99% brains, 1% sweat for these tech bigwigs
By Liz Garone
Saturday September 11, 1999
The first thing Scott W. bought after selling his company was a new BMW. Then, a car for his mom. Next, he says, he might pay off her mortgage.
Add to the equation that Scott W. is only 21, a college dropout and his company resides on his computer's hard drive.
Welcome to the age of Internet millionaires -- 200,000 -- at last count -- who have made it here in Silicon Valley.
You can take a handful of separate success stories: that of Scott W., a 26-year-old CEO, a 34-year-old manager and a 58-year-old former secretary. Not that long ago, it would have been hard to imagine that they would have much in common financially. But in today's booming tech economy, they're all sitting on Internet gold mines.
Whatever the method, the result is the same: quick riches for people usually better known for credit card or student loan debt than outrageous fortunes.
College dropout: Scott W.
At age 6, Scott W. got his first computer. By 14, he was taking computers apart and putting them back to gether. At age 16, he built himself a Web site. Initially, his interest was purely selfish: to compare his computer's speed to that of other people surfing the Web.
The idea took off, and his hobby turned into a business, such a successful one that he dropped out of Texas A&M University last year to pursue it fulltime. "The site was taking away from my studies, and my studies were taking away from the site," Scott W. said. "I had to choose." It looks like he made the right choice.
This summer, New Yorkbased online service EarthWeb announced that it was buying two of his sites along with another site for $12.4 million in cash and stock.
Lucky for Scott W., he had turned 21 a month earlier; he could legally celebrate with a glass of champagne.
Scott W. said that before the sale he was taking in more money than he could have made had he finished school and worked his way up to a senior level engineer position at a large Silicon Valley company. No chump change there: Average salaries for Valley engineers topped $90,000 back in 1997.
Today, Scott W. is living the good life in a two-bedroom house in upscale Sausalito with a view of Richardson Bay, a big screen television and a hot tub. He has an easy 20-minute commute to EarthWeb's San Francisco office, where he serves as editor-in-chief.
He still hasn't gotten used to the $28 daily price tag for parking in San Francisco -- or the Bay Area's exorbitant cost of living. His rent is several times what he used to pay in Portland, Oregon, where he lived for a few months earlier this year.
Part of the deal with EarthWeb was that he would stay on. "It would be easy enough to take the money and run, but I want to stick with it," Scott W. said. "It's sort of my baby." He said that he never re ally thought much about the money while the business was growing -- and he doesn't like to think about it too much now. "I want to be happy with what I'm doing, and I am," Scott W. said. "It just so happens that what I do is profitable."
He spins gold: Dave Samuels
Dave Samuels still plays poker twice a month -- and still throws a raging party.
It hardly seems to have fazed the babyfaced 26-year-old former DJ that he's a millionaire -- 400 times over -- or that spinner.com, the Web site he started three years ago, is the No. 1 site on the Net for people to listen to music.
"Not a lot has changed," said Samuels, from his San Francisco headquarters in Potrero Hill's Audio Alley. "I still have the same group of friends, I'm still doing the same thing. I play poker every other week, and I lost a bunch of money last night. So, not a lot has changed." But things have changed.
Samuels no longer lives in the San Carlos house he used to rent with a bunch of frat buddies. He now has his own apartment in San Francisco's Noe Valley neighborhood and talks of buying a house despite the "crazy market."
He's no longer a mobile DJ. Instead, he is the CEO of spinner.com, which was recently bought -- along with Arizona-based NullSoft -- for $400 million in stock by Internet giant AOL.
"A weight has definitely been taken off my shoulders as an entrepreneur," said Samuels, who is clearly more comfortable talking about his company's success than his own personal wealth. "But also more resources have been given to me to allow everyone here to really kick some ass within the Internet music market."
Samuels is keenly aware that a lot of eyes are on him. "Being an entrepreneur and the CEO/ founder of a company, you have everyone looking up to you to steer the company in the correct direction," he said.
Still, he doesn't see himself retiring anytime soon. "Right now I can't imagine doing any thing cooler than dominating the Internet music market," he said. "Especially with AOL as a bigger brother, we have the ability to distribute music to millions and millions of people."
Don't call her secretary: D'Anne Schjerning
Some of the nouveau riche seem closer to puberty than maturity, relying more on timing than time to strike it rich. And, only a few appear to be radically adjusting their life styles to fit their bulging bank accounts.
But then there are those who vested decades of hard work before getting the payoff that now lets them take it easy.
D'Anne Schjerning spends her days painting pieces of glass on the patio of her $365, 000 townhouse and playing golf in the south San Jose hills where she lives. Her golf cart even sports a CD player.
"According to my family and friends, I have not changed in the least," said Schjerning, a 58-year-old secretary-turned-millionaire. "I take that as a compliment." What Schjerning doesn't take so favorably is the "s" word. "I hate the word 'secretary,'" she said. "I just hate it. It sounds like the person who answers the phones."
As Employee #2 at Netscape and executive assistant to Net scape founder Jim Clark, Schjerning did a lot more than just answer phones. She kept incessant callers and e-mailers off Clark's back. She did the laundry twice a week and stocked the refrigerator for the engineers with TV dinners and Cokes infinitum. Plus, she packed in all the appointment scheduling and other day-today work that goes along with being the assistant to the CEO of a start up on the cusp of be coming a major player.
