The Strangest Meeting Ever

史上最奇怪的会面

New technology is not good or evil in and of itself. It’s all about how people choose to use it. —DAVID WONG

新技术本身并非善恶之分。 关键在于人们如何选择使用它。 ー黄大伟

I should probably tell the story of how I intersected with Facebook in the first place. In the middle of 2006, Facebook’s chief privacy officer, Chris Kelly, sent me an email stating that his boss was facing an existential crisis and required advice from an unbiased person. Would I be willing to meet with Mark Zuckerberg?

我或许应该讲讲我当初是如何与 Facebook 交往的。 在2006年中期，Facebook 的首席隐私官 Chris Kelly 给我发了一封电子邮件，说他的老板正面临存在危机，需要一个不带偏见的人提供建议。 我愿意和马克 · 扎克伯格见面吗？

Facebook was two years old, Zuck was twenty-two, and I was fifty. The platform was limited to college students, graduates with an alumni email address, and high school students. News Feed, the heart of Facebook’s user experience, was not yet available. The company had only nine million dollars in revenue in the prior year. But Facebook had huge potential—that was already obvious—and I leapt at the opportunity to meet its founder.

那时 Facebook 才两岁，扎克22岁，我五十岁。 该平台仅限于大学生、拥有校友电子邮件地址的毕业生和高中生。 作为 Facebook 用户体验的核心，News Feed 目前还不可用。 该公司去年的收入只有900万美元。 但 Facebook 拥有巨大的潜力ーー这一点已经很明显ーー我抓住机会见到了它的创始人。

Zuck showed up at my Elevation Partners office on Sand Hill Road in Menlo Park, California, dressed casually, with a messenger bag over his shoulder. U2 singer Bono and I had formed Elevation in 2004, along with former Apple CFO Fred Anderson, former Electronic Arts president John Riccitiello, and two career investors, Bret Pearlman and Marc Bodnick. We had configured one of our conference rooms as a living room, complete with a large arcade video game system, and that is where Zuck and I met. We closed the door and sat down on comfy chairs about three feet apart. No one else was in the room.

扎克出现在我位于门洛帕克沙丘路的 Elevation Partners 办公室，衣着随意，肩上挎着一个斜挎包。 U2歌手波诺和我在2004年成立了 Elevation，同时成立的还有苹果前首席财务官弗雷德 · 安德森、电子艺界前总裁约翰 · 里奇泰洛以及两位职业投资者布雷特 · 皮尔曼和马克 · 博德尼克。 我们把我们的一个会议室配置成一个起居室，里面有一个大型的街机视频游戏系统，这就是我和扎克见面的地方。 我们关上门，在大约三英尺远的舒适的椅子上坐下。 房间里没有其他人。

Since this was our first meeting, I wanted to say something before Zuck told me about the existential crisis.

因为这是我们第一次见面，我想在扎克告诉我关于存在危机的事情之前说几句话。

“If it has not already happened, Mark, either Microsoft or Yahoo is going to offer one billion dollars for Facebook. Your parents, your board of directors, your management team, and your employees are going to tell you to take the offer. They will tell you that with your share of the proceeds—six hundred and fifty million dollars—you will be able to change the world. Your lead venture investor will promise to back your next company so that you can do it again.

"如果这种情况还没有发生，马克，不管是微软还是雅虎，都将出价10亿美元收购 Facebook。 你的父母，你的董事会，你的管理团队，你的员工都会告诉你接受这份工作。 他们会告诉你，用你的那份收益ーー6.5亿美元ーー你将能够改变世界。 你的主要风险投资者将承诺支持你的下一家公司，这样你就可以再次投资。

“It’s your company, but I don’t think you should sell. A big company will screw up Facebook. I believe you are building the most important company since Google and that before long you will be bigger than Google is today. You have two huge advantages over previous social media platforms: you insist on real identity and give consumers control over their privacy settings.

"这是你的公司，但我认为你不应该卖掉它。 一家大公司会搞砸 Facebook。 我相信你正在建立自谷歌以来最重要的公司，不久你就会比今天的谷歌更大。 与以前的社交媒体平台相比，你有两个巨大的优势: 你坚持真实身份，并让消费者控制他们的隐私设置。

“In the long run, I believe Facebook will be far more valuable to parents and grandparents than to college students and recent grads. People who don’t have much time will love Facebook, especially when families have the opportunity to share photos of kids and grandkids.

