If you think experience doesn't count for much in the new economy, you should meet a guy named Lee Iacocca - and four other entrepreneurs who've staked a dot.com claim.
After their once-brilliant careers came to an end, Nick Nicholas, Lee Iacocca, Rich Frank, James Robinson III, and Julann Griffin all seemed to disappear for a while. Nicholas, deposed as co-CEO of Time Warner, retreated to Colorado to kick back, ski, and figure out what hit him. Iacocca left Chrysler, took it easy, and hit the links. Robinson, forced out of AmEx, did some consulting. Frank, a former chief of Disney Studios, devoted much of his time to producing cabernet at his small Napa Valley winery. And Griffin, cocreator ofJeopardy!, tended to her 1,000-acre estate in Virginia after a string of TV executives rejected her proposal for a new game show.
All multimillionaires, they might have simply coasted into full-time retirement. Instead, inspired by the promise of big ideas, stock options, and the urge to prove they still have what it takes, each has embarked on a digital odyssey. All five are 55 or older (the oldest, Iacocca, is 75), making them role models for a graying horde of executives who see the Internet as the place to launch their next acts. In wide-ranging conversations with Wired, they discussed the ups and downs of plunging into the new economy.
NICK NICHOLAS
AGE 60
ACT 1 CLAIM TO FAME Co-CEO of Time Warner
NOW Self-employed startup investor
MADE DIGITAL LEAP 1992
HQ New York
EMPLOYEES 1
MARKET VALUE $500 million
When Nick Nicholas helped run Time Warner in the late '80s, reporters routinely tagged him as a sober, visionless bean counter - "antimagic," as one put it. In 1992, Nicholas was ousted by Gerald Levin and the late Steve Ross in a devastating coup. "Nick was one step above roadkill," recalls Charles Jennings, a friend who bumped into him days after he was booted. Nicholas' wife, Lynn, a psychologist, confirms the diagnosis. "Nick was in shock," she says. "He had never had a failure before. I think losing his job was an exercise in humility - not the most pleasant human experience but a very valuable one."
Armed with a severance check for $16 million, Nicholas rapidly morphed into an investor with an uncanny knack for finding and nurturing Net startups, parlaying his stake into a fortune worth roughly half a billion dollars. Supported by a staff of one, Nicholas has pumped pre-IPO money into more than 20 high tech companies, including Yahoo! Store (formerly Viaweb, which helps merchants set up ecommerce sites) and PlanetFeedback (a service enabling consumers to contact any company to express gratitude or a gripe). In 1997, Nicholas placed a $2 million bet on the reverse-auction site priceline.com, an investment that is now worth approximately $300 million. Most recently, he returned to his publishing roots, launchingAccess Internet magazine, aParade-like supplement of Web site reviews available in dozens of newspapers and online.
Wired: You crossed the bridge to new media, but is it too late now for other old-media guys to get into the Internet game?
Nicholas: Not this game. This game is going to go on for centuries, so it's not too late at all.
How soon after leaving Time Warner did you get serious about technology?
Within months. Like all CEOs, I already had a computer. But all I knew was how to turn it on and off. I had never even written anything on it - I used longhand. Basically, I started thinking about the future. I asked myself, "Hey, Nick, in 30 years at Time Inc., what turned you on?"
And the answer?
My days starting up HBO and Manhattan Cable Television. There were no rules, so those were exciting times. When I got assigned to both of them, they were just about to be shut down. I got put into solving problems. Well, the flip side of problems are opportunities ... I loved operating with real people doing real things. You know, negotiating with the local union, the tough guys.
Executives don't usually gush about unions.
I'll tell you what: No one had ever sat down to explain to these guys the whole business and what it takes to survive. I used to go down to the garage and meet them. I'd say, "You bring the beer, and I'll bring the company's plan." But when you end up as a CEO of a major corporation, every minute's scheduled. The Queen Elizabeth part of your job, the ceremonial stuff - speaking at conferences, lobbying senators, entertaining foreign partners - becomes very time-consuming.
