History of Famous Startups. Open Systems, Hummer Winblad

handsomely rewarded. The

Mon, 17 Aug 2009 06:19:47 -0700

handsomely rewarded. The stories are not like, “Hey, we had patrician backgrounds
and silver spoons, and we bought our way into this.” We just “thought”
our way into these industries. The power of thought and math and science and
computing, you’re given that for free—it’s a choice you can make. You take that
choice, and it gives you sort of a magic wand to be a captain of an industry that’s
still fairly young, that’s driving the whole world economy. I don’t know. This is
just a mystery to me. Women running these companies have very rich lives. I
don’t…

experience as an

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experience as an investor?
Winblad:Well, if there was a perfect lens on this, it would be easier. Most companies
do not fail because some competitor crushed them. There’s a small
amount of failures where the competition was underestimated. There’s a small
amount in the software category where the technical achievement needed to
bring a high-value product could never be reached. But the majority of companies
fail by self-inflicted wounds by the leadership team. That stuff is all under
your control. We have the biggest challenge in software companies: the core
value is the intellectual capital. It’s everything. And when there…

Winblad: Oh yeah.

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Winblad: Oh yeah. Because you see examples all the time. I do personal references
myself. Whenever I’m going to join a board, I will ask people for personal
references. Your friends, your business colleagues, whatever. I’ll address these
references as these are not going to make or break this deal, but I want to
understand this person. How do they work, how do they think? How do they
get themselves in corners? Or twitterpated? What do they need to be surrounded
by to be successful?
You do learn that people get to be fully formed adults fairly early and it’s…

didn’t ship booths

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didn’t ship booths around the country or shrink-wrap software. Or license software.
Nobody had. Rumor has it that Lotus thought it was so cool to have the
shrink-wrap machines that, whenever they’d ship a new product, they would
shrink-wrap the head programmer and unwrap him quick before he smothered
to death. I don’t know if that’s fact or fiction.
So for us, it was never stressful because we didn’t feel the cadence of competitors
on us. It was tiring and it was hard, but it was a lot of fun. It was like,
“OK, now what?”
Livingston: Was there ever…

tower—and from the

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tower—and from the wood tower was this neon sign that said “Open Systems.”
It required one of those small cranes to crane it up and connect it. The guy on
the crane, while connecting our neon, had fallen in the tower upside down and
was stuck in there. So the medic wanted to saw our tower in half to get him out.
Betty was basically hugging the tower saying, “That will ruin our booth!”
I was thinking, “Oh God. I’ve already invested more money than I ever
thought in this thing. I shipped this heavy sucker halfway across the planet…

could look that

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could look that way. There was the show called Comdex (Computer Dealer
Exposition), which doesn’t exist anymore, and everybody sold their products
through computer resellers and, shortly after that, retail stores like
ComputerLand or BusinessLand. Comdex was the best thing that ever
occurred for us. You could see everybody there. It was pretty small in the beginning;
it was all in the one Hilton Convention Center in Las Vegas. We had some
really interesting experiences there because we had to decide whether we
should spend a bunch of money on a really nice booth.
How do you do a booth…

guys, but it

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guys, but it was more than time to move out of there. That was another, “It’s
time to really either fish or cut bait here. Well, I guess we’re going to have to
move to a real office now.”
And that does change the real demeanor of the company. Once you start
committing to leases, furniture, a capital budget; it does change the cadence of
a company for the better. You can only virtualize the company for a very short
period of time.
Livingston: Do you remember a time when people misunderstood what you
were doing because it was so…

people out there

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people out there rooting for you. That is probably part of what you have to
develop. They probably went back to their offices and said the following: “We
got a great deal on this software and this great little company—I think those
guys might be successful—called Open Systems. And this young woman got up
there, and she had the balls—or stupidity—to ask us each to rip out checks for
$10,000.”
It was such a big victory and we didn’t have cell phones at that time, so I’m
on the pay phone in the airport going, “I’ve got $120,000 in my…

were many things

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were many things we didn’t know—like pricing strategy or how do you collect
money from people? So I remember one very unsophisticated thing, in that we
had been working with CADO and they said, “We’re going to get all of our
resellers together. Since you’re the big application vendor, come and give a
presentation and pitch them.”
So I get in front of these 60 or 70 guys and these guys are probably all in
their 50s and I’m in my 20s, and we had a “blue light special,” where we said, “If
you give me a check today for…

fact opened up

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fact opened up my college accounting book and said, “Let’s start programming
this from scratch and build accounting systems for smaller computers.”
Livingston: Was this before personal computers were even out there?
Winblad: They were coming really fast. Hobbyist computers already started
appearing. Now the year is 1975—remember that’s the year that Microsoft
started and Microsoft was writing Basic for kit computers. We didn’t have as
good soldering skills as probably Bill and Paul did. And we, of course, weren’t
working at the systems level writing the operating systems and languages, so we
first applied ours to a minicomputer. They…