“That Will Never Work”

(spring 1997: one year before launch)

AS A KID, ONE of my strongest memories is of my father building miniature steam-powered trains. They weren’t the tiny electric models you buy as a kit, the pieces all built to fit together, matched to a track that you just have to plug in. No, these were for the real fanatics: fully functional miniature trains, their steel wheels powered by steam. Every component—wheels, pistons, cylinders, boilers, cranks, rods, ladders, even the miniature shovels the miniature engineer would use to shovel miniature pieces of coal—had to be built by hand. About the only pieces you didn’t build yourself were the screws that held everything together.

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That was fine with my father. He was a nuclear engineer who had found that his skill set was much more lucrative as a financial advisor to major firms who were investing in nuclear power and weapons development. His work allowed my family to live in comfort out in the New York City suburbs, but he missed the lab. He missed the instruments, the calculations, the sense of pride in building something. After a long day on Wall Street, he’d come home, take off his tie, and change into one-piece work overalls, the kind that real train engineers wore. (He collected engineer uniforms from around the world.) Then he’d head to the basement. It was time to build.

I grew up in a pretty normal, upper-middle-class household. The fathers of Chappaqua took the train into the city for work; the mothers took care of the kids in beautiful houses that were a little too big; the kids got into trouble while their parents went to school board meetings and cocktail parties.

When the youngest of us finally began school, my mother started her own real estate firm. Our house was built on a hill flanked by apple orchards, with a big pond in the back. I spent much of my childhood outside, roaming through the acres of woods that surrounded our house. But I also spent a fair amount of time indoors, reading in my parents’ well-stocked library. Two large portraits of Sigmund Freud hung there. In one of them, he was alone; in the other, he was posed next to his wife, Martha Bernays. These were surrounded by a half-dozen smaller photographs and renderings, framed and signed correspondence, and shelves filled with his books: Civilization and Its Discontents, Beyond the Pleasure Principle, The Interpretation of Dreams.

It was the sixties. Freudian analysis wasn’t exactly uncommon. But we didn’t have a miniature Freud museum in the library because anybody in the house was spending time on a therapist’s couch. It was because he was family. He was Uncle Siggy.

It’s a little more complicated than that. Freud was in fact my father’s great-uncle, making him my great-grand-uncle.

Still, no matter how convoluted the chain of connection, my parents were proud of the family association with Freud. He was a success, a giant of twentieth-century thought, as important an intellectual figure as had existed in their lifetime. It was like being related to Einstein: proof that the family had excelled on both sides of the Atlantic.

My family also had a connection to another important twentieth-century figure: Edward Bernays. Bernays was my grandmother’s brother, and Uncle Siggy’s nephew. If you’ve ever taken any course in advertising, if you’ve taken a course in mass media in the American twentieth century—heck, if you’ve even watched Mad Men or seen a cigarette ad—then you’re familiar with his work. Bernays is, in many ways, the father of modern public relations, the person who really figured out how to apply new discoveries in psychology and psychoanalysis to marketing. He’s the reason we eat bacon and eggs for breakfast. He’s also the reason we celebrate Thomas Edison (and not Joseph Swan) as the inventor of the lightbulb. He’s the guy who, after helping popularize bananas for United Fruit, turned around and waged a propaganda campaign alongside the CIA to stage a coup in Guatemala.

So, not always the most laudable stuff. But even though a lot of what Uncle Edward did wasn’t all that admirable, it did stick in my head that I could do what my father did, every night in our basement—use the tools he’d been given to create something. I was an indifferent student in high school; I majored in geology in college. But if I ever wanted to look at my destiny on a piece of paper, all I had to do was look at my birth certificate. Marc Bernays Randolph. Marketing was my middle name.


My father’s trains were beautiful. They took him years to build. When he was finished with one, he’d give it a coat of paint, and then another, and then another. Then he’d call me down to the basement, hook the train’s boiler up to an air compressor, and perch the train on tiny blocks above his workbench. As the air moved cleanly through the valves, we’d watch the back-and-forth movement of the pistons, the smooth revolution of the drive wheels. We would admire the hand-built systems of rods and connectors that smoothly transferred power to the wheels. My father would even use compressed air to sound the miniature whistle.

