Although Henry negotiated under the banner of Nicholas Bookstore, the funds for the acquisition were actually drawn from his own resources. While both entities were under his control, establishing a distinct company was essential for clear ownership and to prevent chaos. Once the Nicholas Group was formed, Pixar's integration would run smoothly.
After successfully acquiring Pixar, Henry prioritized relocation. To accommodate Pixar employees, he decided not to hastily move the headquarters, which would remain in Emeryville, California. Once they settled, he transferred the funds to Lucas's account and encouraged the team to unleash their creativity. Henry imposed no restrictions; instead, he wanted them to utilize their talents to the fullest extent.
Was a constrained Pixar still truly Pixar?
Anyone who had seen Pixar's workspace would be amazed to discover it resembled not an office, but a leisure center, complete with toys, game consoles, and even fish tanks! There were no hierarchies inside the company; everyone was on equal footing during discussions. Even a cleaner, if inspired, could contribute two cents and receive applause!
The staff collaborated freely, driving their creativity, which ultimately allowed every animation to aspire to become a classic.
While Henry felt relieved about Pixar's creative potential, he was acutely aware of Hollywood's treacherous waters and worried that Pixar could easily drown in the industry's complexities.
Reflecting on the past, Henry recalled how precarious Pixar's beginnings were. Despite Jobs being ousted from Apple, his dreams of computing continued to burn within him, leaving him little funds for Pixar's development. Without adequate financing for technical R&D and animation productions, Pixar had to survive by taking on small jobs that wasted precious time. Had they not secured a partnership with Disney later on, Jobs might have faced dire consequences.
If Henry was to navigate the film and television waters, he knew he must tread carefully.
He subsequently visited Nicholas Bookstore to connect with CEO Geely Hutt and Chief Technology Officer Tom Wilson to discuss new ideas. Wilson, a 30- or 40-something Stanford graduate who previously worked as a senior software engineer at IBM, was brought in by Henry for his expertise. The three settled into the meeting room where Henry shared his vision.
"I want to create a website dedicated to movies, called the Internet Movie Database, or IMDb for short. I've outlined the concept in this document. Please peruse it and consider its feasibility!" He handed them the printed materials.
The design included extensive film information—actors, lengths, descriptions, ratings, and user reviews—forming a robust platform where fans could rate films. It was crucial to establish a trustworthy and popular scoring system!
Both Geely and Tom scrutinized the documents carefully, and after their review, admiration for Henry's vision was clear.
"Chairman, this website's design is outstanding! I believe it's incredibly feasible!" Tom Wilson exclaimed confidently.
"I agree! Once this site launches, we will gain substantial influence within Hollywood. Chairman, your creativity is remarkable!" As CEO, Geely understood the broader implications. He was aware that Henry had acquired Pixar and that the aim was to break into Hollywood.
"Great! Please begin constructing the site based on my design without delay!" Henry instructed, then added, "This website will remain under Nicholas Bookstore's banner!"
"Absolutely!" Both Geely and Tom beamed with excitement; this would significantly enhance Nicholas Bookstore's profile.
After wrapping up at Nicholas Bookstore, Henry moved on to Cisco.
By 1990, the first web servers would emerge. However, the general understanding of what constituted a server was still nebulous at that time. To Henry, leveraging regular computers as servers seemed far too elementary—not only inefficient but also prone to issues. As the internet grew and traffic swelled, the need for robust servers was becoming essential.
With the internet still in its infancy, most people hadn't grasped the critical role servers would play in its future!
Henry envisioned establishing a new company with some individuals from Cisco to develop a server. The venture would be jointly financed by Cisco and Nicholas Bookstore. The development of a server would require both hardware and software—an ideal collaboration between the two enterprises. While Nicholas Bookstore was wholly owned by Henry, discussions with Cisco's stakeholders would be vital.
Dominance alone does not mark a great leader.
Henry was learning the nuances of great leadership.
Prior to his arrival at Cisco, he called Ford Brook to discuss the planned partnership. As Sequoia Capital's representative on Cisco's board, it was customary to inform him of such significant developments. Upon reaching Cisco, he found Posak deep in research at the lab, so he sent someone to summon him to the conference room.
Shortly after, Posak and Ford Brook joined Henry in the meeting room, their expressions one of confusion, wondering why they had been summoned.
Once everyone was seated, Henry opened the discussion. "Today, we are addressing issues pivotal to Cisco's future. As the internet rises, online services are undeniably becoming a trend, with Nicholas Bookstore as a prime example! However, such websites face a pressing challenge: system crashes! The primary causes of these collapses are twofold: firstly, the user base increases and, secondly, inherent system flaws. A system cannot accommodate excessive traffic effectively, leading to crashes. Here, system integrity is influenced by hardware and software. Thus, ensuring stability is of utmost importance!"
