The New New Thing: A Silicon Valley Story (7 page)

The practical jokes were a case in point. An engineer’s idea of a joke is a practical joke, perhaps because a practical joke, unlike the less practical kind, needs to be designed. It requires the jokester to build the contraption to ensnare his victim. Silicon Graphics engineers loved their practical jokes. And they loved their chairman for the practical jokes he played, especially the ones he played on the boss. For instance, Clark had been struck by the inability of his teenage daughter to recall McCracken’s name. She kept calling him Ed McMuffin. So one day Clark bought one of the thin name plaques that were affixed to the doors in the executive suite, stenciled with the name ED MCMUFFIN. He replaced McCracken’s name plaque and waited for the response. For three days the new CEO walked in and out of an office with a door marked ED MCMUFFIN. The engineers would sneak up from their labs to watch him do it, then run back giggling to their work.

Everyone waited for the glorious moment when the victim of an engineer’s practical joke realized what was happening and blushed and smiled and stammered and told everyone what a good joke it had been. It never came. On the fourth morning of the joke, the ED MCMUFFIN plaque was gone. McCracken never said a word about it. Along with a lot of other pranks Clark played on McCracken, it festered in company lore. One day, years later, at a meeting filled with Clark’s engineers and McCracken’s managers, Clark told the story of how for three whole days McCracken was McMuffin. McCracken reddened, the managers swallowed their laughter. “It was like someone had played a joke on the dictator and you weren’t allowed to laugh,” says one of the engineers who was there.

Ed McCracken was Jim Clark’s first intimate encounter with the American professional management class, and its politics. From it was born his conviction that there was a whole layer of people in American business who called themselves managers who were in fact designed to screw up his plans. Life was unfair: Jim Clark wasn’t the first person ever to feel that way. What is more surprising is that a man who grew up, as he put it, “sitting in a large pile of shit” would be as convinced as Clark was that life
should
be fair. He was so convinced of this that he set out to correct the problem, and to take what rightfully belonged to him and to his engineers. Of course, it took people a while to realize that the new rule in Silicon Valley was that Jim Clark always got his way. It took ten years, to be exact.

Right through the golden years of Silicon Graphics, as McCracken took over the company and made it his own, Clark fought a civil war. He persuaded his fellow engineers that they should feel as mistreated as he did. “Tom [Davis, another founding engineer] and I would go in and talk to Jim,” recalls Rocky Rhodes, who had left Stanford with Clark to create SGI. “And we’d learn how shitty life was. When we’d leave his office, we’d say, ‘Yeah, I guess we really have been mistreated. I guess we should have been paid millions of more dollars.’ Before that, I had no idea. I walked into Silicon Valley with $500 a month from the government. I was a twenty-seven-year-old with essentially no computer experience. Now I had stock options that Jim said would one day be worth a million dollars. Plus I now had a big salary. Before I learned from Jim that I’d been mistreated, I was quite pleased.”

A whispering campaign wasn’t Clark’s style. Anything he said to his engineers he also said directly to McCracken. Dick Kramlich recalls a meeting between Clark and McCracken, attended by himself and Glenn Mueller. “Jim just ripped Ed apart. He explained to Ed everything that was wrong with his character. Jim can be truly brutal—unfairly so. And that day he just took Ed apart into pieces. By the time he was finished, Ed was crying. No one knew what to say.” Clark’s friends who did not know McCracken came to believe the man’s name was Fucking Ed McCracken. “Fucking Ed McCracken,” Clark would say, “he may have helped to stabilize the company, but now he’s destroying it. He can’t see what’s happening.”

What was happening was the personal computer. When Clark created Silicon Graphics, the computer world was a pyramid. At the top were people like him and his engineers, who played with the fastest machines. At the bottom was the personal computer. The PC had been created in Silicon Valley as a toy for hobbyists, a joke technology derided by the sort of hotshot who worked for Jim Clark. Now it had found a market for its services. Moore’s law, which stated that the price of computing power would fall by half every eighteen months, implied that the pyramid must collapse. The PC would soon be able to perform all the functions of a Silicon Graphics work station. Microsoft controlled the market for personal computers through its operating system, and so Microsoft would displace Silicon Graphics. Microsoft and Silicon Graphics sold shares in themselves to the public the same year, 1986. Silicon Graphics might have been stunningly successful, but Microsoft was taking over the world. “You could see a time when the PC would be able to do the sort of graphics that SGI machines did,” says Clark. “And SGI would be toast. Eventually, Microsoft would take over its business.”

