This New Internet Thing, Chapter 31

In Chapter 30 (notes), Netscape Day happened and the earth moved. Not everyone realized it at the time. Bill Gates was gazing down and was not pleased.

In this chapter, we shift focus to the other big tech success story of the 90’s: the Palm Pilot. And Len and Janet’s father-daughter relationship takes a big step forward into the unknown: maybe Len had other ambitions in his life, and now he’s get the chance to realize them.

Reading in serial form has a long and honorable history. My cover artist sent me this “Read Like a Victorian” website. Enjoy.

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Cassie had settled into a routine at Palm. She was testing the software and the hardware as much as she could, and she never got the feeling that she was just being a bureaucrat, like she sometimes did at 3Com.

They had their new device, the Touchdown, which everyone was excited about. There was still no money for manufacturing the thing, although they did have a manufacturing partner, at least. Flextronics was a Chinese company that a lot of Silicon Valley companies used for manufacturing. instead of having to build their own factories, which would have been hugely expensive. They had a lot of manufacturing expertise, too, which would have been impossible to duplicate quickly.

Flextronics was sending one of their engineers to Palm to review the design and make sure all of it could actually be built. So at least they knew it could be manufactured.

But it was still going to take a lot of money, plus the marketing costs of launching the thing, plus hiring enough sales people. They didn’t have the money for all that. Selling software didn’t take a lot of capital, but making hardware sure did.

Donna wasn’t the type to lie about their prospects, which was one of things Cassie loved about her. She knew Jeff and Donna were out trying to raise money or recruit a partner, but there were no big announcements yet.

Her friend Janet had had the big IPO at Netscape on August 9. Cassie hadn’t spoken to her since then, since she didn’t want to be one of those people who suddenly discover they’re your best friend when you have some success. Still, having your startup go IPO was the ultimate dream around here. Would Palm ever make it? There was one obstacle after another before they could achieve that. Palm didn’t have any particular connection to the Internet, which was all anyone cared about since Netscape Day. Her friends seemed to be all looking around for the next hot Internet startup.

Then one day at the end of August, a special Comms meeting was called for a Thursday, not the usual Friday. They knew something was up. Donna was more serious than usual. She reviewed how Touchdown was a great product but they lacked the millions to properly launch and manufacture it. Everyone knew that, of course. Then she said they’d found an entity that was going to do it! Jeff took over and got right to the point: U.S. Robotics was going to acquire the company, paying $5 a share! There was no question anymore if their Palm shares were worth anything: they were going to be worth $5. Everyone mentally multiplied the number of shares they had by 5. This was not as big a payday as Netscape had, of course, but still, it wasn’t bad.

Cassie was speechless. Everyone was. A modem company? Why them, and not someone like Compaq, which they’d assumed was their knight in shining armor? Did this mean they’d have to move to Chicago, land of awful weather? Was Donna getting replaced by some droid from USR? And what about their stock — sometimes when a company was acquired, all the stock options vested immediately. Was that happening here?

All the questions were answered: no one was moving to Chicago,, and in fact USR was thrilled to have a Silicon Valley presence. Yes, Donna was still going to be their CEO. No, their Palm options were not all vesting, but they were all getting some USR options in addition, with the amount to be determined. Their benefits would be at least as good as they had been, and in some cases, better.

Left unsaid was the company culture: they loved being part of a small company where they knew everyone. What was it going to be like to be a unit of a big company headquartered somewhere else? It was obviously going to be different, and not everyone was happy about that. They’d just have to wait and find out what their new overlord was like.

For now, nothing changed. Everyone was focused on the Touchdown launch. Cassie asked for volunteers to help find and report bugs, and was gratified at how many people pitched in. Now Palm was going to have the funds to really launch this thing. “Will anyone buy it, though?” she wondered.

Cassie thought she might soon run out of excuses not to adopt a child: she’d have a steady job with a big company again and a large chunk of money from US Robotics stock, although not enough to quit working forever. Gulp.

* * *

Len’s job at NetsForAll had finished. After the Netscape IPO, Charley, their CEO, became insistent that the VC’s take him public, and they just didn’t want to go on the road with him. Len didn’t think an IPO was a good idea, either, even with the Internet frenzy.

Nor did the VC’s fancy firing and replacing Charley. So they’d accepted a big buyout offer from a large East Coast telecom company; Brad called their insanely high offer “stupid money,” but hey, that was just as green as smart money. Charley had quit in a huff, and the acquirers didn’t want him, anyway.

