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Progranirners quote you as saying This is marathon not

sprint Comment on that

Well think when say that its marathon Im really

talking more about the business or business within the

industry And the industry being you know part of the

net economy that certainly there are individuals who only

know how to sprint and work for the that

Jey companies are

trying to run marathont all mean that

And is as person

trying to run busines or being involved in the executive

management of business youre always struck by the fact

youve got to make every quarter even though youre trying

to build products that have legs for lifetime And you

have to balance the two think most of the heavy

intellectual work involved in particularly the software

side or some of the great semiconductor companies as well

by definition is almost like creating art So it is

intense for periods of time -- short periods of time -- which

would be likened to sprint But to build business you

have to weave those sprints together to create long-term

sustainable product set that ill attract and keep customers

for period of
long
time

People view software creation as the highest form of technology --

how can we appreciate the special qualities of mind it takes to be

great software engineer

O2252
Well think whether you call it an art or the highest form

of intellectual activity to me art is an intellectual

activity Great artists are thinking very hard when theyre

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creating great product or great piece of art

by outside noise

To me art is an intellectual think whether

activit
software is art or whether its intellectual activity is

really immaterial It--its certainly people being as

creative as they can because the medium is so malleable

that can create in any direction you want Thats

you to go
what soft in software means And therefore it is so

open and available for creativity as way to express

yourself that it does attract an amazing cadre of creative

people ut can tell you not all of them are necessarily

electrical engineers or computer scientists Some of the

best software engineers are musicians or people who have

normal sort of artistic creativity who found their into

way

this medium whether its in graphic arts or music or

whatever It does tend in my opinion to attract

therefore some of the brightest people around who find it

marvelously expressive to build products that others will

find
valuab3
c 57

at was exciting about working with people like that

Well the exciting thing in working with software engineers

is to give.. by ringing telephone

Well first and foremost dont think it requires special

management Ive managed lot of people in my life in

fact at Federal Express managed more software engineers

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there than work here at Netscape Uh Ive managed 2.500

pilots as work force -- they have unique set of

management requirements dont think that its so

different as to get outside the bounds of what are normally

good management practices but you look at software

engineers as specific group they do have certain uh

interests that are -- that are somewhat different and ways

of working that are somewhat different and so you manage

those differences but thats true of almost any work group--

they have
differences

The thing Ive tried to do and dont know how successful

Ive been at it is to put myself in their shoes and say

Well what would expect is good place to work

creative place to work rewarding place to work and

place that has justice And we try to create an environment

that does that For as many people as possible you cant

please everybody every day but we try to do that We try to

do that We run an annual survey with very detailed

granular set of questions to find out how people like the

work environment--what would they change and weve tried to

change where we could And certainly weve had some creative

uh personnel policies around here that little

were bit

different the other places worked but it was designed to

make it fun interesting challenging creative

environment
OG

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Do the programmers get to command where they get to work by virtue

of the demand for programmers

Again not to belabor the point but almost every large

business or medium size business today has software engineers

working for them in the IS department Again Id in prior

jobs had large number of engineers working for me at two

other major companies and we tried to be to

accommodating

them there

.O7Mci

Here in the valley its probably more intense because in

small space you have so many software engineers working in

such small space that they can easily move from to

job job

without relocating their residence And theres such huge

demand versus the supply its much more competitive for--for-

-for engineers thats what makes it different is just the--

the space is confined for the number of involved

people

oit
think though it takes the same sort of whether
things

youre in the valley or any where else in the world with--

with development engineers working for you and that is first

and foremost is the job rewarding Are on

they working

meaningful challenging things that they believe to be

worthwhile Secondly is it ruminative Is it competitive

in terms of its compensation and other rewards And third

whats the--whats the culture like Is it fun place to

work or interesting or enjoyable place to work And think

if you combine those whether youre in the valley or outside

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you have successful environment for attracting people that

are going to be enjoying working at that place

nos.SG

Talk about your experience here in terms of the companys profits

over the last four years

Well first this--this challenge of me meeting quarters in

the software business means basically have to sell

you

quarters worth of software in quarter so you dont have

large amount of sustaining revenue to Now we have

carry

more and more of that today in of services and support

tyts
that we get but you still have each quarter you got to go

sell your quarters worth of product Uh in 98 in particular

it was challenging because we came off of bad quarter at

the end of 97 that was just very bad time for us There

was also the quarter uh in January when we decided to give

away the browser and no longer charge for it year and

half ago half of our revenue came from browser sales

Todaf
none of it does so the challenge was to replace the browser

revenue which was substantial relative--relatively

substantial for other forms of revenue and the

keep
uith
business going

Vt05k

Well any business person out there knows that thats huge

challenge mean let me take your number one selling

product away from you and you replace that within period of

12 months or so Not many people want to do that But its

made us refine and tune our skills find out what works and

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what doesnt abandon some things that may have been fun but

