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the risks and rewards of entrepreneurship
taking the leap

Award-winning journalist Tom Ashbrook is author of the book The Leap: A Memoir Of Love And Madness In The Internet Gold Rush.  At this Netpreneur.org Coffee & DoughNets meeting held June 22, 2000, Tom talked about the personal and family dimensions of leaving his secure newspaper career in midlife to co-found HomePortfolio.com.  He was joined by entrepreneur, Internet investor and  Netpreneur.org’s founder Mario Morino who presented his perspectives on the changing Internet marketplace.  

Statements made at Netpreneur events and recorded here reflect solely the views of the speakers and have not been reviewed or researched for accuracy or truthfulness. These statements in no way reflect the opinions or beliefs of the Morino Institute, Netpreneur.org or any of their affiliates, agents, officers or directors. The archive pages are provided "as is" and your use is at your own risk.

Copyright 2000, Morino Institute. All rights reserved. Edited for length and clarity.

mary macpherson: introduction

Good morning.  On behalf of the Netpreneur.org team and the Morino Institute we'd like to welcome you to Coffee & DoughNets.  We are delighted, this morning, to bring two people to the stage¾a new face, Tom Ashbrook, and, I guess I don't want to say an old face, but an old friend in Mario Morino, who will do the closing for us this morning.

          Before we get to the program, I have a couple of questions.  Since our topic this morning is “Taking The Leap,” I'd like to learn a little bit about the audience.  By show of hands, how many of you have taken “the leap?” About a third of you, and there’s more than 300 here.

          How many of you are thinking about taking the leap?  About another third.

          How many took the leap and went back to something else?  Only one or two.  Well, we have a good cross section, here, I'd say.

          Before I introduce Tom Ashbrook I'd like to give a quick acknowledgment to a group that played a part in his being here today, US-IBEX, a community of American Mid-Atlantic and Israeli business executives who are coming together to enhance business relationships, form partnerships and foster exchanges between US and Israeli companies.  US-IBEX had been talking with Tom about doing an event, and we were able to combine forces to make it happen here this morning.  Our thanks to them.  Also thanks to Olsson's Books & Records, one of Washington's independent book sellers, who is out front selling copies of Tom's book for signing.

          This morning's program features Tom Ashbrook, author of the new book, The Leap.  When I first saw the cover, it looked like this guy understood something about being a netpreneur.  He or the artist also had a whimsical sense of humor¾it's a picture of a hand with its fingers crossed.  Tom will talk for a bit about the story of his journey in starting and growing an Internet business, HomePortfolio.com.  After his remarks, he'll take questions.

          Tom's story is told in the subtitle to The Leap: A Memoir Of Love And Madness In The Internet Gold Rush.  Since much of it is similar to what many of you have experienced, it could also be called “Anatomy of a Netpreneur”¾thrashing around, making the decision, trying to take an idea from concept to reality, shaking the trees for money from friends and family and then the VCs, building the product and building the company.  I think Tom’s experiences will resonate with many of you in this room.  Interwoven with the nuts-and-bolts of the business story is another deeply important part, the personal story about Tom, his family and friends, and the roles they played, and are still playing, in his business.  Let me introduce a guy who launched a company in 1996 with no business experience, no technical experience and no money¾a newspaper editor in partnership with an energy consultant.  Talk about a leap of faith!  Let's hear what happened.

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tom ashbrook: non-organization man

Thank you.  Good morning.  It's really great to be here.  I feel like I'm among brothers and sisters.  It's always an honor to be with people who have taken “the leap” or who are coming upon it.  It's an experience that I went through, and it's a funny time to be talking.  It feels like that point in the wedding party when the open bar closes and now you see who really wants to dance and who was just there to drink.

          I grew up on a farm in Illinois where I spent a lot of time with my grandfather working on the farm, walking beans and bailing hay.  He always talked about a great friend of his who had passed away by the time I was working with him.  The guy's name was Glory Sweeney, a name I always loved.  What a great name!

          Glory was famous in the neighborhood because, in a very teetotaling, Christian, church-oriented neighborhood, Glory liked his bottle a lot.  He was a great inspiration to my grandfather, but not to my grandmother.  My grandmother would say to my grandfather, “Evar, it's just the whiskey, it's not joy.”  When my grandfather and I were out further in the bean field than my grandmother could hear he would say, “It's the whiskey and it's joy.”  In a way, I think that's really where we are, today, with what's happened in the markets and this big euphoria we have just come through.

