The Only Thing That Matters

At night in a Seattle bar, the world is alive with possibilities.

The Seattle night is a mix of madness and money -- the stuff that start-ups are made of. At night in a Seattle bar everyone is a genius, every idea is brilliant, and even the most outrageous bullshit glistens like spun gold. At night in a Seattle bar everyone is a genius, every idea is brilliant, and even the most outrageous bullshit glistens like spun gold. At night in a Seattle bar, the world is alive with possibilities: dreamers and schemers fill the rain-stained air with hyper-talk of revolutionary business models, mind-bending techno-capabilities, and industry-reinventing breakthroughs.

Almost any night you can find them in the Six Arms Pub on the downtown slope of Seattle's Capital Hill. This Tuesday night, it's packed with artists, musicians, software engineers, and assorted other techno-preneurs whose array of body-piercings and asymmetrical do's identifies this nightspot as the place to be.

At a tiny table on the mezzanine overhanging the bar, slugging down pints of microbrews with names like Terminator and Hammerhead, sit Mike Almquist, Avi Bar-Zeev, and Sandra Smith, three 28-year-old prospectors from Seattle's current Gold Rush, the digital startup culture that has effectively taken over the city. The fourth person -- and the sole grownup -- at the table is Richard Novotny, a corporate vagabond-turned-venture capitalist whose investment helped launch Almquist's company, where Bar-Zeev now works.

"This guy really has things well thought-out," Novotny says, pointing at the kid across from him. Almquist, who's dressed in a tattered University of Delaware sweatshirt with a faded orange kerchief on his head, is typically oblivious to the compliment. He's too busy holding forth, gesticulating wildly as he tells war stories about how he launched F5 Labs. Novotny smiles indulgently when he hears Almquist blurt out his -- and every techno-preneur's -- dream request to every venture capitalist: "Give me $110 million and stay away from me for three years!"

Almquist's stories are met, outrage for outrage, by Sandra Smith, a producer at Zombie Virtual Reality Entertainment. Smith, like Almquist, graduated from the University of Delaware and gradually but inexorably gravitated toward Seattle. Like Almquist, her office is a mix of funky art and high-tech clutter, jammed into a former flophouse in the Pioneer Square District, a neighborhood chockablock with software shops, virtual-reality game companies, and Web-oriented hardware assemblers. "I don't know how many different budgets I've done for this project," Smith says between slugs of beer. "I'm up to $2.5 million now and it's still not enough."

Neither F5 nor Zombie is destined to be The Next Big Thing -- the kind of history-bending startup like Microsoft, Netscape, or the current favorite, Marimba. Neither F5 nor Zombie will change the game forever. Neither has the feel of a cultural icon -- the kind of startup that captures the popular imagination and propels its founder (the next Bill Gates! Marc Andreessen! Kim Polese!) into the realm of instant celebrity.

F5 and Zombie, and the people behind them, are simply not exceptional. Which is why they're exceptionally important. They are what's happening -- and it's happening everywhere. In just the last four years, Seattle has established itself as the ground-zero of startups: the number has jumped from 85 to more than 1,100 -- 200 of these launched by Microsoft alums. Job growth in the software startup sector in Washington is clipping along at 40%, compared with less than 6% in all industries statewide. Even mighty Microsoft, for many years the fastest growing enterprise in the Seattle area, has slipped to second on the growth charts behind the startup sector.

The people inside F5 and Zombie and the thousands of other startups aren't just building companies or executing business plans. They're creating their own reality. They're not in it for the money. They're in it for the freedom. They understand that they're taking a risk. And they know that it's absolutely risk-free. They're not doing it because they can. They're doing it because there's no way they can not. They -- and countless others like them -- simply cannot imagine doing anything else. They are doing The Only Thing That Matters. And so is everyone else.

Which doesn't mean it's always easy or fun. Startup life, Almquist says, alternates between moments of "bad, miserable depression" and "mere sloth and depression." According to Bar-Zeev, the tensions and pressures at work turn employees' lives into soap-operatic time-sinks. "Any little disagreement results in half a day of meetings," he moans.

