through from first...
through from first principles.
And always having something running was a Sachs thing, because it was just
his experience it was a good thing, and I saw it and said, “Yes indeedy, we
should do this,” long before extreme programming.
Livingston: Was there ever a point when you wanted to quit?
Kapor: After we shipped and the business felt like it was getting out of control,
yes. The most fun parts were from time-equals-zero till 1984. I was terrified
about stuff—how’s this going to come out, what’s going to happen?
I did almost walk out. We raised a second round of venture capital, which I
think, if I had been more sophisticated about business, we wouldn’t have
needed to do. We could have just borrowed the money. We turned cash flow
positive so quickly. If I had been a little bit less risk-averse . . . but that’s another
story.We got to the closing for the second round and they had a very sharp lawyer
on their side—our lawyer wasn’t so good—and all these things were happening
at the last minute, all these onerous terms, and I got up and said, “I’m not going
to do this. I don’t have to do this today. We don’t have to close here and I’m just
not going to agree to this. I’m gone.” And they backed down completely on
their onerous terms.
I was just pissed off about this for a long time. These were supposed to be
our investors, they were supposed to be on the same side, but they were highly
adversarial and totally willing to take advantage of us. And saw absolutely nothing
wrong with that. I don’t really like conflict, was a conflict avoider; it takes a
lot for me to get up. And I really was going to get up and go home and we really
weren’t going to close.
Livingston: You weren’t bluffing?
Kapor: No, I wasn’t bluffing. I was prepared to take whatever—run out of
money or find financing elsewhere. My attitude was: that’s the wrong way to do
business. I don’t care that that’s the way the world works, it’s wrong. That is the
way most of the business world works, but sometimes you just have to stand up
and say, “Not on my watch, not here, not this way.”
I think there were these minor problems—the Blue Sky clearances hadn’t
come in from some of the states—and they wanted me to personally take the
liability. The investor didn’t want to take any risk. It was absurd. They only do
this because they can get away with it, because they have the money and you
need it and “fuck you.” (I hope that goes in the book.)
It’s just wrong, but the fact is that when the VCs do their deals and they do
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