How did a bootstrapper who mortgaged his house to launch a software company end up becoming the father of Flash, the platform that changed online video?
Charlie Jackson is the owner, CEO of Silicon Beach Software, which develops storybooks on mobile devices for kids. In 1993 he co-founded FutureWave Software and unleashed on the world a product that we know today as Adobe Flash Player, the cross-platform browser plug-in that delivers web experiences like video and games.
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Charlie Jackson, Silicon Beach Software
Charlie Jackson is the Owner/CEO of Silicon Beach Software which is a developer and publisher of software for mobile devices.
Andrew: Coming up, well, as you’ll hear in my voice, I had a lot of fun recording this interview for you. You don’t care about my fun. You want to know what’s in it for you. So let me call out a few key ideas that I wrote down in my notes from this interview that I think will help change your life. The first is goal-setting. I know you’ve heard so many self- improvement authors talk about the power of goal-setting. Wait until you hear what it did for today’s guest and how dramatically it changed his life. I think it’ll have a big impact on yours.
Also, the point on advisory boards I think is worth paying attention to. What do you do when you’re in a brand new industry doing things you’ve never done before and you don’t have a mentor, you don’t have advisors to help you? That happened to today’s guest and I asked him how he dealt with it. His response is one that could influence your life, and you might have seen other entrepreneurs I’ve interviewed do the same thing. Finally, there are major shifts that always create opportunities for ambitious entrepreneurs like you, the person who’s listening to me. So pay attention to how two of those shifts impacted today’s guest, and how they might create opportunities for you in the future. Those points, which I have here in my notes, and so many others. I hope you take good notes on this interview, too. That’s coming up.
There are three messages before we get started. First, do you need a single phone number that comes with multiple extensions so anyone who works at your company can be reached no matter where they are? Go to grasshopper.com. It’s the virtual phone system that entrepreneurs love.
Next, does anyone you know need a beautiful online store that actually increases sales but is easy to set up and manage? Send them to shopify.com, the platform that top online stores are running on right now.
Finally, do you need a lawyer who actually understands the startup world that you and I live in? Go to walkercorporatelaw.com. I’ve known Scott Edward Walker for years, so tell him you’re a friend of mine and he’ll take good care of you.
Here’s the program.
Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. How did a bootstrapper who mortgaged his house to launch a software company end up becoming the father of Flash, the platform that changed online video? Charlie Jackson is the owner, CEO of Silicon Beach Software, which develops storybooks on mobile devices for kids. In 1993 he co-founded FutureWave Software and unleashed on the world a product that we know today as Adobe Flash Player, the cross-platform browser plug-in that delivers web experiences like video and games. Charlie, welcome.
Andrew: Do you ever see Flash used somewhere online and say to yourself, “I can’t believe I had a part in bringing that into the world?”
Charlie: Many times, actually.
Andrew: For example?
Charlie: Jonathon Gay, who was my co-founder, and I will email each other, “Hey, check this out! Look what people did with Flash.” I remember there was one in particular. It was a cartoon, animator versus animator or something like that, where they had the Flash interface and a little cartoon character goes running around inside it trying to escape, and it was just absolutely amazing.
Andrew: Yeah, it must be great to be able to just keep passing that back to yourself and say, “I help this creative person build this beautiful thing.”
Charlie: Yeah. I think the thing that has been most gratifying is a few times I’ve had people say to me, “Thank you for creating a whole industry because I have a career.” And that’s really an amazing thing to hear.
Andrew: I know we did. Back years ago my brother and I built Bradford and Reed, which did a lot of online greeting cards, and when we switched to Flash-based greeting cards the business just took off and it kept competition at bay because not everyone could create beautiful Flash-based greeting cards. When you started out, the company before FutureWave, you started out and you created a spreadsheet with your goals on it, right?
Charlie: Yes, I did. I had a very specific goal in mind when I started that company, and I always tell my entrepreneurs that I think goal-setting is absolutely imperative. You should write them down, you should think about your goals all the time, because our brains have amazing problem-solving ability and so your brain is working on it all the time. Do you want me to tell you about what the goal was?
Andrew: Yeah. What was it and how do you put it on a spreadsheet?
Charlie: Well, OK. The goal overall was that I wanted to be financially independent so that I could go back to training in the sport of shooting which I had started in the Marine Corps, and I wanted to make the United States team. I just had a bug in me since I was young, that I wanted to be on the United States team, that I wanted to wear ‘USA’ on my back and walk in the stadium. So the spreadsheet part of it came in when, as I was a little ways into the company with that overall goal, I began to get a little more detail, and I quantified as best I could exactly what I needed to obtain in that company so that I could go on and build a facility. I actually had to make a specialized facility for what I wanted to do, and be independent financially so that I wouldn’t have to work, so I could train full time. And I put that on the spreadsheet. And lo and behold, when I sold my company, it was exactly that number.
Andrew: Exactly the number that you had on the spreadsheet; and then did you get to make the US team?
Charlie: I sold the company in 1990 for exactly the number on the spreadsheet. I began training basically ’91. I had to do a lot of things to get ready, and in 1993 I made the United States team, and I walked in an opening ceremony for a World Cup competition, which is a qualifier for the Olympics, in Milan Italy, and realized a lifetime dream.
Andrew: And that’s also what allowed you then to have the freedom to create your next business, which is the one we talked about a moment ago, the father of Flash.
Charlie: Yes. But at that point I certainly had the money to finance a new company, and so Jonathan Gay, who worked for me in my first company actually wrote our very first piece of software, our first program that we published, when he was 17 years old and starting his senior year in high school. He came to me and said, “I’d like to do something. I’d like to do my own company.” So I told him, “Well, yeah, I like the idea,” because he’s phenomenal, a phenomenal guy. He said “But what?” I said two things; coming up with the right opportunity is a very difficult thing, sometimes the most difficult thing. And the other thing I told him was he had to wait six months because I still had another half year on my non-compete. So, during that time we brainstormed, and we finally came up with something we thought was a good idea to try.
Andrew: Let’s go back and just understand how you launched the first business, how you built it up and got it to live up to this goal that you set up for yourself in the spreadsheet, and then follow through from there and see how you built up the next business. Where did the original idea come from for Silicon Beach Software?
Charlie: Well, I had been looking around for some time for some opportunity in the software arena. I had a little business of my own teaching people how to use computers. And so I saw the rise of the Apple II – I was actually doing that before the IBM PC even came out, with the Apple II. Then I was teaching people how to use the IBM PC. Then when the Mac came along, I said, finally, here’s the right opportunity. What I had seen with both of those previous computers was that in their very beginnings, there was very little software for them. And there was quite a demand for almost anything decent that people would put out. The Macintosh came out, and I got one of the first ones to come into San Diego, and I said, “Wow, this is really different.” And I’m not sure I have a training business anymore, because it’s pretty easy to use.
I really wanted to start a software company. I’d read up about all the startups in their homes and garages over the years. And I said this is the right opportunity. There wasn’t much software; there was Mac Paint, Mac Draw, a couple of other things. So we jumped on that, and starting in the summer of ’84, I think the Mac came out in April or May, I don’t remember which. But we got started right away, and I was right that that was a good opportunity. Whenever there’s a whole new operating system, that will present opportunity. The question then becomes, will that operating system take off?