The rain continues to fall outside, the evening moves along, and the mood at the table grows schizier by the hour, simultaneously more glum and more exuberant. For all of the risk and high failure rate in the startup world, its young inhabitants are having the time of their lives. One minute Almquist declares, "Failure is death!" The next he pronounces, "We're either going to be incredibly successful or the shit's going to hit the fan and we'll go start another company." "I don't really care what happens," answers Bar-Zeev. "I can hold out for six months even if I don't get paid."

The noise builds, the night grows darker, rain caresses the windowpanes, and Seattle parties on. But this moment belongs to the techno-preneurs, the men and women whose birthright of personal freedom and individual destiny marks a fundamentally new way of being in business, finding the future, and making a difference. In all the startups in all the industries in all the cities around the world, you'll run into people with different names and companies with different fates. But you'll always find the same cast of characters -- and the same animal spirits at work: freedom, risk, and teamwork.

The Mad Bomber

The Seattle Tower is an old, brown-brick, vaguely Art Deco building that looks like something out of Ghostbusters. A creaky elevator takes you to the fifth floor where a corner office suite with "F5 Labs" lettered on the window next to its weathered wooden door waits across a dim hallway.

Inside, the first thing that grabs your eye is a conference. Telephone message slips litter the conference table, along with assorted papers, a few books, an open bag of pretzels, a Wendy's Biggie soft-drink cup, a laptop computer, a speakerphone. At the head of the table sits a clean-cut and stern young man wearing glasses, dark slacks, and a dress shirt that -- judging by its telltale grid of creases -- he's just purchased, taken out of its package, and put on. A woman in a business suit sits at the laptop. Across from her, resting his elbows on the table and talking into the speakerphone, is Mike Almquist. He's wearing grimy jeans, a T-shirt, a tattered sweatshirt tied around his waist, and he sports holes in the both the uppers and soles of his shoes.

Almquist's doing his best to remain patient and polite as he talks the people on the phone through their endless series of techie questions. They can hear the steady refrain of answers. What they can't see is his steady stream of facial contortions -- rolling eyes, exasperated hair-grasping, and an occasional exaggerated widening of his mouth into a silent scream.

When the call is finally finished after 20 agonizing minutes, Almquist gets up from the chair with a piratical, "Arrrrgggghhhhh! That company is IQ-bound!" He stomps out of the room, down a narrow hallway, and into a cluttered office, where he sits down at a terminal labeled Bungholio, and starts working. After typing a few lines, he puts on a huge set of headphones -- probably to block out the dialogue going on behind him:

"I want this box to handle 100-megabit ?"

"Oooohhh ? much goat's blood."

Someone emits a fiendish laugh, followed by a low, zombified growl: "Must. Drink. Goat's. Blood ? "

It seems that every conversation at F5 is punctuated by references to the ritual sacrifice of goats -- a custom that no one at the company admits having started, but that no one seems able to resist.

Almquist cofounded F5 labs in February 1996 with Jeff Hussey, the man in the brand-new shirt. Now just one year into the game, the company and its rock 'n roll crew is in an enviable -- and excruciating -- position. Most startups work their way toward the shipment of a first product, then pound the streets looking for a customer, hoping to bring in money before exhausting their investors' cash and patience. F5 finds itself besieged with orders from customers and having to fend them off while working around the clock to ship its first product, dubbed BIG/ip.

The product is a PC box outfitted with two Ethernet cards and F5 software. What it delivers is a dramatic improvement in the speed, throughput, response time, efficiency, and scalability of Web sites. It also enables Web site owners to replace their expensive Sun or SGI Web servers with immensely cheaper and faster PC boxes. It is literally the Web made faster, cheaper, better. And BIG/ip is only the beginning. Almquist envisions a full line of F5 products that will so improve Internet performance that a whole new era of Net-mediated communication and applications will come rushing to F5's door, including networked virtual-reality gaming.