          It's amazing to me to find myself standing here.  From a quick scan of the room, I am guessing that, like me, many of you came of age in the generation to whom business, at least for me, was not a first target of interest.  Business meant a suit and a tie and a desk and a punch clock and a big organization.  I remember my father had a copy of The Organization Man under his night stand, although I don't think he ever read it.  Business didn't have the allure; it didn't have what I wanted out of life growing up in the '60s and '70s.  Maybe people found it their way, but it wasn't for me.  I wanted a road that was more open and free.

          Then a funny thing happened.  Just as I was coming into midlife, this amazing Internet era opened up and suddenly business was one of the most open and free things going in our country and the world. It pulled me right out of a career in journalism that I had been very happy in for 20 years.  In fact, it was a career that I had gone into as a dodge to get away from business.  Suddenly, business was really exciting.  There was a frontier and things were happening in a way that worked with the soundtrack of my youth¾you know, revolution baby.  Now you could make revolution and make money and make love and have fun.  I looked around and thought, “Well, . . .”

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jumping the fast track

          I'll tell you how I got into this to begin with.  By the early '90s, I had been at the Boston Globe for more than 10 years, going on 15.  I had had a great career there and had spent about 10 years in Asia as a foreign correspondent for the Globe and other papers.  The Globe had a nice fast track path where I was a very senior editor at the paper and was reporting from around the world.

          We went on a strategic retreat to Goat Island in Rhode Island in '92 or '93.  There were 50 or 100 of the top executives of the paper and top newsroom executives, including the heir to the family that had founded the newspaper 120 years earlier, William O. Taylor, our esteemed publisher, sitting in our midst.  One morning the topic was “The Digital Future.”  There was a panel on the dais of very distinguished folks who were talking about where things were going and what it meant for newspapers.  Now, this was early on in the talk about the “information superhighway.”  That sounds so clunky now!  The second or third guy on the panel began to paint a picture for us.  He said, “I want to tell you about the Boston Globe in the year 2002.”

          He said, “The big plant is out on Morrissey Boulevard, a beautiful structure, but the windows are gone.  The phones are ringing, but nobody's at the desks.  Tumbleweeds are blowing through the press room, but nobody's there.  The last paper is still in the presses.  Nobody bothered to take it out; nobody wanted to read it.  Newspapers, my friends, are doomed.”

          It was a crowd about like this one, and everyone just went wild in that kind of sassy way that newspeople will, all hooting and hollering and laughing.  I was sitting in the front row.  I'm a famously bad shot, but I wadded up the back page of my program tossed it at the dais and hit the guy square in the forehead.  I was embarrassed.  The one time I actually had decent aim.  Why not at the carnival with my 16-year-old girlfriend?  Then, I could never get the ball in the hoop.

          Sitting next to him on the dais was Ted Leonsis, who, at that time, was head of Redgate Communications and was soon to become president of America Online.  Ted, who, at least that morning, had this very burly kind of flushed and glowering aspect, looked out on all of us yahoos with this terribly fierce look on his face.  He leaned into his microphone and said, “I want to tell you something.  Digitize or die.”

          I was sitting in the front row.  I was a print guy through and through.  I realized that I didn't know what he was talking about.  I didn't know what he meant.  At that moment, I thought to myself, “Something is going on that I've got to find out about.”

          It didn't take long, because the media in the '90s exploded with the whole story of what was going on online.  I would sit upstairs in the cafeteria at the Boston Globe with my colleagues, and they would debate over lunch whether our industry would last long enough for them to retire.  I thought, “It’s the smell of dinosaur wafting up.”  I wasn't even 40 yet.  I wondered, “Can I possibly stay in this kind of environment?”  There was a lot of paranoia in the newspaper business, in fact, in many businesses.  Not all of it has turned out to be justified, but surely a lot of amazing things have happened in the years since then.

          We have just come through an amazing period of history.  I have no doubt that historians will look back on this as one of those unique periods in American history where real mania gripped our country.  Looking back on it, when I think of this Internet era, I remember how we all laughed at the survivalists and the “end is near folks” as we approached the year 2000.  I almost think that the Internet mania, itself, was part of a millennial craze.  We wanted to believe in this “e-topia,” and maybe we weren't so immune to the kind of year 2000 millennial turnover that others felt.  Whether or not that's true, it clearly was a period related to the California Gold Rush and the Klondike and the railroad boom and all of those periods that somehow take on such an amazing ball of energy and magnetism that spreads across the whole country.  Certain people find themselves absolutely drawn to that.  It's irresistible, and they can't help themselves.  It's like when the little signal comes down from the spaceship and all the zombies come down and walk.  I was one of those people.  It was just too alluring.  I could not resist it.

