When you are CEO of a major corporation, everything is a test. When your kidnappers decide to call into the Board of Directors meeting while you are held at gunpoint—well, it’s just another day at the office.
PUBLISHER’S NOTE: This is the fifth chapter in the ongoing syndication of the first section of Ken Goldstein’s new novel, This Is Rage, published by The Story Plant. If you haven’t yet read Chapter One, read it here. Or skip to Chapter Two, Chapter Three, or Chapter Four. If you’d like more background from the author himself, read Ken Goldstein’s welcome post, here.
No Such Thing As CEO School
It was early Monday morning in the boardroom of EnvisionInk. Daniel Steyer sat at the head of the table, as usual the first to arrive, his fellow board members assembling around him. As chairman, he would momentarily call the emergency meeting to order. The raw stinging in his wired jaw was too fresh to ignore, but nothing he would acknowledge. There was too much else on his mind, despite the pain killers causing him some mild disorientation.
Personal net worth was never the yardstick by which Steyer wanted his life’s work measured, but it had helped him accomplish much in the way of lasting influence, which mattered increasingly to him. He never considered himself as a visionary, rather he was the guy who identified visionaries long before others wrote about them. He enjoyed being credited for backing product breakthroughs so many others had missed, and launching careers that would have gone undiscovered. He was a facilitator, but never thought of himself as a manipulator. Party politics had been terrain he historically avoided. Certainly he had opinions, but like religion, his leanings were a personal matter—not because he had any cult-like convictions he needed to hide, but because expressing any polarizing opinion was seldom good for business.
Steyer believed money was agnostic. In raising a fund, he wanted to be open to money of every persuasion. Companies in which he invested undoubtedly reflected any number of philosophies and factions. Talent was what mattered to him. He contributed to the PACs of both Democrats and Republicans because it was smart to have friends at all tables, but he would not endorse any candidate running for office in California or otherwise. He had served on the economic advisory councils for Presidents both Democrat and Republican, and it was unclear to which, if either, major party he held loyalty. He had dodged an inquiry to serve in the Treasury Department—a potential path to Secretary was even kicked around—but Steyer saw the opportunity cost as too severe. He liked what he did, it paid implausibly well, and he believed that venture investing had a more profound impact on society than policy making ever could.
When Steyer graduated from Harvard, he had thought that government service might be his career path. Growing up on the outskirts of Oakland in a comfortable but simple middle class home, he considered himself dedicated to improving the community. He was an only child of financial necessity, his father a journeyman carpenter and his mother a middle school science teacher. Both his parents worked hard, always putting commitments ahead of luxuries, but in meeting their obligations they could never hold onto much in the way of savings. When it became clear to Steyer on his near perfect SATs that his gift of memory would land him a full Ivy League scholarship, he remained convinced his future would return him to the Bay Area where he would work his way up the political ladder to an elected position. There he could have a positive impact on society, to help people like his parents who played by the rules, but never got anything for it other than endless unsolicited offers for revolving credit at double digit interest rates.
With a BA in economics, magna cum laude, Steyer went where so many idealistic young people went in those days before attending law school—two years on Capitol Hill as a congressional aide, first for a Republican, then a Democrat, to ensure he had the full picture of his potentially chosen profession. He quickly discovered the fine line between campaigning and governing was not fine enough. It occurred to him in the year he served on each of the different staffs that the common ground in any elected government job was fundraising, and it was almost always Job Number One. Members of the House had to run for office every two years, which meant they were raising money all the time. If they were not running for reelection, they were eyeing the latest Senate seat that had opened due to death or dishonor, or preparing a home state run for governor, or, with enough cheap well drinks in them at a Connecticut Avenue Happy Hour, tossing about the wild notion of a someday run for POTUS perks. Their ambition was not the problem. It was their time management that bothered Steyer, their use of resources that distracted their staffs from the vital work of the people. Perhaps it was reality setting in, perhaps it was the way all idealism erodes over time, but the cycles consumed by fundraising activity were, in Steyer’s eyes, daunting and deplorable. When an event was not on the schedule, there was always a donor, or support group, or lobbyist who needed hand holding, every unblocked hour in the daybook without exception. Steyer had been proud to understand his role as a legislative analyst, which sounded great, until he realized that his real job was to inform his colleagues how an elected official’s point of view on any given position might poll, then did poll, then how it might have an impact on fundraising and the next election. Teasing apart policy and fundraising was impractical, not at all strategic. Ties went to fundraising, which made the noble aspirant Steyer a de facto telemarketer.
Steyer had been thankful for his two years on the Hill, because it talked him out of law school, another credential most of the high-ranking Entrenched seemed to have for brand distinction, rather than application. Steyer concluded that if he was going to be a fundraiser, he might as well be a for-profit fundraiser. When he was accepted at the distinguished Stanford Graduate School of Business, about an hour’s drive from where he grew up, his choice was easy. It had been a good decision for Steyer on multiple levels. He had been able to spend a bit of time with his father before he passed away during the spring of his first year in business school. He also met Riley, a dynamic Stanford undergraduate in the creative writing program who would become his wife, life partner, and forever perfect companion. Then in the summer between Steyer’s two years of business education, he was offered an internship as a statistics wrangler at a local venture capital firm in Menlo Park, just as Silicon Valley was beginning to heat up with the dawn of the personal computer.
