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Ann Winblad, Partner Hummer Winblad Venture Capital

by Peg Townsend

 

Ann Winblad walks through the door of the tiny San Francisco coffee house and within seconds is being eyed by three young men in button-down shirts and slacks.

Within minutes, they've managed to get Winblad's attention and make their pitch. 

A few minutes more and they're walking out the door with her business card, looking like guys who somehow found themselves in possession of a baseball signed by Babe Ruth.

That's because the petite woman in the brown leather jacket and khaki slacks is one of the most powerful women in the world of high-tech venture capital.

She got that way with a stake of only $500.

Raised in Farmington, a sleepy town of 2,500 people in eastern Minnesota, Winblad was the oldest of six kids.

Her dad was the high school basketball coach, her mom was a nurse, and their house was filled with that kind of energy that comes when six kids are born within eight years of each other.

Winblad was a smart kid, a girl who got all A's in high school and was named class valedictorian.  The kind of girl who wanted to be a biochemist when she grew up.

But says Winblad with a laugh, "I wasn't the nerdy girl."

She was also a cheerleader and dated the football captain.

It wasn't a combination most people expected.

It's the same way today.

At first it's hard to reconcile the 5-foot-2 woman with the huge blue eyes with the notion that she was named by Vanity Fair as one of the top 50 leaders in the New Establishment and picked by Upside Magazine as one of the 100 most influential people in the digital age.

But listen to her talk about her first business, her five-year relationship with Microsoft mogul Bill Gates and what she looks for in a startup company and the two sides begin to merge.

The cheerleader.

And the valedictorian.

Winblad didn't take a typical path in college.  She was one of 25 students in an experimental program at the College of St. Catherine and the College of St. Thomas in St. Paul, Minn.

Instead of taking the required Western Civilization class and English 101, Winblad could choose her own course of studies. So she picked math and business, falling in love with computer programming and the intricacies of the corporate world.

It was 1973 and the push was on for Affirmative Action so Winblad, who was often the only women in her business classes, had a host of recruiters waiting for her when she graduated.

One of them was a big corporation who said right up front it wanted a strong woman with an unassuming manner to run a manufacturing plant.

"That sounded like a lose-lose situation to me," says the 49-year-old Winblad, sipping from her latte.  "You were supposed to trick people into submission."

Another offer was from the FBI, who wanted her to track down tax evaders because she was smart and didn't look threatening.

But, that would have meant packing a 45-pound load of gun, holster and bullet-proof vest on occasion.

"I would have tipped over," the slender Winblad says with a laugh.

So Winblad picked a top-level programming job at the Federal Reserve Bank in Minneapolis.

The pay was good, she says, the programming staff seemed creative and the new building was beautiful.

It nearly sapped the life out of her.

She remembers noticing in those first few weeks how one of her cubicle mates would get up and leave his desk every day from 2 to 3 p.m.

Finally she asked him what he was doing.

He said he went home to watch "I Dream of Jeannie" and drink a beer.

"He'd been doing that every day for five years and nobody even noticed," Winblad says.

For everyone but Winblad, work had become a 9-to-5 job with no commitment to building something, or pride in what was being accomplished.

It wasn't the way Winblad wanted to live her life.

She had worked since she was 6 years old, picking strawberries, then becoming a babysitter and sewing Barbie doll clothes to sell.  In college, she even got a job as a cocktail waitress in one of those places where the women had to wear short shorts and platform heels.

But no matter what Winblad did, she was always moving forward.

This job seemed like one of those highway overpasses that ends in mid-air.

The final straw came when she noticed that since all the programmers worked the exact same hours from a shared computer mainframe, the system would slow to a crawl every day about 10:30 a.m. and production would drop.

So Winblad went to her supervisor, a perpetually rumpled man who could never get his shirt tucked in exactly right, and suggested that they set up flexible work schedule.

While her supervisor hemmed and hawed, she lied and told him that his boss, the department head, had already approved the plan.

"But I told him, 'he wants us to do this very quietly. He doesn't even want us to mention it to him again,'" Winblad says with a grin.

So the unsuspecting supervisor put Winblad's flex-time plan in motion and it showed such an increase in productivity that the department head later took full credit for it.  At the same meeting where he announced his flex-time success, the department head told Winblad that he wasn't going to honor a commitment to pay for the advanced degree coursework she was taking since women didn't need advanced degrees.

"I decided I had to get out of there," Winblad says simply.

She took three of the top programmers with her.

It was 1975, and there were no dot-com millionaires to emulate, no high-tech venture capital to seek out.

Two of the programmers were so unsure about this venture with the tireless young woman that they took sabbaticals instead of quitting, but Winblad didn't feel that way.

