April 20, 2005 – A Minor Silicon Valley Success Story

April 20, 2005 – A Minor Silicon Valley Success Story

There comes a time in everyone’s life when they have an illusive moment of success, when all the planets align and no matter what you do it turns out right. For me this time happened just before the end of the millennium. A few years earlier I had written the epitaph for a once great magazine then just over 60 years old. I was out of a job and the publisher I had worked with several years before called to ask if I would consider coming to work for him on a magazine he was trying to resuscitate. The publication had started in 1990 with under a million in venture funding and had swiftly consumed close to $4 million. I liked the idea of having another chance to save something that was dying. When I came on board we were living from month to month with little cash reserve to cover unanticipated expenses.

The publication had a loyal readership and a circulation that advertisers wanted to reach. But, the publication was being squeezed by the consolidation going on in publishing at the time. Media giants were buying up competitive properties to gain economic scale and in the process saving on payroll as fewer editorial people were pressed into producing more output. We struggled making ends meet and getting sufficiently ahead that we had cash in reserve—no more factoring accounts receivable to pay the bills. We got ourselves a Big Eight (back then there were still that many) accounting firm and even hired a chief financial officer who would get us ready to go public or be purchased by a bigger fish.

The Internet was also happening at the same time and we began to look for ways to leverage our publishing capability over the web. We experimented with broadcasting video over the Internet in 1997 at a conference we were co-sponsoring. With the help of a large Silicon Valley Company who put up the money, we broadcast an hour panel discussion to the desktop of a handful of engineers in companies all over the country, a total of less than 50 if the truth be told. But no matter we were pushing the limits of the World Wide Web at that time and showing stodgy publishing companies we were hip to dot.com.

Sometime that same year, a new market was emerging in our industry called intellectual property. Rather than sell semiconductor chips, start-up companies were selling the designs that were contained on these chips. Smart designers could buy a bunch of designs and make more highly integrated chips. It was the equivalent of squeezing a circuit board of components into an integrated circuit. Since we wrote about the software tools used to create integrated circuits, we were the ideal vehicle for telling the world about this emerging market and the companies that were starting to make it the next next thing in Silicon Valley. We launched a publication called Silicon Strategies to cover this emerging business.

No sooner had the publication got off the ground than it became painfully obvious that small start-ups were not financially well off enough to support a new publication with advertising. We had to find large established companies with deep pockets who wanted to make a statement about their strategy in intellectual property. The new publication was also having trouble developing credibility. We needed something to point to its market clout. What better show of force than a major industry conference showcasing all these start-up companies as well as established companies with something to say about their role in this emerging business trend. Thus, was begun the idea of Silicon Strategies 1998, the first conference covering the business of intellectual property.

We needed somewhere to hold the event and what better place than the Fairmont Hotel in San Jose. Nothing says up-market more than a high-end hotel. The hotel has a great conference facility as well. The Fairmont sits on Market Street across from Cesar Chavez Park. Through the sliding glass doors of the main entrance you can take the escalators on either side to your right or left as you enter to access the large conference area on the hotel’s second floor. Sitting atop the hotel’s lobby on the second floor is the Massive Imperial Ballroom. On the southeast wall of the Imperial Ballroom are the two Regency Ballrooms, which can be opened into one large space about 60 percent the size of its larger neighbor. A hall completely surrounds these two large conference areas and the kitchen facilities behind that serve the rooms. All along the hallway are smaller conference rooms. On the hotel’s southeast wall looking toward W. San Carlos Street are the smallest Paseo and Redwood Rooms. On the northeast wall at the rear of the hotel facing N. 1st Street are the—smallest to largest—California, Valley, and Gold rooms separated by a staircase to the lobby level from the Crystal, Empire, and Garden—largest to smallest. And on the northwest side of the hotel are the small Plaza and Terrace Rooms. The Imperial Ballroom would be ideal for food and beverage service. The two Regency Ballrooms opened into one large room would serve for the keynote and after lunch panel. And the numerous smaller meeting rooms could be used for individual company presentations. We decided to ask for the entire conference facility for two days. It was going to cost between $50,000 and $100,000 to pull this off.

I knew someone at a Minneapolis-based investment bank and I put in a call to him asking if his firm might be interested in sponsoring a intellectual property conference. I reasoned that the event would showcase companies his firm had a banking interest in. To my amazement, he said yes, with the provision that his firm invite other partners to co-sponsor the event—share the risk. He suggested a major Silicon Valley law firm and venture capital company. A couple of conference calls later and we had verbal agreements to underwrite the event. And we also had some clout with the Fairmont who had concerns doing business with a small start-up having no track record producing conferences. As our CFO put together the paperwork to make the deal happen, our own Big Eight accounting firm got wind of the deal and wanted into the venture, “but of course.”

The easy part was getting CEOs of small start-ups and high-level VPs at large established companies to present. The investment bankers and VCs were pushing the management of these enterprises to participate. Besides this was a perfect venue for getting their message before an audience hungry for information on intellectual property.

I had requested from the Fairmont and gotten St. Patrick’s Day 1998 as the opening day for the conference. I was banking on the luck of the Irish to pull us through and make the venture pay off. I was also looking for a celebrated Irishman to add more charm to the cause. I was in luck. Regis McKenna, who I worked for in another life and who still answered my infrequent calls and e-mails, had just completed another book and was on tour promoting his work. I asked if he was in town if he would like to be the keynote speaker on the first day. To my surprise, he said yes. I had the blasting cap to set off the explosion. It was also the name I needed to convince hesitant executive at large companies that the event was worth their time.

The sponsors all wanted a panel after lunch the first day to discuss intellectual property and have their experts participate. Another case of serendipity as the sponsors had a great deal of insight into the thorny problems associated with this new business and they each made their experts available for the discussion. The content was coming together so well that when we started advertising the conference we got enough registered attendees to fill the Regency Ballrooms for the keynote and panels. Thereafter, the attendees had a selection of four different tracks of company presentations to attend.

To supplement the sponsorship income we sold exhibition spaces for companies who wanted to show their wares. To provide the exhibitors some time with attendees we provided refreshment throughout the day in the vicinity of the exhibitors and at the end of the first day, we had an evening reception with beer, wine, and finger food to encourage an informal dialog among attendees and exhibitors. The event came off exactly as planned and when it was over, we had commitments from sponsors to participate again in 1999. Our little start-up publication now had an industry buzz and it had attracted the attention of a big fish. Within six months we had an offer to purchase the company and by the start of 1999 we had a new owner: a modest Silicon Valley success story. For me I had had my alignment of the planets. And I’ve been looking for it to happen again.