werent necessarily ruminative and its--its been certainly

great learning experience nd Im so proud of the team here

at the end of 98 for what/theyve accomplished They have

done those things

We today have business thats worth plus billion dollars

in market cap 600 million dollars year in revenue No

company in history has done that Ub you know as opposed to

some other companies may have larger market caps they dont

have near the revenue Netscape has built the fastest

growing software company in history and urn Im very proud of

that Im very proud of the team that has done that but

still in all think lot of would Oh well

people say

Netscape you know has made mistake here and there Well

who hasnt made mistake But you know just ask yourself

despite that this young company has done these great things

in period of little over four years and Im very proud

of them

Do you look into the future and wonder about how long your success

will hold out

Well look all of us for our--our outside the

image--outwa4
company we want to make things seem calm and ihde the

company we want to be calming influence but there is

certainly moments where you--you become very pressed to--to

keep your strategy in sync with what the market will respond

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to And the bad news is that it can be very stressful but

the good news is it is stress or necessity that always

creatqs invention Were it not for that you would never

change

And so because of that we have changed into what think is

much more responsive aggressive serious business with

better and better products meeting more more real needs

out there in the net economy But it kits stressful

sometimes almost painful to throughthese and

go changes

certainly you have to deal with the lives and aspirations of

the people who work here the expectations of the customer

and the shareholder base out there Those are

responsibilities that think most people certainly take

very seriously and therefore you-you want to be res onsive

to these needs without it becoming too overbearing

Uh weve changed strategies weve modified plans but who

hasnt Almost every major company you can name started out

maybe years and years ago in one business and now theyre now

in totally different business In almost of

every category

business today thats true Weve modified our position but

when youre dealing in internet time you just have to do it

more quickly And as Ive told folks John Wooden the great

basketball coach always said that The hustlingest team is

also the team that makes the most mistakes Id tried

hustle for few mistakes rather than sitting back and

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letting other people get ahead of the--ahead of the power

curve on you where you cant respond

v-rD
What do you think are some of the misiinpressions about Silicon

Valley

dont--I think probably lot of people not all and

dont know how people regard Silicon Valley but like lived

outside of it much more than Ive lived inside of it

think theres probably this misconception that everybodys

just kind of wandering around as bunch of undisciplined

hackers you know kind of doing today what they think they

ought to do When in fact these business operate much like

businesses in other parts of the world Theyre built based

on plans and strategies and capitalization and all those sort

of things that you have to do in any business

tJh the people who are the in at least the creative part of

the business although they are certainly creative and

individualistic are also here to because its place to

work They have families to raise like anybody else They

have aspirations and career goals and you try to manage that

think that probably on personal lifestyle they may give

the outward appearance that theyre little more free

spirited than some types of workers but deep down theyre

just like erybody else they have their ho es and fears

and dreams that would be

misconception

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think theres misconception that some of these businesses

are just sort of accidentally come up out of nowhere where in

fact theyre some of the most highly thought through business

plans that you can imagine that start some of these

companies think that there is lot to the luck of good

timing and right place but theres also lot to good

thoughtful planning and execution

II

What were the early days at Netscape like

Well had been through other explosive businesses had

seen Federal Express package count grow enormously when

others may not have thought that was business Fedex

created not only company but an industry based on rapid

growth So had seen other business grow rapidly At

McCall-Saler we saw whole industry explode when many of

the experts said there wasnt going to be that much business

there So had experienced this But had never

experienced this growth or adoption of products and--

ratef
and brand think probably Netscape established
awareness.I
brand more quickly than any company in history Those were

the things that sort of shocked me at first and this--were

really on to something and that was most enjoyable and

delightful But also it came with it you know this feeling

of is it going too fast You know how do we manage the

expectations that are coming upon us here at such young--a

young part of our companys life And that was real

challenge because everybody wanted to be our partner the same

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afternoon Well we were small company We couldnt even

answer the phones And so those were the bad part of the

good news of--of rapid growth and customer acceptance of

and
product
technolo S-td

What were some of the specifics of your initial success

It was no it was--the language was more like If you give me

ten more people Ill get you ten more sales if you give me

twenty more people Ill get you twenty more sales this

month and it was very short payback That was the

language of it liii the other language of it would be We

need more people to answer the phones to respond to

questions That was the feeling you get from he early part

of the business growing Then as to

you begin post numbers

and--and grow the revenue at the top line and profits at the

bottom line you--you just begin to appreciate the rapidity in

the growth of those numbers where youre hitting your annual

number in your first quarter expectations and you

they say
Were on to something The language would be that the

classic language of business It just comes more quickly if

youve been through and experienced other forms of business

You appreciate the fact that gee this is happening faster

than we expected it and thats now how

good do we capitalize

on that and continue to--to--to maintain the momentum

What was it like to see such tremendous outside interest during

the upside and vice versa when was

quarter disappointing

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Not only was it challenge it can be frustrating at times