"从长远来看，我相信 Facebook 对父母和祖父母的价值远远超过对大学生和应届毕业生的价值。 没有太多时间的人会喜欢 Facebook，尤其是当家人有机会分享孩子和孙子的照片时。

“Your board of directors, management team, and employees signed up for your vision. If you still believe in your vision, you need to keep Facebook independent. Everyone will eventually be glad you did.”

"你的董事会、管理团队和员工都为你的愿景而报名。 如果你仍然相信你的愿景，你需要保持 Facebook 的独立性。 每个人最终都会为你这么做而感到高兴。"

This little speech took about two minutes to deliver. What followed was the longest silence I have ever endured in a one-on-one meeting. It probably lasted four or five minutes, but it seemed like forever. Zuck was lost in thought, pantomiming a range of Thinker poses. I have never seen anything like it before or since. It was painful. I felt my fingers involuntarily digging into the upholstered arms of my chair, knuckles white, tension rising to a boiling point. At the three-minute mark, I was ready to scream. Zuck paid me no mind. I imagined thought bubbles over his head, with reams of text rolling past. How long would he go on like this? He was obviously trying to decide if he could trust me. How long would it take? How long could I sit there?

这个简短的演讲大约花了两分钟时间。 随之而来的是我在一对一会谈中忍受的最长时间的沉默。 它可能持续了四五分钟，但似乎是永远。 扎克陷入沉思，摆出各种各样的思考者姿势。 我从来没有见过这样的东西。 这很痛苦。 我感到自己的手指不由自主地碰到了椅子的扶手上，指关节发白，紧张到了沸点。 在三分钟的时候，我准备尖叫。 扎克毫不在意。 我想象着他脑海中浮现出一些泡沫，一大堆文字滚滚而过。 他会这样持续多久？ 他显然在考虑是否可以信任我。 需要多长时间？ 我能在那儿坐多久？

Eventually, Zuck relaxed and looked at me. He said, “You won’t believe this.”

最终，扎克放松下来，看着我。 他说:"你不会相信的。"

I replied, “Try me.”

我回答说:"试试看。"

“One of the two companies you mentioned wants to buy Facebook for one billion dollars. Pretty much everyone has reacted the way you predicted. They think I should take the deal. How did you know?”

"你提到的两家公司中有一家想以10亿美元收购 Facebook。 几乎每个人的反应都和你预料的一样。 他们认为我应该接受这笔交易。 你怎么知道的?"

“I didn’t know. But after twenty-four years, I know how Silicon Valley works. I know your lead venture investor. I know Yahoo and Microsoft. This is how things go around here.”

"我不知道。 但是24年过去了，我知道硅谷是怎么运作的。 我认识你们的风险投资主管。 我了解雅虎和微软。 这就是这里的规矩。"

I continued, “Do you want to sell the company?”

我接着说,"你想卖掉这家公司吗?"

He replied, “I don’t want to disappoint everyone.”

他回答说:"我不想让大家失望。"

“I understand, but that is not the issue. Everyone signed up to follow your vision for Facebook. If you believe in your vision, you need to keep Facebook independent. Yahoo and Microsoft will wreck it. They won’t mean to, but that is what will happen. What do you want to do?”

"我理解，但这不是问题所在。 每个人都注册了 Facebook，追随你的愿景。 如果你相信你的愿景，你需要保持 Facebook 的独立性。 雅虎和微软将会摧毁它。 他们不是故意的，但这就是将要发生的事情。 你想做什么?"

“I want to stay independent.”

I asked Zuck to explain Facebook’s shareholder voting rules. It turned out he had a “golden vote,” which meant that the company would always do whatever he decided. It took only a couple of minutes to figure that out. The entire meeting took no more than half an hour.

Zuck left my office and soon thereafter told Yahoo that Facebook was not for sale. There would be other offers for Facebook, including a second offer from Yahoo, and he would turn them down, too.

