The end of 1993 would be a pivotal time for CNET. We would move our headquarters from NY to San Francisco, we would join forces with Kevin Wendle Productions, start work on producing real pilots for television shows and still be no farther along in figuring out where the shows might actually air. This was the classic build it and they will come strategy, but even with that it would be a much longer and more painful journey than we thought.
It might not be obvious now as to why we thought we needed television shows. These were early days online. Though the World Wide Web would start to barely emerge in 1993, at that point online meant Prodigy, CompuServe and AOL. Halsey remained convinced that online would be the big thing, but there was literally no money in it. We believed that if we could start with shows and hopefully leverage that into a full network that we would be able to use that television business to promote and grow the online side. Imagine a TV Network with lots of customers and online as a way to compliment with depth of content and community.
It is worth spending a few moments on how we were paying our bills. I say paying our bills but that might sound a bit too proactive. We were paying, but as slowly as we could. We sat on invoices and had also heard that if you ripped the bottom of a check where the account number was, they would have to process it by hand and it took a week longer. We were that company.
We would raise a family and friends round in August of 1993 and a second larger round in January of 1994. In that August round, we literally took family and friends. I invested as did my mom, my dad, my brother, my 92 year old grandfather, Bob Winthrop, Bettina, her soon to be husband, Bill Cisneros, my closest friend John Griffin, Halsey's friend Patrick McGee and Patrick's brother-in-law Clay Mulford (who saved us on CNBC), Halsey's old boss Russell Reynolds (yes, that Russell Reynolds), and Rob Pitts, a friend and colleague from Tiger Management who had originally introduced Halsey and myself.
The January round added a few more folks all of which were friends or past colleagues. We raised $650k in August and would raise around $1.6mm in January. Here is the cap table after those fund raises. This spreadsheet is from a later date because there is room for USA Networks and Vulcan who we had not been introduced to at this point.
I should make a special shout out to my Grandfather, Robert Winthrop, who at 92 years old, had the confidence in his grandson to make a venture capital investment. Later after we were public and in his last year of life, he would check the stock price every morning. He was a wonderful man and also Matthew Barzun's Great Uncle. I might have forgotten to disclose that we were second cousins. Though we didn't know each other before meeting in 1993, he would become a very, very close friend and a critical and loved executive at CNET. He would leave in 2004 and become one of John Kerry's largest fundraisers, Obama's top fundraiser in 2008 and run the entire fundraising effort in 2012. He has a book coming out next year which I will plug excessively when given the chance.
Sometime in the Fall, we would connect with Marshall Cohen. He would become our guardian angel and the top of the list of CNET Dieties. This was another connection from Bettina and her best ever. As you will learn, we will struggle over the next year with finding someone who would take our television programming. The only person that kept us from calling it quits was Marshall. Marshall had been head of research at MTV and was one of the kindest and most respected people in the cable industry. Besides helping us with research, he would open his contact list, make introductions, and provide us confidence and encouragement. I hope every entrepreneur is lucky enough to have a Marshall Cohen. Without him, there was no CNET. You will hear more about him going forward. Besides all the guardian angel stuff, he also helped us produce research to show potential network viability. Click here for the top level findings.
After our launch party at COMDEX, which Bettina assures me had more attendees than I remembered, Halsey thought it was critical to move the company to San Francisco. His view was if you were running CNBC covering Wall Street, of course, you needed to be in NY, and if we were covering computers and technology we had to be in the Bay Area. So off Halsey went to look for real estate in San Francisco.
He looked on the Peninsula and in the City. Ironically, very few technology companies were in the city where rent was relatively cheap. He would decide upon a quirky space at 150 Chestnut Street. It is a the bottom of the rock cliff bordering the North Beach and the Embarcadero right next door to a fitness studio. It was the old headquarters for Victoria Station, a chain prime rib restaurant in old train cars. I always remembered the story that they went bankrupt because they expanded too quickly. As we madly added people on the future, that story would haunt me.
Halsey wanted something that could be an office and studio. This space with the big open area seemed perfect. It was the location of a direct marketing company right before us and they made god awful color choices. Rent was $1 per month per square foot.
Here are two picture:
And here is the inside...
That Fall, we started discussions with Kevin about a more full time role. He had a production company in LA and had a resume that said big time television. He had been the co-head of programming at Fox broadcast network working for Barry Diller and had run Quincy Jones's production company. His last role before us was producing programming for Whittle Communications which afforded him a lot of money, but was clearly running out of steam. The discussions about a full time position advanced quickly.
First of all, it is worth saying that Kevin is an incredible guy and that we were lucky that he joined. He brought a degree of professionalism and style that made a huge difference in what the company would become. It takes a special type of person to have an established career path in the LA entertainment world and then switch to the great unknown. He would bring enormous passion to CNET and I literally and figuratively would become the buffer between him and Halsey.
This combination created some financial challenges since it wasn't just Kevin, it was a team, a lease, and a bunch of equipment. It was a bit complicated figuring out the deal. This was more a merger than one person joining. As part of that, our team grew quickly adding star members of Kevin’s team: Fred Sotherland, Frank Voci, Dan Baker and Howard Bolton, the numbers quy. I also can't forget Lynne Gabriel who was Kevin's keeper and her smile and laugh kept us all balanced.
By end of the year, we would be focused on getting going on the pilots. Our plan was to do all the preparation at Kevin's office at 345 North Maple Drive in Beverly Hills. Matthew moved there to help and stayed at a local hotel, Le Reve. Halsey moved to SF and Bettina and I stayed in NY. I had this plan that I would get the distribution deal put together and a bigger financing raised and then move. That would take a lot longer than I thought.
We were lucky to have Kevin, but we also were blessed to have Fred and Frank as well. Fred would turn out to be the genius whose discipline and creativity on brand and design is what really caused us, as a company, to break through and Frank brought energy, passion and creativity to everything he did.
To give you a tease for next week, this is what Fred would turn the above picture into, you will see copies of the pilots, see our secret on screen icons, hear about talent leaving us mid-taping to go to a Dead show, and all sorts of other issues and adventures......…
Late summer of 1993 I ran into my friend Robin Fisher from Big Fish Marketing. She said she’d been working with Brandon Tartikoff and gave me a creative brainstorming project for a David Letterman promo. When the project wrapped she mentioned meeting a marketing person from NY that was working on a computer focused cable network. She knew I was a fan of tech and encouraged me to call Bettina Cisneros, “Time is of the essence they’re meeting lots of producers in LA”. I worked with Kevin Wendle Productions as Creative Producer and was busy with The WB Television Network branding project...I wasn’t sure I should load more on my plate so I put off calling Bettina.
Interesting projects always passed through Kevin’s Beverly Hills office. Ironically, just weeks after Robin recommended calling Bettina, Kevin and Producer Dan Baker met with Halsey Minor. Dan asked Halsey what his next meeting was. He said, “It‘s with a television creative company because if we’re going to have a 24 hour cable network we’ll need great creative”. Immediately Dan said we have our own Creative Producer on staff you should see his reel. Early in the reel Halsey saw an image promotion for CNN Business that he’d seen on-air, he didn’t look at the rest of the reel. He just kept asking me questions on how the CNN Business spot was created. Bettina and I finally met at the COMDEX launch event as Kevin Wendle had signed on to produce 4 pilots for CNET. Starting my amazing adventure with CNET in October of 1993.