There had been no turning back for Steyer once he saw what Silicon Valley would do for the world. Most importantly, it put motivated people to work in good-paying jobs. Steyer could see no more effective way to improve the human condition than through boundless investment and wealth creation. The fantastic advances in accelerated technology emerging from risk embracing start-ups were mind-boggling. The new wave of tireless engineers was not just talking about changing the world—they were making people’s lives better by ending rote tasks and unlocking the computational power of Moore’s law, allowing exponential creativity to blossom. Not only were they creating jobs and unprecedented new tools in every form of application, they were putting America on the map in a positive reflection post Vietnam, as a world leader in innovation beyond the defense industry and the endless export of trite popular culture. That made Steyer proud to be an American, proud to be an innovator, and worthy—in his own mind—of the prosperity that would come, his share as well as that of others. It was a lifestyle far more consequential than government, lucrative and legally defensible, a platform where his flair could shine and make a permanent mark.
Steyer never thought twice about public life once he got going in venture. He forever avoided the tentacles of politicians and the media that followed them, building up heroes one day and destroying them for headlines the next. He and his wife never had children. With the all-consuming competition of his rivals, he was convinced he would be no good as a father, and after Riley’s first bestselling historical novel on the shifting power structures of medieval Rome, they never much discussed kids. He had made good choices, and he would continue to make good choices, even as his agenda for improving the community faded into the background as compounding returns pushed his bar higher. What Steyer was doing was helping matters, he always thought that, and even when conflicted, he never second guessed his own motives. Defining the line between noble and exploitative was poetic, not practical, a distraction from incomparable achievement.
“Are you ready to call the meeting to order?” asked George Yamanaka, the last to enter the room, diplomatically bringing back Steyer from his momentary contemplation.
“Yes, of course,” said Steyer, refocusing on the live digital stock ticker above the clear glass wall. EnvisionInk was trading down, off 6% this morning in a reasonably flat market, almost a gift to shareholders considering what could have been. The Street was being patient, waiting for a statement from the board meeting that would not be released until after the market closed at 4:00 p.m. EST / 1:00 p.m. PST.
Steyer surveyed the room, without need for ceremonial roll call. Of course two of his board members were missing, thus seven of the nine board members had made themselves available, a somewhat unexpected occurrence given that required notice had gone out so late the previous night. To Steyer’s left was Yamanaka, the much respected Stanford professor and mentor to Choy and Finkelman, who had in fact received an unexpected phone call the night before. Yamanaka pulled double duty at Stanford, a tenured Ph.D. in computer science who also lectured on best practices at the prestigious GSB, the Graduate School of Business. Next to Yamanaka sat Rebecca Gutierrez, executive director of the Human Potential Project, a San Jose non-profit funded by a broad consortium of tech firms to identify and champion minority talent in engineering that would quite likely otherwise go unrecognized.
To Steyer’s right sat Dr. Philippe Francois, a native of Switzerland and onetime world renowned neurologist, now CEO of The Wellness Collective, one of the nation’s largest and most profitable roll-ups of for-profit hospitals and medical clinics, notoriously at war with the health insurance industry and historically successful in litigating against their obstruction to high premium claims. Beside Dr. Francois sat Melissa Stanton-Landers, most recently CEO of eProxent, a $400 million back-end enterprise payment engine for mobile devices that had sold for over $2 billion cash in a private sale. She was now CEO in Residence at Hartwell Investments, which meant when not attending high profile board meetings like this, she read business plans and went to partner meetings while trying to figure out her next gig.
At the opposite end of the egg-shaped conference room sat Barton Throckmore, representing Tehama Capital, the other venture firm that had bet heavily on EnvisionInk in its second private round, allowing the initial round led by Steyer’s own SugarSpring Ventures to price up nicely. Throckmore was a former All-American wide receiver at Cal, top of his MBA class at UCLA Anderson, and a key leader of the California Democratic Party African-American Caucus, which he considered an avocation that offered him time to relax. On the conference table polycom from the East Coast was the Honorable Mitchell Henderson, five-time Senator from the great state of Florida, recently retired from government work and now an independent technology consultant as well as a renowned and handsomely compensated public speaker, much in demand around the globe.