So began a mentorship that lasted three years. In a success story with at least a thousand fathers, I played a tiny role, but I contributed on two occasions that mattered to Facebook’s early success: the Yahoo deal and the hiring of Sheryl. Zuck had other mentors, but he called on me when he thought I could help, which happened often enough that for a few years I was a regular visitor to Facebook’s headquarters. Ours was a purely business relationship. Zuck was so amazingly talented at such a young age, and he leveraged me effectively. It began when Facebook was a little startup with big dreams and boundless energy. Zuck had an idealistic vision of connecting people and bringing them together. The vision inspired me, but the magic was Zuck himself. Obviously brilliant, Zuck possessed a range of characteristics that distinguished him from the typical Silicon Valley entrepreneur: a desire to learn, a willingness to listen, and, above all, a quiet confidence. Many tech founders swagger through life, but the best ones—including the founders of Google and Amazon—are reserved, thoughtful, serious. To me, Facebook seemed like the Next Big Thing that would make the world better through technology. I could see a clear path to one hundred million users, which would have been a giant success. It never occurred to me that success would lead to anything but happiness.

The only skin in the game for me at that time was emotional. I had been a Silicon Valley insider for more than twenty years. My fingerprints were on dozens of great companies, and I hoped that one day Facebook would be another. For me, it was a no-brainer. I did not realize then that the technology of Silicon Valley had evolved into uncharted territory, that I should no longer take for granted that it would always make the world a better place. I am pretty certain that Zuck was in the same boat; I had no doubt then of Zuck’s idealism.

Silicon Valley had had its share of bad people, but the limits of the technology itself had generally prevented widespread damage. Facebook came along at a time when it was possible for the first time to create tech businesses so influential that no country would be immune to their influence. No one I knew ever considered that success could have a downside. From its earliest days, Facebook was a company of people with good intentions. In the years I knew them best, the Facebook team focused on attracting the largest possible audience, not on monetization. Persuasive technology and manipulation never came up. It was all babies and puppies and sharing with friends.

I am not certain when Facebook first applied persuasive technology to its design, but I can imagine that the decision was not controversial. Advertisers and media companies had been using similar techniques for decades. Despite complaints about television from educators and psychologists, few people objected strenuously to the persuasive techniques employed by networks and advertisers. Policy makers and the public viewed them as legitimate business tools. On PCs, those tools were no more harmful than on television. Then came smartphones, which changed everything. User count and usage exploded, as did the impact of persuasive technologies, enabling widespread addiction. That is when Facebook ran afoul of the law of unintended consequences. Zuck and his team did not anticipate that the design choices that made Facebook so compelling for users would also enable a wide range of undesirable behaviors. When those behaviors became obvious after the 2016 presidential election, Facebook first denied their existence, then responsibility for them. Perhaps it was a reflexive corporate reaction. In any case, Zuck, Sheryl, the team at Facebook, and the board of directors missed an opportunity to build a new trust with users and policy makers. Those of us who had advised Zuck and profited from Facebook’s success also bear some responsibility for what later transpired. We suffered from a failure of imagination. The notion that massive success by a tech startup could undermine society and democracy did not occur to me or, so far as I know, to anyone in our community. Now the whole world is paying for it.

In the second year of our relationship, Zuck gave Elevation an opportunity to invest. I pitched the idea to my partners, emphasizing my hope that Facebook would become a company in Google’s class. The challenge was that Zuck’s offer would have us invest in Facebook indirectly, through a complicated, virtual security. Three of our partners were uncomfortable with the structure of the investment for Elevation, but they encouraged the rest of us to make personal investments. So Bono, Marc Bodnick, and I invested. Two years later, an opportunity arose for Elevation to buy stock in Facebook, and my partners jumped on it.

—

WHEN CHRIS KELLY CONTACTED ME, he knew me only by reputation. I had been investing in technology since the summer of 1982. Let me share a little bit of my own history for context, to explain where my mind was when I first entered Zuck’s orbit.