Brad told him, “Len, I can’t thank you enough for all you’ve done for us! Right at the moment, we don’t have another job for you, but please let us know if you get any other offers. We don’t want to lose you.”

Len thought this sounded sincere, but you could never tell with these rich guys. Anyhow, he moved out of Janet and Walt’s house and went back to the mountains with Gretchen and Mickey. Janet told him, “Dad, we’re going to miss you!”

“Well, I’m sure I’ll be back down here again, but if not, it sure was nice. Now I can say I’m a Silicon Valley refugee like everyone else up there!”

He stayed busy keeping track of the Internet mania. All his investors thought he was a genius for getting onto this Internet thing before anyone. Then a month after Netscape Day, he got a phone call. It was some name he’d never heard of, Jim Something but the guy dropped a bunch of names of East Coast financial giants he certainly knew. He wanted Len to come down and talk to them. Len said,

“Jim, I’m really gratified, but it’s a three-hour drive for me, and I’m just getting settled in up here again. Can you give me some idea what this is about?”

“Sure, Len, I know you’re busy. I’ve been tasked by my company to boot up a new mutual fund out here specializing in the Internet. We might be interested in taking you on as one of our principals.”

Len thought that sounded interesting. He wondered if this really meant becoming unretired! He asked some questions about the capitalization of the fund, what his responsibilities would be, whether he’d have to move down there, and so on. Jim was reasonably forthcoming, but he shied away from giving too much detail on the phone. Len finally agreed that he could come in next Friday. He called Janet.

“Hey, guess who has a job interview down there!”

“Wait, let me think! Is it Harry Redding, that guy who hit Dan with his cane?”

“No, clever girl, it’s your old Dad! Some rich mucky-mucks want to talk to me about starting a mutual fund for the Internet!”

“Oh, my God, Dad, that’s wonderful!” They talked about what the job would be, and most of all, if he was going to have to move down to the Valley. Of course he was welcome to stay with them again; in fact, they’d barely gotten used to him being gone.

The next Friday, he met Jim at Cafe Verona in Palo Alto. After the VC’s lush offices on Sand Hill Road, this seemed odd, but Jim said they hadn’t even rented office space down here yet. Len might even help them do that! Anyway, Cafe Verona was where Jim Clark and Marc Andreesen had first met to discuss starting a company, so it was kind of a holy place now. The cafe was full of people who were obviously doing business of some sort, or at least trying to look like they were.

Len was expecting a bunch of specific stock questions, because the other financial types were always asking him those, like “what’s in your portfolio? How much money are you running? What do you think Microsoft is going to do?” But Jim’s conversation was mercifully free of all that. Instead, it was about the financial firm he represented, and the other sector funds it ran. They did have a “computers” sector fund, but “Internet” was a brand new sector. They felt like they were behind already, and Len had been doing this for years!

Len thanked him, but demurred about his experience: he hadn’t actually been “doing Internet” since there wasn’t really any way to, before! But he did mention his time at NetsForAll, which was a bona fide Internet company. He realized that badmouthing yourself was okay up to a point, but you really shouldn’t overdo it, so he also gave an abbreviated summary of his time at Chrysler, and the way he’d built up his private “mutual fund.” The fact that people had come to Len, rather than him having to advertise, was impressive.

Len had never worked in an investment firm like this, of course, so he wanted to know what, exactly, they’d expect him to do. Was he going to make recommendations as part of a team, or have autonomy over some amount of money? Was he going to visit companies and ask them questions, give speeches at conferences, go to New York for meetings, write articles? Were other Wall Street giants doing something similar, and what were their prospects? Who was the competition in this space? Was his age going to be a problem? They spent a long time going over those questions, with “yes” the answer to most of the questions, except the “age” one.

Most importantly, would he get to go on Wall Street Week? This last one was a joke, of course, but Jim took it seriously. He’d seen Len on Computers This Week, so he knew Len could handle being on TV. The firm did like its managers to go out and represent it.

A bearded guy in jeans and a black T-shirt occupied the table right next to them. Jim noticed and realized the guy could probably overhear them, so he suggested they go out for a walk.