She also played Mom to a number of the company's newer employees. "These engineers were just kids, and for a lot of them it was their first time away from home," Schjerning said. "I realized right away they weren't eating properly, and they weren't sleeping."
Aptly dubbed "Netscape Mom," her new title quickly found its way onto her business cards -- and she was proud of it. "Believe me, I earned my title," she said. "I earned it, I re ally did." "Earning it" meant clocking 14- to 16-hour days, then going home to the mobile home park where she lived next door to her parents, who were both sick and needed her help.
The hard work and long hours eventually paid off -- in ways beyond Schjerning's imagination -- when she hit the stock option jackpot.
Schjerning had worked with Clark at Silicon Graphics and decided to follow him to the new company he was founding; in those days, it was called Mosaic. The move didn't get her a raise -- but it did get her stock options, 10,000 of them, which she could buy at half a penny apiece.
"Stock options? I didn't even know what they were, but I said I'd do it," Schjerning remembered.
Even if she had understood the terms of the package, she couldn't have made a better de cision.
On August 8, 1995, the day Netscape went public, the stock shot from $28 to above $70 be fore it closed the day at $54.
Overnight, Schjerning was $1.08 million richer -- at least on paper.
That December, she started selling her shares. She even gave 2,000 of them to her sons.
When it was all over, Schjerning had $1.2 million. She retired in 1997.
"I had always figured that I would be struggling and having to work forever," she said. "I never expected to have this kind of life. I'm just very fortunate to have what I have."
In her genes: Lu Cordova
Feeling fortunate is common among Internet millionaires -- but feeling just plain lucky is not. "You don't get paid for doing nothing. You give up a lot, you basically suspend your life," said Lu Cordova, 44, a former manager at Ex cite@Home in Redwood City. "It's really, really hard work."
But for Cordova and others, long hours and hard work aren't really a problem. "Work is my hobby. I like working, I really do," said the CEO three times over, who comes from a large family of overachievers. Of 12 siblings, 11 have owned their own businesses. And the 12th is an astrophysicist. "It's in our genes," she said.
Cordova left Excite@Home earlier this year to head up a San Francisco start up, called tixtogo.com, but not before cleaning up at the bank with three and a half years worth of stock options.
While Cordova wouldn't disclose the exact amount of money, she would say "millions for each year she worked." She could have been greedy and waited since she still had six months to go before fully vesting. She left behind mil lions, which could have gone to retirement.
But early retirement doesn't seem a valid option for a number of Internet millionaires, Cordova included. A lot of that, she said, can be at tributed to the fact that a good number of people making it big in Silicon Valley aren't doing it for the money -- but for the de sire to build something.
"They think they're successful because they brought broadband to the Internet," she said. "There's the Hollywood stereotype of young rich kids who go crazy. Here, they're not driven to be rich and famous. They're driven to being part of this big wonderful mysterious beyond."
Of course, there are those who have dropped out and slacked off, especially at places like Virginia-based AOL, where last year, thousands of early employees became millionaires. Quite a few got up and left.
"Effective today at midnight, I have resigned from America Online Inc. in order to spend money, race motorcycles and drink scotch. I am, at 27.85, retired. It's the American Dream ..." wrote one such dropout, Hal McCabe, in his goodbye e-mail in February, according to an article in the Washington Post.
But millionaire slackers aren't that easy to find, at least not in Silicon Valley. Maybe they've already left town.
For Cordova, the lure of a start-up environment with lots of potential for growth was too strong to take any thoughts of retirement seriously.
When Cordova arrived at tix togo.com, there was only $12,000 in the bank and six employees. Six months later, the company has 25 employees and is considered the leader in online ticketing.
Cordova is proud of her achievements, both at tixtogo.com and at Excite@Home. She also said the extent of her earnings still hasn't fully sunk in. "I still can't throw away plastic utensils," she said. "I just can't."
@Home: Gabriel Martinez
At 34, Gabriel Martinez is the director of engineering for Excite@Home's @Work division.
Like Cordova, he has bene fited from @Home stock op tions. Now, he is trying to manage his new wealth wisely. The first thing Martinez did was buy a home in Redwood Shores, making for an easy fiveminute commute.
Then, he started flying planes, lots of them. He already had a small plane pilot license -- but suddenly he also had the money to rent them on the slightest urge. An afternoon trip with friends down to Monterey for ice cream? Sure. Why not?
Someday, he hopes to buy his own plane. But, for now, he rents them at San Carlos and Palo Alto airports.
Martinez's newfound wealth isn't all about selfish pursuits. He volunteers his saxophone playing to local schools where music programs have been sharply cut.
When he arrived at one classroom, he didn't just stop at playing music; he brought a Santa Claus-like bag full of cool shades for everyone in the class, so they could really get into experiencing the music.
The money, said Martinez, "frees you up to give something back."
One who waits: Eric Brown
Silicon Valley's 200,000 millionaires are not the only ones with dollar signs on their minds. There are countless others who are playing the waiting game, hoping their companies will be the next big thing, so that they, too, can hit paydirt.
For most, like Eric Brown, becoming a millionaire is the goal -- but far from guaranteed.
Late last year, Brown left a comfortable position with one of the country's top five ac counting firms to join San Francisco start up Tpuppy.com as the company's controller.
The move gave him lots of stock options. "Definitely, the options were the biggest draw," said Brown, 24. If all goes well, his options will be worth $1 million-plus in January of 2002.
And, if all doesn't go according to plan? "If it doesn't work out, I can always go back to my old job," Brown said.