I grew up in Albany, New York, the second youngest in a large and loving family. My parents had six children of their own and adopted three of my first cousins after their parents had a health crisis. One of my sisters died suddenly at two and a half while I was in the womb, an event that had a profound impact on my mother. At age two, I developed a very serious digestive disorder, and doctors told my parents I could not eat grains of any kind. I eventually grew out of it, but until I was ten, I could not eat a cookie, cake, or piece of bread without a terrible reaction. It required self-discipline, which turned out to be great preparation for the life I chose.

My parents were very active in politics and civil rights. The people they taught me to look up to were Franklin Roosevelt and Jackie Robinson. They put me to work on my first political campaign at age four, handing out leaflets for JFK. My father was the president of the Urban League in our home town, which was a big deal in the mid-sixties, when President Johnson pushed the Civil Rights Act and Voting Rights Act through Congress. My mother took me to a civil rights meeting around the time I turned nine so that I could meet my hero, Jackie Robinson.

The year that I turned ten, my parents sent me to summer camp. During the final week, I had a terrible fall during a scavenger hunt. The camp people put me in the infirmary, but I was unable to keep down any food or water for three days, after which I had a raging fever. They took me to a nearby community hospital, where a former military surgeon performed an emergency operation that saved my life. My intestine had been totally blocked by a blood clot. It took six months to recover, costing me half of fourth grade. This turned out to have a profound impact on me. Surviving a near-death experience gave me courage. The recovery reinforced my ability to be happy outside the mainstream. Both characteristics proved valuable in the investment business.

My father worked incredibly hard to support our large family, and he did so well. We lived an upper-middle-class life, but my parents had to watch every penny. My older siblings went off to college when I was in elementary school, so finances were tight some of those years. Being the second youngest in a huge family, I was most comfortable observing the big kids. Health issues reinforced my quiet, observant nature. My mother used me as her personal Find My iPhone whenever she mislaid her glasses, keys, or anything. For some reason, I always knew where everything was.

I was not an ambitious child. Team sports did not play much of a role in my life. It was the sixties, so I immersed myself in the anti-war and civil rights movements from about age twelve. I took piano lessons and sang in a church choir, but my passion for music did not begin until I took up the guitar in my late teens. My parents encouraged me but never pushed. They were role models who prioritized education and good citizenship, but they did not interfere. They expected my siblings and me to make good choices. Through my teenage years, I approached everything but politics with caution, which could easily be confused with reluctance. If you had met me then, you might well have concluded that I would never get around to doing anything.

My high school years were challenging in a different way. I was a good student, but not a great one. I liked school, but my interests were totally different from my classmates’. Instead of sports, I devoted my free time to politics. The Vietnam War remained the biggest issue in the country, and one of my older brothers had already been drafted into the army. It seemed possible that I would reach draft age before the war ended. As I saw it, the rational thing to do was to work to end the war. I volunteered for the McGovern for President campaign in October 1971 and was in the campaign office in either New Hampshire or upstate New York nearly every day from October 1971, the beginning of my tenth-grade year, through the general election thirteen months later. That was the period when I fell in love with the hippie music of San Francisco: the Grateful Dead, Jefferson Airplane, Quicksilver Messenger Service, Big Brother and the Holding Company, and Santana.

I did not like my school, so once the McGovern campaign ended, I applied to School Year Abroad in Rennes, France, for my senior year. It was an amazing experience. Not only did I become fluent in French, I went to school with a group of people who were more like me than any set of classmates before them. The experience transformed me. I applied to Yale University and, to my astonishment, got in.

After my freshman year at Yale, I was awarded an internship with my local congressman, who offered me a permanent job as his legislative assistant a few weeks later. The promotion came with an increase in pay and all the benefits of a full-time job. I said no—I thought the congressman was crazy to promote me at nineteen—but I really liked him and returned for two more summers.

A year later, in the summer of 1976, I took a year off to go to San Francisco with my girlfriend. In my dreams, I was going to the city of the Summer of Love. By the time I got there, though, it was the city of Dirty Harry, more noir than flower power. Almost immediately, my father was diagnosed with inoperable prostate cancer. Trained as a lawyer, my father had started a brokerage firm that grew to a dozen offices. It was an undersized company in an industry that was undergoing massive change. He died in the fall of 1977, at a particularly difficult time for his business, leaving my mother with a house and little else. There was no money for me to return to college. I was on my own, with no college degree. I had my guitar, though, and practiced for many hours every day.