Andrew: You know what, there’s also an issue of, most people at the time didn’t really buy into computers or didn’t understand them. So there’s a tough challenge to both understand and then present software that the average person could use. One of the reasons why you weren’t intimidated by that as I understand it, you told our producer Jeremy that being on the rowing team at UCLA years before prepared you for tough challenges and let you see them in perspective. How?
Charlie: Well, yes, my experience on the rowing team of UCLA gave me a tremendous sense of inner strength, of confidence that I could do almost anything I put my mind to. Because I went through so much, including the pain barrier that you’ll hear talked about some times – I really did that on a rowing machine on the corner of Pauley Pavilion one day, and it just changed my life.
Andrew: What do you mean, how does being on a rowing machine help change your life?
Charlie: Because that rowing machine had been beating me, and I wasn’t as strong as I could be, and my scores were even slightly below average, I would say, compared to my peers. One day I just got really pissed off and I just started going with everything I had, and when I got to that point where the pain was pretty strong in your legs and everything, you know, lactic acid, I just said, “I’m just not going to back on this, and I just went through it. It was like I went into slow motion. I would come up on the slide, and I would hit it with everything I had in my legs, boom, and then come up on the slide and then just boom. I just went through that, and I obliterated my best score.
It was just an incredible experience, and there was more to it that whole season, too. We had dedicated ourselves, my group. That was the third year of the program. We had started just two years before that, the lightweight rowing program at UCLA, and Washington had beaten us every year. They had a tremendous rowing program. We got together, and we made a pact. We just said, “We’re going to do whatever it takes.” And we did, and we went undefeated that year.
Andrew: Oh, wow.
Charlie: Yeah. Yes.
Andrew: That does give you a sense of power over your own destiny when you can come up with a goal like that, see yourself change through it and then achieve it. So now I understand. You want to build a business in this world, and one of the things that people keep telling all entrepreneurs that are starting out is nine out of ten businesses fail. What are you doing? When you hear a statistic like that, what do you say?
Charlie: In fact, I read that exact statistic in a book on entrepreneuring. After my time in the Marine Corps, my active duty four years, I went back to graduate school and I learned that you really want to research a topic and just find out everything you can about something. In the business world, the way I did that was if I had to make a decision, I would take as much time as I could to make that decision, and I would research and think about it and read up and just think about it as much as possible and make the decision. And so, as I was looking to start a company, I need to know more about this because I haven’t done this before. So I read up as much as I could.
And then in one book I came across that exact fact that said nine out of ten startups fail. Now that’s a very sobering fact, and I was taken aback by that, but the next moment my thought was yes, but I’m the one out of the ten.
Andrew: I see.
Charlie: And I never doubted that for a moment.
Andrew: That’s a good way of looking at things. I also wonder, what does that stat come from? No one ever cites a source, not even like a shoddy study that comes from a reputable source.
Charlie: I have not seen a source either, but I’m quite convinced it’s true.
Andrew: [laughs] Right now having launched businesses and seeing them through.
Andrew: All right. So you see this whole new world developing in front of you and you say, there’s not enough software for this platform. I believe in it. I’m going to build a publishing company that publishes other people’s software. That was the vision?
Charlie: No. It was to develop software and publish it, and then we also did publish other people’s software. That just sort of came along later.
Andrew: I see. I read that you met Jonathan Gay through his father who came to a Mac users’ group which you created.
Charlie: Yes. I founded this [?] Macintosh users’ group. That was a blatant ploy to meet everyone interested in the Macintosh. I remember looking up, saying, oh… I did other user groups before the Mac started, and then I thought, oh, there’s no Macintosh user group. Let me check, and if they’re isn’t, well, great I get to start it. The first two meetings were in my house, actually.
Charlie: Yes. Jonathan’s father came there and told me about his son who had won a science fair award for programming on the Apple II, and I said, “Well, do you think he’d want to program on the Macintosh?”
Charlie: Actually, it wasn’t the Macintosh. You couldn’t program on the Macintosh. There weren’t tools. I used my life savings to buy a Lisa computer which was about $10,000 total, as I recall. It was very expensive. I handed it over to him, and he had it in his bedroom at home.
Andrew: So you invested everything you had in a computer for a 17-year-old kid. How did you know what software to start off with?
Charlie: Oh, that’s a really good question. I didn’t actually exactly know at that point, I would say, but what I decided to do was a game. So we didn’t set out to be a game software company, but I made a game first. My thinking was, there’s always room for another good game. I won’t make the one kind of product that I might hit the established companies and not succeed. So, we did a really great game, and it was great because we discovered we could do digitized sound, and that hadn’t been done as a standard thing in software before that.
Andrew: It wasn’t available on the PC because the IBM PC didn’t enable that.
Charlie: Correct. About that time the sound boards were starting to come out, but they were still [??] and you had to buy it separately, and they weren’t shipped with the PC. So you couldn’t just put in digital sound and assume they would have a soundcard. So it wasn’t even being done yet. And I had another young programmer than I met through the Macintosh group. He was a UCSD student at the time in computer science who started working with us, as well. Eric Zacker, an incredibly bright guy, too, who has gone on to do great things in the industry. And he told me at one point, Earl [??], we could play back digitized sound. I said, what do you mean? He said, it has a deck in it. What’s that? A digital [??] converter. What’s that? And he explained it to me, and then I understood, because I had done graduate work in linguistics and in phonetics and phonology, we had done some work where a computer had simulated some things with voices, digitized things. So we got some sound digitizer over at UCSD with my former professor helping out, modemed it over to the Mac, and Eric wrote a sound player, and a wav editor himself. And we played back digitized sound.
I remember calling up one of the Mac World editors, and I said, listen to this, and I held the phone on top of the Macintosh and played some music and some other little things out of [??]. And I said, hey, you know where that’s coming from? And he said, no, what? I said, it’s coming out of a Macintosh. They said, no way! So then we put out the first game, and it had real digital sounds in it, and it was just great. It was an average to OK game, but the digital sound made it a big seller.
Andrew: How did you get the first customers?
Charlie: I think what really helped us get started was the very first Mac World expo. So we would go to trade shows, we would go to user groups, and we would run ads. And it was so early still when we came out with that first piece of software, that game, that if you ran an ad, people would really look at it in Mac World magazine. And at the trade show, we showed it, and people were going, wow.
I remember a retailer came up to us the first day, and he said all right, I like it, people are reacting to it. I’ll buy five copies. Which is a decent, reasonable order from a retailer. And that was our very first order, and I said, woo hoo! Great! And then the second day of the show, he came by and he goes, you know what? Make that 25. And then third day he was there again, and he came by and said, make that 100. This was for one store. And he was the first guy we shipped to. He got the first 100 and sold them all.
Andrew: Did I get that right? I think I pulled it from an L.A. Times article from 1984 that said that you mortgaged your house, you took out a mortgage on your house to start this business. You did.
Charlie: I did. So the life savings went into the Lisa computer. And then as we finished the first product, we needed to make art for the box and for an ad, and we needed to make the boxes, all of the logistics of that kind of thing, and run an ad in the magazines. And so we took out a mortgage on our house, and that funded the production and the shipping of the first product.
Andrew: And you shipped the product from your home?
