The transfer of workspot
This all happened within March of 2013.
This redacted correspondance, between the unnamed co-founder of a new start-up, and
chronicles the purchase of the dotcom-era workspot.com domain.
Its historical interest lies in perceptions of that era -- 13 years later -- by two Silicon Valley dotcom participants who didn't know each other at the time.
It's just a negotiation -- during a recession and not between big players -- over a genuinely tiny asset. (And the stock options became eventually worthless because
of repeated recapitalizations). But this still sounds very much like any Silicon Valley negotiation over much larger issues.
I am one of the founders of a new company called O1 Works based in Menlo Park, CA.
We got started at the beginning of August 2012 with the idea that people working
within companies should finally have the ability to work freely using personally owned
devices and without IT needing to install anything new in their data center.
I call it the democratization of BYOD (aka bring-your-own-device).
I'd like to find out a bit about Workspot today. Free sometime to chat over the next week or so?
Yes, a cloud workplace, and freedom-from-corporate-IT, were my original motivations for
Workspot in 1998.
We also built mobile apps at that time, before anyone else, and unfortunately we became
dependent on that contract work. In part because I was in downtown Palo Alto, I built
the first mobile apps for eBay, Google etc.. After the crash, both the contracts,
and interest in mobile, dried up. We were seven years too early.
Of course, we built a mobile app that accessed one's Workspot desktop in the cloud.
We shipped many pioneering products, but that was quite easy during the boom.
Although I always maintain a design and a plan for reviving Workspot, it is, at the moment,
just a set of domain names I own. One with a long web history.
I would like to talk about that domain name. Chat sometime this week?
It was nice talking with you. I'm sorry the connection wasn't better.
And I'm sorry this is such an awkward thing to talk about!
However, I believe we understood the gist of each other's positions ... in more than one sense.
I must say, the only reason I'm willing to give up the mantle, is that you most closely fit
the original idea of Workspot, of the many proposals I've fielded over the years.
This is just my intuition, given your backgrounds and what you've told me.
So, I had to dig deep, and ask myself ... "what would really push me to let go of Workspot?"
I'll admit that the idea makes me wince. Viscerally.
One consideration: I know, with this tested name, you'll be: 1) well-branded,
2) poised for consumer and enterprise sales, and 3) likely to exit or get further investment
from the huge companies and funds whose founders fondly remember Workspot.
Another consideration: I know you're a startup, but you're also a very-likely-to-be-profitable
venture, while I'm raising money for an important, innovative, non-controversial, non-profit web project.
Letting go of Workspot, for the right price, would seriously benefit that good project, in many ways.
I think 50 / 50 ... equity / cash ... is a fine starting point. I want to be motivated to support your project.
And ... I think [redacted] cash would force me to let go.
To your success,
Thanks for your note back. We put our ideas into motion in the second half of last year,
with our heads down since then. We do indeed have great support from our current investors,
but ultimately it is up to us as the founding team to make things happen on resources we have today.
Something you are familiar.
I appreciate your points about the name history below; no doubt some good vibes remain.
Just so I did not miss anything, when you refer to let go of Workspot, is it more than the domain name?
In general, I meant 'letting go' of the idea of creating a service like this.
Although I have not had time for the last eight years, I still believe this is a multi-billion dollar notion.
I still have casual conversations with investors about restarting it. I know that, if I didn't have the
domain names (.com,.org,.net), I simply would not be having these conversations. The branding's association with
the idea focussed the original effort, and will focus any future effort. I'm quite sure you know how that works.
About $10 million went through the original Workspot. Many people were involved, many people knew us ... we rented
an entire apartment building in downtown Palo Alto, and we were the most visible start-up there. We even held very
enthusiastic and authentic regular block parties outside. We were the archetype of the creative-start-up-on-the-corner,
and we inspired many businesses, in many ways.
If you ever mention Workspot to Larry Page, it would certainly make him crack a smile ... he lived 60 feet from our
building when he closed Google's first major round of funding. Elon Musk parked his million-dollar-car
in front of my window, since he knew I was always in there, working. Until April of 2000, VCs, entrepreneurs,
famous thinkers and programmers would visit, hang-out and mix comfortably in the rooms of our nice old building.
It was a special environment, which they all remember well. I even met my wife because of Workspot. We were the
idealist's idealists of the dotcom boom, involved in many important and influential conversations: we even won a
Best Web Application award in 2000, and the competition was rather fierce.
There are no other tangible assets, but there are many white papers, and expired provisional patent documents,
which of course you might find interesting to read. I can give you a list of interesting people who knew Workspot
well, but you're sufficiently well-connected that simply adopting the name Workspot for your business would do the trick.
So, the [redacted] (equity / cash) figure, was my starting offer in our bargaining process. When your group makes
a decision on a counter-offer, please let me know, so we can continue.
I also would be interested in taking a look at your product. I've been thinking about this space for a very long time,
and I might have some useful comments.
