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THE EMPEROR’S NEW INTERNET KITCHEN DEVICE

When the news broke this week that Diba Inc had sold itself to Sun Microsystems (3,216), one’s first hope was that someone is going to a do a TV movie about this, because this could easily be as entertaining a look into the absurdities and gullibilities of business life as Barbarians At The Gate. For Diba’s CEO and CTO, Farzad Dibachi and his brother Farid respectively, two Iranian refugees who as teenagers relocated to Sunnyvale, California with their family just before Shah Reza’s downfall in 1979, played us all like fiddles. Make that Farzad, given that his shyer brother didn’t like dealing with the press, who in the end turned out to be the company’s only real customers. This guy deserves a Pulitzer Prize for press relations, if they give such things out (let’s hope they don’t).

By Gary Flood

We all played along with this pair as they played out their open air version of Let’s Play Start Up And Become Software Billionaires! Right from the start, Diba was all about presentation. Farzad and Farid organized a 10-day, four city, coast to coast press and analyst tour to kick start the company in early 1996. We produced a beautiful press kit, including glossy photos of our first three product prototypes (Diba Mail, Internet and Kitchen) taken by Rick English, one of the hottest photographers in Silicon Valley, Farzad was to write. The effort was well worth it: The first three stories we received were by some of the top journalists covering Silicon Valley: Don Clark from the Wall Street Journal, Kathy Rebello from Business Week and Steve Hamm from PC Week’s Inside column. Since then we have received a continuous stream of coverage. In all, we have counted over 250 stories on Diba, or articles in which Diba is mentioned. Farzad had a guess at why the company attracted so much attention: The press… loves to report on small companies trying to assault (or in our case, circumvent) established industry giants. It makes for a good headline and appeals to the Horatio Alger ‘rags to riches’ yearnings we all harbor deep inside.

Dibachi’s key weapon

White papers from our partners

Well, yes, but then there was also the angle, as pointed out by an editor at Upside magazine last September, that Farzad gave good interview, as we hacks like to say: Also extremely well thought out was the brothers’ press approach. When they were finally ready to announce products and strategy on April 29 [1996], the press was primed. Dibachi’s key weapon: The former Oracle executive was willing to feed the press comments about why [Larry] Ellison’s approach was wrong. That kind of comment, on the record from an executive who once headed the group that contained the NC project, is priceless to a press corps hungry for controversy. Farzad Dibachi’s charm and eloquence hooked them on the rest of his story. By mid-April, Dibachi began feeding information to key publications, including the Wall Street Journal, Business Week and PC Week, giving them enough time to prime the hype pump before the April 29 announcement. For the record: Farzad did not try that stuff with us, but then after all how could we compete with The Wall St Journal, the world’s greatest business newspaper, which makes its living printing the leaks companies fall over themselves giving it? Anyway, back to the story. Farzad then kept us all charmed and spellbound with his weekly (then monthly) accounts of life at his start up with his regular column at the Upside web site.

Diba kitchen

We were delighted to read about the Saturday morning all 12 then employees turned up to help clean the new offices, about the engineers craving for $25 boxes of beef jerky, about the Diba kitchen (which was even featured on a San Francisco radio cooking show) where every Wednesday you had to cook for the rest of the company, and the Nerf guns – oh, especially the Nerf guns. One of our developers brought in a Nerf machine gun that fires 10 Nerf bullets (soft foam) in rapid succession. In what they claim was pure self defense, all the other developers immediately went out and purchased similar weapons – so many that now our office now resembles a warehouse. Just last week, a delivery man asked whether Diba is a toy company. Farzad knew why we all liked Diba; it was one of the little guys: the image of a small company founded in a garage or warehouse still has great emotional appeal in Silicon Valley. The VCs and investors we meet with are impressed by our fiscal responsibility, while our customers – mostly Asian companies – tell us that they are excited to watch a true start up being born. After all, Diba was going to go all the way, right – Tom thought it would be an enduring tribute to the company if all employees volunteered to get a Diba tattoo if we ever do an IPO. To my surprise (and horror), this proposition has been greeted with great enthusiasm. The discussion now centers on where such a tattoo might be best displayed. The less creative argue that if the forearm or bicep are good enough for Mom, they should be good enough for ‘Diba.’ Others claim that the calf or ankle might be more in keeping with the ’90s. But was Diba ever really a start up? Dibachi, who had worked his way up through the ranks of Oracle Corp and who has obviously learnt a trick or two from Larry about how to make these press jerks do what you want, actually got all the money he wanted to play at being a real life Silicon Valley entrepreneur from Quark Inc’s chairman Fred Ebrahimi, who offered the personable Farzad the money unbidden on a plane ride they shared to the East Coast once he heard he was thinking of leaving Oracle.

Early cushion

He gave the boys about a million dollars – enough money to pay salary for 20 people for a year (ie until about November 1996). But in retrospect this early cushion, allied with all the hype, actually killed off any chance of Diba becoming a real company, as in one that spends a long hard time raising capital through various rounds of funding and self-examination and in the process acquires focus and maturity. The company chose to pursue strategic partners rather than VCs. As The Red Herring quoted its chief operating officer Joe Gillach in August 1996, rather amazingly, Diba thought it didn’t need the operational expertise VCs bring to the table, and anyway, it was now too expensive for them anyway – We also zoomed up the valuation curve so quickly that we were too expensive for seed funding. By last August the company claimed to have attracted half of the $10m it was seeking for its Fall 1996 IPO from consumer electronic companies, half of which had been informally committed (right, Farzad!). Whether it got any is a moot point now. For Diba in fact never actually did doodly-squat. Its business plan was an amoeba in shape – depending on what prestigious business newspaper you read, it was either going to be a software platform for a new generation of information appliances, or a consumer electronics item, or a technology provider for electronics manufacturers. It was also supposed to have a slew of goodies ready for us in the shops last Christmas – must have missed those, I guess. And then there was the endless harping on about its deal with Zenith’s NetVision product, an early WebTV style idea – yet in the end (January 1997) that company announced it had decided not to use Diba software at all, but (ironically enough) Oracle’s NCI subsidiary instead. Granted, on paper it still had deals with Samsung (internet TV), Panasonic (e-mail phone), and Proxima (internet-enabled projectors). It would be interesting to know exactly how much Diba actually did raise in terms of real money. Probably the reality: Farzad and Farid never got more than a fraction of what they’d got for free from Ebrahimi from anyone else; their company was all hype; they never had any real products or customers; and Sun almost certainly over-paid for the wreckage. Thankfully there is only one fall guy: the mainstream press, which fell hook line and sinker for all that Horatio Alger bull. If only Art Malik (Jewel In The Crown, True Lies) were slightly more cuddly

he’d be ideal to play Farzad in the TV adaptation.
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CBR Staff Writer

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