I loved that high-pitched noise. To me, it was like a formal announcement of another completed effort, another beautifully made thing. But my father was often melancholy when he heard it. According to him, a real train whistle, powered by steam—not air from a compressor—was a more emotional sound, one that he could only hear in his imagination. There was no track in the basement for his trains. The vast majority of them never saw real movement—just air compressor tests. After I went back upstairs and he turned the air compressor off, he’d lovingly remove the train from the workbench, place it on a shelf, and start a new one.

Over time, I realized that for my dad, it wasn’t finishing the train that he liked. It was the years of labor: the days at the lathe, the thousands of hours at the drill press and milling machine. I don’t have many memories of watching those trains run. What I remember are all the times he excitedly called me down to the basement to show me a piece he’d just built—a piece that, when connected with fifty others, might amount to a single axle.

“A piece of advice,” he told me once, peering through the magnifying glass over his left eye. “If you really want to build an estate, own your own business. Control your own life.”

I was in high school at the time. Most of my energy was directed at girls, rock climbing, and convincing the guy at the liquor store that I was old enough to buy beer. I wasn’t quite sure what an estate was, but I thought I caught his drift. Sure, sure, I thought, why not.

But twenty years later, in the early nineties? I thought I finally knew what he meant. I’d spent years working in marketing for other people, at large corporations and small startups alike. I was a co-founder of MacUser magazine, as well as MacWarehouse and MicroWarehouse, two of the first mail-order sources for computer products. I’d spent years at Borland International, one of the software giants of the eighties. At all of these places, I’d been focused on direct marketing: sending letters and catalogs directly to individual consumers and studying the way they responded. I’d enjoyed it, and I was good at it. I had a knack for connecting products to customers. I knew what people wanted—or if I didn’t, I knew how to figure it out. I knew how to reach them.

But I’d always been working, in some sense, for someone else. At Borland, I’d been part of a huge corporation. And even as a co-founder at MacUser and MacWarehouse, I’d helped develop an idea that was only partly my own. As rewarding as those jobs were, part of me had always wondered what it would be like to build a company from the ground up, completely solo—if it would be more fulfilling if the problems I solved were my problems. That, after all, was what my father was telling me, hammer in hand. That’s why he descended like Vulcan to his workbench under our house in Chappaqua. He wanted to set up his own problems, and then knock them down.

By 1997, so did I. I was a year shy of forty. I had a wonderful wife, three kids, enough money to buy a house that was a little too big for us on a hillside overlooking Santa Cruz.

I also had, somewhat unexpectedly, quite a bit of time on my hands.


Barely six months after acquiring our company and giving me the green light to build out the marketing department I’d inherited, Reed had agreed to the corporate merger that would make all of us—me, Reed, and the two people I’d just brought in to work with me—redundant. For the next four months or so, while the feds went over the paperwork, we had to come to work every day. We were still getting paid, but we had nothing—and I mean nothing—to do.

It was tremendously boring. The Pure Atria offices were nothing like the laid-back startup offices of today. No nap pods, no pinball machines in the lobby. Think: cubicles. Think: fake office plants. Think: a watercooler gurgling at regular intervals.

Reed was busy finalizing the merger and had already started making plans to go back to school. As his tenure as CEO was coming to an end, he was feeling a little burned-out. He wanted to change the world, but he was increasingly convinced that he couldn’t do so as a tech CEO. “If you really want to change the world,” he said, “you don’t need millions of dollars. You need billions.” Barring that, he thought the way to effect change was through education. He was increasingly passionate about education reform, and he thought that no one would take him seriously unless he had an advanced degree in the field. He had his eye on Stanford. He had no desire to start a new company…but he also indicated that he wanted to keep his toe in the water, as an investor or an advisor, or both.

At first, I filled my limbo merger time with athletic pursuits. Along with a big group of fellow East Coast transplants homesick for ice rinks and pucks, I conned a few Californians into comically lopsided parking-lot hockey games. We’d while away a few hours in the shadows of the office park, body-checking each other into parked cars and batting a scuffed-up tennis ball through homemade PVC-pipe goals.

I also spent some time at the driving range, and those first few weeks brought me a revelation: I’ll never be good at golf. I’d always thought that if I spent enough time on it, I could practice my way into a decent golf game, and for weeks I tested that hypothesis. I’d take an hour-and-a-half lunch, then stop by the range on my way back to the offices.