Henry paused for effect, allowing the weight of his words to sink in before continuing. "I propose a new concept: the 'server.' In essence, it refers to a dedicated computer designed to provide specific services! It comprises processors, hard drives, memory, system buses, etc., similar to general computing architectures. The requirements for processing power, stability, reliability, security, scalability, and manageability far exceed those of standard computers. Servers can be categorized into web servers, database servers, application servers, etc., based on service type. This will be a monumental project!"
At the conclusion of Henry's presentation, the room fell silent.
Ford Brook's eyes lit up with excitement. "Henry, we at Sequoia Capital must invest in this initiative!"
Henry smiled at the enthusiasm in the room. "Given that this project necessitates both software and hardware support, I propose establishing a new company in collaboration with Nicholas Bookstore and Cisco for developing servers!"
"That's an excellent idea! We fully support this!" Posak affirmed, with Lerner agreeing.
Ford Brook, enthusiastic to invest, felt somewhat sidelined when Henry indicated he would consider Sequoia Capital's investment plan only when needed.
Recognizing the need for structure, they began discussing company formation. The consensus was for Nicholas Bookstore and Cisco to each contribute financially, splitting shares evenly. However, acknowledging Henry as the catalyst behind the initiative, he would receive an additional 1% of the shares, while both Cisco and Nicholas Bookstore would hold 49.5% each. While Nicholas Bookstore was under Henry's control, it was crucial to differentiate between personal and business interests—the 1% belonged to Henry personally.
After the meeting concluded, Ford Brook approached Henry with a conspiratorial smile.
Confused, Henry asked, "Ford, what's going on? What's up?"
"Ha ha…" Ford smiled, reminiscent of someone pitching a small investment opportunity. "Tell me, are you considering an investment in Nicholas Bookstore?"
Henry shot him a skeptical look. "Is Sequoia Capital trying to take advantage of Cisco, and now my Nicholas Bookstore is in your sights?"
"Not at all! That's not taking advantage; it's mutual benefit!" Ford chuckled. "You've proven to be quite the genius, particularly with that innovative Netscape browser you developed! Its graphical interface makes everything so straightforward and accessible—everyone's using it! Our analysts at Sequoia Capital agree that the Netscape browser could become the gateway to the online world, with immense potential for development."
Henry realized Ford was more interested in Netscape than in the e-commerce potential of Nicholas Bookstore, but he thought nothing could compare to Alibaba! Such naivety was laughable!
"So, you're interested in investing in the Netscape browser?" Henry asked casually.
"Absolutely!" Ford replied eagerly, sensing a chance.
Henry mulled over their arrangement, recognizing that having Sequoia Capital as a partner would fortify his position. He saw the wisdom in engaging them: the path forward for the Netscape browser required strategic partners.
"Nicholas Bookstore will spin off Netscape Browser as a subsidiary," Henry announced thoughtfully.
Ford's eyes brightened at the news.
"However, there's one condition," Henry added, making Ford tense.
"What condition?" Ford queried cautiously, knowing Henry often brought surprises to the table.
Sure enough, Henry's terms made Ford uneasy.
"It's a share swap! I want Apple shares in exchange for Netscape browser shares!" Henry stated matter-of-factly.
"Apple's stock is on the decline. With IBM encroaching upon their market, their performance is plummeting. Even Jobs, their founder, was ousted! The newly appointed CEO, John Sculley, made a colossal mistake, signing a deal that allowed Microsoft to produce software for Apple, leveraging parts of Apple's graphical interface!" Henry continued. "Trust me, this will go down as one of the worst contracts ever. Microsoft will capitalize on its newfound technology, launching a system that mimics Apple. They're digging their own graves!"
"Between a sunset and a sunrise, Mr. Brook, which would you choose?" Henry asked pointedly.
Ford looked pensive, fully grasping the predicament. Apple's glory had faded, and its shares were sliding relentlessly, much to Sequoia's apprehension. Yet even as Apple waned, it was still a titan compared to the fledgling Netscape browser.
Uncertain about the stock exchange, Ford explained he needed to consult with the board members before making a decision.
Henry smiled knowingly. He wasn't pressed for time; he understood that Apple's performance would continue to falter. Following the launch of Microsoft's Windows 2.0.3 operating system, which would adopt a graphical interface akin to Apple's, there was no doubt that Apple's plight would deepen.
Without the graphical interface patents, Microsoft's new system life wouldn't last long. Although Henry was keen on operating systems, securing a foothold in that realm appeared impossible due to existing patent hurdles—otherwise, Microsoft wouldn't be so formidable today!
As for how Ford Brook negotiated upon returning to Sequoia Capital, Henry had other priorities; he was focused on launching his new venture. He contemplated the name for the server production company. "Noah's Ark" came to mind, an admittedly somewhat clichéd name.
In light of apocalyptic imagery, Noah's Ark symbolized the future of humanity, and he felt that the company represented an impending future for the internet. Any internet-related business would inevitably need a server; massive data would both reside and function within servers. Its significance could not be overstated—it was nothing less than the Noah's Ark of the internet!
A few days later, Henry began the process of registering the company, establishing its headquarters in Silicon Valley. Given the surge of high-tech firms in the area, it was the ideal location to promote their new server products!