Charlie: Yes. We were still working out of my house. Zoning laws didn’t really allow that, but that’s OK. Nobody found out. So we did that, and in fact, my wife used to put a sign in the window, UPS yes or no, at our house.
Andrew: UPS, yes or no? Oh, like we have UPS stuff.
Charlie: Yes, UPS would come by, and they’d know to come in and get boxes that we were shipping out.
Andrew: How did you know what the next product to create would be?
Charlie: Out of Macintosh user group again. We’d hear things that they would want or need. For example, Mac Paint was out with the first Mac, and it had a small window. It was even smaller than the screen size, which was quite small in the Mac, and that was an area that you could draw in, and then you had a hand tool that you could move the area that you were working on, and you could make some more. But what you couldn’t do was use the selection marquis to select more than what was in the window. So you could paint a whole page, but you could only cut and paste a small portion of it. So we said, ah, we need a utility that allows us to select the entire page. So we made a little utility that you could open a Mac Paint document, and do the selection marquis, and when you hit the edge, it would auto scroll, and it would allow you to select the whole page and paste it into a Word document, and that was our second product.
Andrew: And that’s just by going to the user group and listening to people complain, and understanding what their pain is, and then creating a product to solve it.
Charlie: Yes. That exactly.
Andrew: Was it as simple as that? I saw a hesitation there. I don’t want to put words in your mouth.
Charlie: That was to be part of it. That was, well, we were seeing [??] coming up with ideas of what would be good. Getting or label printed and after that. Gensis of Super Paint, which was our, by far our biggest hit product and it really made the company was that cut and paste program called Paint Cutter. While the programmer was doing that, he put in, one day, a pencil and an eraser, a tool in there, and said hey look. Because it turned out those were real easy to program and so he just stuck it in there. And it came to me and I said we are not doing that. And they said why, why. I said, no, we don’t want to be the worst painting program on the market when we can be the best cut and paste utility.
Now if we want to go forward and do a whole paint program during the next generation of that, yeah, that is something good to look at. We also thought about putting the draw capability of Math Draw into the same program having two different layers. One of the big things about Super Paint it was the first program to combine bitmap and pixel and everything and Vector drawing into this one program.
Andrew: I see.
Charlie: It was a big hit.
Andrew: It seems like it. Was that the big break out hit that made you feel like we’ve a big company here?
Charlie: Oh yeah. It was in the top five for the Macintosh for the next two years.
Andrew: Oh wow.
Charlie: Big seller. We were five people at the time that we shipped it. It was our seventh product that we had shipped. I remember a guy a [??] asked me one time, how did you do seven products with just five people in your company? I thought for a second and the only answer I had for him was we had no choice.
Andrew: What do you mean?
Charlie: That’s what we had to do.
Andrew: That’s all you could afford is to have five people there.
Charlie: That’s all I could have was five people and so we just did it. A lot of people said wow, you can’t really do that. I don’t think that way. I know [??] people who say you can’t do it.
Andrew: How did you do it then? I understand not having a choice being the motivation to do it but what’s the process that you get so much software out of such a small group of people that even Apple’s own evangelist whose there to talk to software developers and see the best of his platform is wowed by this. What did you do differently?
Charlie: I don’t know differently, but you know what, the thing that I always tell entrepreneur is that you find a way. If there’s just one thing that I can tell them, it is that you find a way. That’s what you have to do. It’s difficult. It may not be [??] at first. You try and you find a way. What I had to do was find programmers who would do a product without money up front. So, they were promised royalties. So, I was doing the royalty model at that point and time.
Yonkers, because he was in high school got royalties which paid for his college and then he came back and worked for us full-time after he finished college and got his computer science degree. I found a number of programmers like that. When I say five people, that was five employees but there were some outside programmers. They weren’t even contractors though. They were just doing it at our direction, using our design, our specs kind of thing.
Andrew: I see. You come up with idea and you say if you build it for me developer, I will give you royalties from this. And of course, I have the infrastructure and the relationships to make sure that it gets out there into the world.
Charlie: Yes and that became important to what you just mentioned. The relationship and infrastructure as we have [??] programmers would come to us to publish their product. A couple of our products were licensed from the developers. They typically would come to us pretty early and then we would help in the design as well. I would actually put people on it but they would code it. In fact, I wouldn’t agree to publish something unless they allow us to have final say because I felt that we really have a good understanding of what people want and what the interface should look like.
Andrew: How did you know what people wanted back then?
Charlie: Well, I guess it was those years of teaching people how to use computers. I got a sense of what they want and what their expectations were. One of the things I learned from the human user interface group is that Apple, headed by [??] a brilliant guy, was it’s all about the expectation. So, the Macintosh had very set guidelines of how to do the user interface and you were supposed to follow those. Sometimes people didn’t but we were very careful to do that. Just as an example, the OK button or return or last button that you would click in the dialogue box is supposed to be in the lower right. There’s a reason for that. They had seen in the research that (for English speakers anyway, in our language.) we read from upper left to lower right. So you would finish a dialogue box in the lower right and that’s where the okay should be.
Andrew: I see. So you leveraged their research instead of undoing it based on your own hunches?
Charlie: Oh, we absolutely leveraged it. I mean, I used to go up there as much as I could and talk with them and they liked talking with us because we were really into it. We had some great sessions with them. I remember one time they were showing us something that was going to come in the next version of the operating system and it was just a nice little feature. We went back and put it in one of our pieces of software and had it out before they did!
Andrew: What was the feature?
Charlie: Oh, I don’t remember.
Andrew: But you did to Apple what Apple supposedly did to Xerox?
Charlie: No, no, not like that. It was just an interface thing that they were going to add that we all should use. We were just able to add it sooner than the others because we’d seen it. That was helpful to us but we worked closely with them and after a while you just start to say, “What are regular people going to feel like trying to use the software?” I think that was always one of the strengths that I brought to it. I had a feeling for what a regular person would encounter. Sometimes the programmers would do things which would be very esoteric in [??].
We were doing Digital Darkroom, which was photo editor before Photoshop (it was gray scale because there was no color yet for the Mac.) and the two programmers were great, very technical (one of them had a Master’s Degree in math). They were doing some real number crunching and they presented a dialogue box where you would put in percentages to combine 2 images and that wasn’t usable for me. So we said, “What user interface elements do we have here that we can make this work better?”
We had sliders and buttons so what we did was got a slider to work in and then Eric said, “Hey, it’ll work in real time!” So we would paste an image on top of another and run a slider up and down and the image would just fade in and out real time. You could get it to where you want and then you could say, “OK.” and then it would finalize it. When we showed that to people at trade shows, their jaws would just drop. We had come up with an interface that was actually usable, not a bunch of percentages in a dialogue box.
Andrew: Charlie, you had a feel for what the average person would understand in software because of your previous work, right?
Charlie: I think so…
Andrew: What was that work?
Charlie: Teaching people how to use computers. I had a consulting business where I did training, so I would teach them DOS on the Apple II and then VisiCalc. Then later, on the PC, DOS and WordStar and VisiCalc or Lotus 123 and then Ashon-Tate’s dBase. All that early software, people need training on it. To operate a computer, you had to learn how to operate the DOS prompt, how to type in commands and stuff. It was a little tough for people to do that. So I put together a business doing that and I think that was very helpful.
