along the road...

03.08.2009, admin

along the road with that made a processor. When it came down to literally days
before we signed the investment document, they added in a section that said
we would be obliged to use only them as the provider for all of our silicon. In
other words, they set it up so that our backs were against the wall, and they
were getting us locked in. We knew that, if we were locked into one provider
for silicon, we would have no way to negotiate prices. That would drive up the
cost of the unit, so we couldn’t do that. We even tried to explain to them that,
“You guys are investing in a company. You don’t want that to happen.” But they
felt very clever about this strategy and taking these wet-behind-the-ears entrepreneurs.
So there was another 2 months wasted. We were watching the bank account
dwindle. Then we started speaking to VCs, and we talked to a whole bunch of
different ones. We spoke to Paul Allen at Vulcan and a couple of other companies.
We talked to Sony and Philips about possibly investing, but they weren’t in
a position to invest. We found that nobody was willing to make that first step. In
fact, I think a lot of them were sort of like vultures waiting for us to fail, and
then pick up the pieces—because they saw the value of what we were doing—
for a bargain.
Livingston: Can you describe the investors’ initial responses? Did they say,
“What the heck is this?”
Perlman: The biggest issue they had was the concern that people did not want
to interact with their TV. I mean, we showed working prototypes, but that
wasn’t enough. By then we had a browser working that we had written from
scratch. In less than a year, we had a browser working. To give an example,
when Microsoft did Internet Explorer, they started with Mosaic. We couldn’t fit
Mosaic into our system. We only had 2 MB of RAM, and we had a 112 MHz
MIPS CPU, and we had 2 MB of ROM and 1 MB of flash memory.
None of these existing browsers could fit into a memory footprint so small.
So we had to go write the thing up from scratch. Of course, we had to deal with
the reality that a TV screen was very narrow. We had a different user interface
for the remote control. We had a custom chip, and we had a programmable gate
array doing the video. We were doing the image processing that I mentioned to
eliminate the interlace flicker and to sharpen the image. We were building the
whole network side, which was all the servers and the network that would handle
and proxy the information. For example, if a large JPEG came in that we

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