To put it charitably, Almquist is an unlikely a savior of the overloaded Internet. His head features a squarish shape and his face bears the exhausted look of someone who's spent the night being chased by angry villagers bearing torches -- only the neck bolts are missing. He is also what every startup desperately needs, the madman who lives on the lunatic fringe, who sees things in a way no one else can, who provides the energy, vision, and daredevil impulse to drive-this-thing-as-fast-and-hard-as-we-can-drive-it that is the combustible essence of every startup.

Almquist lives on doughnuts, Wendy's bacon cheeseburgers, Taco Time carryout, pizza, massive doses of Cherry Coke, and - on health-conscious days - Kickass Chicken Chili from Seattle's Art Bar, a tavern located a few blocks' walk from F5 headquarters. Between meals, Almquist carries a Gatorade squeeze bottle wherever he goes. He likes to pour Cherry Coke into it, sucking on the bottle until it's drained, then neurotically chewing on the mouthpiece until he gets around to a refill.

Short, stout, and uncontrollably mischievous, Almquist comes across as a techie John Belushi. It's an impression he feeds by his tendency to lapse into wisecrack mode, whatever the circumstances. Standing one day in one of F5's back rooms -- a sparse, L-shaped room where five developers share space with a set of steel racks and a jumble of cords, hard drives, motherboards, and assorted other computer parts -- Almquist is discussing the arrangement of routers, switches, and computers that will comprise F5's interface with its Web site across town. "Why haven't you installed this shit on the racks yet?" he asks.

"I'm waiting for the rack-mountable boxes," comes the answer.

Almquist gestures at the empty racks. "I'm waiting for the rack-mountable cage dancers."

This seems to be Almquist's way of keeping a serious business from getting too serious. It also relieves the unbearable stress of launching a startup -- particularly one that's taking on established multibillion-dollar companies as both competitors and strategic partners. A good chunk of Almquist's time goes into meetings with people from AT&T, Sprint, Japan's Trans Cosmos, and a host of other substantial companies that are placing big bets on the Internet.

Almquist's presentations at these meetings consist of a completely logical, totally mesmerizing, and uniquely self-absorbed description of the future of global Internet-based commerce. It starts with a careful outline of the present structure of the Internet; proceeds to an explanation of where its bottlenecks are, why they exist, how they can be unclogged; segues to a description of who F5's potential competitors are; then dives into a product-by-product review of F5's line, ending with a breathtaking glimpse of the future: an F5-built world of trouble-free, efficient Internet communication. It is a grandiose vision -- and one that only begins to register as, perhaps, a little weird when you step back and realize that the man who's spinning it is wearing a T-shirt and jeans, and addressing an audience of conservative Japanese businessmen in traditional blue suits, white shirts, and dark ties.

One of the visitors, Masa Okuda, Trans Cosmos's marketing director, grills Almquist for nearly an hour. "Can you support FTP? Who is interested in acquiring you? How can I serve 10,000 simultaneous connections with a BIG/ip?"

The questions are Almquist's opening to another vision. He nonchalantly lays out his plans for F5's growth: within a year the company will easily blow past its first multimillion-dollar target.

"And how many people work here now?" asks Okuda.

"Uuuhhh, let me think." Almquist looks up at the ceiling, counts for a minute on his fingers. "Twelve."

Okuda shakes his head in wonderment. "Just twelve people right now. Great adventure!"

The Refugee

Avi Bar-Zeev is sitting on the rubber floor at F5 Labs with his back against the wall. Tall, impossibly thin, gaunt, goateed, he looks like he's wandered in from a long fast in the desert, put on an "I Flew the Magic Carpet" T-shirt, and plopped himself down in the midst of civilization. Right now Bar-Zeev is holding his head in his hands, pounding his feet on the floor, and throwing a mock tantrum. "I wanna do VR!" he screams. "When do I get to do VR?"

Back in September Bar-Zeev was hired to do programming for virtual-reality tools and operating systems. Instead, he has found himself designing the graphical user interface for BIG/ip -- supposedly a temporary assignment until F5's cash-generating product can get out the door, giving F5 time and money to work on its real passion, virtual-reality programming. But BIG/ip's ship date has slipped -- of course -- and Bar-Zeev's dream is on hold.