When I first arrived in San Francisco, I had four hundred dollars in my pocket. My dream of being a reporter in the mold of Woodward and Bernstein lasted for about half a day. Three phone calls were all it took to discover that there were no reporter jobs available for a college dropout like me, but every paper needed people in advertising sales. I was way too introverted for traditional sales, but that did not stop me. I discovered a biweekly French-language newspaper where I would be the entire advertising department, which meant not only selling ads but also collecting receivables from advertisers. When you only get paid based on what you collect, you learn to judge the people you sell to. If the ads didn’t work, they wouldn’t pay. I discovered that by focusing on multi-issue advertising commitments from big accounts, such as car dealerships, airlines, and the phone company, I could leverage my time and earn a lot more money per issue. I had no social life, but I started to build savings. In the two and a half years I was in San Francisco, I earned enough money to go back to Yale, which cost no more than 10 percent of what it costs today.

Every weekday morning in San Francisco I watched a locally produced stock market show hosted by Stuart Varney, who went on to a long career in broadcasting at CNN and Fox Business Network. After watching the show for six months and reading Barron’s and stacks of annual reports, I finally summoned the courage to buy one hundred shares of Beech Aircraft. It went up 30 percent in the first week. I was hooked. I discovered that investing was a game, like Monopoly, but with real money. The battle of wits appealed to me. I never imagined then that investing would be my career. In the fall of 1978, I reapplied to Yale. They accepted me again, just weeks before two heartbreaking events chased me from San Francisco: the mass suicide of hundreds of San Franciscans at Jonestown and the murder of San Francisco’s mayor and supervisor Harvey Milk by another member of the city’s board of supervisors.

Celebrating my first Christmas at home since 1975, I received a gift that would change my life. My older brother George, ten years my senior, gave me a Texas Instruments Speak & Spell. Introduced just months earlier, the Speak & Spell combined a keyboard, a one-line alphanumeric display, a voice processor, and some memory to teach elementary school children to pronounce and spell words. But to my brother, it was the future of computing. “This means that in a few years, it will be possible to create a handheld device that holds all your personal information,” he said.

He told me this in 1978. The Apple II had been introduced only a year earlier. The IBM PC was nearly three years in the future. The PalmPilot was more than eighteen years away. But my brother saw the future, and I took it to heart. I went back to college as a history major but was determined to take enough electrical engineering courses that I could design the first personal organizer. I soon discovered that electrical engineering requires calculus, and I had never taken calculus. I persuaded the professor to let me take the entry-level course anyway. He said if I did everything right except the math, he would give me a B (“for bravery”). I accepted. He tutored me every week. I took a second, easier engineering survey course, in which I learned concepts related to acoustics and mechanical engineering. I got catalogues and manuals and tried to design an oversized proof of concept. I could not make it work.

A real highlight of my second swing through Yale was playing in a band called Guff. Three guys in my dorm had started the band, but they needed a guitar player. Guff wrote its own songs and occupied a musical space somewhere near the intersection of the Grateful Dead, Frank Zappa, and punk rock. We played a ton of gigs, but college ended before the band was sufficiently established to justify making a career of it.

The band got paid a little money, but I needed to earn tuition-scale money. Selling ads paid far better than most student jobs, so I persuaded the Yale Law School Film Society to let me create a magazine-style program for their film series. I created a program for both semesters of senior year and earned almost enough money to pay for a year of graduate school.

But before that, in the fall of my senior year, I enrolled in Introduction to Music Theory, a brutal two-semester course for music majors. I was convinced that a basic knowledge of music theory would enable me to write better songs for my band. They randomly assigned me to one of a dozen sections, each with fifteen students, all taught by graduate students. The first class session was the best hour of classroom time I had ever experienced, so I told my roommate to switch from his section to mine. Apparently many others did the same thing, as forty people showed up the second day. That class was my favorite at Yale. The grad student who taught the class, Ann Kosakowski, did not teach the second semester, but early in the new semester, I ran into her as she exited the gymnasium, across the street from my dorm. She was disappointed because she had narrowly lost a squash match in the fifth game to the chair of the music department, so I volunteered to play her the next day. We played squash three days in a row, and I did not win a single point. Not one. But it didn’t matter. I had never played squash and did not care about the score. Ann was amazing. I wanted to get to know her. I invited her on a date to see the Jerry Garcia Band right after Valentine’s Day. A PhD candidate in music theory, Ann asked, “What instrument does Mr. Garcia play?” thinking perhaps it might be the cello. Ann and I are about to celebrate the thirty-ninth anniversary of that first date.