Another aspect of it was that I’m not a programmer. I learned a little bit about programming just to have enough of an understanding of the realities that they face and not be unrealistic about the demands on the programmers (which was very important at times.) but the products were for me; I was the target user. We had other people in the company like that too. Our product managers, as we got bigger, were really good at understanding this stuff. We hired those kinds of people and they had the final say. I think that was a big part of it. We just made products that every-day people could use. We were taking things like image processing, which was a very specialized, high-end thing that existed in the world that day and making it available to the consumer.
Andrew: You mentioned something earlier on the interview that I made a mental note to come back to which is, you said, “You have to know to jump on a platform quickly when it’s young because that’s when people are going to make the most software but you have to pick the right platform.” So how did you know that this would be the right platform to build software and a whole company around?
Charlie: You mean the Mac and the first company? Well first I want to say predicting what’s going to happen with operating systems is very difficult and there have been other times I’ve been wrong. We have to talk about that in the genesis of Flash actually but I’ll come back to that.
Andrew: [??] got a pen to write this down.
I think that I just felt that it was going to be…I believed that it was going to be very successful because it was so different. It had the graphical user interface. That was the radical change. I think there have been three big waves in the computing so far. We had the Apple II and the IBM PC which was the first computing wave, the platform wave, if you want to say. And then there was the graphic (?) interface, Macintosh and Windows. And now we have the touch interface and tablets, which I think is the next big wave. So I just… There was a time in the second year of our company that it was looking a little shaky. A lot of people are asking, “Will Apple survive?” The Mac hadn’t really taken off. It was still a small market, which was one of the reasons why we were just a couple of people. The market was still pretty small. Then actually what happened was they came out with a little bit more powerful Macintosh and then two things: the laser-eye printer, the first laser printer, and PageMaker from Aldus Corporation and Paul Brainerd, the father of desktop publishing as they call him (he’s somebody I got to know and think very highly of because it was Aldus that bought my company Silicon Beach in 1990). But that just created a whole new industry I guess you could say, the desktop publishing, and things really started to take off then. When we went to the Amega Developer Conference in that second year thinking, “We might have to shift if this Mac doesn’t make it.”
Andrew: Because Commodore shipped this beautiful machine that was low price, that did a lot of what the Mac was suppose to do.
Charlie: I wouldn’t say what the Mac was supposed to do, it was more aimed at being a gaming computer, and so it was a very powerful piece of hardware. For example, the Macintosh I mentioned could play back digital sound, but that really was built in to the disc operating system which was why it was hidden and you had to totally put it in there. Steve Jobs didn’t want people to know about it because he didn’t want Mac to be a gaming machine so they had not documented it. We just found it, we discovered it. With the Amega it had four separate sound channels built right into the hardware, just as an example, but it never really took off. In the end, an operating system will only take off if there’s really, really good software for it. That’s something Apple has always understood and they have their evangelism group and some of the famous people like Guy Kawasaki who did that and it worked.
Andrew: The LA Times article from 1990 that talked about the sale of the company said in 1989 you had $10.7 million in sales, up from $5 million the year before. Is that right?
Charlie: Yes. That’s right. There were $10.7 million the last year and, yeah, I think it was $5 million the year before that.
Andrew: Why did you decide to sell at that point?
Charlie: Because I could get that number, so I could go shoot on the U.S. team.
Andrew: Oh, I see. Because you had the number on your spreadsheet, you said, “That’s it. I’m not looking to gamble and go way bigger than this. I have what I need.”
Charlie: Yes. That’s a good point, not willing to gamble further. Basically, I had my goal that I was really trying to achieve and I really wanted to get on to going into the full-time training. I mean, I was very motivated to do that. I had offers for the company for less than half of what that number needed to be early on, and they were just very premature. When we looked we said, “We have a good product cycle going here. We have more products. We can really go further.” Along with the fact that I felt that I could get that number at the time selling the company right then was the fact that I was looking and going we’ve done all these products we had in the pipeline a while back and we didn’t really have a bunch of things cooking at that point that looked like they could be big winners so it was probably more risky to try to continue. That was the decision-making.
Andrew: I see. So what was the sale price? What was the number on your spreadsheet?
Charlie Jackson The number on my spreadsheet was $25 million, and the sale price as stated, based on the value of the shares (?) on the day that we closed was $25.5 million.
Andrew: Wow. And the company was owned solely by you and your wife?
Charlie: We actually had one small investor that second year when we had trouble getting through (?).
Andrew: Wow. So you felt you needed $25 million in order to devote yourself to training? It seems like you could’ve gotten away with less.
Charlie: Yeah. Because you have to take off a third for taxes.
Andrew: Oh, I see. A third for taxes but still, how expensive is training?
Charlie: No. You have to understand what I was looking at was not just training, but living the rest of my life on that.
Andrew: Oh, I see. You said, “I’m not going to work anymore. I’m just going to focus on being better at this.”
Andrew: And you did achieve your goal. You got to have that U.S. Team on the back of your jacket and you got to compete.
Charlie: I did. And I did that through the ’90s. Actually, when I started training I was 41 and when I made the U.S. team, I was 43.
Charlie: I wasn’t a spring chicken.
Andrew: Was it intimidating, by the way, to be around people who were so much younger?
Charlie: Well, pistol shooting is one sport where you can be a little bit older, so I wasn’t really unique or really unusual in that regard, but most of the competitors were younger guys in their 20’s. No, it wasn’t…we became very good friends.
If you’re watching the Olympics now, you’ll see that people talk about the camaraderie of the competitors and Pristorius…did I get the name right? Oscar talked about that recently. We were very, very tight. A lot of good friends there, I still talk to them all the time.
Because, you know, it’s an individual sport. I’m just really competing against myself more than I am against them in doing something like that. I had to learn to really control my mental processes, and my thinking, and my emotions. That’s a lot harder than it sounds when you’re shooting.
Andrew: What’s your big challenge in controlling your emotions, you personally?
Charlie: For me, personally, it was that I was so motivated that I was almost too motivated. I wanted it so bad that it was really hard to just not get really nervous, for lack of a better term, but nervous is not exactly the right word. The excitement of the level, the heart rate going up, the nerves, you know.
The hardest thing was making the U.S. team, actually. Competing internationally was something I had to learn to do as well. The first time I did it, I fell on my face pretty good. But like anything else, you get experience, and I had a really good mentor who helped me with mental training.
Andrew: You know what? It’s interesting. You also told Jeremy that, this is what you said. “We started out shipping the software out of my house. I had no advisory board, either.” When a sentence doesn’t directly connect to the previous one, I feel like it has extra significance. So, why did you single that out as one of the challenges of running your first company?
Charlie: Dick, what I was getting at there, I think was that I was running this company in an industry that was still in its early days. So a lot of things weren’t all set, exactly how you did things. Which was actually better for me, probably, than if it had been already all laid out. It was difficult to decide how to do certain kinds of things, not having had any prior experience with it.
What we did was we developed a peer network, actually. A lot of us would get together at the trade shows. We’d all talk among ourselves, the heads of companies, and say, “Well, I’m thinking this, that’s not really crazy, is it?” And other people would say, “Yeah, no, I think that’s right, it probably should work that way.” And you go, “Oh, OK, yeah, all right.” It was very helpful.
