As a result, to quote a famous movie line:

"You had them at 'hello'."

Second, the Reality Fusion technology was (and still is) stunning. It would be hard to come up with a demo that was inherently more fun to watch.

And third, you were, to put it plainly, brilliant. Your deadpan, understated style, combined with the sheer brilliance of the technology, both contrasted with the obvious tension and urgency of the moment -- company on the line, baby due any minute -- and made it one of the most compelling presentations ever witnessed.

What you leave out of your blog when you state "Reality Fusion was one of 6 companies to be chosen DEMOgod" is the fact that this choice wasn't just something made anonymously two days later at the end of the conference, but instead was something conferred upon you unanimously, immediately upon your departure from the stage. As I remember it, you concluded your presentation, begged the audience's pardon for not being able to stay and take questions, and then briskly ran off the stage and out the exits (a wonderful, if unintended, theatrical move: "Elvis has left the building!"). Someone in the audience shouted out, "Demo god!" This was picked up by someone else and pretty soon the crowd was almost chanting "Demo god, demo god!"

We had your bags packed while you were speaking. The engine was running, and we were on the road in less than two minutes.

As for the trip itself, it was raining hard -- REALLY hard -- the whole way. I had made my mind up that I was going to drive the whole way because you, quite frankly, looked pretty damned frazzled. I also made my mind up that you were going to see your kid get delivered, come hell or high water (I really did think that, recognizing even at that moment the irony in that old phrase, but not realizing what we would actually see later on). I think I often approached 90 mph and as a result, more than once, you told me to slow the heck down (or something like that), which I did.

As for calling to find out about road conditions, the thing that got me started doing that was when we needed to stop for gas the first time. I pulled off at an exit, and found out that the power was out because of the storms.

No power, no gas pumps, no gas.

We had less than a quarter tank and it was a long way to the next exit. We quickly discussed the options: Go back to previous exits where they still had power; wait here until the power returns; or press on and hope we find power before we run out of gas. We decided to risk it and press on. It was then that you and I both started calling ahead to find out where we might find power and gas. I can't remember now if we found it at the next stop (which was twenty minutes further up the road) or the one after that. What I DO remember is that when we finally reached the station, the gas gauge was absolutely pegged on empty.

The other thing I remember were your conversations with Paula. The contractions were getting pretty close, and we were still a long way away, but you kept telling me about her first delivery and how long it took, even after the contractions were close together. I kept hoping we'd make it ...

We finally reached Pacheco Pass (156) and started our westward trek towards Santa Cruz. As we went over the pass, you lost cell reception, and for over half an hour you couldn't get an update. As we came down the pass, still out of cell coverage, we hit a detour because of the storm and we had to go north towards Gilroy. We then came down from the pass into the farm area southeast of Gilroy, and there the cell reception returned. You got on the phone and called Paula and got the news that you were a father again. Exactly at the moment that I heard you respond to those words I looked out the windshield and saw a couple in a canoe paddling away from what was left of their flooded house. For the next twenty minutes, we rode slowly through what had become a disaster zone, with houses partly submerged on either side of the road. It was an "out of body" experience for me. I cannot begin to imagine what it must have been like for you.

About half an hour later, we met my wife at a pre-arranged point so she could take me home and you could drive directly to the hospital.

While I failed in my determined effort to get you home in time for the big event, it took a major act of nature and an act of god -- a DEMO god -- to make that effort fall short.

John

P.S. In your blog you state that I was a product of the Great Lakes Maritime Academy. I did in fact get my merchant marine certificate from that location (I served one summer on an iron ore freighter), but I didn't actually attend the institution.

Technical Folks

Downtown Santa Cruz is a wonderful place. Like any great city, there are plenty of tasty restaurants and interesting stores - but beyond that, Downtown Santa Cruz is just plain entertaining.  The sidewalks have a wealth of local color; From Umbrella Man, to YoYo Boy, to Angry Woman - you never know who you're going to bump into.

