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Rejection Is Opportunity: 25 months from a hard “No” to the launch of Netscape

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Editor’s Note: B7 General Partner Peter Thorp was an early employee of Mosaic, the company that became Netscape and started the Internet revolution. I’ve known and respected and learned from Peter for years, and excited to have him share some of his insights with our readers here. This is his account of the launch of Netscape and the 25 months that sat in between its initial rejection and eventual huge success. This story is important not just for historical perspective, but to underscore that real innovators never give up. -bg

Day 1: The Submission
Thursday, July 1, 1993
It’s a scorching summer day in Washington D.C. and Route 495 Southbound is again transformed into the capital’s largest parking lot. Packed with anxious locals migrating to the Eastern Shore for the long Fourth of July weekend, the major national highway slows to a standstill. Meanwhile, in Champaign, Illinois, home of the National Center for Super Computing Applications (NCSA), the weather is equally as muggy and hot. There, on the campus of the University of Illinois, a few students linger, braving the oppressive summer heat. One of these students is Marc Andreessen. Marc and his team are putting the final touches on a proposal to the National Science Foundation (NSF) called the “Mosaic Project for Mapping Cyberspace”. Their project intends to “investigate emerging patterns of community and individual methods of information discovery, navigation, retrieval and sharing in the “Global Networked Information Space” (Marc Andreessen, Mosaic Project for Mapping Cyberspace, July1, 1993).

Month 1: The Rejection
The proposal is completed and the Board of Trustees of the University of Illinois submits it to the NSF on behalf of Marc and his team. The estimated cost for the project is $3,392,940, an amount that would be distributed over a period of 36 months. It’s now July 9, 1993, and the weather has cooled into a restless gloom. With tenebrous skies overhead and the Illinois air thick with humidity, the NSF gives their final decision. The project has been rejected.

Month 6: The Emigration
Five months after having been turned down by the NSF, Marc Andreessen is offered a job at Enterprise Integration Technologies, a company that develops Internet security products in California’s Silicon Valley. At this time, Andreessen, a recent graduate, is working at his University’s NCSA for about $6.85 an hour. He accepts the job and departs for California, leaving the code for Mosaic behind. There, in Silicon Valley, he receives an email from a former computer science professor at Stanford University named Jim Clark.

Month 9: The Formation
On April 4, 1994 the Mosiac Communications Corporation is co-founded by Jim Clark and Marc Andreessen. The company’s biggest investor is Kleiner Perkins Caufield & Byers, a venture capital firm from Silicon Valley. In need of strong innovative team members, the co-founders recruit from Silicon Graphics, Inc., as well as the original NCSA Mosaic proposal team. Nine months later Jim Barskdale will join Mosaic as CEO.

Month 15: The Jurassic Age
On October, 13, 1994, Mosaic Communications releases Mosaic Netscape 0.9, a web browser that will soon take the World Wide Web by storm. Mosaic becomes one of the first companies to enter the new frontier of the Internet. Working at Oracle that October, I hear about Mosaic and interview for a position that same month. In the late fall of 1994, Fred Giordano and Todd Rulon-Miller hire me as Mosaic’s first sales person. Jay Nausbaum, VP of Oracle’s Public Sector, asks me to stay, indicating that I could just buy the Netscape stock after it opens in the public market. Recognizing it as an opportunity of a lifetime, I move. Mosaic is unlike anything I have ever experienced before, with offices used as bedrooms, engineers mingling with sales people, and an incredible velocity of interaction between all employees in all levels of the company. Jim Barksdale noted that, “the young turks and grown-up engineers write code together, while a handful of business people try to figure out how to sell the software” (Lashinsky, Adam, “Remembering Netscape: The Birth Of The Web”, CNN Money, July 25, 2005). At the center of the excitement is Andreessen, a very approachable 23 year old with an idea. We become friends.