What was the first check you wrote to a tech startup?
Around $200,000 for a piece of Zombie, a virtual reality gaming company. That was a large amount of money to me. I don't usually see business plans seeking tens of millions. I see ones in the early stages of development. They want money to test a hypothesis.
How did that investment work out?
Not great, not lousy. How can I put it? I didn't lose money, and I didn't make money. Zombie's games didn't sell that well, but the company is a survivor and most game companies aren't.
How much of your capital do you devote to Internet startups?
I'm a "barbell" kind of person in the way I manage my life economically. On each end there's a lot of weight and in the middle just the handle. A conservative investment over here, a high-risk one over there. Not much in between. The conservative investments I owe to my family. With the very high-risk stuff I shoot for the moon. I like to invest really early in the process so I can add value at investor meetings. I want to mentor and focus on developing strategy. That's how I can help.
Do you demand a specific return on investments?
No, I have a different philosophy. Sequoia Capital, for instance, invests billions, so I've got to get there before they do. I like to get in long before VCs are around. The VCs want to get in and take it public and get out in two or three years. I don't think about an exit strategy. I don't have to.
With only one assistant, how do you successfully compete with the mammoth venture capital firms for deals?
I do not compete with large VCs. They almost always get into the deals later - after there is more definition, and less risk, to a project. I try to invest at the very earliest stage - in some cases, when the company isn't even legally formed.
Where do you track down these embryonic companies?
It's word of mouth. People say, "This guy Nicholas is really value-added. He won't screw you on the investment, and he can help you." I've been out of school for 35 years, and I've met tons of people who bring me deals. I do the same thing for them. It's like dropping rocks in a pool; the circles intersect.
What piques your interest when you read a new business plan?
I care more about the idea than the plan. I ask, "What do you guys want to do? What do you want to make happen and why?" I want to see some evidence of leadership skills in the management team. It doesn't have to be business-related. It could be something they did in their community. I prefer backing entrepreneurs who invest some of their own hard-earned cash. Generally, you just listen to people. How do they talk? Do they let other people talk? I really wanted to invest with Jay Walker [priceline.com's founder], and there was no business plan. There was an idea and there was Jay. In 20 minutes I was sold.
In 20 minutes?
Maybe less. I met Jay at breakfast on Manhattan's West Side, and he leans into me, smiles, and says, "What would you say if I told you that you could name your price on something that was important to you and the suppliers would all compete for your business?" I said, "I want in."
What's your take on AOL's purchase of Time Warner?
It's a brilliant deal for Steve Case. From the view of a Time Warner shareholder, I just don't get it. I want a cogent understanding of why, when you put these two companies under one roof, billions in shareholder value will be created that wouldn't otherwise be created. Case is using inflated Internet wampum to buy real assets - CNN andTime and Time Warner Cable.
What's the difference between AOL's stock inflation and priceline's?
Two different animals. AOL is valued on its revenue stream as an ISP, whereas priceline.com is valued on revenues from selling things to customers - like 10,000 airplane tickets a day. It's clear that priceline is going to stay in its own business. It doesn't need to use its wampum to buy any tangible assets.
Time Warner might not have merged with anybody if it had done a great job creating Web content. Could you have handled that better?
It's interesting that none of our major media companies were the major entrepreneurial builders and inventors of the Internet. It happened not in spite of them, but around them. Not one of the big new Internet companies - the Amazons and the AOLs - came from the people who were in the business of journalism or communication. Would I have conducted myself differently? I don't know the answer to that.
So let's pretend: You're in charge at Time Warner throughout the '90s. How would you save it from the AOL gobble?