They were joined in the boardroom by EnvisionInk executive officers, but non-board members, Sanjay Basru, the company’s CFO, and Sylvia Normandy, the company’s general counsel, who would keep the minutes. Steyer, Throckmore, and the two missing CEOs constituted the insiders, those with substantial personal involvement and financial interest in the company accompanying their responsibilities of governance. François, Gutierrez, Stanton-Landers, Yamanaka, and Henderson were deemed independent directors, specifically so that they could outweigh any caucus of insider influence, although with Steyer in the room, it was never a fair fight at one to eight let alone four to five. Predictably, no vote on any board action had ever polarized to that level, not even close. Board meetings historically had been pleasant affairs, if somewhat boring. The company had been public for just over six years, and until a year ago had been roughly doubling revenues every nine months. Now at a run rate of $6 billion topline for the year with earnings above $1.5 billion, the company had seen growth slow somewhat as it fairly well marginalized its last serious competitor and stabilized with just over 65% market share, annualizing at a mere 30%. For most companies that would have been heaven, but for a company that was trading at a valuation of $36 billion and a price earnings ratio above fifty, the flattening had become a modest cause of concern. Modest, that was, with the independents. The insiders felt differently in that they had much more at stake, with their own net worth largely tied up in stock options that could only be sold in a trickle at preordained open windows. Any major correction in the stock to a more reasonable growth P/E of, even thirty-five, could reduce all of their personal net worth by hundreds of millions of dollars. On this point, although Yamanaka had so much less in his portfolio, Steyer knew he was with the insiders. Steyer could count on Yamanaka to understand EnvisionInk had to stay a growth company, no matter what, even if a really good new idea had not emerged from the brain trust since the IPO. It could not have been more obvious to Steyer, this was Yamanaka’s one shot, his two miracle students at the helm after a career of waiting. It was growth or nothing.
Steyer refused to concede any discomfort, unquestionably aware he did not look too good. Half his face was in a fiberglass cast, not so much that he couldn’t talk, but enough that he looked like the Phantom of the Opera inverted, plus widening bruises and scrapes mending in fresh accent. How he had made it to this meeting after the incident at his home yesterday and an intense night with doctors under bright lights made no sense at all, unless you knew Daniel Steyer. He was not just tough. His resilience was a reflection of ambitious imbalance, focus beyond rationale. That photographic memory was only one of his attributes. His real talent was endurance, a trait he admired on par with intellect and sought to mirror in those he backed. No one could quite look him in the eye this morning without wincing, which he noticed but did not acknowledge as he proceeded to the day’s business.
“Thanks, everyone, for being here on such short notice,” began Steyer. “Let the minutes reflect that all board members are present either in person or via conference call, with the exception of our co-CEOs Choy and Finkelman, who are the subject of today’s meeting. I apologize in advance for not publishing a more formal agenda, but either George or I have spoken with each of you individually in the past twelve hours to advise you of the events at my home yesterday, which I’m sure you appreciate have left us in a difficult situation.”
“How you doing, Daniel?” came the voice from the phone, former Senator Henderson. “Sounds like you took a beating. You okay to be on the job?”
“Thanks for asking, Senator. I won’t kid you, it was not the greatest afternoon of my life, and I was only released from the hospital a few hours ago.”
“You weren’t released, from what I heard,” interjected Throckmore. “You walked out the door half-bandaged and told the doctor you’d get back to him when you could.”
“There may be some truth to that,” returned Steyer. “Candidly, I think they were glad to be rid of me, they have rules about phone use, and as you might expect I wasn’t very good at adhering to them. For the record, I’m fine. I have two broken teeth, a partially fractured jaw and some damaged cartilage in a few limbs that dragged on the ground. I’m going back for some more tests today, but it’s mostly cosmetic. This meeting was too sensitive to conduct from a hospital room.”
“You are one invincible soldier for the cause,” said Melissa Stanton-Landers. “Not many Operators would show up for work for weeks after what you went through. Most would take a leave of absence. As a board chair, you just set a new leadership standard for shareholder care.”
“Or psychosis,” added Throckmore. The ribbing between rival venture Investors was too irresistible for him, regardless of the circumstances.
“Thanks, Barton, I’m sure you will help the story evolve nicely over time with your partners. In any event, while I was being looked at last night, our colleague George Yamanaka received a call, which it makes sense for him to summarize here. George, you have the floor.”
“Thank you, Daniel, and may I say, as the only other board member on site for this mishap, our chairman is quite understated about the altercation he endured. You are indeed a hero, Daniel. I truly am surprised, but not really, to see you here today.”
“I hope you received the best medical care the peninsula has to offer,” said Dr. Francois. “In the event there is any specialist you might benefit from seeing, I will enable that without delay. But I have interrupted our colleague, Professor Yamanaka, please do continue.”
“Thank you, Philippe. If Daniel does not take you up on that offer, I will see to it that his wife is in touch with you. Now then, last night I received a call from the abductors, whose true names we still don’t know, but they have suggested using the monikers, Ben and Jerry. Forgive the dark humor, theirs not mine. While Calvin was doing reasonably well, they expressed grave concern about Stephen. As you should be aware from the briefing memo that was emailed this morning, in the struggle, Stephen suffered a massively damaging bullet wound to his left leg. As the evening progressed, we are told the bleeding became increasingly severe. The two adductors became concerned that if they lost Stephen, whatever plans they had formulated would be compromised further. To be clear, we do not appear to be dealing with polished criminals here.”
“What about that investment Banker, Charles McFrank?” asked Rebecca Gutierrez. “Are the individuals we’re dealing with now being sought for his murder?”
“They are, quite definitely,” replied Yamanaka. “I have been in touch with local authorities, as well as the FBI, several times through the night, and in addition to a kidnapping, this is a murder investigation as well.”