When they were out of earshot of everyone, Len brought up the question of compensation. Would he get a straight salary, or a percentage of his trading profits, or an annual bonus, or what? He apologized for not knowing what was customary for this kind of job. Jim explained that fund managers usually got a salary plus an annual bonus, where the bonus was obviously going to be heavily influenced by how well he did that year. That included not just trading profits, but public relations things, like Len had asked about: speaking, writing, helping other fund managers, and so forth. He was shocked at the salary: he’d never made that much money in his life. And the bonuses: who knew what those would be, but he got the distinct impression that they were a lot.

His last question: he knew the answer to this one. Yes, he was going to have to move down here from the mountains. Sigh. He wasn’t fishing all that much anymore, and construction on the father-in-law house had been languishing for a while, too, so what the hell? Len figured he’d probably rent a place, since he didn’t really know how long this thing would last. And staying with Janet and Walt was always there as a backup.

When they parted, Len knew he had the job if he wanted it, and he told Jim he did. They agreed to talk in another week and meet some of the other people who were going to work in the Silicon Valley office.

Janet and Walt wanted to go out and celebrate, but Len cooled them down. He said, “Let’s wait until I actually have an offer, at least! Many a slip between the cup and the lip, and all that.” Still, it was a sweet moment for him and Janet. She always thought he was capable of more than he was doing at Chrysler. Was he sacrificing his chances to give her a stable existence? She didn’t like to think so.

She felt a little guilty for pushing him to retire to a life of fishing up in the Sierras. That wasn’t really what he wanted out of life, obviously! But he never said anything about wanting a second career. How was she supposed to know? Fortunately, he’d found one now.

In high school at Kingswood it seemed the other girls’ fathers were all Vice Presidents and had a lot of money. She wasn’t exactly poor, but she wasn’t rich, either. Now she was going to be rich, and with any luck, Dad was, too! What would it be like to go to a class reunion now?

That thought only occupied her mind for a second or two. She still had her girlfriends from back then, and in fact she just saw them a couple years ago. Those were real friends, and who cared about the other bitches?

Janet, Walt, and Len were sitting watching the ten o’clock news, and Walt got the distinct impression that they wanted a father-daughter talk, so he excused himself and went to bed.

They sat there for a while, and then Len turned off the TV.

“Well,” he said.

“Well,” she agreed.

“We both made it, it looks like, huh?”

“It does look that way.”

“How do you feel?”

“I don’t know,” she said. “How about you?”

“I don’t know how to be rich. I’ve always been middle class.”

“Yeah. Me neither. Of course, we’re not rich, yet.”

“No, not really. But it does look pretty promising.”

She agreed.

“Was this what you wanted from your retirement, Dad?”

“I guess it was. I didn’t realize at first. I thought ‘fishing every day’ was going to be it.”

“Yeah. I feel bad that we sorta pushed you into that!”

He grabbed her arm. “Hey, you didn’t push me into anything. I’m the one who wanted it.”

“OK. Anyhow, it looks like you found out what you really wanted.”

“Yeah. In a roundabout way, I guess I did.”

She leaned her head on his shoulder, and he put his arm over her.

“I always figured you were going to get rich by being a CEO. Not like this!”

“I disappointed you, you’re saying?” she asked, mockingly.

Len laughed. “You always make me very, very proud, Janet. I think you got tired of hearing me say that a long time ago.”

“Well, this time I’m proud of you! My dad started from nothing and now he’s going to be an Internet guru!”

“An Internet guru!” he mused. “A couple years ago I couldn’t even spell it. Now because of these stupid bingo people I’m a celebrity.”

“So how’s it feel?”

“How’s it feel? Like someone’s going to unmask me any second now.”

“That’s how everyone feels, Dad. Just remember, those people don’t know any more than you do.”

Len didn’t say anything. She continued,

“Dad, can I ask you something?”

“Sure.”

“Did you ever feel like striking out on your own, when I was growing up?”

“Striking out on my own? What do you mean?”

“I don’t know… switching jobs, going to a small company, something like that?”

Len thought about that. “Back in those days, if you had a good job with a big company, you held onto it. We didn’t move around like you kids do.”

She took that in.

“Besides, I had you to support! I couldn’t take a risk of being unemployed with the mortgage and all those tuition bills to pay.”

“Now you’re making me feel guilty!” she said.

He squeezed her harder. “Never, honey. Never!”

They were both silent for a long time.

Finally, Len got up. “Well, I guess everything worked out in the end, huh?”

“Seems like it. Good night, Dad.” He nodded.