It's not the first time. After graduating from The Ohio State University in 1992, New York City-native Bar-Zeev took only three months to find his first VR-programming job. Over the Internet, through the sci.virtual-worlds usenet group, he met Bob Jacobson, founder of Worldesign, a Seattle company that built CAVE-like virtual environments. Bar-Zeev, a computer science graduate interested primarily in computer graphics and virtual worlds, moved west and put in two years at Worldesign, building virtual-reality operating systems and authoring tools. Then the company went into an inexorable death spiral -- the fate of nine out of ten startups -- as the initial investors gave up on Worldesign before new investors or customers could be found.

"My last six months there," Bar-Zeev recalls, "were kind of a waste. There was no money and no projects. I was actually living in the office. It was really just subsistence at that point. I finally left because I didn't have a choice."

Bar-Zeev took off in 1994 for Walt Disney Imagineering -- a wrenching cultural shift from an archetypal 90s startup to an archetypal 50s corporation. "I didn't want to work for a corporation," he says. "I didn't think about joining SGI or any other computer company. But I thought Disney might be cool because it's an art company, a company that gets the whole picture, not just the technology."

At first Bar-Zeev thought he'd found a visionary's paradise. Disney had virtually infinite resources to put at its virtual-reality dreamers' disposal. Bar-Zeev went to work on the "Aladdin" show, in which users don a helmet, sit at controls that look something like motorcycle handle-grips, and "fly" through the world of the movie "Aladdin," encountering three-dimensional characters along the way. (The user also flies past a "bar" at one point, its sign alternately flashing the words "Bar" and "Zeev.")

When "Aladdin" was released, first in 1994 and then in an expanded version in early 1996, it was the best virtual-world experience ever built -- testament to both Bar-Zeev's abilities and the resources Disney put at his disposal. The more work he did, the better Disney liked what it saw. After his first year, the company offered him his own lab with his own staff. "It was the opposite of Worldesign," Bar-Zeev says, "where there was like, no hope, ever."

Unfortunately, at Disney there was like, no excitement, ever. In part this was a reflection of Bar-Zeev's personality -- he genuinely missed the fight for survival at a startup that infuses every day with meaning. But there was also nothing genuinely thrilling to work on. And Bar-Zeev wanted to keep pushing the edge.

"There are a lot of people at Disney, like at a lot of big companies, whose sole function is to slow things down," Bar-Zeev says. "They're spending hundreds of millions of dollars, they want to make sure you're doing the right thing. They have evaluations all the time, they're very careful about everything. The buy-off process there is amazing."

To Bar-Zeev, the future that loomed before him at Disney was all about politics. "To stay there and do what I wanted to do, I'd have to move up the management chain, get allies, get resources, hire people, and sell ideas," he says. "That's not what I'm good at. I hate the politics. The place for me to succeed is where it's just smarts. And in a startup, to a great extent, smart wins."

It's one of the big differences between the world of the corporation and the startup -- the sense of freedom and adventure, the feeling of risk and self-reliance that infuses the built-from-scratch venture. And it's why a skilled techie like Bar-Zeev -- and others like him -- jump ship from the plush corporate world to the scrounge-and-scrimp startup scene. After all, There is something of the romantic to Bar-Zeev, as if he were looking for deep-seated psychological rather than corporate solutions to F5's startup dilemmas. One night, after a painful meeting in which Jeff Hussey had delivered a blistering critique of their development team, Bar-Zeev and his fellow developers went back into their lair and slammed the door. They worked far into the night, long after Hussey had left, then took a break.

"Let's get psyched! Totally psyched!" someone shouted. Suddenly the five of them were tearing up boxes, ripping off long strips of duct tape, covering up windows, transoms, and doors with cardboard and paper. Then they scrawled warnings all over the outside of their sealed-off room: "Development in Progress! Do Not Disturb!" "Leave Food at the Door!" "Do NOT Enter!" The final statement was a piece of paper: a photocopy of an adorable goat, seen in profile. The handwritten caption read, "So many goats. So little time."

The next morning, a bemused Hussey stood outside the door, afraid to enter. Looking at the picture of the goat, he shook his head. "I'm just glad it doesn't say, 'Sheep,'" he muttered.

