The Blyth dictation — the immaculate revolution, and the threads around it

I submitted the last prematurely. For Ray Lane, I heard he was a fan of complex adaptive systems theory, having learned about it at Aspen Institute, and I had been meeting with some technical champions at Oracle that close with him, and they connected the dots. They did some due-diligence, went radio silent on me for about a couple of weeks (they warned me they would) and then Ray Lane reached out and let me know he had joined Kleiner Perkins Caulfield & Byers as a partner, having been lured by his friends John Doerr, Brook Byers, and Vinod Khosla.

Separately I had connected with Anil Nouri and Ajit Nazre at Asera via - well, I'm not sure how, because according to my contacts management files from back then, I had tons of connections to them. I know I met Bunny Weiss through Ron Ellis, who was one of my closest friends and mentors - we met at Tesseract when he was VP of Sales, I was Director of Product Management. He joined Evolve Software very early - he would have been a founder, but as a more senior executive he had a bigger set of golden handcuffs than I did, and a more robust non-compete and non-solicitation agreement after Ceridian bought Tesseract.

Tesseract was my second big "win" after Stanford GSB graduation, the first being Blyth Software, which was a barely public company when I joined, trading for $2.30/share, and at $23/share when I sold every share I owned when I negotiated an early vesting agreement as my reward for the "immacculate revolution" there on behalf of Walt Smiley, a wealthy investor from Arkansas who was one of the principal backers of Bill Clinton when he ran for governor and President in 1992. His ties to Clinton were so tight he had avoid any hint of scandal, so he recruited me to take to initiate a secret bloodless coup against my boss and my mentor's husband Michael Minor - my job was to get the entire management team to speak honestly with the board, after the last three people who tried had been summarily fired by Michael Minor, and completely ignored by the Chairman. (I asked him why he ignored what he heard from the execs Mike fired, and he said that Mike Minor had driven the stock up 10x since he started, and he was going to ride that horse until he dropped. I told him the Blyth really went up 10x because Wall Street viewed Powersoft and as it's comparables, because of a non-sustainable revenue surge from upgrade revenue from our installed base after I pulled the entire engineering team off of major new "PowerSoft killer" release Mike Minor was talking to the press about as CEO, and put them on fixing bugs so we could ship a stable point release that our loyal Mac installed base could use to actually run their businesses reliably. (They taught us about such things in the IEOR department at Berkeley.) I told him that based on my experience in litigation consulting defending bankers, accountants, and law firms for negligence or fraud against shareholder litigation and ambulance-chasing contingent attorneys that sue every time a stock falls suddenly and dramatically for any reason or no reason, that he should either reconsider, or sign a retainer agreement with Cornerstone Research for the inevitable shareholder lawsuit. I told him that the entire US development team was actively looking for jobs with our competitors, and that if they quit all at once, the stock would likely collapse suddenly, and since he had been hearing the warning signals for a year from the people Mike had fired, and he was very wealthy - they would go after him and any investors with a controlling stake, including John Bayless, another famous texas venture investor, and the father of my friend and boss Jeanne Bayless, who was sitting next to me nodding her head and smiling. (Jeanne Bayless is one of the most delightful human beings and Texan's I have ever met. Texan's are generally much nicer in person than they seem in politics.)

Anyway, the Chairman listened, they hired Patrick Nettles (who had a PhD from Cal Tech in physics or something, so he could have an actual conversation with me where I didn't need to rely upon metaphors or euphenisms - I could just explain things based on first principles and logic.) as EVP/COO, so Mike had only two direct reports (Patrick and the CFO) instead of 10 that all matrix reported to me as Senior Director of Product Management. (I inherited all these groups as their previous managers quit or were fired, so basically everything reported to me. I worked 120 to 140 hours a week, missed most meals, and slept very little. My weight dropped from a muscular 208 pounds on a 6' 4" frame, to an emaciated 159 pounds in only six months. It had taken me a year of two hours a day in the gym to gain that muscle, and I was very sad to see it disappear so quickly.)