For a while, I considered a Micro-Entrepreneurial quest to create a set of Santa-Cruz-Personality trading cards based on the dozens of interesting people who live in, around, over and under the great city of Santa Cruz.  On one side of each card, I'd have a photograph of the person.  On the other side, I'd have stats.  For example, for Umbrella Man (a notoriously slow walker), I'd include maximum speed in feet-per-hour.  For Raging-Guitar-Man, and Small-Mexican-Violin-Man, I'd have musical stats - like "number of songs known". For RGM, this would be 3. For SMVM, it could be thousands - he seemed to improvise a lot.

I was also going to conduct interviews. I figured that I could assemble short life stories to be featured along with the stats.  Sadly though, despite support from close friends, I was always too busy to follow through on the trading card idea.

Speaking of interviews and interesting people I've met on sidewalks, that reminds me of a story - which also had it's roots in downtown Santa Cruz.

My first startup company was Cool Software; a small outsourcing company located across from the Palomar Inn on Pacific Avenue in Santa Cruz. Cool Software, like the name suggests, was very cool.  I commissioned a local artist to build a beautiful green and purple neon sign for the front window, which overlooked the Pacific Garden Mall.  We always had a wealth of super-cool outsourcing projects from Silicon Valley. We may have been better off skipping the sign, and naming it something like "Recurring Revenue Software" - but that wouldn't have been nearly as cool.

Anyway, when Cool was in it's infancy, we had 4 talented employees; 3 from Borland, and 1 from Microsoft.  This was a good starting point, but we needed more. I wanted to round out the team with some junior programmers and testers for a QA department, so I advertised in the local paper.

I have always had a hard time interviewing people. I find it hard to get a feel for someone in an interview.  You can look for the obvious warning signs like nose-picking, bad breath, needle marks and hairy-sandal-feet - but once you've established "base credibility", you've got to do more research. It's not easy.  Recommendations aren't that useful.  I suppose if someone couldn't find anyone to recommend them, that would be one thing. But generally speaking, recommendations are always positive and therefore useless.

One of the people I interviewed and later hired, was a girl named Jennifer.  I hired her because she threw my calculator across the room.  She wasn't trying to scare me, she was showing off her awesome ability to "stress test".  In some way, Jennifer was completely off the radar - I considered this a good thing. I think she ended up being a pretty good tester, if I'm not mistaken.

One night, while I was locking the front door to the office, I heard footsteps approaching from behind.  I turned to find one of the recent interview candidates standing on the sidewalk smiling.  His name was Jeremy.  He was a recent graduate from UCSC and was biding his time working at a local bookstore while he searched for something more interesting to do.

This was either a serendipitous chance encounter, or a planned strategic meeting on his part.  He asked me about "the job". Did he get it? I didn't believe in serendipity at the time.  I figured that he was genuinely excited about the job.  So I hired him.

Jeremy turned out to be an awesome hire and great a friend - he worked for me continuously from 1993 until just last year - 13 years in all. He is now VP of Engineering at ClipSync.  Perhaps I'll hire him again someday.

While Jeremy and Jennifer were pretty good at figuring out how to get my attention, other technical people weren't as effective - but ended up being great employees just the same.

I've had the pleasure of hiring and working with a wide variety of people. Over time, I've noticed a trend. Many brilliant, reliable, loyal, and otherwise highly competent technical people are terrible self promoters. On the other hand, most marketing and sales people, being marketing and sales people, understand how to sell themselves during job interviews.

If you are starting a company, and you want top technical talent, be prepared to "dig deep". Look for subtle signs of passion.  Interview in a relaxing, non-confrontational environment.  Take them to lunch, or out for a cup of coffee.

It may be a vast generalization, but I think that most programmers are not genetically disposed to tie-wearing. Important veins and arteries can be pinched, causing a noticeable decrease in apparent IQ. For this reason, I usually suggest that tie adorned interview candidates loosen their ties a bit and try to relax.