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          I'm going to talk a little and read a little this morning.  With this being about the Internet, some of the groups I talk to are so young that when you say “read,” they are like, “Oh man!  Read?”  I tell them, “I have a realtime, full audio, 3D, hypertactile multimedia presentation for you.”  That’s cool. Then it's down.

          There are a couple of pages I want to read because you might relate to them.  I'll tell you more about the company, HomePortfolio.com, as we go along, but this is early in the book when I try to catch that moment in my life that many other people shared and what it felt like.  I was turning 40.  Here we go...

        I knew I had dreams my life wasn't touching. I knew there was a clock ticking. I knew the world was changing in ways that meant I shouldn't count on old assumptions anymore. But I didn't know if I could act on that, with kids and a mortgage and all the habits of a familiar life. Hello boomer! Are you stuck yet?

        How funny that the Internet gold rush should show up in the middle of our lives, a seductive, invisible frontier as big as our imaginations. It was the direct descendent of every wild, golden sunrise that ever set armies of dreamers in motion. We sing songs about those times and pass down their legends, of Pilgrims and pirates and settlers and gold-mad ’49ers.

        I wasn't the only one who went chasing thrills and fortune on the Internet, but I must have been one of the least equipped. I was not a tech wizard or an entrepreneur. I had only been on the Internet half a dozen times myself. I knew almost nothing about computers beyond what it took to get through a working day. And I had never started a business before, let alone one that would require millions of dollars to get off the ground.

        Here's what I did know: something huge was happening, something on a scale so large that I was lucky to see it even once in my lifetime. It was stirring economies and imaginations and possibilities like nothing I had ever known. And the more I looked at it, the more desperately I wanted to be part of it.

        Here's something else I knew: I was going on forty, and was desperate for fresh oxygen. I probably would have joined a mule train or a circus or any damned thing that moved if the Internet hadn't come along. I wasn't twenty-four with nothing to lose or fifty-five with a trunk full of play money. I was just a hungry soul clashing clumsily into midlife vertigo a little earlier than most. I had played out the better part of a first career and found some of its limits¾and some of my own. It was time to make the leap.

        It was the kind of leap that, one way or the other, we were all beginning to weigh in those days. A leap from security to risk. From the known to the unknown. From well-grazed limits to open vistas. It was thrilling. It was terrifying. It changed me. It changed the people I loved most, whether they liked it or not. But I couldn't know that then. Hey, there were twenty-two-year-olds riding the rocket all around me. How hard could it be?

          I found out.  I was lucky enough to have a fellowship at Harvard in the academic year '95-'96.  In that year, I spent a lot of time in the spare bedroom of an old college roommate named Rolly Rouse who had been calling me and whispering in my ear for several years at the Globe saying, “Hey, man, the new media is coming.  Hey, man, what's it mean for your industry?  Hey man, I got a cool idea.”

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the pied piper of hamelin.com

          I bet I'm not the only one in this room who some visionary wild-person was whispering to.  Rolly really planted the seed in my mind that maybe there was something else, but it was hard to take it seriously.  I had almost three children at that time. The third was on the way.  I had a mortgage.  I had the regulation credit card stack.  Nothing like what it would become, but regulation, and Rolly kept calling.  In '95-'96, while I was on the fellowship at Harvard, I spent a lot of time in his third bedroom.

          Rolly had this idea.  We had been roommates at Yale years earlier.  He had degrees in architecture and engineering, and he had always been in love with residential home design.  We lived in Newton, Massachusetts, just outside of Boston, a wonderful, late 19th-early 20th century community with a very diverse and rich housing stock.  As he drove around town, drove his daughter to daycare, he would look at these houses bursting with individuality and character, each one a real expression of some home builder or homeowner's personal vision of what they wanted their home to be.  Then we would drive around the suburbs outside of Boston with huge million dollar homes going up and, somehow, they just didn't have that same pizzazz that these homes had 100 years ago.  Rolly would say, “Look at these homes, the older homes.  There is no reason why people shouldn't have homes like that today, but the industry is just too messed up.  Communication is too hard.  It's too hard for people to find what they want, too hard for them to make decisions and too hard to learn enough to make the right decisions for themselves.”

          He would say, “You know, the new media are going to change all kind of industries.  They are going to change the home design industry.”  He said, “Tom , I really think there is a big opportunity here.”