The falling price of computing power was leading the computer into new markets. Moore’s law came with a social corollary: high-tech could not remain high-tech for long. You might be the smartest engineer in the Valley, and you might have built the most sophisticated computer, but it was only a matter of time before some schlepp with a PC wrote a program that let him do everything you could do, at a fraction of the cost. Technical vanity did not pay. If you wanted to make a great deal of money and acquire a great deal of power, you cultivated a more egalitarian outlook.

In the late 1980s and early 1990s people with a reputation for inventing the future spent a lot of time talking about where the trend might lead next. Jim Clark was one of these people. In December 1990 he joined a discussion at a conference called PC Outlook. One of the questions the panel considered was “Will personal computing and personal communications be combined, or will it just remain as science fiction?” In 1990 the idea that people would use their PCs to communicate with one another was outlandish. Yet it was still worth discussing, for if the computer ever did become a communications device it might transform not just the Valley but the economy. It would plug the masses into the thinking machine, and the thinking machine into the masses. At the conference Clark predicted that this would happen once the computer became fun to use. For the preceding two years he had argued that the new new thing was computer games, like Nintendo. He was wrong, but in an interesting way. He was groping toward a mass market. “Jim always was looking to democratize the technology,” says Dick Kramlich. “He was always thinking about how to make some high-end technology accessible to a larger audience. That’s what he’d done with the Geometry Engine. His chip cut the cost of real-time computer graphics from millions of dollars to tens of thousands.”

Clark saw only one solution: Silicon Graphics had to build a cheap computer to compete with the personal computer. Cheap machines meant mass markets, and mass markets meant great sums of money. In early 1987 he started arguing, in characteristically undiplomatic fashion, that SGI was doomed. “Jim was probably two or three years ahead of the rest of us in seeing what was coming,” Ed McCracken says. “He could see problems down the road and the problems become
emotionally
important to him.” “I was saying, ‘Goddamn we’re out of our minds,’” says Clark. “I was so worried about the PC. I was adamant that we had to build a low-end product, and that it had to be something that sold for under five grand.” It didn’t happen—largely because McCracken did not share Clark’s view. Fred Kittler, then an analyst with J. P. Morgan, recalls visiting Clark in his office at SGI in early 1990. “I was out here with a couple of analysts, and he was pacing back and forth like a man in a prison cell complaining about how his board wouldn’t let him create his cheap computer. It was clear by then he had no real power.”

Clark thought that Silicon Graphics had to “cannibalize” itself. For a technology company to succeed, he argued, it needed always to be looking to destroy itself. If it didn’t, someone else would. “It’s the hardest thing in business to do,” he would say. “Even creating a lower-cost product runs against the grain, because the low-cost products undercut the high-cost, more profitable products.” Everyone in a successful company, from the CEO on down, has a stake in whatever the company is currently selling. It does not naturally occur to anyone to find a way to undermine that product. Clark thought he knew how to become the agent of his own creative destruction, and he was prepared to do the deed. He wanted Silicon Graphics to operate in the same self-corrosive spirit.

More to the point, he wanted Ed McCracken to operate in this way. But Ed McCracken was not the man to roll the bones on the future—for which he could hardly be faulted, since as CEO he would get a lot more of the blame for any gamble that went wrong. Still, he manufactured a kind of contradiction in the heart of his company. All the good things that happened at Silicon Graphics happened because Clark had guessed that computer graphics had a commercial future. The company had been built entirely on Jim Clark’s foresight. But once it became a big company it had no room for Clark or his hunches. A big company—even a big company as highly charged as SGI—needs to believe its own internal propaganda: that its products are the best, that its technology will win, and so on. It has trouble entertaining the thought that it is doomed.

When it became clear to Clark that he could not force his own company to reinvent itself and lead this charge, he went into another dark hole of despair. He’d just married for the third time, and his new wife, the journalist Nancy Rutter, had started to complain about his behavior. He had to find something else to occupy his turbulent mind. He hired people to renovate his house. He bought a motorcycle and rode it too fast. He discovered model helicopters. At first, he was embarrassed at the mere possibility that someone would see him—it was such a typical technogeek thing to do. But they had these fantastically elaborate kits that let you assemble a machine that you could fly by remote control. So he would wait until the middle of weekdays, when the neighbors were all at work. Then he’d take out his helicopter kit and fly.