Thanks for your patience and sharing some great stories from the heyday. I wanted my previous note wording to reflect
the fact that I can fully appreciate the dedication and brainpower previously put into the efforts; I hope it came across
that way. I remember those days in the year 2000, where ideas were grand and companies like 3Com and Silicon Graphics
were giants in the valley. How dramatically things have changed.
I also believe the important conversations continue. In 2001, I was at a startup that focused on mobile task automation
software delivering back-end application data like Siebel to Windows CE and Palm Pilot devices over GPRS wireless networks.
We did it better than anybody else, proving people wrong time after time. To some degree, we were also idealists in that
we fundamentally believed that people could work more efficiently using mobile devices. We have since learned a lot working
at companies like Citrix, VMware, and Oracle. And times have indeed changed as to the speed of innovation getting into
the hands of people.
Things may change once we raise Series A funding, but the reality today is that we are three entrepreneurs with limited
cash resources right now. We have our people and rising company momentum. Equity is our biggest lever. We are still in
the seed company stage with upside potential still ahead. If I focus on the offer for domain only, we will unfortunately
not be able to get close to the figures you mentioned.
We discussed different combinations of options and cash. The constraint right now is cash, and our offer at the moment
on that end is going to be close to an order of magnitude different. We believe in the upside of our stock. We can offer
5,000 stock options now. At this stage of the company, I believe $10 a share is within a short distance shot already;
$20 a share and beyond a goal for us all. Every share is being managed carefully at this point.
If this is even within the realm of possible, it would be great to continue the conversation.
Again, I appreciate the road already travelled.
Yes, we should keep the conversation going.
And yes, I do believe that everyone who started a company in the valley, during the boom, shares some kind of ideological resonance. The world had suddenly turned upside-down, engineers could leap outside of large corporations, and gain independence over their own work. Today, we still learn things inside the behemoths, but a start-up is now recognizable as a profound attempt by its founders to free themselves from wage-slavery.
Back to the issue of price ... I didn't realize that you hadn't opened your Series A round yet.
So, on the equity side, the 5,000 shares is good. I was in this situation and I understand the care that must be taken when allocating shares.
I see from your SEC filing that you raised 1.9m in August. I appreciate that this budget must get you to the next stage. And, of course, as an owner of your shares, I would be rooting hard for you to get there.
I'm sure now that [redacted] cash is far too much to ask, given your present state. This was more a psychological marker for me, since I'd never thought of letting go of Workspot before.
On the cash side, what would work for me is [redacted] now, plus a Note for [redacted] due when your Series A round closes.
I also need your mail servers to forward [redacted email] to me for a while, since I've had this email for 15 years, and changing over will involve significant effort.
All the best,
Appreciate your understanding the entrepreneur point of view, our working towards rise of value for the company, and words on our current equity position. We would certainly work with you on keeping your email alive. But the main conclusion at this time is that we would not be able to meet your cash request. Fiduciary duty is hard thing to balance against the drive to create something awesome.
Things may change quickly on our end, so I would like to keep communications lines open.
So, is it the immediate cash request, or the post-series-A promissory note that is the sticking point? Or both? And, what amount were you thinking about for both? It's always best to ask.
As you mentioned, there are the considerations of pre and post Series A fundraising. As you can imagine, investors are closely watching things like capitalization tables with named shareholders and cash levels before Series A. Here is our best offer at this time:
[redacted] shares of company stock in the form of stock options and [redacted] cash now.
A note for [redacted] cash for the earlier of within 30 days of closing the Series A or by September 1, 2013. We can put some contingency if the round does not close for some unforeseen reason, reverting ownership back to you.
Let me know if the above is workable.
Thank you for making your cash status clear. I sympathize with your situation, but you were right, in an earlier e-mail: I won't be able to let go of Workspot for even many times this amount. Feel free to contact me if things change for you significantly.
Best of luck with your enterprise, and keep in touch!
Thanks for your note. It would have been nice to work something out together now for the domain. Will do on getting back in contact if and when things change significantly on our end. We are moving forward and fast on many fronts on our end. I also wish you best of luck on your new adventures.
We have been working hard, doing A/B testing, and getting more early feedback. Even through this long week, our not getting to an agreement together still wears on me. We are still early stages as a company, but looking to ramp things up in the next months while nailing a few things down now. I want you to be part of this ramp up with us. I have been lobbying the others, and we can do the following:
[redacted] cash now and [redacted] shares of company stock in the form of stock options
A note for [redacted] cash for the earlier of within 30 days of closing the Series A or by August 1, 2013. An earlier timeframe to show our confidence in success. We can put some contingency for unforeseen reasons, reverting ownership back to you.
Will keep your personal email going through a transition period.
Do me the favor in really thinking about it and getting on board with us early. Happy to get on a call to talk more details, as we need to make some decisions quickly on my end. A post Series A world has more constraints on my side.
Ok ... I believe we have a deal.
Please send me details on how we should proceed.
With best regards,
FANTASTIC!!! Let me get with a couple people first thing Monday and come back with details.