Blyth was the first stock this commune boy had every owned - I had to set up a brokerage account at Charles Schwab. The moment they had custody of the stock after I exercised my options, I called Patrick Nettles and told him I was going to dump it all in hour, so he should line up some buyers to make sure my selling into a thin market didn't crater the stock. He answered, "noted". I have no idea if he actually told anyone (which arguably might have been dangerous for him in the event of shareholder litigation, since lawyers need actual communications tied to actual trades to make their case), but I did manage to sell $250k in stock in a stock in a matter of hour, and the price didn't budge. I've never been so nervous in my life, as I only knew stock trading in theory, or from reading the CUSIP tapes that recorded every single block of shares that traded, from defending Goldman Sachs and Robert Freeman's from insider trading cases, prosecuted by Rudy Guilliani and the Southern District of New York. I comforted myself by the fact that, since I was no longer an employee, I could dump my stock without it being insider trading. Either way, it was decades ago, so the statute of limitations has long since expired, and Blyth Software's stock held up for quite awhile, since Patrick Nettle's arrival stablized things for awhile.

I'll write up the amazing week where I actually implemented the immaculate revolution - one of the boldest and actually terrifying exploits of my life. where I learned to channel Martin Luther King as a defender of the oppressed willing to die for his cause. (I actually didn't want to die, but Mike Miner did accuse me of having a messiah savior complex, which I took as a subtle threat to make a martyr or me. He couldn't say it in so many words, because I was backed by the entire board of directors by this time, Jeanne Bayeless was sitting in the conference room with us listening to every word, and the fact that I now reported to Patrick rather than Mike.

After that dramatic meeting, I spent my time working on a next-generation architecture to create a three-tier distributed architecture (as opposed to the two-tier fat client architecture ued by Blyth's Omnis, PowerSoft, Gupta, and PeopleSoft, and I read a bootleg copy of Forte Software's business plan that was circulating around the valley. (When VCs tell you they can't sign NDAs, but promise not to share the secrets you reveal to them for due-diligence, they are very likely lying - someone always leaks, and once one leaks, they all share it. Which is why I stopped hanging out in Sand Hill Road for a good decade.)

Meanwhile, Walt Smiley flew in from Arkansas, introduced himself in person for the first time. (When he originally reached out to me, I was seen as Mike Miner's protege, who he bragged was the smartest graduate from Stanford GSB in 40 years, who could single-handedly replace the five or so executives Mike had recently fired for challenging him or for incompetence. I distinctly remember my first meeting after I started in September after my post-Stanford european summer vacation with David Baron, a very thoughtfull VP of something or other with a prodigous IQ and a growing family, which meant he couldn't afford to lose his well paying job. As soon as I sat down, and said "I want to apologize for helping recruit you. Everything we told you was a lie. I could't tell you the truth, or Mike would have fired me - he would have known it was me if I told you the truth. Blyth's Omnis 7 hadn't been rewritten from scratch from Pascal to C++, it was just run through a Pascal to C++ converter - effectively the same code, just in a different language. The class libraries were as flat as Kansas - except for the GUI, was 97% imported UI frameworks written by Apple, not Blyth. The customer installed base was rebelling, because we had dropped work on Omnis 5, which is what they all used, to prioritize Omnis 7, which was the cool new product developed in the Foster City headquarters, whereas the real developer talent was in Suffolk with the founder - I think he was from Cambridge, who basically wrote almost all of the code that actually mattered himself.

David Baron was the "deep throat" who reached out to Walt Smiley, and told him he could trust me, Mike Minor's protege everyone was afraid to talk to, with the truth. Walt Smiley was just a kindly southern voice on the phone to me, before we had lunch that day. He was my CIA handler for my secret operation, which would have been denied and disavowed had it failed, because, given his close relationship to Bill Clinton, he couldn't afford any blowback. It was literally like Mission Impossible, just without guns and killing.

When we finally met, I told Walt all about my strategy for a next generation third-tier architecture, sort of like Forte's business plan, but more organic, network-centric, and decentralized , based on protocols rather than frameworks and code libraries. Walt listened patiently, and said "You've already done what you need to do - you need to be on a beach somewhere in the tropics for the next six months, not working at Blyth. I'll talk to the board about accelerating the vesting schedule on your options."

Later that afternoon I went for my annual doctors appointment at the Palo Alto Medical Foundation hospital, who asked me why I had dropped 50 pounds since my last appointment. I told him what I had been through with the 120-140 hours a week of work (which is about as much if not more than Elon Musk worked at Tesla when they were trying to fix the production process for the Model 3 as Tesla teetered on the edge of insolvency), and the stress of taking on my boss in some intense politics. He said "you need to quit immediately, and get away from those people. If you keep working like this, you might actually die. Nobody can survive that kind of stress indefinitely."