Soon enough Clark had become obsessed with his little choppers. He would put them together in the garage, then take them out and fly them around the neighborhood. He’d buzz other people’s homes. Nancy would come out to the garage and see this six-foot-three-inch, forty-seven-year-old man bent over the ground piecing together a toy designed for a small boy—at least in the beginning the choppers resembled children’s toys. Clark started with the small models; once he got the hang of it, he moved on to the bigger, more realistic machines. The bigger machines kicked up huge clouds of dust in the front yard, so naturally he built a landing pad in his driveway. He’d stand out there for hours in the middle of the day in the middle of the week, executing takeoffs and landings of these giant toy helicopters.

One day some workers he’d brought over to move a swimming pool, or build a hill, made the mistake of parking their cars near his landing pad. Clark went over to them and told them, in a slightly embarrassed tone, that they might want to move the cars, as he planned to fly his helicopters. The workers laughed, and went about their business. Clark seized the controls of his largest helicopter and sent it up, up, up over the neighborhood. And then something went terribly wrong. As he guided it down toward the landing pad, the controls ceased to function, and instead of gliding backward and down the helicopter came zooming straight for his head. Clark dropped the remote control and dived out of the way just in time. The helicopter whipped along the side of the workers’ cars with a horrible
whack whack whack
, as it dented the doors and peeled the paint.

Obviously, he couldn’t spend all of his time flying toy helicopters around his neighborhood. He wrote the workers a check for the two grand to cover the damages, and took up computer programming.

W
hen I asked Kittu Kolluri what he thought of his first encounter with Jim Clark, he thought for a moment and then said, “So…” This was not unusual. When a computer programmers answers a question, he often begins with the word “so.”

“Why did you come to Silicon Valley?”

“So…I’m from this small town in Iowa…”

“So” cuts across the borders within the computing class just as “like” cuts across the borders within the class of adolescent girls. It’s the most distinctive verbal tic manufactured by the engineering mind. Silicon Valley engineers for whom English is a second or even third language acquire it as readily as native speakers. Nobody knows why. Some say that “so” imposes the semblance of logic on an essentially illogical event, human conversation. After all, “so” implies that the answer follows directly from the question. Others claim that “so” just buys you time to think.

“So,” said Kittu Kolluri, who learned to speak English where he learned to program computers, in Hyderabad, India. “Jim Clark walks into our office at Silicon Graphics. It is 1990. I have just joined the company. And I’m thinking:
This could not be! The chairman of SGI has just walked into our office! He walked right by my cube! He’s standing right there next to Pavan!
[Pavan is Pavan Nigam, the Indian man who hired Kittu to work at Silicon Graphics]. Jim Clark didn’t say anything; he was looking at our group. Finally, he turns to Pavan and says, ‘Pavan, we got to get some more Indians around here.’ I was so shocked. I am thinking:
You cannot say such a thing in California. It must be against the law!”

Clark then asked to see what the Indian engineers were working on. Pavan and Kittu showed him. Silicon Graphics was still having problems making its machines easy for people to use. Clark could relate. Looking for some way to occupy himself, he had taken to programming at home on a Silicon Graphics work station. He was experiencing some of the same frustrations as SGI’s customers and was hungry for anything that made it easier for him to write programs that worked. And that, it turned out, was why he had paid his call on Pavan and Kittu. Clark was a physicist by training. When he returned to programming computers again, he wrote his code in the language of physics, mathematics. The Silicon Graphics machine required the programmer to translate his math into computer language. For example, if you wished to square a number (
x
²
) in a program, you needed to write it as
x
**2. “Jim was speaking German, and the machine only knew Spanish,” said Pavan Nigam, “so there was this extra layer of thought required to turn Jim’s German into Spanish. This drove Jim crazy; he thought the machine should bloody well know German, since German was the language of first principles. Since he was the chairman, we would say, ‘Good idea, Jim! Good idea, Jim!’—and then we would talk to product development people, and they would say, ‘Why the hell do you want to do that? That is about number 300 on a list of 300 things we need to do right now.’”