“I’ve fired off a half dozen emails to the DOJ this morning,” came the Senator’s voice. “I don’t suspect we’ll have any shortage of their attention. FBI should pick up the case in California shortly.”
“Much appreciated,” said Steyer. “If anything, they are a bit eager to be helpful. We need to slow this down some. Right, Professor?”
“I believe that will be a more beneficial approach,” continued Yamanaka. “Here is where we are. As I mentioned, there are two abductors, Ben and Jerry. First I spoke with Calvin to be assured of the situation, which he corroborated. Then I talked to Ben, I think he is a bit older than the other fellow, if memory serves from the party. I did meet them before they let loose. Ben told me they did not want Stephen to die, that he needed us to use our influence to arrange for medical care in the area. I did the best I could to consult with Daniel, Dr. Francois, and Senator Henderson as I could reach them. With everyone’s cooperation, we were able to secure an isolated emergency room at Salinas Valley Memorial Medical Center, just off the 101, east of Monterey. Ben, Jerry, Calvin, and Stephen made their way there, and last I heard, Stephen was receiving excellent medical care and they were likely to save his leg.”
“That is correct,” added Dr. Francois. “I just received a text from hospital administration in Salinas. Stephen has progressed to stable condition. The bleeding has stopped. This is one of our hospitals and fortunately they were not far away. We were able to make timely and critical arrangements.”
“I apologize,” interrupted counsel Normandy, “I know I don’t have a board role in this discussion, but may I ask a question?”
“Of course, Sylvia,” said Steyer. “You know we don’t stand on formality here.”
“Terrific, so I am confused. We have our chairman nearly removed from his own home and beaten within an inch of his life. We have a dead—hang on, murdered—investment Banker. We have our two senior-most executives kidnapped, one with a near fatal gunshot wound. And we arranged a private medical emergency room through a network of legal and medical connections where our happy family of dysfunctional, band on the run, yin and yang renegades is holed up? I’m trying to get a clear picture.”
“That’s a pretty clear picture,” pounded the voice of Henderson. “We have them pinned down in Salinas, behind a locked door. Our boys—and girls—are on site, on the other side of the door, but on their side they have a loaded semi-automatic pistol, I believe a Walther P22 from the reports I’m getting, but don’t quote me on that.”
“Excellent, I was just checking to make sure our minutes were complete and accurate,” said Normandy, her tone not lost in its contempt.
“Please keep the minutes high level, Sylvia, would you?” deflected Steyer. He had little appetite for sniping and once again controlled the room.
“I was attempting levity, Daniel,” countered Normandy, ever incredulous. “Lawyer humor, on par with programmer humor. So what happens now?”
“That depends on the will of those assembled here,” said Yamanaka. “The other request we received last night from Ben and Jerry was to engage in a brief conversation with the board at its next meeting. They are awaiting a call from us at the hospital if we are willing to place it.”
“They aren’t as stupid as we think,” offered Stanton-Landers. “They have some understanding of business protocol. They obviously knew the board would be convening under emergency circumstance. This may be a better planned sequence than we think.”
“With all due respect, Melissa, you don’t have to be Larry Ellison to know the board of a public company would promptly meet upon the abduction of their co-CEOs,” shared Gutierrez. “I may not be in the public sector, but even criminals can have common sense.” Steyer noted her comment as another in a continuing theme that had toiled without excuse over the years. The competitive tension between the two women on the board was palpable.
“May I ask a question?” said the CFO, Sanjay Basru, his tenor unassuming, unchanged from any other day.
“We already established a lack of formality, Sanjay,” said Steyer. “What’s on your mind?”
“Are we going to be discussing Atom Heart Entertainment today?”
The air had been sucked out of the room. Basru was as soft-spoken as he was matter of fact, with a complete lack of people skills and the perfect ability to say the wrong thing at the wrong time.
“Honestly, Sanjay, that is about as insensitive a remark as I could imagine given the circumstances,” declared Throckmore. “Even a schmuck like me knows when to backburner business over more critical issues.”
“Unfortunately, it’s all business,” replied Steyer. “Yes, we will have a brief update toward the end of the meeting on Atom Heart.”
“That is good,” said Basru. “I have received five texts from Sol Seidelmeyer since you called this meeting to order. I believe he wants an update on our intentions so he can plan accordingly.”
“Yes, that’s right,” said Steyer. “So the motion before the board is whether we wish to engage in a verbal discussion with Ben and Jerry to hear what they want next. Or I suppose I should say, how much? Any response is going to be problematic, especially with the media gathering outside. I see little downside in the conference call, but I don’t want to pressure or lead the board. Counsel, any opinion?”
“It should be an executive session, especially if you intend to have the call without police participation,” said Normandy. “Board only, action minutes, which should be none. I offer no other opinion. There are greater minds than mine to decide if Ben and Jerry are phone worthy.”
“As chair of the governance committee, I think it only responsible that we hear from them directly, as I did last night,” stated Yamanaka. “What we do next could be directed as much by the style as the content of their communication.”
“I concur,” said Stanton-Landers. “Style is content. So moved.”
“Second,” came the Senator’s phone voice.
“Discussion?” asked Steyer. There was silence. “All in favor?”