In the '90s, Time Warner was a large, sprawling, unfocused company with a poor balance sheet, and as a result it probably underinvested in new media. I wanted something lean and focused with a great balance sheet. Fundamentally, lean organizations are more likely to be entrepreneurial. Two examples of moving too slow: The people who founded Yahoo! came to Time and offered them a quarter of the company for about 10 million bucks. Didn't happen. And in early '95, Paul Allen had accumulated 25 percent of AOL. He wanted to be more active in the company but was rebuffed by Steve Case, so he sold his stock. Time Warner could have picked that up for a song, a couple hundred million at the most. It is supremely ironic to me that before the AOL deal, Time Warner made this huge announcement that they were establishing a $500 million fund to invest in Net businesses. That's the fund that should have picked up Yahoo! and AOL.
LEE IACOCCA
AGE 75
ACT 1 CLAIM TO FAME President and chair of Chrysler
NOW Director of Online Asset Exchange
MADE DIGITAL LEAP 1999
HQ San Diego
EMPLOYEES 65
MARKET VALUE $300 million
For the past few years, Lee Iacocca has steered clear of the Internet to concentrate on EV Global Motors, an electric bike company he started three years ago. But he recently rented his glib tongue and famous face to Online Asset Exchange, something of a cross between Nasdaq and eBay. Touted as "the world's largest surplus machinery marketplace," the well-funded startup is backed by a quartet of venture firms (including Delphi Ventures and Sigma Partners), and lists 200,000 secondhand assets with a value of $7 billion, from aircraft engines to zipper manufacturing tools. Iacocca doesn't know much about the Net's intricacies, but he should feel at home at Online Asset Exchange - he peddled tons of used equipment at Chrysler, and his new company's management team is stocked with older execs. Initially, the company is making markets in metalworking and production equipment, power-generation systems, and aircraft gear, though it plans to rapidly diversify. Can car parts be far behind?
Wired: Why doanything? Why not just retire?
Iacocca: My kids ask me that all the time. What the hell are you doing this for? Why not play golf? I've played enough golf. The world is changing and I want to keep talking to young people and see all these wonderful new markets and inventions. I already own a big electric bike business, but with Online Asset Exchange I realized I can learn a lot and, through my 50 tough years in business, I can help them.
Online Asset Exchange is your Net debut -
Well, actually, I dove in with my own Web sites for my bike business. I brought in a company that set up a great Web site for us, and told us how to tie in our dealers and organizations like AARP and Kiwanis International that are interested in bikes, and I began to realize how quickly you can gain awareness. I now have three sites, including iacocca.com, which is called that because I couldn't get my full name. Some guy in Texas says he owns it. We'll go to court and figure that out later.
How much did you know about computers after leaving Chrysler?
Steve Jobs came to my office 15 years ago and gave me two computers and said, "You're computer illiterate, and I imagine you're proud of it?" And I laughed and said yeah - but I learned a little bit, played piano on it a couple of times. So many executives don't want to take time to delve into the Internet, but now if you don't you're sort of saying, Stop the world, I want to get off.
Many Internet startups must have wooed you in recent years. What did you pass up?
Online car dealers, who are trying to get part of the trillion-dollar car market - everybody from Autobytel to Cars Direct to cars.com. They wanted me as a spokesman. And while I agree that many brick-and-mortar stores aren't necessary, I still embrace the franchise system for cars, as much as it is maligned. I grew up with dealers - they're some of the best businessmen there are - and I didn't think it was time to jump ship.
What attracted you to Online Asset Exchange?
What I like is good people with a good plan who are well capitalized. Of all the concepts out there, this one turns me on. Why is there so much excellent used equipment in the US? It's because we've had an affluent 10 years and a lot of this stuff is only halfway depreciated, but companies buy new machines to keep efficient and use capital expenditures to improve productivity. The result is that all this heavy equipment is lying around in storage. Boeing has a ton. The Big Three have a ton. In my days at Chrysler I remember saying, "Just get rid of it." Using auctioneers, you would try to get the best price you could, but often you ended up with 10 or 20 cents on the dollar.
Would you have used this service at Chrysler?