Ann and I graduated together, she a very young PhD, me an old undergraduate. She received a coveted tenure-track position at Swarthmore College, outside of Philadelphia. I could not find a job in Philadelphia, so I enrolled at the Tuck School of Business at Dartmouth, in Hanover, New Hampshire. So began a twenty-one-year interstate commute.

My first job after business school was at T. Rowe Price, in Baltimore, Maryland. It was a lot closer to Philadelphia than Hanover, but still too far to commute every day. That’s when I got hit by two game-changing pieces of good luck: my start date and my coverage group. My career began on the first day of the bull market of 1982, and they asked me to analyze technology stocks. In those days, there were no tech-only funds. T. Rowe Price was the leader in the emerging growth category of mutual funds, which meant they focused on technology more than anyone. I might not be able to make the first personal organizer, I reasoned, but I would be able to invest in it when it came along.

In investing, they say that timing is everything. By assigning me to cover tech on the first day of an epic bull market, T. Rowe Price basically put me in a position where I had a tailwind for my entire career. I can’t be certain that every good thing in my career resulted from that starting condition, but I can’t rule it out either. It was a bull market, so most stocks were going up. In the early days, I just had to produce reports that gave the portfolio managers confidence in my judgment. I did not have a standard pedigree for an analyst, so I decided to see if I could adapt the job to leverage my strengths.

I became an analyst by training, a nerd who gets paid to understand the technology industry. When my career started, most analysts focused primarily on financial statements, but I changed the formula. I have been successful due to an ability to understand products, financial statements, and trends, as well as to judge people. I think of it as real-time anthropology, the study of how humans and technology evolve and interact. I spend most of my time trying to understand the present so I can imagine what might happen in the future. From any position on the chessboard, there are only a limited number of moves. If you understand that in advance and study the possibilities, you will be better prepared to make good choices each time something happens. Despite what people tell you, the technology world does not actually change that much. It follows relatively predictable patterns. Major waves of technology last at least a decade, so the important thing is to recognize when an old cycle is ending and when a new one is starting. As my partner John Powell likes to say, sometimes you can see which body is tied to the railroad tracks before you can see who is driving the train.

The personal computer business started to take off in 1985, and I noticed two things: everyone was my age, and they convened at least monthly in a different city for a conference or trade show. I persuaded my boss to let me join the caravan. Almost immediately I had a stroke of good luck. I was at a conference in Florida when I noticed two guys unloading guitars and amps from the back of a Ford Taurus. Since all guests at the hotel were part of the conference, I asked if there was a jam session I could join. There was. It turns out that the leaders of the PC industry didn’t go out to bars. They rented instruments and played music. When I got to my first jam session, I discovered I had an indispensable skill. Thanks to many years of gigs in bands and bars, I knew a couple hundred songs from beginning to end. No one else knew more than a handful. This really mattered because the other players included the CEO of a major software company, the head of R&D from Apple, and several other industry big shots. Microsoft cofounder Paul Allen played with us from time to time, but only on songs written by Jimi Hendrix. He could shred. Suddenly, I was part of the industry’s social fabric. It is hard to imagine this happening in any other industry, but I was carving my own path.

My next key innovation related to earnings models. Traditional analysts used spreadsheets to forecast earnings, but spreadsheets tend to smooth everything. In tech, where success is binary, hot products always beat the forecast, and products that are not hot always fall short. I didn’t need to worry about earnings models. I just needed to figure out which products were going to be hot. Forecasting products was not easy, but I did not need to be perfect. As with the two guys being chased by a bear, I only needed to do it better than the other guy.