Don't judge technology folks by their interview skills, look for what really matters.   Look for people with a positive attitude who are loyal, hard working, smart, and up-to-date.  Oh, and don't hire assholes.   Even if you, personally, can put up with one or two "prima donna"s - that doesn't mean that your staff can.  Your staff is like a chemistry experiment - beware of corrosives!

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I don't have the full story, but I know that Umbrella Man, who's real name is Robert Steffen, was actually a former rocket-scientist/electrical engineer at NASA.   He also tried to run for president once.   His campaign was conducted from a cocoon of green plastic trash-bags on a bench in Downtown Santa Cruz.  He didn't win.  Man.  People are SO superficial!

(Umbrella Man Photo Courtesy of Rob Watson at Photo Phun)
(Nerd picture from my somewhere on my hard drive)

Labors of Love

My wife's name is Paula.  She and I had a competition a few years back to see who could deliver the most awesome baby.  She won.

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My garage at it's peak had about 8 people working downstairs and 4 working upstairs in the attic.  Needless to say, I had really nice neighbors.

Since the "office" was so crowded, we took advantage of the cobblestone driveway for meetings. 

One day we had two meetings going on -- one on the planter box by the lemon tree, another on the brick wall by the swing set.  There was also an interview with a local TV station by the back steps to the house - complete with microwave up link. My first son, Nicky, was 4 years old and rode his red tricycle in circles on the cobblestones.

All we needed was a midget on a swing and some clowns bouncing on trampolines and I'm sure Fellini himself would have shown up with a camera to film the whole thing.

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So anyway, Paula and I had a couple of baby projects.  When Paula was a few months pregnant with our second child, I was a few months "pregnant" with Reality Fusion. Paula was due in mid January of 1998. I was due in February.

Paula's project took place in the house, on one corner of the cobblestone driveway.  My project took place in the garage, on the other corner of the driveway.

Of course, calling her project "Paula's project" isn't really accurate. It was my project too. Only, my participation was more "executive level" than hers.  Paula and her uterus had to do most of the work - I was just there at the "kick off".  I also walked to the The Food Bin from time to time on hunting and gathering missions.  Actually, there wasn't much hunting, only gathering of Ben and Jerry's Half Baked Ice Cream.

Paula is a great mother. In addition to countless hours researching school systems, cooking wonderful things for the kids to eat, and attending all the important little events in the kids lives, she also understands important nuances; like maintaining a sizable inventory of batteries for toys.  She also has a fond appreciation for slot cars. For her new project, she was taking care of herself, our first son Nicky, and the little player to be named later.  Her project was on schedule, and going according to plan.

We'll get back to Paula a little bit later.

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Long before the Felini scene took place, Reality Fusion consisted of 5 people; Me, Jeremy, April, Max and Paul. We also had the help of John Meyer - he wasn't an employee, he was an adviser. He had founded of a very successful startup - we were lucky to have his encouragement and sage advice.  You can read about him here.

April was our QA department. Jeremy and I wrote code. Paul was business development.  Max was responsible for everything else including marketing, graphics, website design, and public relations.

We were running on vapors, as usual.  I still believed that we could bootstrap ourselves without investment. We had two pretty good licensing deals.  One with Intel, and the other with Logitech.  These companies paid up front for the rights to products that we hadn't developed yet.  For you rookie entrepreneurs, that's called a "sweet deal". You should get one of those if you can. These deals kept us going for 18 months.

It was a super exciting time for the company. We had awesome technology, cool people, great advisers, and on top of that, we were cash flow positive.  In fact, this was the ONLY TIME in the history of the company that we were cash flow positive.  Exciting times indeed!

At some point in the fall Max had a brilliant, but frightening idea. His idea was to see if we could get into Chris Shipley's DEMO Conference in February. If you aren't familiar with DEMO - here's the deal.  Hundreds of companies try to get in to DEMO. From these hundreds of companies, 40 or 50 are chosen for the event. If your company is chosen, then you get 6 to 10 minutes on stage to demonstrate your product.  The audience consists of upwards of 500 people; venture capitalists, "tech mavens", corporate execs and members of the press. Afterward, a handful of presenters and companies are honored for their outstanding presentations with a DEMOgod award.