          I was not an architect; I was a news guy.  I was spending my time covering stories in Asia and editing stories from all over.  I was just back from Rwanda and Somalia and the Balkans.  This was very far from the world that I had lived in, but in some way it looked so real and so immediately, intimately important in people's lives. At the same time, frankly, I was looking for my way onto the Web, but I was not a technology guy.  What did I know about routers?  What is that, a road map?  I had no idea.  I didn't know technology, so that couldn't be my path, but this was something I could intuitively understand.  During that fellowship year we just dove into the business plan again and again and again. I thought, at the time, it was kind of an avocation for me, a hobby.  I had a job to go back to, a career.  I had a salary and pension and 401K and perks and a secretary and the whole works.  This was just fun.  This was just dreaming, shooting the breeze, but, little by little, it got its million little hooks into me.  I'm sure I'm not the only one who has a story like this to tell.

          Meanwhile, the buzz around the Web was really starting to brew so that many old industries¾it's hard to remember now, but the old economy had been through a hellish few years.  We had just come out of a recession that had made everybody doubt their industries’ futures and their own futures in those industries.  Downsizing was the big word.  The New York Times ran a big series in January of '96 about the downsizing of America and how everything was going to hell in a hand cart.  It’s unbelievable now, after the boom we've been through.

          All of that got me more and more interested.  I promised my wife so many promises, so few of them were kept.  She looked at this with some bemusement.  I had promised her I would make all the dinners during this year, because I had a year off, essentially.  I don't think I made any.  I was always in the third bedroom.  I said, “I'm just playing with this.  It's just an interesting thing.”  Then, as she watched me spend more and more time with it, she wondered what was going on.  I said, “Don't worry.  I promise you one thing, I will never leave my job at the Boston Globe if I don't have at least seed money for this new company.”

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the decision

          Of course, when the time came to decide in the summer of '96, we didn't have seed money.  We had a few thousand dollars from friends and family.  We had some stuff out of our own back pocket, but there wasn't much there.  I'll never forget the day that I resigned from The Globe.  Again, I'm sure, everyone who has made the leap has a comparable story.

          The day had a symmetry to it.  In the morning, a meeting with a venture capital guy out on Route 128 outside of Boston, Andy Markuvitz of Matrix Capital, a brilliant venture capital guy.  In the afternoon, my resignation.  The meeting was scheduled with the editor.

          I got up that morning.  I had the resignation letter in my pocket as I sat through a three-hour meeting with Andy Markuvitz in which he did not show any warmth toward our idea.  I looked at this very experienced, brilliant guy, his forehead ascending up to the skies with multiple lobes.  We were singing our hearts out in the way you do in your first venture capital meetings when you have no idea what they want to hear.  You're full of passion and they don't want to hear it.  They want to know, “What's the nut of this thing?”  We didn't even know what the nut of this thing was.  I think it was our second VC meeting.  The first had been with Bill Kaiser at Greylock, another god of venture capital, and that hadn't gone anywhere, but that's a more complicated story.  You can read it in the book.

          At the end of the meeting, I'm on my way to resign, mind you, and Andy steeples his fingers and says, “If Bill Kaiser is not interested in this and I'm not interested in this, why would you do this?”  I'm thinking, “Oh, man!  My resignation letter is right here by my heart burning in my chest. Well, what the heck.”

          We were in the car on the highway, and I was headed into the Globe to resign.  I didn't know what the reaction would be.  Would they be furious?  Would they be disappointed in me that I was taking off the collar of the journalistic priesthood?

          Everybody ended up saying, “Congratulations!”

          First of all, I didn't expect it.  Then I’m thinking, “Congratulations for what?”  I'm walking away from everything.  I have three kids, one who’s about to go to college.  I have no tuition money saved¾who does?¾and they’re saying, “Congratulations and good luck!”  I had nothing.

          Happily, three weeks later, our first seed round came through of half a million dollars.  It came by way of a mentor we had developed in the software industry who led us to a friend who had family money.  You know how that goes.  Half a million dollars!  Gosh, I thought that was a big number.  I remember we saw it on the bank statement and were just in Heaven.  “This is so much money!  Our destiny is assured!  Big money!”

          By that time we had brought in Shawn Becker from the MIT Media Lab, a third founder and a super technologist; one of the top guys in the world at turning 2D images into 3D models where you know nothing about the camera optics, just using math.  A brilliant guy who was being courted by everybody under the sun, including a local agency and Industrial Light & Magic and Autodesk and all kinds of folks, but he joined us, and we found this again and again¾no matter what your business is, you have to find the people who have the  passion for that business because that's what attracts them when you're so young and have nothing.  Sean's mother, miraculously, was an interior designer, so he was into homes.  That was cool.

          We ran out of that money, of course, in short order.  We were out in March of '97 and, for the next year and a half or two years, we had our long trek across the desert¾no salaries, no money, everything floated on personal debt and Visa cards and every ugly combination thereof under the sun.  During that year I learned a lot about human nature, myself and my marriage, and, once again, I'm sure I'm not the only one who can speak to that experience.

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