I ended up with too many four-cylinder engines, because I thought gas was going to $2 a gallon - not $1, like it did back then. So I went to Beijing and sold a slightly used automated engine line to the Chinese government. This new way makes deals like that a lot easier. Already, on Asset Exchange, you see these amazing deals - there's a small power generating company, for instance, that is trying to sell an entire power plant!
What do you see as the biggest risk facing the company?
Actually, of all the proposals I looked at, I found this company the least risky. The people who run it - Frank Berlage and Norman Bastin - have been in the asset liquidation business for years. They know all the people in Silicon Valley - I know because I checked them out - and they raised plenty of capital. They have $7 billion in assets already. What you worry about in any business is how tough the competition will be. I have no illusions that there won't be others selling secondary assets and machine tools, but the guy with the best system will be left standing. I like this company because it's full service. It's doable. It's an exchange like the New York Stock Exchange, but instead of selling bid-and-ask stock we sell the used collateral behind that stock. It's pretty slick. I wish I'd thought of it.
What will you do for them?
I'll be on their board, go to conventions, talk to the press, advise them about moves to make. Take medical equipment, which they aren't into yet but should be. Old magnetic resonance imaging machines are relatively small and they make people in the US feel claustrophobic, but a hospital in China will take whatever you got - forget the claustrophobia. The Internet allows you to create a real exchange with a bid and ask price - not an auction - every day around the world. The Asset Exchange people will appraise the equipment, finance it, open the escrow account, rig it, move it to Europe or wherever from New York.
In your bookTalking Straight you complained that old people get discarded in the business world "just because they have wrinkles." Will Internet opportunities change that?
I've always been against automated chronological dates to farm people out. The union would always say, Make room for the new blood; there aren't enough jobs to go around. Well, that's a hell of a policy to have. I don't know if the Internet will be able to change stereotypes, but I hope so. I had people at Chrysler who were 40 but acted 80, and I had 80-year-olds who could do everything a 40-year-old can. You have to take a different view of age now. People are living longer. Age just gives experience. Besides, it takes you until about 50 to know what the hell is going on in the world.
What do you tell 25-year-olds with $25 million in stock options?
I spoke at a conference Arthur Andersen sponsored last year on communications. On one side were the old guys like AT&T and Lucent, and on the other side were the Internet guys. I told the Net guys not to get too carried away; I reminded them that in 1909 there were 120 car companies. Thereis going to be a big shakeout, and I told them that to survive they have to implement these wonderful concepts, and that requires good people, marketing sense, some techies, but above all an awareness of taking care of the people you're selling to. Ecommerce companies that want to make it have to say, "The customer is king and I will service him until death do us part." Because in the end, only the good ones will be left standing.
RICH FRANK
AGE 57
ACT 1 CLAIM TO FAME Chief of Disney Studios
NOW Chair of Food.com
MADE DIGITAL LEAP 1996
HQ San Francisco
EMPLOYEES 200
MARKET VALUE $500 million
If you can read a man by the books he reads, Rich Frank, Disney Studios chief turned Internet impresario, is both reflecting on the past and bracing for the future. As the recently appointed head of Food.com, an Internet delivery and takeout service, Frank currently shuttles between Steven Stark's nostalgicGlued to the Set: The 60 TV Shows and Events That Made Us Who We Are Today and Clayton Christensen's treatise on the life span of success, The Innovator's Dilemma. Frank's jump from studio exec to ecommerce turk comes courtesy of San Francisco-based Food.com, a four-year-old startup that enables hungry consumers in America's 10 largest cities and major university towns to order delivery of restaurant meals electronically. Food.com has, in Frank's assessment, "spilled" $15 million of the approximately $45 million in venture capital that it originally raised (it closed an $80 million round of financing in March), while the company's revenues remain snack-sized: roughly $3 million. What's the problem? Restaurants seem reluctant to pay for unproven Internet ordering systems (Food.com charges them $79 a month plus 5 percent of online orders), and diners seem slow to abandon the trusty telephone.