With that, I told Walt I was open to his suggestion about relocating to a beach in the tropics. A week later Patrick Nettles gave me a call, and said the board had authorized him to negotiate a package that included accelerating vesting for a portion of my options, and arranging for cashless exercise so I could cash out immediately if I wanted. He asked what I thought was a fair number of options, given that I had only worked for six months, and my options were on a 4-year vesting schedule with a one-year cliff (which meant I got nothing if I quit or was fired in the first year). I said Ihadn't thought about it, but said that half seemed fair, since I had worked really hard, and the fact that my crash bug-fixing sprint for Omnis 5 was key to the surge of maintenance revenue that led to our stock price surging (because the idiots on Wall Street only understand revenue, profits and expenses, and believe in fairy tales when it comes to strategy, architecture, or product development).

When I finally said I would accept half my options, Patrick said without hesitation "done". I said thank you, but immediately said to myself - "you idiot, he was authorized to vest it all, and you only asked for half." Which was obvious in retrospect, because if I remained at Blyth, MIke would have found a way to fire me or get in my way, and it would have been armageddon. By my leaving quietly, everyone won, and no one was defrauded. For the record, when I asked what Mike Minor what he was telling Wall Street when our stock was going through the roof, he said "nothing, except our earnings and the growth of the client server market - I didn't make any forward-looking projections at all. I have no idea why the stock is going up." More evidence of how Wall Street has no idea of how to value technology companies during booms or busts.

I'll fill in the rest of this story later, how my conversation with Cindy Zollinger went, and the laughs James Malernee had about how incredibly reckless I was years later, when he ended up dating my boss Jeanne Bayless. (My guess is she told him what went down, but that he never talked about it - Jim knew how to keep a secret, while spilling the beans at the same time. For example, in that same dinner with Jeanne, he said "Hey Jonathan - you remember that couch I had in my office you used to like sleeping on. I burned it, with a giant grin on his face.." Suffice it to say, he wasn't complementing my famous work ethic - I think it had more to do with some midnight exploits he'd heard about through the grapevine. That's another episode or five, in a different part of my graph. Add a request for Doug Abbott or Jim Malernee to explain that one.

Walt thanked me thanked me for my good work (more on Walt Smiley, and my first and only visit to the Oval Office in the White House in a separte episode),

and for a 5x step-up in valuation versus the deal Val Vaden (my classmate from Stanford GSB, who put the Tesseract private equity deal together with its founder and Val's investor friend, selling it for a 5x gain in a year or so. Ron was my buddy and friend, and we used to go to lunch at Bix's quite regularly - the best restaurant in the SF at the time, and my all-time favorite...I'd be going there since it was first opened (my cousin Dodi took me there when I was at UC Berkeley to teach me the ways of bourse

everybody. Silicon Valley was even more incestous then than it is now, because it was a more cohesive community that emerged slowly in the 1980s and early 1990s, before everything exploded in 1995. It was the internet innovators against the enterprise orthodoxy, and a very few hybrids that lived in both worlds. it also took a lot more work to raise money, and people actually had business plans and pitch decks that circulated broadly.

so the en my friends Warren "Bunny" Weiss and Vinod Khosla, who co-founded Asera, with Bunny as founding CEO and Vinod as founding Chairman. Asera's founding strategy was very aligned with that of Evolve's original grand strategy, albeit more mechanistic or less organic - composite applications vs. adaptive applications. Still, it had a far superior architectural approach than most, and was backed by Ray Lane at Oracle, and Cisco, Intel, and SAP - I had heard about them from everyone.

who connected me with Ajit Nazre to do due-diligence. Vinod Khosal was co-investing with Warren on that deal, and Ajit ended up joining KPCB at the same time Ray Lane joined - I met them totally independently, but they converged at KPCB at the same time. Ajit had already done a bunch of due-diligence on us, but Ray Lane was a huge name (he was largely credited for driving Oracle's spectacular sales growth), so he had the clout to drive the spectacular deal I was looking for.

working with Asera's CTO Anil Nori had con in discussions with

After I single-handedly orchestrated the reverse cram down on (which cancelled the attempted cram down orchestrated by our numerous venture investors, Index Securities, and the management team (by inventing a superior instrument that nullified the attempted c defend "the common people"