Early Venture Capitalists Immortalized in Film

If you are at the South by Southwest Music and Media Conference and Festival in Austin this week run don’t walk to the nearest movie theater screening Something Ventured, a new documentary offering an insider’s look at the genesis of some of the most successful tech companies in the US. Something Ventured, narrated by Po Bronson, features interviews with the original VCs of the 1950s and 1960s, and offers a rare glimpse of what the Silicon Valley was like 50 years ago when the two words “venture” and “capital” were auspiciously joined to form an industry that would eventually fund 27,000 companies to the tune of $47B.

Luck of the VCs

In this 85 minute film, the original investors and founders of such companies as Apple, Atari, Cisco, Fairchild Semiconductor, Genentech, Intel and Tandem Computers share their memories of successes and failures.  Listening to the candid and occasionally self-effacing recollections of these gutsy investors and entrepreneurs who brought us the personal computer, fault-tolerant computers, human gene-splicing and the router among other innovations that we take for granted today, it is striking how much of their success is due to serendipity. The investors and entrepreneurs interviewed in this documentary include Nolan Bushnell (Atari), Reid Dennis (Institutional Venture Partners), Bill Draper (Draper Richards), Pitch Johnson (Asset Management Company), Dick Kramlich (NEA), Tom Perkins (Kleiner Perkins Caufield and Byers), Arthur Rock (Arthur Rock & Co), Don Valentine (Sequoia Capital), Dr. Herbert Boyer (Genentech), Jimmy Treybig (Tandem Computers), and Sandy Lerner (Cisco Systems). Each has a fascinating story to tell about how they followed their gut to bet the farm on long-shot investments.

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Arthur Rock

© Copyright of Geller/Goldfine Productions

Don Valentine

“You’ve got to be lucky,” says Arthur Rock. He invested in the “Traitorous Eight” engineers and scientists who left Shockley Semiconductor Laboratory in 1957 to form Fairchild Semiconductor, and he later invested in Intel on the basis of a one-page business plan typed by Robert Noyce that was perhaps most noteworthy for its typos. Rock, along with Valentine and entrepreneur Mike Markkula went on to invest in Apple Computer, a company that Perkins, Dennis, Draper, Johnson, and Bushnell turned down. Only a prescient (or lucky) few believed there was a market for the personal computer.  Johnson admits to wondering at the time why anyone would need a computer at home. “Was it to keep recipes?”

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Steve Wozniak and Steve Jobs

Don Valentine, whose investment portfolio includes Atari, Cisco Systems, LSI Logic, Oracle and Electronic Arts, notes that “so much luck goes into these things that … without it I think very few of us would have very many successes.”

Fortunately for Valentine and Rock they had the foresight to see Apple’s potential, although both admit that Apple’s co-founders Steve Jobs and Steve Wozniak did not make a good impression. Steve [Jobs] was in his “Fu Manchu look” at the time, notes Valentine.

Nerves of Steel

A high aptitude for risk tolerance is a trait of these investors too as evidenced by Rock’s decision to invest in the unproven Apple, Fairchild and Intel. Tom Perkins did what most VCs tell you never to do when in 1976 he invested $250K in “pure research” at the embryonic Genentech (sold in 2009 to Roche Holdings for nearly $47B in cash). Jimmy Treybig, the founder of Tandem Computers, a company turned down by multiple investors, said “you have to be brave, and brave is one thing you can say about [Perkins].”

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Tom Perkins

Yet, Perkins admits to having had failures, pointing to an investment in a company called Snow-Job (yes, seriously) that converted motorcycles into snow mobiles. It was ready to go into production just when a fuel crisis hit. Needless to say they couldn’t find distributors from that point on.

Then there was Dick Kramlich of NEA who believed so strongly in Robert Campbell’s PowerPoint (offering an alternative to presenting information on overhead projectors) that he funded it himself because it automated “a very cumbersome process.”  “When you see it you just know it. It goes right through your bones,” he explains. Years later, Campbell is still lamenting his decision to sell PowerPoint to Microsoft in an all cash transaction.

 
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Cisco's Sandy Lerner

Cisco’s Sandy Lerner Reflects

One of the highlights of the film for me was Cisco co-founder Sandy Lerner’s reflections on the troubled corporate culture at Cisco in those early days. She and her co-founder husband, Leonard Bosack, were early evangelists of what would become the Internet. Their router capitalized on that foresight. But Cisco was plagued by what Lerner herself called a “trench mentality,” and she admitted to alienating others in the company. One of the first tasks of Cisco’s newly-anointed CEO John Morgridge was to address the problems, including actual physical fighting in the hallways. He eventually fired Lerner at the bidding of the company’s vice presidents. In Something Ventured we see the human side of Lerner as she recounts that difficult period. She notes that she was the only woman at Cisco. “I think I was just very, very frightened and there just wasn’t a box for me,” she said even as she admitted that she didn’t make it easy for anyone.

One thing that I learned from this film is that the last thing you want is to be at the helm of one of the companies Pitch Johnson referred to as “The Living Dead.” Unfortunately, anyone with a track record in tech has probably worked for one of those.

The Wizards Behind the Curtain

This slick documentary is produced by Miralan Productions, led by Paul Holland, a Silicon Valley venture capitalist with Foundation Capital (whose idea it was for the film) and Molly Davis, a founding partner with Rainmaker Communications, who I have worked closely with in marketing communications over the years. It is directed by Dan Geller and Dayna Goldfine (Geller Goldfine Productions), the directors/producers of such films as Ballet Russes, Kids of Survival and Frosh: Nine Months in a Freshman Dorm.

The North American distribution rights for Something Ventured have been picked up by Zeitgeist Films who also distributed “The Corporation.”  It will be released to festivals and the educational market this Spring and Fall with a release to the TV and Home Entertainment markets to follow.

Update: 3/31/2011

On April 24th and May 1st, Something Ventured will make its West Coast premiere at the San Francisco International Film Festival.

Several of the film’s subjects will step on stage on May 1st for a short Q&A. They are: Don Valentine (founder of Sequoia Capital), Tom Perkins (co-founder of Kleiner Perkins Caufield & Byers), Mike Markkula (early CEO of Apple) and Nolan Bushnell (founder of Atari). They will be joined by Paul Holland (co-executive producer) and Dan Geller and Dayna Goldfine (the film directors).

Tickets are $15 each and they can be purchased at: http://fest11.sffs.org/.

Links to News Coverage

The Austin Chronicle: “Veni, Vidi Venture

The New York Times: “A Film About Capitalism, and (Surprise) It’s a Love Story

The New York Times: “Festival Films Have Minimalist Themes

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