Frank - who was recruited by the venture capital firm Accel Partners after it forced out Food.com's founders - concedes that the company's turnaround might require the resources of a "bigger fish." (He occasionally drops subtle hints that Food.com is amenable to suitors.) Still, when pressed, the man who shepherded TV shows likeHome Improvement and films likeDead Poets Society maintains that he has another hit on his hands.
Wired: You split your time between LA and San Francisco. Compare the two cultures.
Frank: I live in LA most of the time. When I'm in San Francisco, about three days a week, I stay at a hotel. Most of the people in San Francisco and the Valley are young and willing to work for very low pay in exchange for very high stock, and in LA they want hard cash, stock, and bonuses. Everyone there wants more of a guarantee. Things move quickly in Hollywood but they move even quicker up north. San Francisco is even faster-paced than New York.
Why is a former movie executive the right man to lead Food.com?
I may have been a movie executive but I'm an executive first. I think I could run General Motors given a little time to learn about it. The only things I've failed at were trying to retire twice.
Why wouldn't a 24-year-old eat your lunch?
Well, I think a 24-year-old could eat my lunch playing basketball. But what I've found is that you need some perspective. That's what I bring to this company. We're in the process of negotiating our last round of financing, and McDonald's is likely to be involved. Literally, when I was sitting in their offices in Chicago, one of their executives leaned forward and said, "It's so great to see an old person in the room. I just feel more comfortable giving my money to you" - she actually said this - "than to a 24-year-old."
When you joined Food.com, what did your friends in Hollywood say?
The funniest call I got was from Michael Eisner, who asked, "What are you doing takeout and delivery food for?" I told him food delivery was just the entry point to a very big idea, and that is to create the Food Network of the Internet, and to do everything that's been done on television on the Internet. And he said, "Oh, I get it."
Why do you think your old boss, Barry Diller, has yet to hit a home run on the Net?
Integrating the management staffs of his old, established companies and the new ventures causes conflicts, but I think Barry is doing a pretty good job.
Do you agree with Diller that almost everything about old and new media is different?
The pace is certainly different. With the Internet, things are moving so rapidly that you almost don't care about process, you just want to move forward, and you figure you'll build the process as you go. The entertainment business has been around for years, so it had structure, heritage, and history. But it was also tied down by unions, negotiating new contracts all the time, and that forced a certain rhythm, timed to the major seasons, for releasing movies. Here, the rhythm recalls a very rapid heartbeat. No seasons - just urgency.
Hollywood wasn't fast-paced?
Yeah, but everything was structured - from where you parked your car to who was allowed on the lot to where your office was. It was structured to protect the system, sort of like a fraternity. Once you became a brother, you wanted to be able to harass a pledge. And there was also an awful lot of setting things up so that, if a project wasn't successful, you had somebody else to blame. You had to call up all the past deals to see how you were going to build a model. Here the structure is, "Let's just make the deal. Let's get on to the next thing."
You started your career in the '60s at BBDO as a junior media planner. Was there anything reminiscent of that in your first day at Food.com?
They're about as opposite as could be. Madison Avenue was very formal; you had to wear a suit and tie, wing tip shoes. I can remember using these giant Monroe calculators at BBDO. You would hit a bunch of numbers and sit there while the machine wentch ch ch ch ... And you would wait and wait while it carried out long division.
How much did you know about technology coming into Food.com?
I didn't know anything about technology and still don't know much more. I have problems working basic programs.
What's the worst old habit you brought with you?
At Disney we analyzed everything, looked at everything. We wanted to see what all the downfalls were. We wanted to make sure the return on investment was right. I was taught to think that way. So when I came here, I started looking at every decision. I would sit down and analyze, and meanwhile things were just happening. Here the question is, How do we get to market faster? The first one to market starts gobbling up market share, generates venture capital and money to continue. So you start thinking, Hey, I just feel this is right, let's go do this. It took me a while to get my hands around that.
Was there a turning point when it all fell into place?