But no matter how many balls I hit, I never got any better.

I think a part of me knew, even then, that a perfect swing wouldn’t cure what ailed me. What I needed wasn’t a sweaty hockey game or a birdie at DeLaveaga. What I needed was the feeling of being deeply engaged with a project. What I needed was purpose.

Hence the ideas for a new company. Hence personalized shampoo by mail.


I kept a little notebook of ideas in my backpack and carried it with me everywhere I went: driving, mountain biking, you name it. It fit into the pocket of hiking shorts really nicely. I’d even take it surfing—leaving it in my backpack on shore, of course. There’s a reason why rejected idea #114 is “personalized surfboards, machine-shaped to your exact size, weight, strength, and surfing style.” They say the best ideas are born of necessity, and nothing’s more necessary than a properly shaped board when you’re scrambling for waves at Pleasure Point.

I’m an idea guy. Give me hours of empty time in a Silicon Valley office with a fast internet connection and multiple whiteboards, and you’re going to need to buy more dry-erase markers. I probably would have come up with business plans just to get out of embarrassing myself at the driving range.

But I also felt a sense of responsibility for the people I’d already brought over to work with me, who had left perfectly good jobs and were now sitting on their hands. Christina Kish, whom I’d worked with at a company called Visioneer, which made desktop scanners, had gotten one workweek in before the merger. Te Smith, my friend from Borland, had gotten laid off her first day.

I wanted to make their decision to follow me worth it. I wanted to provide them with a place to land when we were all out of a job. And, selfishly, I didn’t want to lose them. When you find people as capable, smart, and easy to work with as Christina and Te, you need to keep them around.

So I started looping them in on my ideas for a new company. They were perfect sounding boards. I’m a great idea guy, but I’m horrible at follow-through. I’m not good at details. But Christina and Te are.

Christina was a project manager. A little buttoned-up, with her dark hair pulled back into a simple ponytail, she had years of experience turning visionary ideas into tangible products. Along with a sharp eye for detail, she had a real genius for scheduling, and a ruthless ability to get things done on deadline—even if she had to kill someone to make it happen. She was well versed in the art of translating a visionary idea out of the realm of possibility and into reality.

Te was a specialist in PR and communications. She knew everyone, and everyone knew her. She not only knew how to write an attention-grabbing press release, she knew who was important to know in the press—and what to say to get them to return her call. She was the mistress of the press tour, choreographing them like state dinners. She was schooled in dress codes and even the most obscure protocol. She always knew which fork to use. For her, publicity was a kind of stage, and she was the queen of it, a diva. Like Madonna, she required only one name. To everyone—from a disheveled user group moderator to the most formal business section editor—she was simply Te.

The two women couldn’t be more different. Christina is intense and somewhat self-contained. Te is an eccentric, a wild dresser with an explosion of wavy hair and a Boston accent that has endured through decades of life in California. Christina wore sneakers to work and ran marathons. Te taught me what Manolo Blahniks were and had an alter ego named Tipsy Bubbles, who came out after a couple glasses of champagne.

But both women were—and continue to be—sharp, detail-oriented, and no-nonsense.

And once I’d sniffed out that Reed would be amenable to funding a new company if I could come up with a good enough idea, I went to Christina and Te for help. We started spending hours at the whiteboards in Pure Atria. We made good use of the company’s high-speed internet (a rarity in those days—and even in Silicon Valley, it wasn’t that fast) to do background research in hundreds of diverse fields, looking for the perfect opening. Long before an idea made its way to Reed’s car, it had been examined and vetted by Christina and Te.

Those whiteboard sessions made me feel better than any parking-lot goal or long drive on the range ever could. Even if every idea I brought to the whiteboard was bad, even if Christina and Te’s research made it clear just how implausible some of my middle-of-the-night revelations were, I knew that eventually we’d land on something good. Like my father in the basement, there was pleasure in the work. We were designing something. Someday, we might get to build it.


“Okay,” I said, sighing on another Tuesday morning, this time in Reed’s immaculate Toyota. “That one’s toast, I guess.”

Reed nodded as we accelerated smoothly up to 55 mph. Exactly the speed limit. No more, no less.

We’d been discussing idea #95 in my notebook: food custom-blended specifically for your pet. The idea was good, but it was too expensive. And Reed had pointed out that it was a liability nightmare.