Andrew: I see.
Charlie: I never had an advisory board, the whole time. I think, really, my peers were all everybody’s advisory board.
Andrew: All right. And then, of course, once you started competing in rapid fire pistol, you did have a mentor who helped you out. So I can see the significance of it there, too.
Charlie: Yes. I didn’t have a coach, which was a problem. It’s not a sport that is done very much here in the U.S. There are very few people who do it, which was one of the reasons why I chose it, but I had to coach myself, which was very difficult to do. I was talking about the mental training, and how to handle those things. I went through a course with this guy who had been an Olympic gold medalist, and had developed a whole program and his program was really, really good. So he mentored me, and got me on the right track. Some of it just comes from experience, too.
I remember I was in a competition in Germany. I was sitting there talking with a guy from the English team, he was actually from Wales, and had a real dry sense of humor. I was just telling him, like, “I’m trying to figure out this way to be Zen, and all calm when I shoot, and I just can’t figure it out,” and he just laughed at me. He said, “No, mate, you just have to shoot anyway.” It sounds like, “What? What is that?” But that was the answer. I just had to learn that there was no magic way to absolutely calm myself. He told me about how his heart rate was measured, and it was high when he would shoot, and I realized, “Oh, OK, this is not unusual, and I just have to deal with it.” And I learned to deal with it.
One time, I controlled my thinking, what I was thinking about, from the evening before I started a big competition. Every waking moment, my mind would start to go off on something, I would just cut it off and say, “No, I’m just going to shoot like I’m capable of.” I went in the next day and I shot the best score I’d ever shot, a world-class score.
Andrew: So, every time your mind would go off to a different direction, you’d say, “No, stop, I’m going to shoot like I’ve never shot before.”
Charlie: No, I didn’t say, “I’m going to shoot like I never shot before.” I said, “I’m going to shoot just like I’m capable of shooting. Just like I’m capable. I’m just going to let go, and I’m just going to do it.
Andrew: It wasn’t, “I’m going to be the best shooter ever,” because that adds more pressure. It was just, “I’m going to do what I can.”
Charlie: You don’t do that. What you want in big competition is to perform like you’re capable of, trying to think of, “I’m going to do better. I’m going to have my best performance ever,” you tend to try harder and that’s usually it. I helped one beach volleyball player prepare for the Olympics and all we did was some simple stuff. “You’re going to play like you’re capable of playing. You’re not trying to do something more. Just allow yourself to do what you’re capable of doing.” He played at his best that whole Olympic. I was so proud. It was a blocker and he got voted the best blocker in that 2000 Olympics in Sydney, Australia. It was really neat helping somebody prepare like that.
Andrew: I’ve got to tell you, Charlie, I could spend a whole hour just talking to you about this part of business and life. If you’d like to, I would love to have you come back. We’re not done yet here, but I’d love to have you come back just to talk about the mental game.
Charlie: I’d love to. It’s something I love talking to entrepreneurs about. We can talk specifically about goal setting a little more, and we could do a session on that. Absolutely.
First of all, I experience this myself, but I also hear from my audience. It’s where there’s something that we need to do. Go give a presentation to someone, in my case, sit here with the camera on me and ask you questions. Someone who, I’m sure there are people in my audience who know more about your life than I do. In my head it’s natural to think, “What if I ask a stupid question? What if I ask something that’s so obvious to everyone else? What if I miss what they need to know?” That could really screw up with your performance. We all have that. Anyway, I’d love to have you back to do that. Let’s move on to the next business idea. Where did that come from? The one that became Flash. What was the original idea and where’d it come from?
Charlie: It’s, like I touched upon before, a whole new operating system. Jonathan and I were talking and saying, ‘What are we going to do?’ A lot of software was already out there for the Macintosh, for the IBM PC. Those were not brand new areas that you could just come into easily. At that time, in 1993, there was this new thing, the pinpoint operating system and a pen tablet, called the Ito and pen computing and tablets was going to be the next big thing.
We went to a conference, there were 1000 people there. There was talk that there was going to be Pen World, like there was Mac World and PC World, there was going to be Pen World Magazine. The operating system was good. It was a new generation. Very good operating system technically. We thought, ‘Let’s make a drawing program and get started with graphics,’ which was our background, ‘We can be the graphics software company for this whole new thing.’ That would have worked well. We made the product, it was called Smart Sketch, but we had just shipped it and then AT&T killed off the hobbit [SP], ship. I still don’t know exactly why on that. Everything went away. The hardware, that company shut down. The operating system, that company shut down. Almost overnight it just went away. There we were with a drawing program for a non-existent system.
I often talk about there are forks in the road, nowadays people like to use the term pivot, we faced a pivot because there was no choice. We went and ported to Mac and Windows. That was not what we wanted to do originally and here we were, a little no name company, Future Wave Software, with yet another drawing program. Wasn’t really doing much. This was ’95 by then. World Wide Web was becoming the big thing. You’d walk in a store and there’d be a kiosk with products that said, “Something for the web. Make this for the web. Make that for the web.” If it said, “For the web,” it got premium placement because that’s what was selling. I was talking to Jonathan, I said, “We need to make this for the web. Make a drawing program that’s specifically for web pages.” A drawing program already can be for web pages, so that wasn’t very interesting. He said, “I’ve been thinking about cell based animation.” We went to a trade show that he was talking to people about this and he was beginning to get a vision for an animation editor that would have animations run on web pages. I said, “If it says web pages, I can sell it.” His vision of it was phenomenal. He coded that with one other programmer with him. He’s incredible. He always had the vision for this product. It didn’t come from me. It was all Jonathan.
So we shifted that with a funky name on it. And some people were buying it. It wasn’t any big seller yet. And of course there was the plug-in and to be able to see the animations you had to get a plug-in, which was actually a bit of a challenge. There was a lot of resistance to plug-ins then. And people didn’t really want to do them. But Disney adopted the product to make some of their comic book stuff for a website that they had. I remember Aladdin in particular because if you know Flash at all, balloon text boxes are just so easy and straightforward to do. And Flash is just made for that kind of thing.
And Macromedia would go into Disney and say, “No. Use our product.” And the director, which was all CD-Rom animator program and he said “No, no, no. We’ve chosen to use this product already.” So Macromedia came to us and wanted to buy us and we were very open to that at that point so the acquisition took place. It was in an early acquisition, what they call a technology deal. I didn’t really want to build another whole company at that point in time. And in particular Jonathan wanted the resources of a large established company to really make something. It was phenomenal what Macromedia did with that.
We essentially did version 1. The [??] portion of it is still basically the same but then there was so much more that was done. There was no programming liners, no video or stuff in that first version so they took it and made it a phenomenal product.
Andrew: How did you know that creators are going to need an easy way to add text bubble and an easy way to move images on the screen? How did you know what was essential to include in this version 1 that you created?
Charlie: Well, we were just making an animation editor so that things could move around on a page and that could be might as well animations. And we wanted it to be pretty easy to use, that most people could use it and the first version had no programming language. Pretty much anybody could learn to do some animations. And actually using the vector drawing which the drawing portion of it was all vector drawing, no pixel editing, made it more efficient. And Flash has been beet up over the years for making pages bloated and take too long to load. But we actually shared in the early days that it was about 1/10 the size of the file if there was a vector drawing as opposed to a simple paint or bit map drawing. So we were tapping that it was much more efficient and it was essentially.