As we started getting bigger - eventually surpassing 550,000 registered subscribers - we realized that our site was not as functional as we wanted it to be. I had to go to the board to ask them for a couple million to reprogram it. We made that decision very rapidly, and at Disney we would have taken a long time. We put about two weeks' work into a presentation, got approval at one board meeting, and then started interviewing firms immediately. We didn't overthink it. Maybe I'll find out six months from now that we made a mistake. But then I'll just change the site again as opposed to worrying about it.
What's the biggest challenge facing Food.com, and how do you plan to meet it?
It's all in the execution, and I think we have put together the management staff to make it work. We have no competition except for the telephone, and if we can continue to develop the site, add restaurants, and make the site easier to use and then drive people to it, we will succeed.
Who's more difficult to deal with: Hollywood writers or Silicon Valley programmers?
Both are equally fickle. I think of the programmers like comedy writers. There's an old saying in Hollywood: A writer asks, "Do you want it funny or do you want it Friday?" I always told them, "I want it as funny as possible on Friday." I tell the programmers a similar thing: "I want it as user-friendly as possible on Friday."
Ever tempted to return to Hollywood?
I've always been a believer in the "been there, done that" theory. You do have a lot of perks in Hollywood. But you're always in some way at somebody's beck and call. Yes, you have the jet to fly around in. You have somebody to make sure that your hotel room is just right. When you step off in Europe, somebody hands you a packet of local currency so you don't have to go to the American Express office. There's a translator waiting for you when you arrive in Japan. It's very nice. But some other time it will be the day before Christmas and some big star calls you having a fit. And no matter where you are - on the beach in Hawaii - you have to get on the plane and go calm them down. There's always a bigger dog than the top dog.
JAMES ROBINSON III
AGE 64
ACT 1 CLAIM TO FAME Chair and CEO of American Express
NOW Founder of RRE Ventures
MADE DIGITAL LEAP 1994
HQ New York
EMPLOYEES 14
MARKET VALUE $350 million
In the last four years of James Robinson III's 16-year reign as chair and CEO of American Express, the company showed up in the tabloids nearly as often as in the business press - one day it was facing a revolt from restaurateurs over high commissions, the next a humbled Robinson was publicly apologizing to his former banking partner, the late Edmond J. Safra, for waging a smear campaign in the media. Robinson survived these and other imbroglios until 1993, when AmEx's board grew impatient and forced him to retire.
Robinson bounced back, co-founding RRE Ventures, a venture capital fund that manages $350 million in assets. RRE holds stakes in 42 Internet-related companies, including Netcentives, which gives out online loyalty rewards, Weddingchannel.com, one of the leading gift registration sites for brides, and eCoverage, an online insurance brokerage. Robinson still has plenty of detractors, particularly people who can't forget his years at American Express. But he dismisses such talk, pointing grandly to RRE's impressive returns on investment, which he boasts is "north of 125 percent."
Wired: Complete the following sentence: "When investing in startups, don't leave home without - "
Robinson: A prayer. I'll tell you the way we make decisions. At least two of the three partners have to be 80 percent convinced, and the other one 60 percent convinced. If anybody says they're 100 percent convinced, they're smoking something.
How many business plans cross your desk annually?
We see a couple thousand a year. And we'll meet with probably 10 companies a week. We are seeing so many business plans that you just have to make quick decisions as to which ones you will look at seriously. You're always worried that you'll miss something. It's a bandwidth problem we've got: how many? How many deals can we safely and soundly process?
What was your most resounding success?
We put $4 million into a company called WatchGuard, a leader in managed security systems for middle-market companies. Our $4 million investment is worth about $120 million right now.
Flops?
We invested in Diva, a local-loop-technology phone system built by some PhDs from Berkeley. Its target market was developing countries. It would tie the local communities that didn't have phones, and then link into the main telephone system of the country. It won some very large contracts in Asia, but then the company got bogged down by the political process; it just couldn't stand the length of the sales cycle.
Did you take a bath?
Eleven and a half million.
Did you miss out on any real winners?
