Founders at Work.pdf

198 Founders at Work
of information to them, and if they lose their way, they have to go into a safe
mode. So we had this safe mode for TiVo, where it would ignore everything and
it would phone back to TiVo and say, “I’m lost.” When we contacted it, we
would then redownload the software so it could come alive again. Right now it’s
4.5, but it has to scale for 10, 20 million. You got them all out there, and it’s a
massively distributed, incredibly complicated system. So when somebody says,
“It’s just like a VCR,” you want to attack them.
Livingston: When did you first start getting users? You raised the first round of
money in ’97 and then homed in on your plan. Then, you raised a lot more
money, right?
Ramsay: We raised a lot more money. We were able to get the first round done
because we had Jeff and Stewart and they were into it and it wasn’t a lot of
money. The second round was a lot harder, because we wanted an uptick in valuation
and we needed to bring in some more investors. That was a very difficult
round. I can’t remember all the numbers of what we raised, but the combination
of the first and second round was probably $10 or $15 million. Not a huge
amount of money.
For the third round, I believe we got Paul Allen—I think it was either the
third or fourth round. Paul Allen came in with Vulcan and invested a significant
amount of money. After Vulcan came in was another interesting time. That was
when the media companies started to get interested in us. We raised a lot of
money from major movie studios and content holders prior to our IPO. Then
we had an IPO; then we got an investment from AOL—$200 million. We did a
bunch of other rounds and if you add it all up from then till now, it was about
half a billion dollars that we raised. So we were in money-raising mode from
day one.
Somewhere in that process we hired Dave Courtney as CFO, which I think
was one of the most successful hires for us. Dave had not been a CFO; he was
an investment banker. I thought, “Though the accounting part of a CFO’s job is
very important, the capital-raising part is so difficult and specialized. Why don’t
I find somebody who is really good at that?” So we found Dave, and he joined
us. He had a ball raising all that money, and he got us through our IPO.
I would say that one of the reasons that TiVo is thriving today is that we
were well-capitalized. We were able to power our way through the downturn—
that early 2000 period when Replay went away. We were capitalized enough
that we knew we could ride through it. While we had to make a few adjustments
to the company, there was never a question that we were going to survive.
We knew we were going to survive.
Livingston: Tell me about the launch and the first users.
Ramsay: We launched at the end of March of 1999. It was the last day of
March, and we called it the Blue Moon event. It turns out that month was a
blue moon. Because it was such a momentous thing—our first product
shipped—we declared it a company holiday. It’s still a holiday today.