Clark turned the young Indians into his private software tutors. The young Indians were both flattered and impressed. Two minutes with Clark and the young wizard always fell under his spell, as many engineers before them had done. They felt that Jim Clark understood their value as no other important person did. “Jim Clark is not one of these flakes who starts companies,” said Kittu. “He’s not some manager who doesn’t know what he’s talking about. When he first saw the tools, he knew exactly what they meant. He knew we were onto something.” But it was a few months before Kittu discovered why Clark had taken up computer programming, which seemed a rather odd activity for such an important man. Then one day Kittu’s phone rang. He picked it up, and a female voice on the other end of the line told him that Jim Clark was calling. Kittu felt a surge of excitement. He pictured Clark sitting at his fine desk in his fine office in the finest of the dozen red brick buildings on the Silicon Graphics campus. There was a long pause and then came Clark’s voice, distant and crackling. He sounded as if he was in Outer Mongolia.

“Kittu,” Clark said, “I have this bug I can’t find.” He described the problem he was having. Kittu could barely hear him, he sounded so distant.

“Jim,” he asked, “where the hell are you?”

Long pause. More crackling on the line. Then Clark’s deep voice, “I’m not sure.”

“What do you mean you’re not sure?” asked Kittu.

Nervous laughter. “Off the coast of New Zealand somewhere.”

“Jim, what are you doing off the coast of New Zealand?”

“I’m on my boat.” Clark had bought a second-hand sailboat. The boat came equipped with a personal computer, which Clark had chucked over the side, on principle. In its place he’d installed a Silicon Graphics work station.

“Jim, what are you doing programming a goddamn computer off the coast of New Zealand?”

More nervous laughter. “I’m programming
the boat
.”

And this was the first inkling that Kittu, and so also Pavan, had that all was not right with Jim Clark. Soon Kittu figured out that Clark called him from everywhere
except
his fine office in his fine building at Silicon Graphics. The man had stopped showing up for work. He spent all of his time writing a navigation program for the sailboat he had just bought. He was doing this, he once told them, because he had ideas about the future of high technology that no one would listen to. Teaching his boat to sail itself diverted his mind from the fact that others, not he, were about to inherit the earth. On his boat he could think about how to inherit the earth from its current heirs.

For about nine months Clark called Kittu and Pavan regularly to pester them about his software. Then he went silent.

A
bout that time—late 1990, early 1991—the cardboard boxes in his guest room stuffed by his devoted secretary with his old papers suggested, his life took another unexpected turn. Clark’s motorcycle skidded out from under him as he rounded a bend near his home in Atherton. It crushed his leg against the street and laid him up in bed for six weeks. It gave him another reason to be angry with Ed McCracken. If McCracken would do what Clark told him to do, he, Clark, wouldn’t be forced to amuse himself by riding around on motorbikes on wet city streets in the middle of the week.

In bed waiting for his leg to heal and with nothing better to do but curse McCracken, he wrote a paper. It summarized his thinking of the past few years, as he groped for a solution to what he viewed as Silicon Graphics’ inevitable doom. He was right about the future of the company. Through its monopoly of the operating system Microsoft already controlled the personal computer. Microsoft would one day overrun the high end of computing where Silicon Graphics made its money. Microsoft had made it clear that the only way to preserve your station in Valley life was to create a monopoly. If you created a monopoly, you were at least partially exempt from the ordinary rapid cycle of creation and destruction. In computing, a monopoly took the form of a toll booth. Bill Gates had his toll booth, the PC operating system. Jim Clark wanted his own toll booth.

In 1991 people who had computers on their desks used them mainly for financial analysis and word processing, but that was sure to change as the price of computer memory fell. For the moment, though, the reach of the personal computer was nothing like that of the television set. About 95 percent of American households owned at least one television set; only one in ten owned a computer. To Jim Clark this looked like a huge opportunity: turn the television set into a computer. He finished his paper in bed and called it “The Telecomputer.”

Technically, the telecomputer was feasible. The United States had a tantalizing new infrastructure into which such a device might plug. In the preceding decade the cable television industry had laid pipes leading into 75 percent of all American homes, and those pipes could carry information into and out of a telecomputer. The question was: Could you make a telecomputer cheaply, and persuade ordinary people to buy it? If so, you could control an exciting new chunk of the American economy. The computer had an important trait that the ordinary television did not: it could interact with the viewer. You could tell it what you wanted, and it could go out and fetch it for you. You could shop through it. You could send instant messages through it, and receive messages back. You could order up local news from anywhere in the world. You could order any movie you wanted, when you wanted it, and pause it when you went to the toilet. The machine could be the conduit for all information into and out of the home.