Seven ayes, none opposed. No surprises, the same way Steyer architected all shared decision making. Basru and Normandy got up to leave.
“Please call us back when you reconvene on the topic of Atom Heart Entertainment,” said Basru. “I appreciate the timing is not good, but I think the potential activity under consideration is now of even greater importance.”
“What’s the stock doing?” asked Throckmore, reaching into his bag to replace the dead battery in his fully-consumed mobile.
“Hasn’t moved since the open,” said Normandy. “Still down six percent. I’m guessing it will close there today. We need to issue a statement at market close.”
“Thank you, Sylvia, we will get that done. Also please note for the record that the board has been reminded of its fiduciary duty. Any discussion or decisions today as always will be made with the interests of our shareholders first and foremost.”
“That’s why you’re the best,” said Normandy as she jotted down the note and left the room, CFO Basru immediately following her.
When the boardroom door closed, Steyer looked around the table to ensure he had the control he presumed. Slight nods confirmed implicit concurrence, as was the group’s behavioral norm. After a moment to allow all participants to put down their mobile devices following a quick check, he reached for the polycom.
“We are in executive session,” said Steyer. “Let’s place the conference call.”
Pain has an odd way of expressing itself in the acts of business. No matter how many setbacks a leader might experience, there always seems to be a new opaque watermark of endurance testing, invisibly triggered for erratic combustion in each compounding decision. Every CEO in the world knows this, yet few have the good sense to walk away from the table when their cards are hot. Why win in Act Two when a comeback in Act Three gives you a longer biography? Ego is not so much about immortality as it is about demonstrating stately resistance to nightmarish attacks in public forums. Any good smack to the head is a continuity wake up call, or at least another invitation to be interviewed by Charlie Rose.
That largely summed up what Calvin Choy and Stephen J. Finkelman had learned after nine years on the job as co-CEOs of a moon shot. Perhaps their only real regret to date was that life itself just did not seem long enough to learn everything you needed to know to stop making huge, embarrassing mistakes. It always seemed to them that any reasonable human being would need to be a CEO twice, the first time to figure out what it was, hopefully without burning up too much risk capital in the process, and the second to deliver a winning game. No reasonable human being would ever want to do the jobs they had, for as much wealth and power as they brought, the personal cost never seemed to balance the equation. They had never intended to be CEOs at all, the past six years leading a public company and the prior three founding it out of a Stanford dorm room. Everything was a test, and no score could ever be passing because the curve was set by the moving market itself. They had to be decisive, but every decision was a self-contained paradox of personal values, competitive will, and collective outcome. They learned to make trade-offs quickly, definitively, and without enough information, but they were always trade-offs. Someone had to be left unsatisfied for any agenda to be moved forward. They learned to live with it, but they never learned to like it. Now they wondered if anything at all they had learned could help them craft a path from gunpoint back to their desks.
Calvin Choy and Stephen J. Finkelman were, at heart, geeks of the first order, extremely good at the art and science of the algorithm, business leaders by default rather than choice. Unlike Daniel Steyer or any of his board colleagues, whom no one beyond the Wall Street Journal readership could pick out of a police line-up, Choy and Finkelman were near household names. They were prodigies, real rather than manufactured. They made national headlines on a regular basis whether they earned them or not. The story of EnvisionInk was mythic in a way that almost defined Silicon Valley for people east of the San Andreas Fault, who probably could not point to it on a map—which was not hard to miss, since there really was no such place called Silicon Valley. Perhaps the only way you could define Silicon Valley as geography was to say it’s kind of between San Jose on the South, Oakland on the East, San Francisco on the north, and the Pacific Ocean to the west, pretty much anywhere in that polygon where society-altering technical innovation happened—unless it happened anywhere else in the world with financial backing that came out of that turf, or if the non-local money backing some tech success just as easily could have come out of that turf. Silicon Valley took its lead from Hollywood—if it sounded like it came from there, good enough. It was a state of mind, a consciousness, an adjective more than a locale, but a place nonetheless that defined the resurgence of the economy in something called the post-manufacturing Age of Information.
Choy and Finkelman had impeccable timing on their side. EnvisionInk was a company that needed to be invented. Its financial backers were on the rebound after Crash v1.0. The original dotcom implosion was their approximate birth date and their IPO surged into the rebound that preceded Crash v2.0, the Great Recession, which they never at all felt. In the crossfire of the Flubbed Search Engine Wars, which followed the brief peace left after the vast wreckage of the Settled Portal Wars, the great leveler called Search Engine Marketing was changing the media landscape in record time, laying waste to radio, magazines, and newspapers, with television in its cross hairs. This very simple thing, the tiny text ad, was the germ warfare that was stealing dollar share from every Fortune 500 advertising budget on the planet, shifting every advertising agency still in business to retool client budgets to bid for keywords, those super highly-targeted phrases that became hot links that led customers to destination sites. Now when you plugged virtually any word or phrase into any search box on any screen, toolbar, mobile device, or the like, no matter what the word or phrase might be, the legitimate “organic” search queries on the screen would be surrounded by paid insertions. It was so simple it made you want to cry, search for Orange Peel Scented Linen Napkins and every company on the planet that sold them would bid to see their advertisement on the screen, “Buy Orange Peel Scented Linen Napkins Here!” Click on that, and wherever it sent you, someone was paying the search engine for that click—and not just any agreed price, but a fluid, variable fee set by a perpetual, real-time auction that had no beginning or end. Today at 11:00 a.m. that click might cost you a dime, tomorrow at 4:00 p.m. a quarter—you could not control it, you could only say how much or how little you were willing to pay for that click, and how high up on the page you might want it at a premium. Depending on what other companies in the secret auction were willing to pay, that was the competition that set and moved your price. It was genius, it was ubiquitous, it was effective, and it was more efficient and measurable than anything compared to it. For the auction house, it was nothing less than a global cash factory.
