Having Bill Gates say that he doesn’t think you can cut the mustard as a chief executive officer would be the kiss of death for most company leaders. Apparently not so for Jerrold (Jerry) Kaplan, who despite earning Gates’ scorn has managed to rescue his career by taking his latest venture public. Kaplan was the author of an excellent failed software entrepreneur’s autobiography in his 1995 book Start-Up (A Silicon Valley Adventure). As Kaplan put it himself, it was a story on how to spend $75m of other people’s money and still fail – in his case, the failure being of pen-based computing hopeful Go Corporation, later Eo. Born of a casual remark made during a cross- country plane ride with Mitch Kapor, founder of Lotus Development Corp, in 1987, Eo was a way for Kaplan to learn the hard realities of raising venture capital, working with partners like IBM and AT&T, and of competing with Bill Gates. The latter wrote up a Microsoft internal memo on a ‘friendly’ visit to Go, in which he doubted (correctly) that Go would make it, partly because Kaplan didn’t have the makings of a major Silicon Valley mover and shaker.
Post-Go
But things seem to have gone much, much better for Kaplan at his post-Go venture (he is a co-founder), Onsale Inc, which has just filed for an initial public offering. Onsale’s business model is to let customers ‘bid’ for electronic consumer items, computers, and peripherals in auctions over the Web. Debuting in May of 1995, Onsale has specialized in refurbished and discontinued products, holding three auctions per week, with a notable example being its success last November in successfully auctioning off a used IBM mainframe, for $12,250. Orders placed through Onsale are transmitted to the participating merchants, who process the orders and collect the payments. The company claims to have been profitable since January of last year. It is moving about 1,500 items a week, ranging from $50 to $5,000 in price typically, and is claiming revenue of $14.2m for fiscal 1996, with 20,000 hits a day at its Web site. The initial public offering, due to be completed the first week in April, will raise 2.8 million shares, raising around $22.6m if the launch price of $8 to $10 is met. Afterwards Kaplan will still own 36% of the 50-person strong company, which is based in Mountain View, California.
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