I remember being very reluctant.  It sounds stupid now, but I didn't see how DEMO could be so important.  Max didn't see it that way.  Neither did John Meyer.  John said something like, "if you can get into DEMO - it would be HUGE.". (Actually, I'm sure whatever he really said was much more profound than that).

My reluctance was really just fear.  I wasn't comfortable in front of large audiences.  In fact, the last time that I stood in front of an audience of more than 50 people was in 4th grade.  I had the lead part in our school Christmas play.  I was Santa Claus.  The first performance was an after-lunch performance in front of the school. I was really nervous.  I walked onto the stage, said my first line, and threw up. Chicken Fricassee dripped from my fake Santa beard.  After 3 seconds of silent shock and awe, teachers stormed the stage and led me away.

Despite my 4th grade performance,  I found it hard to argue with common sense. Sure, we had some sweet deals, but we were completely unknown.  Fewer than 100 people who had heard of the company.  I remember feeling a little surprised that people hadn't simply "found us" somehow. So, I relented.

Max setup a meeting with Chris. We met her at her offices in San Mateo.  We brought a computer and a little CRT. I showed Chris a few rudimentary demonstrations and told her that we would have something much better for the actual event. She asked some questions and tried the software herself.  Like everyone else who had seen our magical software, Chris loved what she saw. I didn't tell her about the Chicken Fricassee.

A couple weeks later, we received confirmation that we were accepted. We were going to have 6 minutes of fame, on stage in Palm Springs.

Fear is a great motivator. This event was going to be the scariest thing that I had ever done.  I've spent years locked in offices writing software - I've always been better at relating to computers than people.  This would be a huge stretch for me.

One thing that I remember from Toastmasters, before I dropped out, was the importance of preparation. We spent every minute prior to DEMO working on the software.  Jeremy, Max, Ken, April and I spent many long nights in the garage developing the software for DEMO; writing code, creating graphics and sound effects, and debugging.

When the software was almost complete, I started practicing. We used a stopwatch to perfect timing.  I worked on things that I would say during transitions.  I tried to memorize the presentation, but also prepared some 3x5 cards in case I forgot my lines.

The final software was complete after one last caffeine fueled all nighter.

The DEMO Conference was at the Indian Wells Resort.  Due to the late hour, I didn't have a choice - I had to make the 8 hour drive.  We left Santa Cruz on the evening of Sunday, February 1st.

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Meanwhile, in the opposite corner of the cobblestone driveway, Paula's project was running even later than mine.  She was originally due in mid January. Now, on February 1st, it looked like it might be another week or so before she delivered.

I left Paula behind, I told her I'd be back as soon as the conference was over.

I left her in good hands - her parents lived nearby, and in case of emergency, our good friend and childcare expert, Bethany (aka "Mackie"), would be there if needed.

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I arrived in Indian Wells after the all night drive on Monday morning, February 2nd. I was totally wiped out and opted to sleep in.  I was hoping to be somewhat lucid for the presentation which was scheduled for the next morning; February 3rd.  I didn't care about seeing the other presentations.

Max, April and John took over the logistics of the our conference participation. Clearly, they wanted me to focus on those precious 6 minutes. They told me that I was going to do great.  I'm not sure where their confidence came from, but it definitely helped.

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John and I shared a room at the resort. The rooms were spacious and sunny.  A perfect stage for John's unending optimism. He was all smiles, all the time.

On the morning of the demo - I woke up early, got dressed, and walked over to the conference center. Max and April were there - they looked even more stressed out than I did. Together, the 3 of us hunkered down in a corner of the hallway, and I practiced my presentation. They sat on the floor, looking up at me as I stammered through my lines.  For the first time, I saw "visible concern" on their faces. Was Barry going to do it? Was he going to freak out? What the heck is "Chicken Fricassee" anyway?

