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Livingston: Tell me about some of the other major turning points in the first year or two of Viaweb. Graham: There were a lot of turning points. Basically Viaweb s history was one turning point after another, alternately up and terrifyingly down. A couple days after we launched came the next turning point, when a giant company called us up and wanted to buy us, right on schedule. It was just like we thought it was going to be. We re these great hackers, we write this clever piece of software, we launch the thing, and rrring, there goes the phone and it s some big company wanting to buy us. Livingston: What happened Graham: There was kind of a clash of cultures. First they came to check us out.

They showed up wearing these Bill Cosby sweaters, like someone in corporate affairs has told them that when they go and visit startups, they re supposed to not wear suits and they re like, Uh, what do we wear Wear a sweater that looks like some macrame class knitted it collectively. So they show up in their Bill Cosby sweaters and march up the stairs past all the landlady s kids shoes in the corridor, and walk in, and this company they re supposed to be buying is just a grad student apartment with some computers in it. But they still wanted to buy us after that, so we arranged to have a meeting at Julian s loft in New York. One of our investors was a metals trader, so we figured that he must be a great negotiator and we d let him handle it. The guys from the big company said, We want to buy you for $3 million. And he said, Well, I won t sell you the company for $3 million, but for $1 million, I ll sell you an option to buy the company in 6 months for $20 million. At that point the guys from the big company just got up and walked out.

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about device drivers and how the cache works and low-level stuff in the computer in other words, it was wonderful. You know, we were going to the boundaries for us. We were pushing the boundaries of what was going on inside the OS and things. And then it was oh we probably had fifteen months worth of work into it before we realized that the idea had already been patented [Laughter]. Smolin: OK, so market research first. Matfield: Well, yeah, and before we realized it was patented, and we had this idea and we didn t know what the market was. You know, there is a lot of innovation that occurs specifically where people don t know what the market is, and they just do it because it seems like a good idea. So I would say marketing and understanding the market, understanding what the market wants before even getting obsessed with an idea is the most important thing.

Livingston: How did you feel Graham: For the first day or so, it didn t register with me what had happened.

Then I felt really bad. I realized that if they d bought us for $3 million, it would have been more than a million for me personally, so I felt like I d lost a million dollars. I d had a million dollars, and then lost it. I was aghast. I called up the guy we d been talking to at the big company and I said, Do you still want to buy us and he said, No! He had lost face, I guess, with his colleagues for wasting their time on us.

Livingston: So that was a harsh dose of reality about the acquisition process. Graham: That was my first introduction to something that turns out to be a

So many things can go wrong with deals, and they all do. Before we ultimately got bought by Yahoo, we probably had nine or ten different acquirers that we were talking to, and things always went wrong for one reason or another.

If you ve come this far, I ll assume you remain undaunted by the number and magnitude of the tasks facing you in converting your raw program into a finished product. So, I d like to introduce a few final topics to which you should give some serious attention.

Livingston: So then what did you do Go back to business Graham: Yeah. There were always two stories going on simultaneously with

belongs to the mirror camera instead of the normal camera. As an example, xMirrorView is not the View matrix multiplied by a Mirror matrix; it is simply the View matrix of the mirror camera.

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