How did we know? I mean, really it was just that thinking I mentioned that it’s for a web page so it was a way to get the product noticed and get it into the stores.
Andrew: Did you talk to the customers and say, “Would this work for you?” Did you spy on your competitors or try their software and think I can improve it? Did you use that as a basis for your thought in developing?
Charlie: No, no. To be honest, at that point we said, “OK. We’re going to be making a really good animation editor.” So we focused on what it would be a really good animation editor and as always, we focused on use interface. Michelle Welch, was also involved. She was our VP Marketing. She has been my best part manager previously in this company and the three of us did a lot of design sessions and really figuring out how we could make this really usable and I think that’s where we succeeded. Again, user interface for, once you get into the graphical user interface world, it’s just critical.
Andrew: Right. And one of the first companies that you talked to was Adobe. They turned you down when you suggested that they buy you. Why?
Charlie: That was an interesting story. So actually we were proactive a little bit before Macromedia came to us. We were concerned about competitive issues because they did have a competitive product, Macromedia Director. So we didn’t talk to them first when we were actually looking at somebody that may want to acquire the company, the product.
So we talked to one of the companies and then my first VPO software development guy I met from UCS, Eric Zucker, was working at Adobe and he was in charge of most of their software development. So he set up a meeting with us, with John Warner who was the co-founder of Adobe and was running the company. And we went up there and showed it to them and all the Executives were there. I’d never, sitting in a meeting, this was our first meeting and all the decision makers were here. This is really amazing.
And Eric told me, “This is how we will go. Nobody will say anything before John Warner talks so you’d be [??] he’ll kind of indicate yes, he likes it or no, he doesn’t and if he says he likes it the others will go yes, we like it and if he doesn’t, they’ll go no”. And sure enough that’s exactly what happened. But he was preoccupied with an acquisition they were doing with a company called Frame and a product called FrameMaker, I think it was. He was pretty preoccupied with that. They were doing it right at that time, and our plug-in at that point in time, it was still early. It wasn’t as fast as you’d really want it to be, so he was not overwhelmed at what it would do, and he didn’t get interested at all.
So, they could have bought it in the tens of millions. I talked to Bruce Chizen not too long ago, who was the CEO of Adobe at the time they bought Macromedia. The price was $3.2 or $3.6 billion to buy Macromedia, and Jonathan and I were talking about it and thought it pretty funny that they could have gotten it for a lot less some time before. We thought, well, maybe a billion of that was for Flash, and then I talked to the CEO, the former CEO now, and he said, “No, no, no. We’ll assign some 0.6 or something like that to the other products like DreamWeaver. But it was really for Flash, probably $3 billion for Flash.
Andrew: So they valued Macromedia as roughly $3 billion for Flash when they bought it, and the rest was for all of the other assets of Macromedia. If they had bought you sooner, they would have saved billions of dollars.
Charlie: Yes, but I like to say right away, I’m not sure that Adobe would have done such a good job with that product as Macromedia did, too. So it wouldn’t necessarily have become the same product with Jonathan leading the way for the ten years that he did. He was in charge of the development all the way up until the time of the acquisition by Adobe, and then he didn’t want to go into yet a bigger company, so.
Andrew: Why did he need you, considering that he essentially came up with the idea himself? He cared so passionately about it that he stuck with it even after the company was sold. Why you?
Charlie: Well, you have to think back to the very beginning. We didn’t start off doing Flash. We started off doing graphic software for the Penguin operating system. He was a young programmer. He didn’t know how to run a business. He didn’t know about the marketing and the sales and the distribution and all that. That was not his strength. So it was a classic business-founder and tech-founder.
Andrew: I see.
Charlie: Really, it was a good team and we had the third person really who was the founder, Michelle Welch right from the beginning, and she was the product side. She really ran the product through. So we were a really good team, the three of us.
Andrew: You talked to Microsoft, and you asked them to include your software. What was it called before Flash?
Charlie: Splash. Splash or Flash Animator. There’s a whole story there that I don’t think I want to go into.
Andrew: OK. Is it online? Would people be able to look it up? I hadn’t seen it in my research.
Charlie: Yes. Well, if you look up the history of Flash in Wikipedia or Jonathan Gay, there’s a little bit about it. I’m sure the name is around. We wanted to call it Splash. OK. I’ll tell you the story. We wanted to call it splash and thought it was a pretty good name for what we were trying to do but, of course, that name was taken. Anyway, it’s so hard to get good names because they’re all taken and trademarked, right? Well, we thought we’ll call it Future Splash, and that didn’t seem to be too bad, but we were getting to the deadline where we were going to ship, and we really hadn’t resolved this.
And then Jonathan said, “Well, I want it to say Animator, so it says what it is. We needed to ship, we didn’t have a better name, so we went with that. It’s not a very good name, I’d be the first to admit, but it was a great product. And as I often tell entrepreneurs, they talk about branding, it’s the product that creates the brand. You can overcome a bad name. You can overcome a bad piece of graphics as your logo if you have a great product. So the idea is to get all of them right, but you don’t always do that especially in a startup.
Andrew: So you talked to Microsoft about getting Future…
Charlie: We wanted to put the plug-in…
Andrew: You wanted to put the Splash Animator. You said, “Put it in as part of your browser. People won’t need to download it, and if they have this without having to download it, they’re going to have a richer web experience.” Why did they turn you down?
Charlie: What we were asking them to include in the browser was the plug-in code, the playback engine not the editor because we wanted to sell the editor. Actually, it was Netscape and Microsoft. I don’t know why, to this day, because the code was only 100K at that point. The first plug-in was pretty small, and they could have just taken that code. We would have given it to them, licensed it to them, but we would license it for free because obviously we would benefit tremendously so we could sell more of our editor. We didn’t sell the plug-in anyway. We never did, so we offered that to them and both companies just did not want it. Maybe, they didn’t want to set the precedent where every plug-in, people would be bugging them, you put their code in your product, put ours in because there were lots and lots of plug-ins starting to happen then. Maybe it was something like that. I don’t know.
Netscape, we couldn’t hardly get their attention. Very arrogant company, really not a great company in many ways. The mid-level managers, we’d show them what we had just made and they were like, “Great. Bother me.” We took to a Microsoft mid-level manager and they’d go, “Wow. Check this out. Hey guys.” Called the other guys over, “We got to talk to these guys on Monday about what they’re doing here.” They were all over it. They’ve always had really good people. I knew Netscape was doomed the day that the head of the company, I think it was Jim Barksdale. Not Martin Andreesen, the founder. He was the technical guy that was running the company, he made a statement and said, “We are going to take the desktop from Microsoft.”
Andrew: I remember that.
Charlie: Do you?
Charlie: That was one of the stupidest things I’ve ever seen done in the industry. Even if that’s your goal, you don’t say that to Microsoft with all their money and resources. It’s like waving this big red flag in front of a bull. Actually, the way I always think of it is that there are big companies, so sometimes it might be a little slow. They’re a big battleship and to hear it, all of a sudden this battleship is, like, “What? What’s happening over here?” Turn. Turn [??] the United States. Netscape was gone after awhile.
