Harvard Business Review
Eboys: The First inside Account of Venture Capitalists at Workby Randall E. Stross
Randall Stross, author of acclaimed books on Microsoft and Steve Jobs, blends a business
The first inside account of life within a Silicon Valley venture capital firm, eBoys is the fascinating true story of the six tall men who backed eBay, Webvan, and other billion-dollar start-ups that are transforming the Internet and setting a new pace for the economy.
Randall Stross, author of acclaimed books on Microsoft and Steve Jobs, blends a business historian's perspective with a journalist's flair for suspenseful storytelling to look at wealth creation up close. For two years, Stross gained unprecedented access to the venture capitalists at Benchmark, an upstart firm founded by thirtysomething renegades whose average height happens to be 6'5". Since Benchmark's founding in 1995, each partner's net worth has increased, on average, $100 million annually.
Stross was present as the Benchmark boys debated which businesses to support, and by recounting their conversations in testosterone-rich detail, he offers readers the most precise and enlightening account of the ways in which venture capitalists think, evaluate prospects, and wield influence.
Stross also gained access to a number of the Benchmark-backed start-ups, including a small, privately held San Jose company called eBay. The value of the company grew from $20 million to more than $21 billion within two years of Benchmark's investment, an increase of 100,000 percent. Business Week called it "probably the best venture capital investment of all time."
Venture capitalists have become iconic symbols of our time, just as investment bankers, investigative journalists, and hippies defined previous eras. In eBoys, Randall Stross has vividly captured the interplay of ambition, personality, experimentation, and risk, all acted out, larger than life, as the men of Benchmark and the entrepreneurs they back play their remarkable roles in the new world of Internet commerce and the creation of vast, sudden wealth.
Harvard Business Review
- Random House Publishing Group
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- Edition description:
- 1ST TRADE
- Product dimensions:
- 5.52(w) x 8.26(h) x 0.77(d)
Read an Excerpt
1. The Right Answer
The guy. No special emphasis on either the or guy, but no intervening pause, either. TheGuy.
That's the person needed to head a start-up once it has grown beyond a seed. To wit, a stud, ideally, a big honkin' stud or a total fuckin' stud. He (or, yes, she) will not lack for balls, at least in one sense, but in another will work his nuts off, or his ass off (these being valuable pieces of anatomical real estate; you never hear "works his index finger off"). A high-hustle guy. A total can-do guy. A winner. Smart. Someone with integrity-off-the-charts. Scrappy. A kick-ass dude, a nail-eatin', nut-crushin' (that trope again!) decision maker, a competitor with killer instincts. Someone who attracts and hires A's, unafraid to hire above himself. A player. A hitter.
Finding TheGuy--finding the Right Answer--for companies in need was Dave Beirne's world for ten years.
Thanks to happenstance, Beirne's career as a search guy had begun at the age of twenty-two in cold-call hell. Freshly graduated in 1985 from a small school, Bryant College, with a business degree, he had an appetite for work. During his last two years of college, he had taken a full course load, worked at IBM virtually full-time as a marketing assistant, captained the lacrosse team, and led buddies in sundry intramural sports--and in what in the 1980s was defined as the back half of work-hard/play-hard (the lock-and-load party, for example: the dorm door was locked, and a concoction of liquor and Kool-Aid that filled a giant garbage can in the room's center was drunk until every person was loaded).
He had his coterie of mates, to whom he was fiercely loyal. But outsidethat circle, he was not a gregarious person. In fact, he was unable to mix without putting many on the defensive. He walked with a chip on his shoulder that he took no pains to disguise. He had a particular aversion to anyone whose status derived from inherited privilege. A college friend would later liken his attitude to that of a ghetto-hardened tough: If it was given to ya, don't think you're better than me.
His own family had prospered from blue-collar roots, working for General Motors. His grandfather was a union leader who worked forty-two years on the assembly line at the Tarrytown, New York, plant, and his father, Gus, had followed, directly out of high school, hanging doors on the line. While Dave Beirne was growing up, his father worked the swing shift. But eventually, Gus was able to make the jump to line management, and when Dave was in high school his father moved into the upper reaches and eventually would oversee fifty thousand people at his career's peak before retiring. The ascendance of this high school graduate happened too late for his son Dave to think as ambitiously as he might have about where to take strong grades when applying to college, and too late for Dave to change his own sense of class status. At Bryant he all but shouted: Don't think anything was handed to my dad or to me.
Graduating from a small school without the national reputation of an Ivy, he was at a disadvantage for entree to the most promising career tracks in business. Resolved to gather the experience and money he would need in order to obtain a Harvard MBA, the instrument that would give him parity, he spoke with anyone he could think of about entry-level positions. He was introduced to Chuck Ramsey, an executive recruiter at Sales Consultants who worked with technology companies; Ramsey was willing to overlook the fact thatthe kid did not even know what a recruiter did and give him a try.
Hiring Dave Beirne was not an especially expensive risk; the only pay was the commission earned when a candidate was successfully placed, and it was up to the "account executive," as Beirne was grandly titled, to obtain the recruiting assignment from an employer willing to pay a contingency fee when hiring a recommended candidate. Beirne was given a phone, a desk, Yellow Pages, and training that consisted of a simple injunction: Have at it.
It was not clear why either a prospective client or candidate would take Dave Beirne seriously. He was young, and looked even younger than he was; his job experience at that point--summer work on the assembly line and the IBM assistantship as essentially a gofer--had not provided a tour of the upper floors of power. He had no list of successful placements. Why would anyone look at him and sign on?
The answer: No one did look at him. The business of placing low-and midlevel sales people was conducted entirely on the phone. What prospective employers and employees heard was a baritone that conferred the authority of someone twice his age. He was a quick study, put in more hours than anyone else, talked his way into assignments, and found recruits.
Because debt was anathema to him, he had started with the in-tention of first saving up enough to pay for business school, and only then applying. But commissions rolled in, almost instantly. (After only six weeks on the job, the kid had suggested to Ramsey, twenty-one years his senior, that the two should leave their employer and start their own firm; Ramsey demurred.) Beirne did sensationally, and the savings were in place in months, not years. He had simply leaped over the stepping-stone of business school to the other shore.
Meet the Author
Randall E. Stross teaches business history at San Jose State University and is a contributing editor at U.S. News & World Report. He is the author of four previous books, including The Microsoft Way and Steve Jobs and the NeXT Big Thing. He lives in Menlo Park, California, and can be reached via his website, randallstross.com.
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