It was also obnoxious, one-sided, and frighteningly addictive. The genius of Choy and Finkelman was their foresight into the unfairness of the mass blind frenzy. No one had taken a mathematical opposition to the steamrolling search machine, and in this they saw opportunity. If only they could write an algorithm that, in real time, would back the advertiser’s bid off the screen when they were about to bet stupidly against weak or little competition, they could save their advertisers billions of dollars. They knew they could not reverse engineer the search algorithms for profit, that would be an illegal invasion of intellectual property rights, but if they could simply analyze the search environment in fractions of milliseconds and get an upstream packet to the ad server before the ad was served when the bids were too high or unqualified, that would save advertisers from buying the clicks they never wanted. The old adage of half your advertising spend always being unnecessary was not lost on the shift to digital, to the contrary it was alive and well, and of profit to the search engines. Choy and Finkelman attacked that problem as an engineering conquest, not a media crisis, then fashioned their business on a percentage of dollars saved by improving their clients’ bottom line performance. These calculations of actual dollars saved on measured and improved return on investment was their secret sauce, and it worked. They were not the first to go after pay for savings as antidote to pay per click, but they were the very best. The search engines pushed the price of clicks up through obscurity, EnvisionInk pushed them down through strategic abstinence. Advertisers finally had a real ally to save them from their “marketing partners” who had, in turn, saved them from traditional media before fashioning the mother of all shakedowns. The target was ever moving, and so was the algorithm. This was all that mattered to Choy and Finkelman, keeping the algorithm nano-fractional notches ahead of the search engine triumphs, so their favorably priced software as a service would always be in demand.
The fact that they had to run a company based on their math was a necessary evil, not a step up. That they then had to use the cash stockpile they generated to buy other companies that produced incremental cash flow was more distraction than intellectual mandate, but to keep that stock price moving, they were driven by task-masters like Steyer and Throckmore to aggressively buy topline and relentlessly shred costs. They had considered stepping down any number of times to devote themselves religiously to the algorithm, but there were too many stories in Silicon Valley of the suits getting power over founders and their vision of changing the world disintegrating into a singular vision of cash management. There was no way to let go without risking the whole show, so they stayed in place, learned to hire CFOs and attorneys and sales managers and marketing types, and did their best to create positive headlines. In the early days they hired more wrong than right, muffed interviews, cut short earnings calls, let too many lawsuits get filed and not the right ones withdrawn. Yet every day they made sure the algorithm got better, and in so doing, much to their chagrin with lady luck profusely kind, they figured out their job descriptions and built EnvisionInk into a leviathan without peer. Professor Yamanaka wished he had taught them all this at Stanford, but he knew better.
Timing, they knew it had all been about timing. A few years earlier and no client would have been angry enough to give them a try. A few years later and two other guys would have invented it, maybe Ben and Jerry. It was all locked up with the fates, circumstance, the unknown and unpredictable, all of which a CEO had to be ready to absorb without warning, notice, or emotion. They thought about that a lot in their sealed hospital room, which they somehow saw as not that different from picking the date and terms of their IPO. They were by no means in control, but they had more at risk than anyone, which made any outcome their personal responsibility. Market forces had emerged and required response. Ben and Jerry were market forces of a different flavor, but no more or less real or worthy of second guessing. Sure, if Choy and Finkelman had only stayed at the office and coded that weekend, they would not now be under the thumb of two poorly armed, but no less dangerous, numbskulls. Had they learned anything on the job that could be applied here, with the stakes being their own lives? It did not appear so, no algorithm of detachment standing ready in the reams of documentation, but that did not mean much. The had not created global wealth doing the obvious. The obvious led only to mediocrity, a bad memory at best.
It had been an excruciatingly long night. Finkelman had lost consciousness several times, but was stable now. Choy’s minor injuries had been bandaged. They sat in a private, windowless hospital room where they had been told by Swerlow and Kisinski, also known to them as Ben and Jerry, to wait, do nothing, graciously accept medical care. The door would open when Ben and Jerry had something to say.
On the other side of the door, in an adjacent windowless room that had been provided upon request, were Swerlow and Kisinski, about to dial into the EnvisionInk boardroom.
“We’ve got them,” said Swerlow. “They wouldn’t be taking our call if they didn’t want to make a deal.”
“You do realize we have zero leverage, none of any kind,” countered his cousin.