Andrew: Reading books about the early days of Google and they intentionally avoided that mistake. They did not want to raise Microsoft’s attention, or call any attention to how big they were getting, for that same reason, to avoid that mistake.
Charlie: They probably saw that and learned that lesson. Either that, or they were just smart enough. Well, we know they’re smart guys, so that’s just another example.
Andrew: You told Jeremy that there were two low points, two big challenges. One of them was that second year that you talked about a little bit here. Second year at Silicon Beach Software. What happened then? What was going on?
Charlie: Probably every company has its points where it’s very difficult to get through in the early stages of it. Actually, relatively we had it pretty easy, but that second year, a major distributor at the time, filed for bankruptcy and owed a lot of money to lots of software companies throughout the industry. I was fortunate that I had cut them off two months before because they weren’t paying in a timely manner and I said, “We’re going to take this from you guys. You’re not getting product from us anymore.” Everybody else, “They’re the biggest ones. We got to ship to them.” It was a big hit. I remember it was about one month of revenue, so 1/12 of our revenue for the year all of a sudden wasn’t there.
We had put ads in magazines, then we had to pay for those and all of a sudden, the money that we were expecting that was accounts receivable, that you would normally expect to get and it’s not crazy to run an ad that you’re going to pay with the money that’s coming in. We had to go to Mac World Magazine and say, “We can’t pay you all of this bill on time.” We set up a payment plan with them. We said, “This is what we’re going to do.” We were proactive about it. [??] got really involved in this and she’s very good at this. And said, “Here’s what we’re going to do.” We set up a plan and they were very understanding because they saw that everybody was having this happen to them and really it took big, serious hits to their companies. We did that though. We made those payments, and we got through that challenge.
The other part was, as I mentioned before, that second year we were wondering if Macintosh was really going to make it. Actually, [??] I felt was viable, but there was a lot of people questioning whether the Macintosh and Apple Computer was really going [??] make it. That is when I had to take a small investment from a guy that I knew personally to bring out three new products that we had and we just didn’t quite have the cash for it and one of those was Superbank, the big hit product. We knew it was going to be a big hit product. We’d been showing it. People were really dying to get it and we knew it was going to be a big product. There still wasn’t that much out on the marketplace and it wasn’t really guess work. I took an investment and I’m happy to say I got him on a 60 times return.
Andrew: I was going to say, he must have been really happy when it all worked out.
Charlie: We’re good buddies.
Andrew: Two big challenges. One was the company going out of business and the second one was, “Maybe this Mac platform that we built on isn’t the thing.” Jeremy also asked you about the big lessons that you learned from your experiences building these companies. The first one you said was, “Think of the big why.” What’s the big why?
Charlie: I often talk about this with entrepreneurs and, surprisingly, many times they have not thought about this. I ask, “Why are you doing this? Why do you want to do this?” “Well, I want to make this product. I want to do this.” I said, “[??]. But why?” There’s been times where I’ve had to really dig into this. For example, when the founders of Wired Magazine got a hold of me and said, “Would you listen to our pitch?” I said, “Sure.” I went and listened and they went through everything, and I said, “Why do you want to do this?” They started to talk about the magazine. I said, “No. I understand that.” They didn’t quite understand the question. The way I found to phrase it was, “If your life could look like anything it could be and money wasn’t an obstacle, what would your life look like?” They said, “Well, we never thought about it that way.” I said, “I’m not even considering investing in your company until you can answer that question.”
Much to their credit, two weeks later they called me and said, “Wow. We’ve done some real soul searching here and it’s been fabulous. We want to do this, that.” “I don’t need to know all the details, what you want to do personally. That’s really not issue.” They said, “We know why now.” I said, “Now I’m in. I wrote them a check.” [??] a C investor with a [??] and Wired Magazine. Your goals. Why are you doing this? The reason I say that’s important is because many of your decisions will flow from that. You say, “My goal is, I want this company to be like this. I want this to be a small family owned business that I can generate income from for 20 more years.” Then you’re going to make decisions accordingly because that’s where you’re trying to get to. The goal setting and why you’re doing something, sometimes have to do some soul searching on that. I did it to other entrepreneurs and they wouldn’t get back to me. I wouldn’t hear from them again. Does that explain?
Andrew: Absolutely, it does. It’s not the kind of thing that we’re used to hearing from investors. It’s the kind of thing that we’re used to hearing from other entrepreneurs.
Charlie: It’s not typically what investors would actually get at. That’s true. I knew how important it was, so I always asked about that, if I was looking at investment. Back in the ’90s I did some seed investments.
Andrew: Why don’t you do it anymore? I saw on your Wikipedia page that it said, “He’s done doing investments.”
Charlie: It’s complicated. It’s a combination of things. The one big one that I would actually mention is that too often there are venture capital seed grounds [SP], later and they can heavily dilute the early investor. You can plan for that because I remember one guy asked me once, “I want to start doing some investments. How do you avoid the dilution?” I said, “You don’t. You just have to plan for it.” Then there’ve been a couple of C- round venture capital investors who had behaved very poorly, to put it nicely. They had really tried to screw over the early investors. Take everything. There was a point in the story of Wired Magazine, you can read about it, there’s a book written by Gary Wolf, called “Wired.” I think there’s some other subtitle, that the [??] investors had been sold for 65 million that the early people, the founders and myself and a couple of others were getting nothing. We had to threaten them with lawsuits and they backed off because they knew they would lose those lawsuits, etc.
Something else happened here where we got crammed down, as they called it, or paid [??], which I never heard of before. They said, ‘If you don’t invest more money, we’re going to dilute your shares.’ So they diluted us 10 to 1. Early seed investors just make a first investment. They don’t do subsequent rounds and everything. They were doing that just because they could and I decided that I wasn’t going to do that anymore.
Andrew: I’ve heard that there was a big reason for it. You also say, “Do it right.” You get into the story of how someone, you’re nodding. You understand the story I’m about to introduce.
Charlie: Do it right, or as I would say, no shortcuts. You have to make a great product. The fundamental thing that will work is to make a great product. Easy to say. Everybody talks about that, but you really have to keep pushing on that and one of the things you don’t do is take a shortcut. An example that I always use in this case is with our Superbank product, in Version One, we did not have [??] curves in the drop portion. They were really hard to program. So they didn’t make Version One. Typical kind of thing. That’s OK, but then we needed to do it on Version Two, but we had to do them right. We put Jonathan Gay on it. He was there with us then and still in college. We said, “Here’s how we [??]. Jonathan, you do it.” It took him, a phenomenal programmer, two months to do that one single feature for the product. [??] curve is a mathematical description of a curve. It gets very complex.
One of our competitors did something they call [??] curves where they put line segments. Here’s a little line segment. Another little line segment. Another little line segment. Another little line segment. That’s not a [??] curve. It took them two weeks to program that. Our product just [??] them off. That company eventually went out of business because they would do things like that. You know how you know a company’s going out of business? When you get a resume from every one of their programmers. We got [??] from every one of that company’s programmers about two months before they shut down. Because they took shortcuts. You can’t do that. I always look for the hard thing to do. Somebody says, “It’s really hard.” I go, “Good. That’s what I want.” I don’t want it to be easy. That’s why I don’t like webpage development. I’ve never tried to do anything with websites because it’s just too easy. Too fast. Too quick. It needs to be really hard, really challenging because, to me, that presents a better opportunity.