Exodus, a company that puts up buildings that have all the telecommunications links coming into them - the T3s and T1s, and so on. It's configured inside so that you've got, in effect, a wire cage where companies will host their computer facilities, so that they don't have to worry about trying to stay current with all the changes in telecom and network management and routers. It has been wildly successful, and we passed.
Describe the dumbest mistake startup hopefuls make.
Inadequately thought-through business models. We generally have been skeptical of models that rely solely on advertising. All these models where you buy something for a dollar, sell it for 90 cents, and make it up on advertising - that's a bit far-fetched.
When you analyze a business plan, what are you looking for?
Very large markets that look like they'll have substantial growth. The new markets we're looking at, for instance, are in the wireless area, where because of technology you're going to see a rapid acceleration of the utilization of peripheral devices to access the Internet.
Some executives who submit business plans to you must have a thin résumé. How important is experience?
When we seeded our first company, an outfit called eCoverage, the guy we hired to be interim CEO and to run with the ball was a 27-year-old who had graduated from college, started a company that failed, and had no other business experience. And he turned out to be the guy who ran that company from a $1 million valuation to around a $500 million valuation. He had the moxie and the intellect to make a company. You can do all the statistical work you want, in terms of running models, but the final decision is going to be based on your feel for the people, and your excitement for the market they're trying to cultivate.
But as the history of startups shows, founders aren't always keepers. How do you tell a founder he's toast?
You just have a conversation. "Look, here are the needs of the company, and here are your strengths, and here's what we think we need - going forward." My first investment was in ScreamingMedia. I discovered these kids through the Internet, and cold-called 'em, left a voicemail. They thought one of their buddies was playing a practical joke. But they eventually called back, and I invested. In early '98, we started conversations in earnest with the CEO, saying, "You know, you're a terrific operating executive, but we need someone in here who can carry this company from a cottage industry company into a big success."
You once said that your biggest miscalculation at AmEx was focusing on overly rapid growth. Are many ecommerce companies rolling out products and services before they're ready?
Sure. You've got rapid growth. The difference between now and 5 or 10 years ago is that today you canimplement rapid growth. You didn't used to have the systems capacity to do that. You didn't have the ability to access multiple databases, which you still don't quite have yet, but we're getting there. First to market is very important today. It was less important 10 years ago. But if you forget execution then you're in trouble. At American Express I used to always say that our four most important priorities were: quality, quality, quality, and quality. I say the same to the companies that we're investing in.
The media often portrayed you as arrogant.
Well, they said I was ... courtly. I didn't think I was arrogant then, and I don't think I'm arrogant now.
How do you guard against arrogance when you have 42 successes with returns averaging 125 percent?
One of the best books I've read isOnly the Paranoid Survive, by Andy Grove. You always have to assume that tomorrow, some competitor is going to show up and knock you out of business. I don't care how good you are, or how solid you are in the marketplace - you have to run scared.
JULANN GRIFFIN
AGE 71
ACT 1 CLAIM TO FAME Cocreator ofJeopardy!
NOW Cofounder of Boxerjam.com
MADE DIGITAL LEAP 1995
HQ Charlottesville, Virginia
EMPLOYEES 60
MARKET VALUE Not available
Julann Griffin is the cofounder and self-described "empress" of Boxerjam.com, one of the Internet's leading game sites. (More than 2 million contestants a month play networked quiz games like Strike a Match and Out of Order on the site and on AOL.) Griffin has had three successful careers already: In the '50s she worked as a radio comedian. In the '60s she teamed up with then-husband Merv Griffin to create and launchJeopardy! And in the '70s she helped cofound the First Women's Bank of California, later selling her stake for a tidy profit. From its humble beginnings as a pre-Web launch, Boxerjam has grown into a major player in online gaming, though it has yet to turn a profit. The model is a typical attract-eyeballs-and-show-them-ads plan: Major national advertisers, including Purina, Hallmark, and Sprint, run "intermercials" - 15-second TV-quality spots between game rounds. Boxerjam recently scored a $12 million infusion from Oak Investment Partners and New Enterprise Associates, and has started snapping up competitors like SilverSun.