I--I spent- spend lot of time trying to have the people

appreciate that no tree grows to heaven and that you know

whatever they say good about you today theres going to be

some guy write bad about you tomorrow because were in the

news and the news is either good or There isnt any

ba4
neutral news about these kind of things

Arid so my job in way one of the things try to do is--

was to get people to focus on the business to be--to

disregard the--some of the other aspects like the stock

price or whatever We had rule--you couldnt look at the

stock price You cant enforce things like that and--and uh

-and can that sometimes it
say was very frustrating because

the exside --the outside the external influences on

the company were not and in

universally good fact can be

very in--much of an interference with the business

think though that on balance have

you to say that so much

more was good than bad that its like lot of things you

will take the bad with that much good and press on think

thats what sort of maturity is and the ability to separate

the wheat from the chaff and keep your eye focused that the

main thing is to keep the main thing the main thing And my

job is just trying to keep them focused on the main thing

which was to build this business and the way you build

business here like anywhere else in any industry is by

creating and keeping customers and my focus has been and

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try to keep our folks focused on that and by and large we

havebeen

Comment on the demands of business where change is so rapid

First of all the--the fuel is not that

necessary.Evebody
here is challenged and bright and trying day to figure
every

out the next killer ap mean thats just the nature of the

way they think Uh there is though the--the enormity of the

opportunity which is--which is driven by the network itself

the internet and thats what the net economy is--is--is the

fuel of the net economy that if product work it is--it is--

can be immediately available to 100 million people Where

theres never been anything like that before but thats

basically what Marshall MacLuhan was talking about when he

said The medium is the message In other words this

medium is so powerful that if anything works that becomes the

message The good news of that is that you can quickly

determine whether something works and here on our net center

if we put something on the net center and people hit on it

very hard we call it product And if we call it

thedont
market research and thats
we go to the next thing Well1 an

opportunity that if you have seen before other than maybe in

the broadcast medium or in the newsprint or publishing

medium where you could try book and if it didnt work youd

print another book but there was a--there was distribution

system there just like in the television or medium and things

of that nature where lot of these are much more like

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producing hit show then they are building another widget

that youre going to turn out million of and hope that you

can keep selling them for 20 years

Thats challenge where you only create hits

Well but we are publisher We are software publisher

Microsoft is probably the largest publisher in the world

publisher is dependent on its hits To me its like running

movie studio Youve got to keep creating hits but there

are certainly some movie studios and companies who have

produce--produced good sustaining growing business over

the years and others have fallen by the What

wayside are

the talents and--and abilities of the people who run those

kinds of companies and theyre similar to the ones who

very

run software publishing companies

Now the thing weve tried to do is balance that more and

more with services like the net center which have more

sustaining regular revenue sources or in our professional

services our consulting group where thats more

sustainable revenue source and then on top of that you

produce the hits And uh thats what business like ours

does

What observations can you make about technology communities versus

land based communities

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Well think to use your term technology based communities

which are much broader than the internet do change our

behavior Just look at the way children grow up today

was commenting the other day when was child believe it

or not we ditht have television My children dont believe

that was BTV--before television So we found ways to

entertain ourselves and playing games and so forth We were

long before certainly video games

at people have done is they have just changed the use of

time For instance most of Internet usage or--or--or using

the internet today at home at least is taking away from the

amount of time people have spent watching television Well

dont know that television was necessarily any better worse

for you than the internet Its not like youve--youve quit

doing your homework or youve quit you know going to

church or something

Youve--youve really changed one entertainment medium if

you will for another entertainment and would argue

educational medium and the time there trade off today it

seems to be about even Now as we go forward lets move it

lO--20 or 100 years Im not able to say exactly how it will

occupy peoples time but it will be used more and more

think for appropriate ways to educate to entertain to

stay involved with others but it does have the unsettling

quality that you can communicate real time with people in

both visual medium multimedium uh in way that is--is

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quite satisfactory yet you never get to meet them Thats

good and bad Look at whats its done for the community of

people that have specific rare diseases Its done marvelous

work today of bringing those people together who never would

have met each other before and through no other medium could

they meet Along with the medical professionals and research

people to actually make great advances there Thats

marvelous new type of tecbnology community if you will tJh

that may have taken away from some other time but would

argue that thats better time spent than whatever else they

were doing if its helping solve those diseases for instance

Y4

Well people can argue back and forth oh its intrusive oh

its invasive oh you lose security but sure you do to some

aspect but oh you pick up greater knowledge oh you meet

people you never would have met before out in cyberspace oh

you get to find people who are very interested in very

specific things that you happen to be interested in and not

just general run of the mill things You got to balance the

good with the bad

.5

My belief is theres lot more good than bad and technology

communities can be marvelously helpful and hopefully people

will be able to balance their lives around that in that

ways

are not invasive or destructive although you and know that

there will be certain people who cant find balance in life

and they will get way too distracted and it can be harmful

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of tape

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