by Jean-Louis Gassée

BeOS and its creators kept jumping to more ice floes until the adventure ended with a 1999 IPO and a low low price sale to Palm after the 2000 burst of the Internet Bubble.

In last week’s episode, we saw Gil Amelio make a felicitous move of historic proportions. He leaves Be at the altar and, instead, brings Steve Jobs back to Apple. For his reward, Amelio is knocked off of his CEO throne.

Apple’s decision to go with NeXT and Jobs was doubly perilous for us. Not only would we not be the next MacOS, Jobs immediately walked third party Mac hardware makers to their graves. No more Mac clones for BeOS. With tepid BeBox sales and no future on the Mac, Valley VCs weren’t keen for another round of funding — and the 1995 round was running out.

Our little tribe needed a new ice floe.

With a fine sense of the retroactively obvious, we noticed the rich and wooly universe of Intel-powered devices that ran on variations of DOS, Windows, Linux, and Unix operating systems. In short order, we had a BeOS demo running on Intel-based hardware and took it on the road. One Intel research exec exclaimed he didn’t know a PC “could do this”, meaning multimedia performance that was impossible on Windows. Intel was to anchor our next funding round.

Another stroke of luck took place in 1997 when François Pinault, the founder of financial giant Artemis (and noted art collector), showed up at our Menlo Park office and inquired about investment opportunities in the Valley. I launched into a “learned” and, as it turned out, embarrassing exposé on the Valley’s reckless and unsophisticated mores, warning him about the pitfalls that would horrify French investors. Mr. Pinault politely interrupted my lecture to explain that he was acting on a tip from his more technically inclined son François-Henri…he was asking about investing in Be.

With a bit of fresh money, we set out to find buyers for BeOS licenses. Our idea was to get PC makers to offer BeOS as an alternative to the standard Windows OS in a dual-boot configuration. At startup, the PC would offer to launch Windows or BeOS. PC users would feel safe that Windows would always be there, and they would be exposed to the superior performance that excited Intel execs.

There was, however, a fly in the dual-boot lubricant. While the Windows license allowed PC makers to offer a dual-boot tool, it had to be Microsoft’s dual-boot launcher…which would only recognize Microsoft operating systems. We were stymied.

(Later, after Be’s assets — not the company itself — were sold to Palm, we sued Microsoft and reached a settlement in the $20M range. With dubious humor, I called it enough to put fresh tires on my imaginary wheelchair.)

Yet again, we needed a new ice floe. This time we jumped to the newly en vogue Internet Appliance concept. We presented BeOS as small and agile, yet powerful enough to build devices for dedicated Internet-centered applications. (Comdex, the now-defunct computer industry trade show, even had a pavilion dedicated to Internet appliances where I once saw Bill Gates checking the new interlopers.)

With the money running out (again) in the first quarter of 1999, Be CFO Wes Saia took me aside: Let’s take the company public on the strength of our Internet Appliance platform. But, I protested, we haven’t finished the platform, yet, and we don’t have much to show in terms of revenues and profit. It didn’t seem to matter. Saia had met with some bankers that he knew from his experience running previous IPOs, and they had agreed that Be was a strong candidate for a “concept” IPO, as opposed to one based on a more conventional business. (Of course, let’s recall that the stock market was white hot at the time, and bankers were hungry for any tech company they could take public.)

So, we prepared an IPO Road Show, complete with a demo Internet Appliance carefully tended by Ming Low, a Be engineer who also happened to be a dentist, a skill that came in handy as we took our fragile prototype to both US Coasts and Europe.

[Update: Incorrect recollection. I’m told the real dentist and prototype healer was a Be engineer called George Wong. My apologies to both individuals.]

It was during the roadshow that I learned, by force, to be brief. When our bankers couldn’t convince me to cut back my opening act, they simply moved me to the end of the show, after the Marketing VP, the CFO, and the demo. As each pitch was limited to 25 minutes or so — there were other companies in the queue behind us — I had no choice but to choose my few words carefully. The forced austerity became the root of Monday Notes such as Three Slides? You’re Nuts! OK. How About Seven?.)

With a few complications and a price lower than we had hoped, we nonetheless became a publicly traded company by the end of July, 1999 with the BEOS quote symbol.

At the same time, I became peripherally involved in the antitrust lawsuit against Microsoft. As a potential witness, I met with David Boies, the lead attorney for the government, and the DOJ’s Antitrust Division head, Joel Klein. The latter advised me to knock back a stiff scotch before weighing my decision to give testimony — he thought I was “dangerous”, meaning unpredictable. On our CFO’s advice, I decided to give our IPO the priority.

Right after we went public, I took our extended family (the flesh-and-blood sort) on a different sort of road show, up Interstate 5 to Vancouver, BC and back again. The drive got me thinking: Be isn’t going to make it. We hadn’t raised enough money in our IPO and I didn’t like what I saw in the Internet Appliance market.

Upon our return I told our Board of Directors we should sell the company right away. My plea fell on deaf ears, I was told we should use the IPO money to seed the market with prototypes and “do a secondary”, meaning sell more BEOS shares in the spring, a fairly common maneuver back then.

I had a choice to make. I could resign and sell my shares, or ride it out. I owned 10% of the company and, as a side-effect of the Microsoft antitrust situation, BEOS market capitalization briefly reached $1B. My sell out price was looking like serious money.

But what the actual price would have been can only be speculated upon. I decided to stay, I couldn’t abandon ship, even over a key disagreement with the Board. Seeing my lack of optimism, the Board wisely appointed Steve Sakoman, who had come back to help in the Intel and Internet Appliance efforts, as COO.

Then, in 2000, the Internet Bubble burst. Dozens of web-based companies folded, and Star companies such as Cisco lost more than 80% of their market price.

We were out of ice floes. In 2001, we sold Be’s assets to Palm for $11M, about 90% down from its peak value. After the sale, a clash of company cultures caused many Be employees to quickly leave Palm. They are now doing good technical work in companies such as Google, Facebook, and Apple.

I later traded my seat on the Board at 3Com to become Chairman of PalmSource (the software arm spun off from Palm). After making some changes, we managed to sell the company in 2005 to Japan’s Access Systems for about $324M.

While I was on the PalmSource Board, I learned that Manuel Petit, a former Be employee who had a gift for making low-level connections between hardware and software, had offered $800K for a BeOS source code drop, no support expected. Why? An unconfirmed story at the time held that BeOS was being considered for a tablet/smartphone project at Apple… He was rebuffed, Palm wanted $1M.

Today, a (possibly bootleg) version of BeOS circulates as Haiku OS.

[Update: Wity apologies, it now appears my "possibly bootleg" comment just above might have been misguided.]

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I’ll take a break from the 50 Years In Tech series and return to more current equations and events in upcoming Monday Notes.

— JLG@mondaynote.com