“What if someone’s dog dies?” he’d asked. “We’re out a customer.”

“And they’re out a dog,” I said, thinking of my own Lab, who had chewed a hole in the fence that morning.

“Sure, sure,” Reed replied absentmindedly. “But the point is that customizing a unique product for every customer is just too difficult. It never gets easier. The effort to make a dozen is exactly twelve times the effort it takes to make one. You’ll never get ahead.”

“But we have to sell something.

“Sure. But you want something that will scale,” he said. “You want something where the effort it takes to sell a dozen is identical to the effort it takes to sell just one. And while you’re at it, try and find something that’s more than just a onetime sale, so that once you’ve found a customer, you’ll be able to sell to them over and over again.”

I thought of all of my most recent ideas: personalized surfboards, dog food, and baseball bats. All of them were made one-of-a-kind. And aside from dog food, these were things you bought only occasionally (surfboards and bats). Dog food you bought a few times a month.

“What’s something you use relatively often? Something the same person uses over and over again?”

Reed thought for a moment, his head tilted slightly back. The Stanford student in the driver’s seat turned slightly and said, “Toothpaste.”

Reed frowned. “It takes a month to use a tube of toothpaste. Not frequent enough.”

“Shampoo,” I said.

“No,” Reed said. “No more shampoo.”

I thought for a second, but my brain felt slow that morning. I was two cups of coffee into my day, but I was still tired from the night before. My three-year-old had woken up in the middle of the night with a bad dream, and the only thing that had coaxed her back to sleep—dried the tears and closed the eyes—was a well-worn copy of Aladdin, wedged deep into the entertainment console in our living room. I’d ended up watching most of it, even after she’d fallen back to sleep.


Reed looked at me. “Don’t remind me,” he said, shaking his head. “I just got nicked forty bucks by Blockbuster on a movie I returned late. But…” He let his voice tail off as he turned to stare again out the window, his face blank. Then his eyes arched upward and he nodded.

“Maybe,” he said.


That morning, Christina and Te and I met in my office, as usual. When I told Christina how the drive with Reed had gone, she walked up to the whiteboard and slowly erased the thicket of lists, projections, and calculations we’d scrawled across it in the past few days.

“So long, Fido,” said Te.

“We need a product that already exists in the world,” I said. “But that we can help people access online. Bezos did it with books. You don’t have to write books to sell them.”

It was true. Amazon had just gone public, proving to everyone that services that were once considered strictly limited to physical stores could now be done online—and could be done even better. E-commerce was the next wave. We all knew it. That’s why people were starting online shops for pretty much anything that could fit in a box—diapers, shoes, you name it.

And it’s why I was spending my mornings with Reed, batting ideas back and forth until they shattered into dust.

“I was thinking VHS tapes,” I said to Christina. “They’re kind of small. People don’t necessarily want to own them after they’ve watched them once or twice. Video stores do pretty well. We could let people rent online, then ship tapes directly to them.”

Christina frowned. “So we’d pay to ship things two ways: there and back. You can’t expect people to pay for the shipping.”

I nodded. “Sure.”

“That’s gonna be expensive,” Christina said, jotting down some figures in a tiny notebook. “First you have to buy the tapes, then you have to pay to ship them—twice. Plus whatever you’d mail them in, plus storage for all the tapes that you’ve bought…”

“Not to mention,” Te chimed in, “who wants to wait a week to watch Sleepless in Seattle?”

“I’ll wait forever,” I said.

“My point is that when you want a movie, you want it now,” Te said.

“Yeah, but have you been in a Blockbuster lately?” Christina muttered, still staring at the neat, orderly rows of writing in her notebook. “Terrible. Disorganized, apathetic. Kind of low inventory, too.”

I picked up my hockey stick from the corner of the office and started absentmindedly batting a tennis ball against a file cabinet. Te had moved back to the whiteboard and written VHS ONLINE STORE at the top in blue marker.

Once again, we were off to the races.


That night, I went home and looked at our video collection. It was smaller than I’d imagined. Aladdin, The Lion King, Beauty and the Beast, all in their Disney slipcases. Now that I was thinking about mailing them, they looked gigantic.