The Natural

Just a few blocks from F5 Labs in the Pioneer Square District stands an old brick building that looks remarkably like an artist's loft turned into a silicon sweatshop. A hundred years or so ago, the building was the State Hotel (the neon sign outside still reads "Rooms 75c"). Now the three long, narrow floors of the old hotel have been turned into the headquarters of Zombie Virtual Reality Entertainment, a CD-ROM gaming company that has done work for MTV and produced a number of hits such as Zero Population Control, Ice & Fire, and Locus -- two ingenious variations of "first-person shooter" games and an intergalactic hockey-like game.

Cofounded in 1994 by Mark Long and Joanna Alexander, Zombie is 50% female and more than 50% artist, with a workforce that gives the company the look of an independent film operation or a graphic-arts production house: young, hip, playful, wasted.

In a corner next to a large window sits Sandra Smith. Small and slender with auburn-tinted hair, a light dusting of freckles, arresting blue eyes set off with black eyeliner, and a thin silver ring in her nose, she looks more like an art student than an engineer. In fact, the wall behind her attests to her training: hanging there are several pictures, postcards, and little posters of artwork, along with a bouquet of dried red roses and a poster announcing an artistic installation of hers, entitled "Mall Me!" -- a mixed-media installation that is part of the Center on Contemporary Art's "Nirvana: Capitalism and the Consumed Image" show.

Smith's journey from art student to game producer may be unlikely -- or it may be inevitable. She's a classic example of a talented and bright young worker attracted by degrees into a job and an industry that she never even knew existed when she was in college. It's only after she arrives at the destination she never was headed for that it becomes immediately and obviously apparent that it's a natural fit.

After graduating from the University of Delaware with her art degree in 1990, she found herself full of ambition and dreams, and stuck in an East Coast job market that seemed to lack both imagination and opportunity. So she did the only thing you can do these days: she headed west.

A year later, she looked around her and saw that she was still full of ambition -- and she was still nowhere. This time, nowhere was called Albuquerque -- an economically depressed place that was a desert in more ways than one. "It was beautiful," Smith says, "but it was depressing. I had a pretty good college education and couldn't find a job to save my life." So she and some friends moved to Seattle, where a group of friends -- including fellow UD alum Mike Almquist -- had moved two years before. "We'd never been there before," she recalls, "we'd just heard about it." Within a matter of weeks Smith found a job as the assistant director of the Center on Contemporary Art (COCA), a nonprofit arts group known for its experimental exhibits. She was soon buried alive in work, raising money, doing budgets, curating shows.

"I was just super-stressed out," she says. "With nonprofits you're always trying to get money, and even after you get the money, it seems like you never have enough." Besides, there really wasn't anywhere to go at COCA. But two friends from COCA had previously gravitated to Zombie. Both had taken the office manager job there, then moved into producer roles within a matter of weeks. "I saw how quickly my friends moved on at Zombie," Smith says. "I knew I had the skills to do what they were doing, so I saw it as an incredible opportunity."

Smith worked as Zombie's office manager for a few months before she was dispatched to Moscow to assist with the art direction of Ice & Fire, a game composed by two Russian developers who'd invented Tetris. Now Smith's producing a new game, Special Operations. Based on U.S. Army Ranger tactics and training, it features a realistic, cinematic series of Ranger missions with three-dimensional characters moving in real time through breathtaking landscapes. Smith oversees the work of four programmers and six artists, reports to the title's publisher and underwriter, BMG Interactive, and deals with people and situations she never imagined she'd encounter.

Like her boss. Zombie cofounder Mark Long is a former Army Ranger who keeps his head shaved, wears tight black T-shirts that are stretched to the limit by bulging biceps -- one of which is encircled by a tattooed crown of thorns -- and has a taste for high production values and clever presentations of gore. "We've already got some cool artwork in this title," Smith says, pulling up an image on her terminal. "Like this blown-off face. It's just really disgusting."

Long's style of management involves peering over his peoples' shoulders, offering a nonstop series of opinions. In a meeting with Smith and her team one day, he suggests that Special Operations players be allowed the point of view of only one member in the team of Rangers taking part in the battle.