I got my first chance to manage a portfolio in late 1985. I was asked to run the technology sector of one of the firm’s flagship funds; tech represented about 40 percent of the fund. It was the largest tech portfolio in the country at the time, so it was a big promotion and an amazing opportunity. I had been watching portfolio managers for three years, but that did not really prepare me. Portfolio management is a game played with real money. Everyone makes mistakes. What differentiates great portfolio managers is their ability to recognize mistakes early and correct them. Portfolio managers learn by trial and error, with lots of errors. The key is to have more money invested in your good ideas than your bad ones.

T. Rowe launched a pure-play Science & Technology Fund, managed by two of my peers, on September 30, 1987. Nineteen days later, the stock market crashed. Every mutual fund got crushed, and Science & Tech was down 31 percent after only a month in business. While the number was terrible, it was actually better than competitors because the portfolio managers had invested only half their capital when the market collapsed. In the middle of 1988, with the viability of the fund in doubt, the firm reassigned the two managers and asked me to take over. I agreed to do so on one condition: I would run the fund my way. I told my bosses that I intended to be aggressive.

Another piece of amazing luck hit me when T. Rowe Price decided to create a growth-stage venture fund. I was already paying attention to private companies, because in those days, the competition in tech came from startups, not established companies. Over the next few years, I led three key growth-stage venture investments: Electronic Arts, Sybase, and Radius. The lead venture investor in all three companies was Kleiner Perkins Caufield & Byers, one of the leading venture capital firms in Silicon Valley. All three went public relatively quickly, making me popular both at T. Rowe Price and Kleiner Perkins. My primary contact at Kleiner Perkins was a young venture capitalist named John Doerr, whose biggest successes to that point had been Sun Microsystems, Compaq Computer, and Lotus Development. Later, John would be the lead investor in Netscape, Amazon, and Google.

My strategy with the Science & Technology Fund was to focus entirely on emerging companies in the personal computer, semiconductor, and database software industries. I ignored all the established companies, a decision that gave the fund a gigantic advantage. From its launch through the middle of 1991, a period that included the 1987 crash and a second mini-crash in the summer of 1990, the fund achieved a 17 percent per annum return, against 9 percent for the S&P 500 and 6 percent for the technology index. That was when I left T. Rowe Price with John Powell to launch Integral Capital Partners, the first institutional fund to combine public market investments with growth-stage venture capital. We created the fund in partnership with Kleiner Perkins—with John Doerr as our venture capitalist—and Morgan Stanley. Our investors were the people who know us best, the founders and executives of the leading tech companies of that era.

Integral had a charmed run. Being inside the offices of Kleiner Perkins during the nineties meant we were at ground zero for the internet revolution. I was there the day that Marc Andreessen made his presentation for the company that became Netscape, when Jeff Bezos did the same for Amazon, and when Larry Page and Sergey Brin pitched Google. I did not imagine then how big the internet would become, but it did not take long to grasp its transformational nature. The internet would democratize access to information, with benefits to all. Idealism ruled. In 1997, Martha Stewart came in with her home-decorating business, which, thanks to an investment by Kleiner Perkins, soon went public as an internet stock, which seemed insane to me. I was convinced that a mania had begun for dot-coms, embodied in the Pets.com sock puppet and the slapping of a little “e” on the front of a company’s name or a “.com” at the end. I knew that when the bubble burst, there would be a crash that would kill Integral if we did not do something radical.

I took my concerns to our other partner, Morgan Stanley, and they gave me some money to figure out the Next Big Thing in tech investing, a fund that could survive a bear market. It took two years, but Integral launched Silver Lake Partners, the first private equity fund focused on technology. Our investors shared our concerns and committed one billion dollars to the new fund.

Silver Lake planned to invest in mature technology companies. Once a tech company matured in those days, it became vulnerable to competition from startups. Mature companies tend to focus on the needs of their existing customers, which often blinds them to new business opportunities or new technologies. In addition, as growth slows, so too does the opportunity for employees to benefit from stock options, which startups exploit to recruit the best and brightest from established companies. My vision for Silver Lake was to reenergize mature companies by recapitalizing them to enable investment in new opportunities, while also replicating the stock compensation opportunities of a startup. The first Silver Lake fund had extraordinary results, thanks to three investments: Seagate Technology, Datek, and Gartner Group.