At dinner, my wife, Lorraine, wiped spaghetti sauce off our three-year-old daughter, Morgan’s, face with one hand and spoon-fed applesauce to Hunter, our youngest, with the other. I tried to teach my older son, Logan, how to twirl his spaghetti on a fork, using his spoon. I tried to explain my new idea to Lorraine. Neither attempt went particularly well.

I made an effort to come home for dinner every day, and my work had a way of following me home. Lorraine didn’t mind, up to a point. And she was usually a very good barometer about whether or not something sounded feasible. When it came to new ideas, I tended to get a little enthusiastic.

This time, Lorraine listened to me with a skeptical expression. It had been almost twenty years since I’d first seen her in Vail, Colorado, the friend of my ski-patrol buddy’s roommate. She’d come to ski with her boyfriend, and…well, let’s just say that once I entered the picture, things didn’t work out between them. I loved her then for the same reasons that I love her now: her keen mind, her down-to-earth common sense. She reins me in.

Watching Logan maneuver a forkful of pasta toward his open mouth, I mustered the last of the day’s enthusiasm to sell Lorraine on my brilliant idea. “Think about how much you hate dragging these three to Blockbuster,” I said, pointing to Morgan’s sauce-streaked face and Hunter’s grinning, toothless mouth. “A nightmare. And this could solve it.”

Lorraine pursed her lips and dangled her fork over her largely untouched plate of food. I knew that when we got up, she’d have to eat it quickly, standing up near the sink, while I started the lengthy process of corralling the three kids into their baths and then to bed.

“First of all, you have sauce all over your shirt,” she said.

I looked down. It was true. Not a great shirt—a white T-shirt advertising BORLAND BUG HUNT ’87 only passes for high fashion within forty miles of Scotts Valley. And the sauce stain wasn’t helping. I dabbed at it with one of the wet wipes we kept near the table anytime the children were eating.

“Second of all,” she said, smiling broadly. “That will never work.”


Lorraine’s reasons were much the same as the ones Christina and Te gave me at the end of that week. The tapes were too bulky to ship. There was no way to guarantee that users would ship them back. There was a high likelihood they’d get damaged in transit.

But more than anything, it was expensive. It’s easy to forget how much VHS tapes used to cost. There’s a reason the only tapes we had in our house were kids’ movies—back in the nineties, the only studio that was pricing VHS tapes to sell was Disney. And even then, they were only doing it for movies that had been out for years. For Disney, Bambi was pretty much always a new release—because new customers who had never seen it were born every day.

Not looking for a kids’ movie? Tough luck. You were looking at $75 to $80 a tape. There was no way we could afford to assemble a VHS library big enough to tempt users away from the video stores.

Christina spent days looking into Blockbuster’s and Hollywood Video’s business models, and what she found wasn’t encouraging.

“Even the brick-and-mortars have a hard time,” she said. “To make any money, you have to turn a tape twenty times in a month. You need a steady stream of customers. That means you really have to stock what people want—new releases, ideally. Crowds don’t line up at Blockbuster every Friday night for Jean-Luc Godard. People want Die Hard. That’s why there’s a whole wall of them.”

“Okay. We could also focus on new releases,” I said. “Two can play that game.”

Christina shook her head. “Not really. Say we buy a tape for eighty bucks and rent it for four. After postage, packaging, and handling, we’re clearing maybe a dollar per rental.”

“So we have to rent something eighty times just to break even,” Te said.

“Right,” Christina said. “The video stores can rent the same new release twenty-five times in a month, because they don’t have to wait for the postal service. They can just have a twenty-four-hour rental period. Plus they’re not paying for packaging or shipping, so they’re clearing more money on each rental, too.”

“So we limit a rental period to two days,” I said.

“Still takes at least three days to ship,” Christina said, looking down at her notebook. “Best-case scenario—and it’s not likely—you get the movie back after a week. You could rent the same tape four times a month. If you’re lucky.”

“So by the time you could rent a new release enough times to make some money off it, it wouldn’t be a new release anymore,” Te said.

“Exactly,” Christina said.

“And you’re still competing with Blockbuster,” Te said. “There’s one within ten or fifteen minutes of almost every potential renter in America.”

“What about rural areas?” I said. But my heart wasn’t in it. I knew they were right—unless tapes got cheaper, or the post office got faster, renting movies through the mail would be almost impossible.

“Back to the drawing board,” I said, eraser in hand.