"No!" Smith fires back. "We want them to be able to switch points of view. If their character is killed off, they need to inhabit another one rather than having to start the game over."

Long immediately assents. Later, talking about Smith, he says, "I like a producer who'll say 'No' to me. It tells me she wants to own her project." He hired Smith as a producer, he continues, "because she has an athlete's mind-set. Athletes train for what they're doing, they 'get' the game, and they constantly strive for improvement."

Long figured Smith would be a quick study. But he's been dismayed by what he views as her sometimes disdainful treatment by BMG, the game's publisher. "They keep giving her a hard time," Long says. "They say it's because she's green, but I know it's just because she's a woman."

Smith doesn't let that -- or much else -- bother her. "I can pretty much hold my own against people like that," she says. The evidence suggests she's right. One day, doing research for Special Operations, she took her team to a "live fire" at the Army's Ft. Lewis training grounds where she found herself wearing a huge Kevlar vest and a helmet, and standing in the middle of a field lined with trenches. All around her soldiers were frantically running, diving, squirming, and crawling.

"They put us in a HMMV and took us out into this field," she recalls, "and I'm thinking, 'This is pretty cool.' We were actually right next to the soldiers. This guy runs by me with his rifle, I'm right next to him taking a picture. They're in the trenches, we're right above them taking pictures." When they started using live ammunition, however, Smith was relieved to be sent to safer, higher ground.

"Then it starts raining," she says, "and we get soaked to the skin. Then it gets dark, and a guy brings all the soldiers in, gathers us all together, and says, 'OK, now we're going to do it again.' We were freezing, sopping wet, and I'm thinking, 'Uh, we wanna go home!'"

For Smith, the work at Zombie comes naturally; the company provides an environment where she can help define new art forms, discover new ways of looking at the world, develop new mixes of media. "I guess we're trying to take reality and kind of bend it a little, almost with a cinematic effect," she says. "We're always asking, 'What can we do with game play? How will it integrate with what we can do technically?' We want a mixture of reality, cinematics, and definitely a sense of immersion. We want people to sit in front of the screen playing the game, and not even realize that hours have gone by. And then, when they walk outside, they feel like they've been on a drug."

The Grown-up

And then there comes the time when what's needed is adult supervision -- or at least the techno-preneurial version of it.

Where there are startups there are venture capitalists -- the money side that pairs with ideas -- and so the software-startup boom has triggered its own VC-startup boom. "Since we began," say Richard Novotny, who joined the EnCompass Group in 1995, "I can name 10 other new VC firms started in Washington. It's all part of the startup climate. Silicon Valley is pretty well saturated with VC firms. Seattle is one of the few areas that has lots of software companies and relatively few VCs." Focusing almost exclusively on hardware and software for the Internet, EnCompass averages $1 million per investment.

It's not a small operation -- but when you first meet Richard Novotny, you take him for used-car salesman. He's wearing a paisley shirt open at the neck, with the sleeves rolled up. He doesn't even come close to fitting the suit-and-power-tie mold that cranks out stereotypical venture capitalists. His way of talking makes him sound like a character on the old TV-sitcom "Taxi" -- a Danny DeVito on downers -- and he never quite manages to disguise the vaguely sardonic look on his face, even when negotiations take a serious turn.

Yet here he is leading two visitors from Japan into the conference room at F5 Labs, quietly orchestrating this meeting between F5 and Trans Cosmos, which may be interested in localizing BIG/ip and marketing it in Japan. Novotny skillfully guides F5 cofounders Mike Almquist and Jeff Hussey through their presentations with occasional prompts. The questions the Japanese businessmen are throwing at Almquist and Hussey grow increasingly technical; Novotny listens carefully to the answers in English and offers his own elaborations in a soft-spoken Japanese.

The shift from Novotny's garage-mechanic's English to smoothly syncopated Japanese is a jarring reminder of his unlikely package of skills. Another of Novotny's anomalous traits is a sympathetic manner that runs counter to the bottom-line bearing of the typical VC. "People who come to me are very sincere," he says. "I don't like to say just 'No' to them."

