Founders at Work.pdf

428 Founders at Work
The book The Soul of a New Machine characterizes that environment fairly
well. It talks about two competing teams—the Eagle Team and the Fountainhead
Team—how they competed internally, and how the Eagle Team eventually won
out because they got to market sooner. I was the head of the Fountainhead
project. Spending 13 years there was a really good background for me to understand
a truly entrepreneurial kind of environment.
I left Data General in the spring of ’82 and, with two other cofounders,
Craig Mundie and Rich McAndrew, I started Alliant Computer Systems. Our
mission was to build very high-performance computer systems that provided a
growth path from Digital’s Vax line of machines, which were topping out at half
a million dollars.
Our machines provided anywhere from four to ten times the performance
of Digital’s largest Vax, for maybe 50 percent more, using parallel processing
technology. But because this was a very complex technology—obviously all
hardware-based; back in those days everything was proprietary hardware—we
had to raise a lot of money. We took the traditional approach of going out and
raising venture capital.
We knew, even then, having watched how Data General financed itself, that
you wanted to generate two things when you’re looking for money. One is a
sense of exclusivity, saying, “This is a very special kind of deal and not everybody
is going to get into it.” And secondly, a sense of urgency, so you can get
people to make a decision.
A former boss of mine, Carl Carmen at Data General, knew the VC community
pretty well. We brought him in, and another partner of his, Jesse
Aweida, who was the founder of Storage Technology Corporation. We didn’t
call them this at the time, but they were angel investors. Together they put in a
couple of hundred thousand to help us get launched and spend 6 months writing
a business plan on how to commercialize parallel processing technology.
We then contacted Kleiner Perkins, who even then were viewed as one of
the premier venture capital firms. We told them that we thought we had a really
interesting idea. We weren’t prepared to talk about it, but we would talk about
it in about 6 months. We thought, having been at Data General and knowing
the computer business very well, it could be something even approaching a revolutionary
idea.
One of the big wins Kleiner Perkins had in the ’70s was Tandem Computer.
Tandem’s gone now, but it was a big hit in the ’70s and early ’80s. They
rethought computer architecture to build what they called Non-Stop Computing.
They used redundant computers, so if one computer failed, the system kept
running. For transaction processing, it was very reliable.
It was really elegant, sexy technology. We thought that we were doing the
same thing on the performance side through parallel processing. We didn’t
want to talk about it until we felt we had it really fleshed out well. So we let
Kleiner Perkins know that we weren’t ready to talk, but we’d contact them
when we were.
Livingston: How did they respond?