History of Famous Startups. Shareholder.com

like that at

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like that at all.
I’d be the one to call up and apologize, and that was just part of the job.
Most people were very reasonable, and they would understand—things go
wrong. I would use the analogy of a cell phone (that was when cell phones were
really getting hot). I’d say, “Look, we’ve all got cell phones or car phones.
Sometimes they just screw up and they go wrong. And this is the same kind of
stuff; this is pretty advanced technology and sometimes things go wrong.”
But we did occasionally lose a client that was just irrational, saying,...

breed of cat

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breed of cat in financial services. We were a technology company providing
great service to public companies. So we were always viewed as a technologist
kind of company, and many companies liked that. Some didn’t like that so
much. But that was our niche. That was our differentiation. We understood
technology better.
Livingston: Who did you learn from? Did you have any mentors?
Gruner: I had several. I tried to learn and listen to them. The whole founding
group at Data General were really smart people. There were four founders
there: Ed de Castro, who was the president, who was…

didn’t want to

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didn’t want to sell the company to somebody that was going to disembowel it.
So that’s why, when we had an offer from NASDAQ—and we had a couple
of offers from them; I can’t talk too specifically about it—we felt that it was the
right strategy. We’ve known the people for a long time; we’ve had marketing
relationships with them; they’re going into corporate services and they’re very
sincere about that. They want to use Shareholder.com as the foundation for
building their corporate services. They’re keeping the name. The valuation was
right. It all happened very quickly.
Ron Gruner 443…

$85 million of

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$85 million of venture capital—they were going in and just bombing prices and
even giving stuff away for free.
We realized that we would have to adjust prices. So we sat down and talked
about it and, literally in a day, made the decision to completely restructure our
product line and roll that out pretty quickly. That’s the kind of thing that would
have been difficult to do in a more complex, let’s say, structure.
Livingston: You could be more flexible and move faster.
Gruner: Yes. So we were able to compete with all these startups—almost all of
which went…

lives.

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lives.
Livingston: So you became a source of advice for these companies as well as a
source of new technology?
Gruner: Yes, I would say Shareholder.com played a significant role in the late
’90s and up until now, interpreting both the technology and the regulatory environment.
And from 1995 to 2000, the company and I personally spent a lot of
time going to trade conferences, luncheons that NIRI (National Investor
Relations Institute) would host, talking about “What’s the Internet?” and giving
demonstrations, trying to make that less intimidating, explaining it. And then,
starting in 2000, we did a similar thing…

scariest incident we

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scariest incident we had in these 15 years.
Livingston:Were you a hero with the client?
Gruner: Yes, we were, but we didn’t fall on the sword too much on that. We
basically told them that we got it worked out. I don’t think I even told them we
used a private investigator. We absorbed all the costs. Turns out, there were two
people involved: a client plus a very large stock transfer agent that was working
with the client. Of course, the transfer agent really felt good about that, so they
threw a lot more business in our direction at…

hiring a private

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hiring a private detective?”
I said, “Well, let’s try this. It’s an interesting idea.” So I went to the Boston
Yellow Pages, looked under “private investigators,” and found an ad that
appealed to me. I called the private investigator and I said, “Here’s an 800 number.
It belongs to somebody that has a pager. All I need from you is to know the
name and the personal phone number of this person.” He said, “No problem.
It’ll cost you $100.” And I said, “That’s fine. How long will it take?” He said, “It
will probably take about 4 hours.” I…

few years there

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few years there were only three or four people, including myself. We were
delivering news for public companies that was very visible, under scrutiny. If
you screwed up, either by being late or by getting the wrong information, you
were in big trouble. We had a couple of things that scared me to death.
I think the one that was probably scariest, that definitely could have put us
out of business, happened in ’94 or ’95. A very large pharmaceutical company
had decided to go with us. We had everything underway, and they were going to
announce this new service…

which at the

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which at the time was a very successful high-end machine, and converted it to
run on our machine. The key question was, “Can we take these off-the-shelf
Vax programs, recompile them for ours, and actually have them (1) run correctly
and (2) significantly speed up as you add more computers?” When we
demonstrated that to ourselves, that was a huge milestone. At that point we
knew. By early ’85, we knew we’ve got technology that works and is viable. And
if we can execute from that, we’ve got a viable company.
Livingston: Did you have any competitors at that point?...

edge. And we

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edge. And we also thought it was a good recruiting technique in terms of
having people focus on three things we thought were important. First of all,
“Let’s focus in both directions on the people, on the culture, on the environment,
see if that makes sense to you.” Because we asked them some extraordinary
things. We said, “This project is going to take about 2 years, and it’s going
to be a lot of work. Furthermore, we are going to institutionalize it by saying,
‘We need you to work every other Saturday.’”
Livingston: Really?
Gruner: Yeah. “You gotta be here....