Wired: Did you know anything about the Web when you started Boxerjam?
Griffin: No, because we got involved in computer gaming before the World Wide Web was created. I saw an article inThe Wall Street Journal that said games would be played by computer in 10 years. This was in 1988. So I called Maureen, my sister and business partner, and said, "What do you know about computers?" I told her, "They say that's the future, and I'm sick of this TV thing."
What's the most recent thing you've learned about the Internet?
That fiber optics and copper wiring aren't compatible. One of the frustrating things about being a content provider is that there are so many distribution points, and so many obstacles to getting into all the sites, that a lot of people just are not getting with the computer age. This is especially true for my age group. They don't mind turning on the TV - just don't ask them to tape a show - but they think computers are monsters. I can't wait until they are made easy for everyone.
Is Boxerjam.com run entirely by old-timers?
No. We're a funny-looking group. Maureen is 67 and I'm 71. Two of our other most important people are 34. But we've found common ground, and we're lucky to be starting with good people. We're able to keep everything aboveboard, with high ideals in mind.
What's the biggest thrill for you in this new business?
My grandma said, "Anything that you can think of can happen." Now, I know Jeopardy! was a simple idea and it was produced very well, but by now that show has probably generated over a billion dollars. Not for Merv alone - I mean generated a billion dollars for all sorts of people. When I realized that, I thought, OK, Grandmother was right. Everything you shoot out there multiplies. And that's what cyberspace does especially. So I decided this game show company is going to be huge in 2005. That's my dream.
How hard has it been getting there?
As a company we were stretched very thin until we got our venture capital. But we stuck in there, though there were some people who tried to eat us up for nothing. And that was very hard.
Companies wanting to buy you?
Not only buy us, but wanting to make a deal with us to give them games. But then their fangs would come out, and you'd see the paperwork with blood on it, for God's sake.
How do you evaluate an angel? Do you worry about them seizing too much control?
Well, frankly, that's exactly what I worried about. As a company we were stretched thin until we got our venture capital. My partners and I look for, one, How long they've been in business and, two, How involved they are with other companies as close to ours as possible. And three, Who is in the company? What's their background? We go by recommendations from other people who have worked with them. Some VCs are out there throwing money around. It's hard to trust them. I was worried about losing control, but we have gotten so much good from our VCs - fantastic ideas and leadership. And the fact that they offered due diligence - they were impeccable about it - we thought anybody that cares that much will be able to help us. So it's been wonderful.
Have games changed in your lifetime?
When I was a kid, the family got a game for Christmas like Parcheesi, and the family would gather around the table and play it. But now, you get on a machine and shoot somebody. I miss the tables. To me, tables are intrinsic to rituals like the family dinner: sitting around and discussing problems, good times, bad times. Tables are almost like altars, where you celebrate life.
Will the Net ever feel like a table?
It's evolving, and it will be more of a table when it's connected to the television set that the family sits around - playing games against one another.
Has your site ever been down?
We've been down maybe half a day or so. When we go down, it's awful. But we're pretty good. Our engineers have covered us pretty well, but there's always the potential for problems.
What did TV games teach you about interactive, Net-based gaming?
That if you do a good game, you should do it without people having to type in any information. You have to keep downloading simple. You can't overload the screen. Less is better. You want to finish a good game like you would a good meal. It makes you hungry to play it, and it tastes delicious all the way through. There are so many text-driven games on the Net that are boring.
You grew up during the Depression. What advice would you give to a newly minted Net millionaire?
Don't think that you are your money, because it may go bye-bye.
What advice would you give to a 60-year-old who gets the irresistible urge to jump into the Net right now?
Hundreds of companies out there need older people with teaching skills, financial skills, database skills, whatever. Look at all the Web sites and ask yourself which one you would like to be associated with, and apply! I was 65 when we created Boxerjam. I didn't even realize it until I looked in the mirror.
