on December 9, 2000
I bought this because I read an interview with Mark Andreesen (co-inventor of the browser) in which he shared kind words for Kaplan's memoirs. Having seen the Netscape debacle from its inception to its consumption by AOL, I take Mark as a reliable source on startups and corporate deals.
Startup: A Silicon Valley Adventure has much to recommend. Andreesen points out (and I paraphrase) that no one will tell you the real secrets of how their business succeeded; these have to be learned from observing failures and reading between the lines. Jerry Kaplan's GO Corporation was a failure -- a collosal one. At the end of GO's life, its staff were not surprised to see it go... away. The watercooler scuttlebut focused on how unusual it was that GO survived as long as it did -- considering it had no products, no market (and no marketing), constant financial troubles and, to complete the drama: Bill Gates in the role of surreptitious competitor.
Jerry Kaplan describes in diary-like detail how he and fellow industry visionary Mitch Kapor (founder of Lotus) conceived the idea of portable, pen-based computers in a spontaneous moment of shared epiphany during a private jet flight. Here was an idea seemingly out of nowhere: no one had thought of pen computers up to this point. None existed, and none were being developed -- a market vacuum of seemingly unimaginable proportions. The sad irony of Jerry's tale is that when GO was finally absorbed by AT&T and immediately beheaded, only the proportions of this unimaginable market remained. The market itself and the products to drive it never materialized.
Kaplan gives a harrowing behind-the-scenes account of how startup venture capital is *really* enjoined -- and its not what you think. In another moment of divine inspiration, he conceives of and perfoms a one-man show for the bored and now-napping investors who have agreed to giving Kaplan his 15 minutes of fame -- or at least a shot at it. Things are almost too good to be true when the meeting turns out to be a slam-dunk. With a few exchanged words and surprised handshakes all-around, GO Corporation is created and Jerry, Mitch, and their investors start down the Yellow Brick Road.
As in the fabled story of Oz, bad apples appear quickly and threaten to poison the troupe. Some of GO's early supporters are seeking to improve their minds. Some are looking for a community with a heart. And our Jewish Dorothy sings too much and is easily distracted while searching for a way to get home.
GO seemed doomed from the... well, from the get-go. Although I admire Jerry's vision, ambition, and personal commitment (Jerry turns out to be a pretty likeable guy), his company's business plan was a disaster waiting to happen -- at least in retrospect. Always afraid of running out of money, the group scrambled to make deals with anyone and everyone who would talk to them. They committed to hardware platforms they had never seen. Relied on software developers who had no interest in developing their applications. Pursued only one major customer and then never developed anything for them. And meanwhile took big-bucks from some household names on Wall Street -- $75 million of them, to be exact. These were not "rounds of financing," mind you. They were more like desperate attempts to sign with anyone who would assure them of making the next payroll.
Startup makes the VC commandos look like Las Vegas high rollers. The logical outcomes of a startup's business plan and the reality of its day-to-day operations are not considered when VC's "throw the dice." Oh, I know they go to great lengths to prepare press releases in which they ennumerate the "logical" reasons for creating a company -- but Kaplan shows that, behind the scenes, this information plays no part. Investors are not even marginally informed on the daily realities of the businesses in which they invest -- which explains a lot of the funding that continues to happen for silly ideas. And Jerry & Mitch's idea was not silly.
While GO played cat & mouse with every investor, software, and hardware company they could think of -- they spent an enormous effort on ignoring their "customers." Since they never had any customers, perhaps this seemed like a reasonable approach at the time. From the perspective of today's CEO, it seems impossible that a $75 million company would even attempt to get off the ground without a serious marketing and CRM program. GO's concerns focused more on getting boxes and circles to come out pretty on the screen (is there a business application for this feature?) and on fixing their stupefyingly awful handwriting recognition software. A small concession here is the fact that one has anything better than a stupefyingly awful handwriting recognition program -- even today. This odd collusion of a misfocused attention span and an obsession for technical "goodies" almost resulted in GO's pen computer displaying the enormous image of a very embarrasing term during an important "spontaneous" customer demo of the handwriting recognition capabilities. (Lesson: Never let a customer try something you have not tried yourself.)
Another glaring error that one can see from this tome is GO's almost cult-like insistence that a non-standard platform was the way to go. They alone could turn the tide! We've been hearing that since Altair first put a machine with keyswitches on the cover of BYTE magazine. And who has succeeded in creating a platform out of nowhere? Clearly Microsoft, with invaluable "assistance" from Xerox PARC and Steve Jobs and incredible naivete on the part of IBM. Yes, Virginia, you can create a platform out of nothing -- if you can zap yourself back to the early 80's and talk IBM into giving you DOS for free.
In reality, the three biggest components of Microsoft's operating system (a simplified mouse-based GUI, shared interface libraries for applications, and Ethernet networking) were all invented at PARC, not at Microsoft. If you haven't already guessed it, the pen computer wasn't invented by Microsoft, either. A 1988 email from Bill Gates shows that, at that time, he was already planning a standardized machine with a higher-resolution screen -- to be produced en masse by "the Japanese." I don't have to tell you this email was circulated interntally the day after Bill saw a demo of GO's prototype. They could have joined the ranks of the enemy right then (being "acquired" by Microsoft today and quitely going out of business isn't even headline news anymore), but GO's insistence on riding out "The Perfect Storm" lead to a grisly end for the end for the company that set off with such bright hopes. Groupthink, in this case, did not pay.
In the end, the GO experiment never benefitted anyone but millionaires Redmond -- at least insofar as the advance of pen computing was concerned. Nearly everyone GO touched attempted to steal something from them, although none was any more successful than GO in turning them into real products. In other words, despite Bill's "fast track" development, unlimited checkbook, and propensity to "borrow" heavily from others' work, the ubiquitous pen computer imagined by two buddies over a tray of airline food has still not arrived as the real millenium approaches. Today's best laptops far exceed the target price of GO's imagined device (a price that even Gates agreed with) but still don't have any reasonable inputs other than a keyboard. No one has even come up with a good mobile mouse yet; we're still stuck with primitive tiny trackballs and little eraserhead things -- or worse, miniature touchpads. Who thought of those? Long before any of this drivel was up for grabs at finer stores everywhere, two visionaries tried to build a computer that was actually better than the ones we have today. My hat's off to them for their efforts -- and for having the guts to divulge the catastrophic business decisions that ultimately led to Microsoft's Comdex announcement of the Tablet PC, albeit without the people who "made it so."
Startup is peppered with a Warhol-esque array of dignitaries from the early days of personal computing, which means it sometimes reads like Valley of the Dolls. Save those chapters for bedtime. You might also find that keeping up with all the names and relationships can be difficult in later chapters if names like Manzi, Gasseé, and Cannavino don't conjure up a whole host of memories for you (these are then CEO's of Lotus, Apple, and IBM).
A valuable business book for any serious entrepreneur or new CEO, regardless of industry, and written in an engaging personal style, Jerry Kaplan's Startup: A Silicon Valley Adventure is a page-turner that could change your company forever -- if, as Andreesen suggess, you read between the lines. Highly Recommended.