SM: What was the closing chapter of Air Communication?
KS: There was real technology and we had orders coming in. People wanted to buy product, and the skeleton office sold a few hundred thousand dollars a year for the next several years. Eventually they sold off the technology and got some money out of it.
SM: What year does that bring us to?
KS: That brings us to 1996. I then had a number of job offers. I ended up going to General Magic, which was a public company. It was six years old and had an IPO just over a year prior to my joining them. It went from $36 a share at the IPO to 93 cents when I joined. It had products nobody wanted, but we had $100 million in the bank.
SM: What was your role at General Magic?
KS: I was the EVP and ran everything except legal and finance. The CEO, Steve Markman, wanted to focus on wrapping up six big things the company did in Japan and expected it to take him a year or so to do that. He wanted someone to develop products, build a team, get the products out, and ramp revenue. I had come up with some concepts around a voice user interface, which was still a new technology. I wanted to do it at a new level, which was voice user interface for phones so that you could have a personal assistant on the phone that was very human-like. We called it Portico. We had Portico Magic Talk, MyTalk, the OnStar Virtual Advisor for General Motors, and Qwest’s virtual system.
It was a $60 million investment project and I had almost 100 people on the team. We had 2.5 million users and built the largest combined voice data center in the world at the time. It was a world-class team and a great time. We then did a big licensing deal with Microsoft and got the stock up to $18 in a three-year timeframe.
At that point, three years later, I felt I was done. The company would not let us sell stock unless we left, under any circumstances. After I had been away from the company for three months and no longer had inside data, I sold my stock. The company made some changes and they stock later went to $0 five years later.
SM: You left General Magic at the height of the bubble?
KS: Just before it. I started another company called Perfect Commerce which was Perfect.com. We raised $50 million at the end of 1999 and early 2000. The bubble was still there at that time.
SM: You must have closed funding right before the bubble burst.
KS: Our rounds closed just before. In running Perfect Commerce I did something unique the day the market crashed. I had all this money in the bank and a big team. The day after the crash, I cut my team in half. I thought my board was going to shoot me. I just felt that we were at the beginning of the end and that we would need every dime to create great enterprise software.
SM: What software were you trying to do with Perfect Commerce?
KS: Perfect.com started out as a consumer software play to do multivariate auctions. It became a supply chain software play. Today it remains a very successful $100 million private company. It is very hard to take enterprise software companies public today.