The general idea hardly originated with Clark. Back in the late 1970s the corporate ancestor of Time Warner, called Warner-Amex, had created a pilot for an interactive television in Columbus, Ohio, called Qube. Qube was supposed to let cable TV viewers send messages to the networks, and request the programs they wanted to see, via remote control. But the machine didn’t work particularly well, and it cost a fortune to build. The company spent $30 million trying to build it, and then quit. Then there was an idea, called Videotext, cooked up by researchers at the British post office, also in the 1970s. It hooked a black box between the telephone line and the television set and enabled people to send messages to each other while they watched the BBC. Nobody wanted that either. A few years later AT&T and Knight Ridder came together to deliver the newspaper each morning to the masses on their television set. The masses yawned and went back to bed.

In every case, at least a part of the problem was that the wires entering and exiting the average home were unable to transmit data with sufficient speed. The wires could handle printed text, which required much less “bandwidth,” but they could not send moving pictures. Moving pictures contained a lot of digital data, and so required vast computing power. Never mind. The engineering problem was so interesting that it seemed rude to spoil it by asking who, exactly, wanted to read text on his television.

A stunning ignorance of mass tastes was a common problem in high technology. When a brilliant engineer dreamed up a product, he tended to build the sort of things only a brilliant engineer would appreciate. Typically, he overestimated the average person’s willingness to learn how to use some new machine and underestimated the cost of making the machine. When you page through the history of computing, you find a lot of very weird examples of just this. In a warehouse behind the Computer Museum just north of San Jose, for instance, stands a gleaming red four-feet-high computer built by Honeywell in the mid-1960s. The Kitchen Computer, it was called. The Organization Man’s housewife was meant to program her recipes into it. “If only she could cook as well as Honeywell can compute,” read the ad in the Neiman Marcus catalog. The computer was premised on the dubious assumptions that every American housewife would (a) want a massive computer in her kitchen and (b) know how to program it. Neiman Marcus failed to sell a single unit.

The idea Clark became wedded to, albeit briefly, was that the computer would become the most important household appliance. Information appliance, was one term used to describe it back then. The company that built the first information appliance would sit in the middle of all human communication; it would be the McDonald’s of information. It could play the same role on the television that Microsoft played on the PC. “The telecomputer was a direct result of the frustration I felt watching Silicon Graphics continually fall behind the PC in market share,” Clark says. “I was trying to do an underbelly thing with Microsoft—come in under their monopoly and take it away.” The telecomputer would be the most fabulous toll booth ever built. But before it happened, a question needed answering: Why would people rush out to buy a telecomputer? What would a telecomputer do that people simply could not live without?

Clark had no great hope that Americans wanted their computers to educate themselves. He assumed they wanted their computers to play Nintendo and otherwise divert themselves from the poverty of their existences. The answer he finally came up with was that people wanted to watch any movies they pleased, whenever they pleased. The telecomputer would be many things, but at first blush it would be a virtual VCR.

Of course, Ed McCracken wanted nothing to do with a virtual VCR, at least initially. It was just another flaky idea from his flaky chairman, who refused to leave him to run the company alone. And so Clark found another outlet for his ambition, the media. Once he’d recovered from his motorcycle accident, he shared his thoughts freely with journalists. “I might not have any power at Silicon Graphics,” he says, “but
they
didn’t know that. I was still called the chairman. And most journalists think a chairman of a big company is an important person.” He knew perfectly well that McCracken disapproved of his talking to the press. But hype had its own wonderful generative power: the more he talked about his telecomputer, the more people wanted to hear about it. It was almost as if by talking about the telecomputer he made it happen. “I would go out, and I would just say all this shit to reporters,” he recalls. “And they’d print it! And people inside SGI started to talk about it. And I thought, ‘Fuck Ed McCracken. I can say whatever I want. And by God if I go out and talk about it enough, Ed won’t have any choice but to build it.’”

Clark’s opinions found their final published form in 1992 at the annual trade show for the computer graphics industry, called Siggraph. Clark delivered as a speech the paper he’d written while he was laid up in bed recovering from his motorcycle accident. The paper described “the consumer’s computer.” Clark guessed it could be built in “two to three years.” He explained that, although computer memory in 1992 made such a device too costly to be mass-marketed, computer memory in 1995 would be a different story. He outlined the basic technologies—digital audio, digital video, transmission-reception decoupling, resolution decoupling—all of which existed in one form or another. But he dealt with the technical side of things in only the sketchiest form. Mostly his paper was a bit of political propaganda, aimed at raising the heat on McCracken. In Silicon Valley political propaganda took the form of futurology. “Over the next four to five years,” Clark told his audience,