During the Silver Lake years, I got a call from the business manager of the Grateful Dead, asking for help. The band’s leader, Jerry Garcia, had died a few years before, leaving the band with no tour to support a staff of roughly sixty people. Luckily, one of the band’s roadies had created a website and sold merchandise directly to fans. The site had become a huge success, and by the time I showed up, it was generating almost as much profit as the band had made in its touring days. Unfortunately, the technology was out of date, but there was an opportunity to upgrade the site, federate it to other bands, and prosper as never before. One of the bands that showed an interest was U2. They found me through a friend of Bono’s at the Department of the Treasury, a woman named Sheryl Sandberg. I met Bono and the Edge at Morgan Stanley’s offices in Los Angeles on the morning after the band had won a Grammy for the song “Beautiful Day.” I could not have named a U2 song, but I was blown away by the intelligence and business sophistication of the two Irishmen. They invited me to Dublin to meet their management. I made two trips during the spring of 2001.

On my way home from that second trip, I suffered a stroke. I didn’t realize it at the time, and I tried to soldier on. Shortly thereafter, after some more disturbing symptoms, I found myself at the Mayo Clinic, where I learned that I had in fact suffered two ischemic strokes, in addition to something called a transient ischemic attack in my brain stem. It was a miracle I had survived the strokes and suffered no permanent impairment.

The diagnosis came as a huge shock. I had a reasonably good diet, a vigorous exercise regime, and a good metabolism, yet I had had two strokes. It turned out that I had a birth defect in my heart, a “patent foramen ovale,” basically the mother of all heart murmurs. I had two choices: I could take large doses of blood thinner and live a quiet life, or I could have open-heart surgery and eliminate the risk forever. I chose surgery.

I had successful surgery in early July 2001, but my recovery was very slow. It took me nearly a year to recover fully. During that time, Apple shipped the first iPod. I thought it was a sign of good things to come and reached out to Steve Jobs to see if he would be interested in recapitalizing Apple. At the time, Apple’s share price was about twelve dollars per share, which, thanks to stock splits, is equivalent to a bit more than one dollar per share today. The company had more than twelve dollars in cash per share, which meant investors were attributing zero value to Apple’s business. Most of the management options had been issued at forty dollars per share, so they were effectively worthless. If Silver Lake did a recapitalization, we could reset the options and align interests between management and shareholders. Apple had lost most of its market share in PCs, but thanks to the iPod and iMac computers, Apple had an opportunity to reinvent itself in the consumer market. The risk/reward of investing struck me as especially favorable. We had several conversations before Steve told me he had a better idea. He wanted me to buy up to 18 percent of Apple shares in the public market and take a board seat.

After a detailed analysis, I proposed an investment to my partners in the early fall of 2002, but they rejected it out of hand. The decision would cost Silver Lake’s investors the opportunity to earn more than one hundred billion dollars in profits.

In early 2003, Bono called up with an opportunity. He wanted to buy Universal Music Group, the world’s largest music label. It was a complicated transaction and took many months of analysis. A team of us did the work and presented it to my other three partners in Silver Lake in September. They agreed to do the deal with Bono, but they stipulated one condition: I would not be part of the deal team. They explained their intention for Silver Lake to go forward as a trio, rather than as a quartet. There had been signals along the way, but I had missed them. I had partnered with deal guys—people who use power when they have it to gain advantages where they can get them—and had not protected myself.

I have never believed in staying where I’m not wanted, so I quit. If I had been motivated by money, I would have hung in there, as there was no way they could force me out. I had conceived the fund, incubated it, brought in the first billion dollars of assets, and played a decisive role on the three most successful investments. But I’m not wired to fight over money. I just quit and walked out. I happened to be in New York and called Bono. He asked me to come to his apartment. When I got there, he said, “Screw them. We’ll start our own fund.” Elevation Partners was born.

In the long term, my departure from Silver Lake worked out for everyone. The second Silver Lake fund got off to a rocky start, as my cofounders struggled with stock picking, but they figured it out and built the firm into an institution that has delivered good investment returns to its investors.