Soul Proprietor

SmartRay got by on the $35,000 invested by the father of Kidder's former girlfriend, among others. Then, finally, the three founders met Marty Schoffstall. Schoffstall, who had cofounded PSINet -- and who owned five mobile devices -- liked the plan. In a Manhattan hotel room, he asked the three, "What do you want?" They wanted money, and they wanted Schoffstall on their board. Schoffstall rejected the second proposition but agreed to the first. Emboldened by his commitment, two other investors stepped forward. Suddenly, smartRay had $1.3 million. A second round of $3 million would follow in March 2000. The founders had salaries. The company had life.

Even with money, though, smartRay had to prove itself almost daily. "Everything was a beauty contest," Tyler says. "We had to have our hair combed and our teeth brushed just for the right to lease space." Or to license software. Or to rent a coffee machine. With every transaction, smartRay had to sell itself again, to convince someone that it was worth taking seriously.

Tyler saw that the antidote to smartRay's legitimacy gap lay in branding. So he pored over hundreds of design books, looking for a logo style that would capture smartRay's identity, ultimately choosing rounded edges for its business cards to evoke an LCD. He angled to speak at every conference panel that would have him, hoping to be the one whom audiences remembered. He printed up pocket-size information cards and spent long Amtrak trips walking the length of the train, handing a card to every traveler with a mobile device.

Meanwhile, smartRay started developing a product. As the person in charge of the product-and-technology team, Kidder set furious development cycles, asking his engineers how much time they had built in for buffers and safeguards and then telling them to strip out the padding from the next version. "It's become habit to have goals that are just barely achievable," Tyler says. "That's the key. Everything is a stretch goal -- not just product-development cycles, but contracting cycles and hiring cycles too. And everything is in draft all the time, like a constant beta. We have to move so fast."

As they reckoned with a growing, increasingly viable enterprise, though, Tyler, Playford, and Kidder also found themselves forced to reassess a question at the heart of their venture: How much were they worth? Before incorporating, they had agreed that Tyler would be CEO. He had the r?sum?, after all, and the leadership experience. They also had agreed to split their capital equally. Tyler now viewed this as a naive mistake. "It's a fiction," he says, "to say that people bring the same assets to the table. I believe that I have the skills to be the CFO and the COO of this company. So I would make the argument to anyone that I am the best person to do this job -- bar none."

Tyler proposed adjusting the equity split to reflect his more critical role at the company. It was a wrenching discussion, one that forced Playford and Kidder -- both headstrong leaders in their own right -- to come to terms with their secondary roles. Ultimately, they came to an agreement. They won't discuss specifics, but the new arrangement gives Tyler more than Playford, and Playford more than Kidder.

Nine months later, Kidder, who lost the most, justifies the realignment. "Sometimes, to win as a team, you have to give up something as an individual," he says. "You may think that you rightly deserve more, but it's more important to win. It certainly is for me."

Tyler, for his part, believes that, even now, smartRay is getting a bargain in him. Not just because he has a Harvard MBA and the blue-chip pedigree of Salomon and BCG. Not just because he could do any conceivable job at smartRay. Not even because he is the company's pivotal external face, perhaps the key to its existence.

The reason for his belief is even more elemental. Tyler says that he creates value for smartRay, ultimately, because he places a higher value than anyone else on the company's equity. It's economic efficiency: The person who believes that the company is worth the most should be the boss. "I will stake this claim," Tyler says. "I have always believed that my product was more valuable than everyone else thought that it was. I've always believed that I was the prettiest girl at the dance and that I deserved to dance with the best guy. And that's why I should be the boss. Because in the end, I'm going to tell our shareholders, 'You thought that this stock was worth X, and I got you 3X.' "