The few hours that lay ahead of me prior to the presentation were going to be nerve wracking indeed. It was nice to have the support of April and Max.  I wanted to do a good job; these guys had worked hard to get us there - I didn't want to blow it.

After a half hour of rehearsing, it was time to take a walk. I rounded a corner, and started walking up a staircase towards the main lobby. Light was streaming down the staircase. From the light I heard a clear and confident voice say, "Hey Barry".

At the top of the staircase was the sunlit silhouette of John Meyer.  He said, "Did you hear?" I took a few steps towards him - close enough to see his big 'ole John Meyer grin.

"Hear what?", I replied.  He had good news; I could see that.  But what good news? Anything that might change the plan for the day would be mediocre news at best.  We had everything that we wanted. We had 6 minutes on stage in front of 500 influential people.  The software was rock solid.  The demo computer and A/V connections were tested the night before.  The only risk factor was me - and there was nothing anyone could do about that. We had 4 more hours to see what would happen.

"Paula's in labor". With those words, my fear dissolved.

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A minute later I was on the phone with Paula. She really was in labor. I told her I'd leave right away.  She told me that I should go ahead with the demo, and come back right after. Our first baby, Nicky, was an 18 hour labor - she told me that I had plenty of time.

I was going to be a dad again.  There could me no greater reassurance than to know that my second son was on his way.  I was still going to do my presentation, but now, there was nothing that could screw the day up. Even if the software crashed, or I fainted on stage, it didn't matter.

John and Max told Chris Shipley that Paula was in labor. Chris immediately moved my presentation up -- so I could get back to Santa Cruz as soon as possible.

I remember sitting in the audience, behind Chris. She turned and looked at me. She asked me to hold my hand out.  She wanted to see how nervous I was. My hand was as steady as a rock.  She smiled and said I'd do fine.

A few minutes later Chris was on stage. She told everyone that Paula was in labor, and that my demo had been moved up.  Then, she introduced me - and it was show time.

On the stage there was a HUGE timer-display which was used for the demos.  Chris wanted all the presentations to remain within the alloted time. I had 6 minutes.  I ignored the timer - I think I used about 10 minutes instead - a faux pas that Chris was nice enough to overlook.

Apparently, the demo went pretty well.

Reality Fusion was one of 6 companies to be chosen DEMOgod - in addition, we won the DEMO People's Choice award for that year - which is the best demo, as selected by the attendees.

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25 minutes later, I was sitting in the passenger seat of a Toyota Camry.  John Meyer was at the wheel.  We were in the middle of a driving rain storm.

The rain was from El Niño; an atmospheric phenomenon which delivers a huge amount of rain to California every now and then. When John and I were trying to get from Indian Wells to Santa Cruz after my presentation, El Niño was high gear. There was widespread flooding across Central and Southern California.  Airports were closed. Bridges were washed out. Roads were closed. People were flooded out of their homes.

John had one hand on the wheel. His other hand held a cell phone.  He was talking to the state police, getting road advisories. From these advisories, he charted a course back to Santa Cruz.

I used the phone to talk to Paula - who was now at the hospital with Mackie. I could tell that she didn't want to talk on the phone, so I kept the calls short.

At one point, John and I drove into Gilroy from the east. I remember seeing people in canoes and row boats paddling through fields - retrieving belongings from flooded houses.

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I arrived at the hospital 2 hours after Julian was born. I missed his delivery, but I'll never forget the day he was born.

Paula, holding Julian George Spencer.

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The next year, I attended DEMO again. This time, we didn't win any awards - but Julian, the amazing demo baby, spent 10 minutes on stage with Chris Shipley as I gave my demo.  Julian had never met Chris before.  Despite that fact, he sat very happily in Chris's lap. He was bathed by bright lights on the stage - completely relaxed, and unfettered by the hundreds of people in the audience.