Andrew: And a bigger barrier to competition?
Andrew: Speaking of people, I heard you don’t like confrontations with your own people. How do you deal with that? How are you as a manager?
Charlie: I would say generally you need to know your own strengths and weaknesses. Here I was running a company, 75 people, five vice presidents reporting to me, which was nice. It was a lot easier to do that than in the early stages where I had to do everything myself. Write all the copy and take the phone calls for tech support and talk to the distributors and all. It was crazy. There weren’t enough hours in the day. It was really, really difficult. Then we had a nice established hierarchy in the company and it was good, but you always have to make some difficult decisions and say, ‘No,’ to things. That was not my strength. I don’t like confrontation, personally, with people and I try to avoid that. That’s a potential weakness as an executive. You figure out what’s going to work best for you and how to do that. For example, in negotiations, that’s a weakness, in a way, in a negotiation. I’m not a good face to face negotiator and I know that. My solution for that is to use an intermediary. I highly recommend using an intermediary in negotiations because it’s very easy to say, ‘No,’ to this intermediary who is working for you.
Andrew: You send someone else in to do the negotiation? Like you said you sent your wife to talk to the magazine?
Charlie: No. We just let them know on that. I was thinking, in particular, when we were going to do the acquisition of the company. The first company we had an investment banker helping us with that and it really paid off, in this case. He was very good. He knew what was going on. He could advise us, but in particular, it was over the weekend and we got an offer and I just said, “Oh geez. That’s too low. It’s not going to happen.” He’s on the phone with me. It’s the weekend. He said, “No. Don’t give up. This is just starting.” He understood the process and I did not. He said, “No. That’s just an offer.
That’s just a starting point.” I said, ‘You tell him, “No. I don’t like it and I want this.” He went back and said that to, however, he said it. Doesn’t really matter. That’s what he knew how to do. Then he came back and said, “They’ve come up halfway.” My wife, who’s listening in said, “Now you split the difference.” I said, “No.” If I’d been face to face with them, I probably would have had difficulty saying what I said next, which was, “No. I still don’t like that. Go back and tell them it’s still what I said originally”‘ I didn’t come down halfway. I said this again. Then they came up again. I said, “OK. Now I know we’re going to get a deal.”
Andrew: Let me explain something to the audience about Mixergy, and then I’ve got a question that I wrote down here that I’m sure has been on everyone’s mind, but I haven’t had a chance to ask you. Even though I wrote it down right when we started, so that I’d remember to ask you about it. Here’s the thing. A lot of people are asking, “What’s the difference between Mixergy Premium and regular Mixergy?” If you’ve been watching me talk about Mixergy Premium and wondering about it, regular Mixergy is interviews where entrepreneurs come on to tell their stories. How they built their businesses. The challenges along the way. How they overcame them. What happened afterwards. Mixergy Premium is where entrepreneurs come on to teach you. They teach you things like how to negotiate. How to raise funds. How they talk to customers and extract ideas for features and businesses to create. They teach you what they do best in Mixergy Premium and on Mixergy.com proper you can see interviews. If you’re a Mixergy Premium member, you get access to all of those courses and if you’re not, I guarantee you’re going to love it and see a return on your tiny investment in joining Mixergy Premium very quickly. If you’re not happy, here I am, you know me, you can trust me, I absolutely will give you 100% of your money back, but thousands of people have signed up and love it. And I know if you join right now, you’re going to start to see results and love it just as much as. So go to MixergyPremium.com.
All right. So here’s the question. End of Flash. Flash changed YouTube, changed online video, made games easier, changed my life with greeting cards, and now we’re seeing that because of mobile and Apple specifically spearheading this move, it seems to be going away. How do you feel about what’s going on with Flash?
Charlie: Yeah. I get asked that question now, and I have no emotion about it. I mean, we sold that company a long time ago, in 1996, so it hasn’t been my baby. It never was my baby. These things are not my baby. They’re products. It’s a business. We have goals. And it’s just, I think of it as just the normal progression. Nothing lasts a really long time in the software industry. I can go back to my early days and rattle off the names of products. They’re not still around, things change, evolve, next generation. So I view it as just a normal progression of the industry.
Andrew: So we just need to accept it instead of fighting it like sentimental people.
Charlie: Yes. There’s no sentiment.
Andrew: There’s no sentiment in software.
Charlie: Sentiment doesn’t work. It’s just a very fast moving industry.
Andrew: And is it the right decision to move it from mobile devices? It seems to be.
Charlie: I think so. I don’t know enough about the technical stuff to be honest. Jonathan questioned some of the premises that Steve Jobs mentioned, and he’s written about it, but they didn’t want plug-ins basically is my understanding. So there’s a whole thing behind that which I do understand. I think it’s not just a technical issue, and there’d been issues between Adobe and Apple and Steve Jobs for a long time. So those kind of things can come into play. Adobe and John Warner got the best of Steve Jobs back with the laser printer because they had to have Postscript and there really was no alternative. So they me him pay a pretty hefty fee for it, and Steve Jobs, if you read his history, was used to winning those kinds of battles. Even before Apple he would buy parts and he’d always be getting them at the best price. There’s a whole history there of how he would do that. He didn’t like that, so it never sat well and there always was some issues with Apple and Adobe which may have played into it as well. I think it probably did.
Andrew: Did you get to know Steve Jobs?
Charlie: You know I never did. At the time I was doing Mac software was when he was gone. And so, I never actually got to talk to him. It was John Sculley most of the time that I was there, “plastic man” as we called him. The guy was not real. He was just a piece of plastic, a suit, as I call him. That was not the greatest time, and it was partially because there was a lot of suits at Apple.
Andrew: Well, this is the time when I thank you for doing the interview, as I usually do. But I’ve got to do an extra thank you to you because I asked you before I started the interview, what’s in it for you? What are you doing this because you’re at the stage in your life where you don’t need to do this, where you’re not trying to raise funds or build reputations or potentially meet acquirers through doing this interview. You’re just doing this interview to share your experiences with the audience so that they can go out there, use it and grow so that hopefully they’ll get to the level where they can come here and do an interview the way that you did. To me, that kind of interview is the most meaningful, and I really appreciate you going through all this and telling us your story here.
Charlie: It’s been a pleasure. I mean, it’s just for me a lot of fun. Why would I do it? Why would I not do it?
Charlie: I can sit here and tell stories about the good old days and all the things we did. Geez, it’s just fun. I do love interacting with entrepreneurs. A lot of times they’ll call me and say, “What about this or that?” I’ll always talk to them. I have been mentoring at the Founder Institute lately, and I’m really enjoying that. I do it just because it’s fun. So it was my pleasure being on, and thank you for having me.
Andrew: And I should thank the Founder Institute for making this interview happen. They’ve introduced me to so many great guests and I appreciate it. If, by the way, you are looking to check out the Founder Institute, I highly recommend getting to know them. They’re a great organization.
All right. Thank you for doing this interview. I hope it will be the first of many, and thank you all for being a part of it. Bye.
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