Founders at Work.pdf

184 Founders at Work
Perlman: I didn’t know. Bruce told me on the cab ride over. I said, “What about
the stability? Bruce, Japanese is nice but . . .” And he said, “Don’t worry. It
won’t crash. It will be fine, it will be fine.”
We gave a great demo in Palo Alto, and now we’re going to give this demo
to the president of Sony Corporation, and we’re going to fall flat on our face!
Well, it didn’t crash. It worked beautifully. The CTO was there, and we said,
“By the way, there was one web page that you went to in Palo Alto that didn’t
work. Well, it does work now.” We typed it in, and, sure enough, it showed
beautiful Kanji, and we won him over.
Then they said, “We want to go back to the original contract we negotiated
with a 1-year exclusive.” And we said, “We would love to do that, but now we
have a deal with Philips, and so we can no longer offer you an exclusive.” They
were very unhappy about that, but, in the end, they felt it was worth doing. So
there it was. We had a deal with both Sony and Philips—at the time, the two
powerhouses in consumer electronics.
Now that we had these deals in place, we raised Series C. I think we raised
about $35 million.
Livingston: Did you get funding from the same people?
Perlman: Well, Brentwood re-upped, and I think Vulcan re-upped, and the
Davises did what they did at Catapult—they flipped. They sold their shares to
other investors. They’re not technology people, so they saw it purely as an
investment. And they were happy as clams. I think they got seven times their
money in less than a year.
And then Microsoft came in, interestingly enough, and Citicorp and
St. Paul Venture Capital. Some individual investors came in, and also Seagate, I
think, put some money in. And Washington Post Group. A lot of people were
interested in the subject area. We expanded the board then, so the board was
now the three cofounders; we had Randy Komisar as an outside director, and
we had representatives from Brentwood, Vulcan, and I think that was it. Maybe
we had one other guy.
Then we cranked. We introduced the product in July of 1996—one year
almost to the day after I got that first check from Marvin Davis to fund the company.
It had custom hardware, a browser from the ground up, proxy servers,
and so forth. The whole network was supported, and I was true to my word
when I called the guy at Pacific Bell and told him that we were going to be running
a nationwide online service.
Livingston: How did the idea for WebTV evolve? Was it to make the Web available
to people who might not have computers?
Perlman: Yes. I should go back even further. My mission, even before then, was
to connect average people together doing non-engineering things, the things
that interest them—to foster better communication, sharing of ideas, and for
pure entertainment. I love storytelling; my favorite college class remains “The
Novel.”
I wanted to figure out how to do communication. I wanted to figure out
consumer electronics. I wanted to figure out ease of use, you know, interfaces.