She figured since she had nothing, she had nothing to lose.

Winblad got a $500 stake from her brother to supplement her meager savings, incorporated the business, and rented an apartment where they would work.

The four programmers trademarked the name Open Systems, which later would come to be used to describe standards and systems architecture, and looked around.

"We decided to build a general accounting system," Winblad says, "so I took out my college accounting book, which I had bought used, and we began to build a program."

At night, they wrote their new accounting program. During the day, they built software for a large school system in order to pay their bills.

It worked.

Almost.

Because she qualified, Winblad applied for food stamps, bringing home grocery bags of food for the partners to share.

That first year, the company lost $85 and her partners who were on sabbatical nearly panicked.

"I said, 'hey, I could have rounded it up and we would have broken even.'" Winblad says.

"They stayed and we built a company."

Six years after it started, they sold the company for $15.5 million cash.

Winblad could have retired like two of her partners did, but that wasn't her style.

"I loved building systems and competing in the marketplace," Winblad says, as dot-commers begin to fill the cafe for their morning coffee.  "I loved beating people in your category.

"Besides, I was too young," she says.

Winblad had already begun dating Microsoft mogul Bill Gates, a merger of two tech minds that lasted for five years. They shared dreams and strategies and Winblad decided to move to California, thinking she would take a year off.  Instead, began doing consulting work for clients like Microsoft, IBM and Price Waterhouse.

It was a heady time.

The whole technology world was just beginning to hit its stride.  There was a sense of excitement among the cadre of young business people who were destined to shake up the world.

She wrote a book called "Object-Oriented Software." Then John Hummer approached her about starting a venture capital firm aimed at the high tech world.

"I said, 'I'm busy now, go away,'" Winblad remembers.

But the idea of moving from being a player in the high-tech world to being a coach began to appeal to Winblad, who had grown up listening to her dad's pre-game talks and seeing the joy in competition. She also knew that there were no other venture capital companies in 1989 that focused on high-tech startups.

"The only thing that concerned me was that there was no turning back.  You're either a coach or a player in this business," she says.

Winblad knew she was in the same position she was 13 years earlier: at the edge of a new way of doing business.

So she jumped feet-first into this new venture.

The only difference was, this time she had more than $1,000 in her bank account.

She and Hummer raised $35 million in the first 18 months of the company and began funding startups, using their business acumen to help raise a brood of successful companies. Their work made Hummer-Winblad synonymous with the rise of the new economy and the reason those three men so coveted Winblad's business card.

Sitting on the boards of directors of companies like the e-business helper Net Perceptions; the online music company Liquid Audio; and the No. 1 online wedding site The Knot, Winblad is besieged by high-tech entrepreneurs.

They send her flowers, chocolates and stuffed animals. One enterprising young man walked into the office, asked to use the restroom and left his business plan behind on the counter hoping one of the partners would find it. (They did.)

But stuffed animals are not what Winblad looks for in a company.  Instead, she looks for the very kinds of things that made her first software company a success: passion, customer need and stamina.

"I want people to tell me about their customers," Winblad says, checking her watch to make sure she stays on track for her tightly scheduled day.

"I can look under the hood (of a business) and tell you what's there, but I can't make customers buy things they don't need or want," she says.

So budding entrepreneurs need to prove that people need their services.

"They also have to have that ability to attract excellence," Winblad says.

One of the truths about business, is that it can't be done alone.  A business person has to have the ability not only to come up with a great product, but to be able to lead a good team, Winblad says.

"They have to be extremely smart and durable," Winblad says.  "They have to have the intellectual and physical stamina to build a company."

No matter what you read about dot-com millionaires, success doesn't come overnight and without a lot of hard work and passion for what they are doing.

Winblad knows the value of that.

At a point in her life where she could retire and live a jet-setting, Martha Stewart kind of life, Winblad chooses to keep working.

Every day she walks into the old brick building in San Francisco where her office is located and goes to work, investigating business plans, doing research, answering her emails.

"I think I got lucky in picking an industry when it was not even an industry," she says.  "I'm in the right place for the kind of skills I have."

It's not about the money, she says.

You can't measure success with Mercedes SUVs and rambling California-style houses.

"People who are doing what they want to do are being rewarded more than they could ever expect," Winblad says.

"Success is about being happy," she says.

And is Winblad happy?

Winblad takes a minute to think and then a smile spreads across her face

"Yeah," she says. "I'm happy.

"Sometimes, I have to pinch myself."

 

Peg Townsend is a writer for Central California Newspapers.

Copyright 2001, Techdivas, all rights reserved.