“What are you talking about?” argued Swerlow. “They gave us everything we wanted, absolutely everything. They have no reason to stop. They want Choy and Finkelman back. It’s a sub-measurable amount for them to pay. The stock was down 6% today, that’s more than $2 billion in market cap. They provide us a tiny bit more of what we need, they get back that $2 billion with a press release, maybe a good faith premium on top.”
“Right, mouse-nuts, like you said,” snipped Kisinski. “No complications. You have it all figured out.”
“I’m improvising, not perfect, but we’ll get there. Let me do as much talking as possible,” said Swerlow. “Remember, at the end of this, your code will go to market, big time.”
“Right, either that or they base Thelma and Louise II on us. It will be called Ben and Jerry Die in a Murderous Financing.”
The disposable cell phone rang on schedule. Swerlow smiled, full confidence brewing.
“I told you to stop using the term murder,” said Swerlow. “It won’t help us.”
The disposable rang again. Swerlow waited.
“Dennis, these are serious people we are dealing with. We have one gun and by now the building has to be surrounded by SWAT. Get this right or we are Thelma and Louise.”
The phone rang yet again. This time Swerlow answered it and put it on speaker. “EnvisionInk boardroom?”
“Yes, this is Daniel Steyer. We met briefly yesterday at my home. Do we have both Ben and Jerry?”
“Yes, you do,” answered Swerlow. “Let me first say, thank you for the arrangements you have made thus far. It is not an exaggeration to say that Professor Yamanaka’s decisive actions allowed Mr. Finkelman’s life to be saved. He is doing quite well.”
“We know that,” interjected the voice of Dr. Francois. “We are in constant communication with the hospital. I own that hospital. Or I should say, the corporation I oversee owns the walls around you.”
“Thank you, Sir,” interjected Kisinski. “This is Jerry. We appreciate your sphere of influence.” Swerlow shot him a dirty look. Kisinski was not supposed to be talking, but clearly he was not going to trust his cousin to fly solo on something this delicate.
“Can you bring us up to speed on your view of what is going on there, and what you may have in mind for it to end peaceably,” prodded Steyer.
“I’ll do my best,” replied Swerlow. “Last night we phoned Professor Yamanaka, told him of Mr. Finkelman’s condition, and reported that Mr. Choy was for the most part unharmed. We told him we needed to get Mr. Finkelman immediate medical attention. He got back to us shortly, told us to proceed to Salinas Valley Memorial Medical Center where private quarters were arranged. Mr. Finkelman received initial treatment. He is resting in the room adjacent to this one, with a door only to our room. We are locked in here and of course believe you have surrounded the medical facility with armed authorities. Are we on the same page so far?”
“Gentlemen,” boomed the voice of the former Senator. “You don’t know me and I don’t know you, but I served five terms in the United States Senate, three as chair of the Armed Services Committee and one and a half as chair of Intelligence. I sing Christmas carols at Langley and have July 4 barbecues at Quantico. Trust me when I tell you, there is no way you can walk out of that hospital. You can’t be very good at this. You boxed yourselves in, one bad move to checkmate.”
“Let’s call it check,” said Swerlow. “We still have the king and queen. We don’t intend to walk out. We intend to be escorted by well-trained servicemen.”
“What’s the ask?” said Steyer. “You aren’t going to get it, but tell us the ask.”
“One hundred million dollars in a Shanghai account, an EnvisionInk overseas R&D fund which we will manage on your behalf. Plus thirty-six hour use of the company’s G550 to fly the four of us there, and Choy and Finkelman back.”
“What can you possibly expect to do in China with $100 million and a cloud hanging over you?” asked Steyer. “And you want to take our co-CEOs for a joy ride?”
“You’ll have them home quickly enough, Sir,” said Swerlow. “We plan to start our own high-tech company. It will be formed as a wholly owned subsidiary of EnvisionInk, which we will establish for divestiture. We had hoped to do something similar here in California and create a lot of local jobs without EnvisionInk’s backing, but our plans had to change, rolling a bit with the circumstances. We think it will work in China, but hopefully when we go public, we’ll still trade on US exchanges.”
“You seem to be rolling quite fluidly,” said Steyer. “You came to my house for me, and left me with a few less teeth than I began the day. Then you stumbled, took Choy and Finkelman, and shot McFrank. In the middle of the night, you called one of our board members for help, to save yourselves from a second murder charge, which was the first smart thing you did. Now you want a $100 million reward, a job, and a free ride to Shanghai. Do we have the full ask now?”
“Not a reward or a job,” said Swerlow. “It’s an investment, where you will reap the rewards at a far greater multiple than we will when we spin off, given your stake at current valuation.”
Steyer was speechless. Swerlow tried to imagine his calculus. He was well aware Steyer had heard every pitch imaginable, and this was a term sheet beyond compare. Swerlow grew antsy as the silence continued, but he knew whoever spoke next lost. It could not be him. Who was Steyer looking at in the room? He had to be anointing someone to continue the dialogue at some level of sensibility. If no one obliged, Swerlow’s next move would be unrecoverable. The room was bigger than Swerlow, maybe bigger than Steyer. No answer would be final. Swerlow waited, the big boys’ game, the no limit table to which you invite yourself. Then he heard words, and felt redux behind his tonsils.
