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Excerpted from Chapter 7: Series B or 

Series G

 

 

 

April 2004

“Do we have to take the money?” I asked, breathless as I tried to keep up.

In our first few steps, I could usually tell how well Keyhole was doing by the pace John set. An uneventful day at the office, and we maintained an easy jog. A missed product milestone or a delayed push of a new imagery database, and we galloped. Throw in a kerfuffle with Brian McClendon over some user interface decision, and we’d be off at a full sprint.

Often, John would stop by my cube near the end of the day and say, “Let’s go for a run.” I’d stop whatever I was doing, throw on my running clothes in the bathroom, and out the front door we would go. We would walk in silence along the sidewalk, John seemingly gathering his thoughts as we passed Microsoft’s Silicon Valley campus on our right. A block and half down the road, we’d reach the trailhead, where La Avenida dead-ended. We’d stretch out a bit, and then hit the crushed-gravel trail, running north along the Stevens Creek, which split the massive 2,300-person NASA Ames Research Center on our right (where NASA’s space-mission-controlling software was written) from a trailer park on our left (where you could buy a $800,000 mobile home).  

John ran faster. “We have to take the money if we want to get there first. I mean, we are clearly on to something. Something with the opportunity to be big. Like ten times as big where we are today,” he said. At this point, Keyhole had about 50,000 paying subscribers. “The board wants us to go for it, and we’re likely to have competitors gunning for us soon.” John sprinted up the hill above the Shoreline Amphitheatre and around a bend. I lost him.

That spring of 2004, as the tech sector began to show signs of life from its three-year contraction, venture capitalists had woken up and once again began to open their wallets. As a company that had weathered the dot-com crash and had, step by step and year by year, transformed into a break-even enterprise: Keyhole was an attractive investment. Many companies up and down the 101 had thrown in the towel, but we were finally in control of our own destiny.

I hadn’t been a part of the effort to raise capital: The $10 million Series B investment round would value our little mapping upstart at $30 million. Throughout Silicon Valley, a new season of innovation was being seeded with capital under the nebulous moniker “Web 2.0.” John knew the time was right. He hoped to use the new money for more data, more servers, more tech talent, and even a bit more marketing.

In February and March of 2004, John and Noah Doyle shopped the Keyhole investment opportunity along Sand Hill Road, a four-mile stretch that runs through the heart of Silicon Valley and up into the Santa Cruz Mountains, and is considered the venture capitalist’s version of Madison Avenue in the advertising world. John managed to secure three investment term sheets from different VCs, but it was Menlo Ventures, one of Silicon Valley’s oldest and highly regarded VC firms, that offered the most agreeable investment terms. A deal was imminent.

John, sweaty from his fast sprint, waited for me at the top of the hill, overlooking the San Francisco Bay to the north. “Listen Kilday, you understand that we have got to deliver on the numbers. You know I won’t be able to protect your job, or even my job, if we don’t hit our numbers.”

“I know. I know, John. I got it!” I said, waving him off while I tried to catch my breath.

It was the second time that week he had hit me with this threat, and he was starting to freak me out. These afternoon runs were a zero-sum stress game for me: Every stress-reducing, dopamine-releasing mile was negated with an equal and opposite adrenaline-and-cortisol-inducing mile as John peppered me for status updates and marketing minutiae.  

No detail was too small. “I thought you said the monthly newsletter would go out today?” “You told me two weeks ago that the new demo video would be out in ten days.” “Didn’t we agree to make that button blue?” “Why haven’t you updated the pricing matrix to reflect the new Earthfusion price scheme?” “Can you see if you can get the cost of the new icon set down to under $2,000?” “I thought our last run of spec sheets came out too glossy. They felt cheap.”

Mile after mile he would continue. John was aiming to change the world, but from my perspective, this Menlo money only amounted to a shit-ton more stress for this marketing guy.

Nevertheless, on Wednesday, April 21, three original copies of Menlo Ventures term sheet were delivered to Keyhole. The document spelled out the terms that had been verbally discussed. Doug Carlisle and his partners were ready to complete the deal, and a meeting to sign the term sheet had been scheduled for April 26. The office was abuzz with excitement. In fact, I wasn’t sure if much work was getting done. Games of pool and darts started earlier than usual that day. (We had a house rule of no pool before 4:30pm, but that day was an exception.)

But Monday came. And Monday went. With no announcement from John. In fact, John was holed up in a conference room with Brian, Michael, and Noah. As I walked to the kitchen or bathroom, I fleetingly glanced through the porthole window of the conference-room door and saw them still gathered around the table. When I left work at 7:30pm, there were no signs that they were going to finish up any time soon. I, like many others, began to worry. Had something gone wrong with the deal?

When I arrived the next day, it looked like the four of them had never left as they were already back in the conference room. Finally, John emerged late that Tuesday afternoon. He looked relieved. I got the sense that something was up and commented on the marathon-like nature of the meeting. In response, John asked me if I wanted to grab a beer after work. We both drove to the Sports Page, parking next to each other in the lot that was unusually crowded for a Tuesday. I was surprised that John was waiting for me in the parking lot because we often met inside the bar. As I got out of my car, John stood at the rear bumper of my car, blocking my path to the bar’s front door. His expression was stern.

“Hey listen, I need to tell you something.”

Looking around, John continued: “You’ve got to promise not to tell anyone. Not even Shelley.”

“Okay.”

John stood there in the middle of the black asphalt parking lot. The sun was setting against the pristine blue sky. He paused as another group of strangers walked past us. A cool breeze pushed through the nearby stand of willow and palm trees. A ruckus cheer erupted from the beach volleyball court adjacent the bar. More cars streamed into the parking lot. John turned to me after triple-checking to ensure no one was within earshot.

“Google wants to buy us...”