knew that a TV could not display, we would resize it in servers and send that
down to the box to make a faster experience.
Then we had to go set up a whole dial-up network. We had to make relationships
with dial-up providers all around the country, so that they would automatically
find a local phone number to dial. So there was huge range of things
we were doing to make this thing work. I don’t know, but, if I were advising a
VC, I’d see a bunch of guys with all these pieces of the puzzle and they were
executing and working with so little capital—I’d say, “Wow. I don’t care what
they’re going to do; something’s going to come out of it.” But that’s not the way
that most investors look at it.
Now, looking back, I think some of the investors saw us as potentially carrion
ready for the taking, if we ran out of money. None of them said that, and at
the time I wasn’t thinking that, but now I’ve seen it happen. I think other
investors were just nervous. Because all the other Internet plays are happening—
this was 1996, and huge deals are being done with the Internet. But, they
are all purely web-based: software running on servers somewhere. There were
no actual capital costs. We were talking about building a box that was going to
be deployed to people’s homes. It has to be manufactured; there are inventory
risks, all those kinds of things. It was just not something they were used to
doing.
But the biggest thing people would say is they didn’t think people would
want to interact with their TV. They could imagine them changing channels
with their remote control or playing a video game, but, as far as doing something
more advanced with the TV—like surfing the Web or doing email, or the
future things we were doing, where you had video content on the TV along with
the program guide (believe it or not, back then there weren’t program guides
on TV) or having video eventually recorded on a disk with pause/rewind—
people thought that was crazy. I know it sounds so obvious now, but back then
they thought it was crazy.
Steve Perlman 181
Then we found one venture capital firm, Brentwood Venture Capital. Jeff
Brody, a VC there, saw it and he thought it was great. He said, “We want to
invest.” And they were prepared to put in $4.5 million.
We were just about to sign all the paperwork. It was great, since we were
plumb out of money. I would have lost everything: my house; I would have
been deep in debt; the company would have folded; it would have been a bad
scene. Then we get a certified letter from Sony, and it said, “After due consideration,