“Hey Ben, this is Barton Throckmore. I’m a venture guy like Steyer. I used to play a bit of D1 football, I get the coin toss. You seem to be a clever fellow, you’ve read a blog or two on investing. Suppose for an extraordinary moment we were to consider this, which we are not. How exactly would we position this with our shareholders?”
“As yet our names are unknown to the public,” let out Swerlow, his game voice forcibly conditioned. “You let a little time pass, then you announce the new venture with us running it. No harm, no foul.”
“Would you mind if I muted the polycom for a moment?” asked Throckmore.
“Not a problem,” said Swerlow, believing the agreeable a decent ploy.
Throckmore instead left the polycom line open, addressing his colleagues. “Well, here’s what we know, this guy was probably trained at Microsoft. Either that or he escaped from a mental hospital and is stupid dangerous beyond any sentient level of comprehension. We remain in executive session.”
Swerlow was baffled. Did Throckmore know he had not gone on mute? Of course he did. Damn, these guys were a different class.
Throckmore continued, no longer feigning the mute. “Sorry about that, Ben, conferring with my colleagues, this is still Barton. You are indeed a clever fellow and have fully thought this through. A few more questions. Presuming that we did this, and you were in fact guilty of a crime, our board would become complicit in that crime. Again, these are all hypothetical presumptions. How might we handle the matter of Charles McFrank, whom you killed? Is that crime to be forgiven? Shall the Senator quietly arrange a Presidential pardon?”
“We don’t believe we did that,” said Kisinski, holding the new company line per Swerlow’s direction. “There was a struggle, for all we know, Choy shot him. We suggest you help to have it buried as an unsolved crime. It’s a tragedy, certainly not what we intended.”
“Jerry, are you aware that we have a Constitution?” barked Senator Henderson. “Are you and Ben aware of any laws at all?”
“Senator, we are quite aware of the law,” said Kisinski. “We do understand we have broken some laws. We are trying to minimize the damage at this point, if we can.”
Throckmore seemed to be out of gas, same as Steyer. Melissa Stanton-Landers picked up the thread. “Gentlemen, my name is Melissa Stanton-Landers, I was formerly a small cap CEO, so I do understand your passion for the entrepreneurial. You are clearly not fools. Let me ask this. Suppose we send you to Shanghai with Choy and Finkelman on the G-5. You get off the plane, the plane comes back with Choy and Finkelman. You have given up your trump card. How exactly do you get your financing and your sign-on announcement?”
“I’m glad you asked that,” said Swerlow. “Once you send us on the Gulfstream, we believe you are all in. As your colleague noted, if there was a crime and you were complicit, you are in much worse shape than we are. All we need to do is play back this recording for CNBC. Since China has no extradition treaty with the US, our worst case is that we are free and out of the country. China has no beef with us, we change our identities and disappear. Your worst case is that you destroy your company, ruin your personal reputations, and probably do some time. So we’re confident at wheels up that we’ll have a solid deal.”
Swerlow was running the table and had taken out Melissa. Just like that, all the chips coming his way. Luck, precision, he didn’t care. He was on a roll, all the way to the banker’s cage. No mistakes now, just the close.
Gutierrez was up next. “This is Rebecca Gutierrez, and I believe this is the last question. Suppose we don’t get to wheels up?”
“We simply have to get to wheels up, or we will have to commit two more truly regrettable crimes, knowing the servicemen surrounding this hospital will kill us,” threatened Swerlow. “Should that happen, EnvisionInk undoubtedly will be worth a lot less than it is now—perhaps nothing at all, without the visionaries who founded it. We want the money moved, verification provided, and the company jet ready by 6:00 p.m. tomorrow. I think we’re done.”
“Ben, you aren’t giving us much time for something so unprecedented,” reengaged Steyer, taking back leadership of the opposition. “Talk it over a bit with Jerry. We may need more flexibility to get to a good outcome.”
“We speak with one voice, that’s our proposal,” said Swerlow. “You have our contact number. Let us know what you decide. If we haven’t heard from you by 6:00 p.m. tomorrow, we will consider ourselves convicted and do what we have to do.”
Swerlow clicked off the phone and tossed it to Kisinski, who had broken out in a cold sweat. Swerlow walked passed him to the door that joined their room with Choy and Finkelman’s and opened the door.
“Guys, we just had our phone conference with your bosses. In all candor, I think it went well.”
“What happens now?” asked Choy.
“We’re in a holding pattern for the evening. Tomorrow an all-nighter. Tell Finkelman to pick out a favorite doctor or two, preferably ones who won’t mind crossing the international date line twice in the same day.
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This Is Rage: Serialization Schedule
We will be serializing the complete first section of This Is Rage.
August 5……..In Tres Partes Divisa Est
August 12…….It’s Terrestrial
August 19…… Never Bet Against the Bozos
August 26…….Let’s Get Small
September 2….No Such Thing as CEO School
September 9….Live from the Boulevard of Broken Dreams
September 16…The House Checks and Raises
September 20…If There Were Rules Who Would Listen?
September 30…Show Me Your Bulls