Month 18 : A Product
In the late fall of 1994 the browser is subsequently renamed Netscape Navigator, and the company takes its new name: Netscape. One year after arriving in Silicon Valley and just 18 months after being rejected, Netscape ships a product. It is our first sales meeting and everyone is at 501 Middlefield Road in Mountain View. There’s a general calmness in the air as the entire company sits around the table. It is announced that Jim Barksdale will be joining the company as the CEO. On March 8, 1995, one hundred days after joining the company, we sell a Netscape license to the U.S. Government via BTG for $2,000,000. BTG is headed by Paul Collins and Linda Hill. The deal is immediately paid in full and I send both the check and the order to Marc and the engineering team led by Bob Rylea and Taher Elgamal. This marks the beginning of a long friendship with the engineering team. On a warm spring day in May 1995, my first hire, Frank Hecker, and I walk into NIH on Wisconsin Ave. We have been asked to speak at the NIH Technical Conference and expect to see about 10-15 people. Frank and I arrive at Room 25A and find a conference room packed with about 400 plus SRO attendees. “Who is the next presenter,” I ask, stunned by the massive turnout. A small group of people turn to me and say, “We’re waiting to hear from Netscape.” At that moment, even I know something is up.

Month 25: The Launch
On August 9th 1995 most Americans are following the death of music icon and Grateful Dead singer, Jerry Garcia. Eager investors and anxious traders, however, are consumed by Netscape’s first public appearance on Wall Street and its brand new product, the Netscape browser. The browser promises to introduce everyday people to the World Wide Web, which, until this point, had been exclusively used by experts, engineers and computer science students. Netscape completes a successful IPO and the stock doubles from its perceived $14 per share to a last-minute change of $28. By the end of the day it closes at $58.25, rising to a high of $75 at one point. The market value of Netscape, which just two years and one month earlier was nothing but a failed proposal, is a whopping $2.9 billion (Eric Niiler, “Netscape’s IPO Anniversary and the Internet Boom”, National Public Radio, August 9, 2005). On this day I’m driving down the Dulles Toll Road listening to Coolio’s “Gangsta’s Paradise”. The music ends and there is a breaking news update: Netscape opened at $72. I think back to Oracle’s response to taking a job at Mosaic. I loved Jay Nausbuam, but buying Netscape on the open market was not an option. I call my co-workers in California and they are giddy with excitement and they barely have time to talk. As the stock price continues to rise, the local TV stations rush to the Netscape parking lot, and are running around trying to interview people as they leave the building. How do you control something like that? This is a moment.

Month 32: The Cover
It’s February 19, 1996 and a cold day in DC. I grab my coffee and take off for work. Sitting on my desk is a copy of Time Magazine . I still have it. The Netscape moment has been immortalized with a barefoot Andreessen on the cover. To go from rejection to the cover of Time Magazine in 32 months is still surreal. The message is clear: rejection is opportunity.

July 2013
July 2013 was the 20th anniversary of that original rejection of the Mosiac Mapping of Cyber Space project. Rejection is just part of life. It does not define you and can be a catalyst for manifesting your destiny.

Summary
As Eric Bina once said, “Netscape and the Internet supercharged each other,” (Lashinsky, 2005) thousands of websites emerged in 1996 and by October users had downloaded 45 million Netscape browsers. The Netscape home page became the online hot spot for anyone with access to a computer. It was everywhere. During my first 15 months at Netscape my team closed millions of dollars worth of sales. In 1995 our revenue rose from $85 million to $346 million in the course of a single calendar year, soaring to $534 million in 1997 (Niller, 2005). There at Netscape I met many great people like Jim Clark, Jim Barksdale, Ram Shriram, Ben Horowitz, Michael Homer, Fred Giordano, and Marc Andreessen. My sales team, John Menkart Frank Hecker and I have worked together to close deals ever since.

 

Peter Thorp is the founder of and a B7 General Partner. He was an early employee of Mosaic, the company that became Netscape and started the Internet revolution. Since then he continued to work with the cadre of innovators from that community, including Marc Andreessen and Ben Horowtiz (now of a16z). Peter has been instrumental to the success of firms shaping the future of enterprise technology, including Opsware, HP and Nicira.

 

 

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Bob Gourley writes on enterprise IT. He is a founder and partner at Cognitio Corp and publsher of CTOvision.com

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