One of the advantages he brings to his VC work, says Novotny, is his motley background: He has dabbled in corporate management, marketing, sales, product management, international operations, and strategic planning. "I've had the big side and the smaller side," he says. "I've looked at VC work from the beggar's side of the table. I know what guys coming to me are going through."

After graduating from the University of Minnesota, where he majored in a salad bowl of engineering, business, math, and physics courses, he got a master's degree from Temple University in international marketing and finance, then studied Japanese business, language, and culture at Sophia University in Tokyo. Novotny did a long stint at Univac, then moved on to Storage Technology and Microsoft, before coming to the EnCompass Group as its investment officer. The firm was founded in 1995 by Yasuki Matsumoto, one of the founding members of Microsoft Japan.

The Japan connection is critical: EnCompass's deals almost always hinge on its ability to leverage the startup's product into the Far East. Typically, EnCompass can increase a startup's export sales by nearly 60%. Walk through EnCompass's suites of offices and you see rooms full of people at work on documentation in various languages for Compaq, Microsoft, NEC, Intel, SPRY, Visio, Asymetrix.

Novotny's office is simultaneously sparse and littered. His desk, a small table, and two chairs are piled high with company prospectuses and business plans, which pour into his office at the rate of more than 100 per month. Half the time Novotny is jumping between the telephone and the prospectus pile; the other half he's on the road.

It's an exhausting regimen characterized most often by delivering bad news to people, yet Novotny gives the impression that he has the best job in the world. "I've never had more fun in my life!" he says excitedly. "I don't sleep well at night. I'm always waking up to write notes to myself. But that's the way I like to live. My wife gets ticked off when I turn the PC on at night in the bedroom. But face it -- it's an exciting time, an exciting business, dealing with a lot of brilliant people."

Much of what you hear from Novotny is the standard VC line. His vision of an ideal corporate structure, for example, is almost universally held in the VC community. The first thing he looks for in a startup is business sense rather than technological vision. "What kind of management team do they have?" he asks. "A not-so-top product with a good team is better than a great product with a poor team." A good team, in his estimation, has a hardheaded businessperson running the company and a tight-fisted chief financial officer keeping the visionaries in check.

After the team, says Novotny, comes product and market specifications, with a nod to speed: "What's their time-to-sale?" Novotny asks. He looks for specifics that detail not only the petitioning company's product and plan, but also the products and plans of present and future competitors. "I want to know exactly how they will win the market battle," Novotny says. "I don't like hearing, 'They'll come to us because we're better' -- especially if they can't say why."

Novotny wants to see a startup with definite target dates not only for delivering products and making money, but also for an eventual exit strategy: taking the company public or being bought out by a larger company. "Startups today are almost like controlled substances!" he says. "With the kind of valuations they're getting you can make me more, sooner, with a merger or acquisition than with an IPO."

But for all the careful human and financial analyses, when you press him on how he makes decisions, Novotny ultimately falls back on the intangibles: "What does my gut tell me? I have to share the vision of these people, but I also want to feel a certain kind of excitement in the air when I tour their offices." One of his standard pieces of detective work from an office visit: the Dilbert cartoon count. "You can judge the morale of a company by the number of Dilbert cartoons hanging up," he says. "The more cartoons, the lower morale!"

Novotny's attitude suggests a man driven more by how much fun he hopes to have than how much money he expects to make. So far, the only payment he has earned from his investment in F5 Labs is emotional -- and he gives the impression that's a healthy return.

Having brought the visitors from Trans Cosmos to F5, Novotny joins in enthusiastically as Mike Almquist makes his presentation. The meeting ends with Trans Cosmos placing an order for a BIG/ip. "I mean, the Trans Cosmos people were really excited about the product when Mike was finished talking to them," Novotny says. "That's fun! You start with people who are very skeptical, and watch them come out true believers."

Fred Moody (fredmoody@msn.com) covers technology, social change, and rock 'n' roll from Seattle. He is author of "I Sing the Body Electronic: A Year with Microsoft on the Multimedia Frontier" (Viking, 1995).

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