wanted, and there’s...
wanted, and there’s all this stuff going on in the background they had no idea
was going on.
We had our fingers crossed. I remember once the thing broke, and we had
to literally go in there and change people’s DVRs. It happened very early in the
company. We responded instantaneously, and our customers hardly knew what
had happened and we got them back on air. We looked at each other after that,
and we said, “Thank goodness that happened right now, and not 5 years from
now.” We put in place some things after that that made sure that you could
never send data to a TiVo that would break it. Because you have 4.5 million
TiVos out there, and if you get something wrong in a software release and you
issue the software to all these TiVos and it breaks them, you are in a lot of
trouble. So we had to ensure that that was impossible.
One of the things we did was this thing called TiVo phone home. It’s like
controlling satellites that are orbiting Mars. You can only get a certain amount
Mike Ramsay 197
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
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