Eric Hahn, a geeky 12-year-old in middle school in East Hampton, N.Y., wanted a computer in the worst way. It was the early 1970s, and computers were owned by corporations and schools, not by kids, but Hahn had to try to get one. He wrote a letter to C. Gordon Bell, then the brash vice president of research and development for the mighty Digital Equipment Corp., at the time the world’s largest maker of minicomputers.
The object of Hahn’s desire was a Digital PDP-8/a minicomputer. It may be hard to remember what it was like to get excited about a computer the size of a microwave oven with 4 kilobytes of main memory and a 12-bit word length. But this was at a time when men’s sideburns were big, women’s shoes were high, and Donny Osmond and the Carpenters ruled the airwaves.
Hahn didn’t want charity—just a price break. A PDP-8/a, then two years past its introduction, could be had for around US $1000—in quantities of 100. All Hahn wanted from Bell was the 100-quantity price. He’d already saved up close to $1000 by soldering circuit boards for his father, who had a small electronics company that did one-off projects.
Bell, already a minor legend for having led the design of the time-shared PDP-6, knew a publicity opportunity when he saw it. So a few months later Hahn and Bell met in an office in DEC’s Maynard, Mass., headquarters, Bell in a dress shirt, Hahn in a sweater, and posed over the computer gear [see photo, “At the Keyboard”]. Hahn gave his $1000 to Bell, and Bell handed over a PDP-8/m, a much faster and more expensive machine than Hahn had sought. “It was a no-brainer to get him a computer at a price he could afford,” Bell says, “and it turned out to be one of the better investments Digital ever made!”
And then, Hahn recalls, came “one of the high points of my young life. I spent two or three hours debating with Gordon Bell, who had personally designed the instruction set used on the PDP-8, about the foibles of programming the machine.”
Hahn carried his new computer home and began writing code for it. Within four years—at age 16—his work on the PDP-8/m became the basis of his first successful software company, Amide Software, which sold an emulation program that enabled Intel 8080-based personal computers to run PDP-8 software.
Touch a child’s life, they say, and you never know what other lives might be touched in turn. But in Hahn’s case, you can make a darn good guess. He has helped start about a dozen companies, including the e-mail and collaborative software company Collabra, which was acquired by Netscape in 1995. He ran technical initiatives at Bolt, Beranek & Newman (now BBN Technologies), Convergent Technologies, Lotus (now IBM Lotus Software), and Netscape. Along the way he became a millionaire.
Nine years ago he started the Inventures Group, a tiny, early-stage investment business in Palo Alto, Calif., that is similar in some respects to a venture capital firm but invests mainly Hahn’s money. It has stakes in some highly touted start-ups, including Linux pioneer Red Hat and Opsware (formerly Loudcloud), purchased by Hewlett-Packard in July for $1.6 billion.
But what has Hahn really excited these days is Zimbra, a San Mateo, Calif., company that is replacing traditional low-function e-mail software with much more versatile software that uses the power of the browser. Hahn calls Zimbra his quintessential project. He invested in it in 2004 and, shortly thereafter, joined its board of directors. “I eat, drink, and sleep Zimbra these days,” he says. Zimbra’s key technical insight was that the browser itself could be used to deliver fully functional e-mail to users without installing any software. People knew about Web e-mail, but they had never seen a system like this. Zimbra was one of the first browser-based e-mail systems to have more functionality and a better user experience than traditional desktop packages.
After Hahn took Zimbra under his wing, his first step was a product architecture review. During weeks of intense meetings, Hahn grilled the key developers. “Why is this in a single database table? What happens if there is a corruption?” Hundreds of such questions were hashed out in the next few weeks. “I’ve made many, many product mistakes over the years,” Hahn says. “I should at least help make sure we make new mistakes this time around!”
Hahn got hooked on software early. Hobbyist computers running on the Intel 8080 microprocessor came out in 1975. A friend, Howard Cannon, got an Imsai. The boys, in high school, quickly discovered that while lots of free software was available from user groups for Hahn’s PDP-8, little software existed for the Imsai. So the two wrote a program that let the 8080 emulate a PDP-8, thereby opening up the PDP-8’s vast software library for the 8080. They distributed the program on paper tape, selling it by mail for $35 a copy.
“We sold hundreds of copies,” Hahn recalls. “It was a significant amount of money.” The boys wanted to spend the cash on computer gear; their parents insisted they save it for college.
Cannon studied artificial intelligence at MIT and went on to become a key contributor at newly founded Symbolics, in Cambridge, Mass. Hahn, rejected by MIT, went to Worcester Polytechnic Institute. WPI had close ties with DEC, so given Hahn’s passion for PDPs and his connection with Gordon Bell, it was an easy choice. He blasted through in less than three years and graduated at age 19.
Computer classes at WPI were easy for Hahn. It was a new field, and the knowledge bank wasn’t yet immense. In many cases he and his fellow students knew nearly as much as their professors.
At the time, many users accessed the WPI computers by dialing through ordinary phone lines. The campus phone system wasn’t particularly reliable, and users would regularly lose connections, at which point the computer would cancel their work in progress. So Hahn wrote software that would take everything the computer was doing when a call got disconnected and would save it to a file. He called the program “Freeze and Thaw” because users who were disconnected could come back, “thaw” their work, and start from where they had stopped.
His popularity soared. “Because this was an engineering school, and everybody used the computer, you affected everyone. What you did was probably right up there with changing the menu in the cafeteria,” he says.
Upon graduation, Hahn had three job offers—one from DEC, another from DEC’s up-and-coming competitor Prime Computer, in Natick, Mass., and a third at a much lower salary from Bolt, Beranek & Newman, in Cambridge. He took the job at BBN, and he swears it is the smartest choice he has ever made.
Hahn liked BBN because it was the prime contractor behind the ARPANET, a high-speed data network that connected the scattered laboratories and contractors of the U.S. Defense Department’s Advanced Research Projects Agency (DARPA). One of the Internet’s key forerunners, the ARPANET then had no more than a few hundred connected hosts. But it was booming, adding as many as two hosts each month. (Today’s Internet grows at a rate of a few million sites per month.)
“At DEC, I would have been working on the PDP-10 operating system,” Hahn says. “It was perfectly wonderful stuff, but there was nothing mystical about it.
“People working on the ARPANET, to me, were light years more evolved in thinking about computers and networking than anyone in the traditional minicomputer world.”
But he wasn’t quite through with WPI. For his undergraduate thesis, he had created a paper design for a campus network that used 8-bit Zilog Z-80 microprocessors as switches, connecting users to the school’s PDP-10 computer. It would let more users connect to the computer than could do so using direct phone connections. After he left, WPI decided to build the network, and Hahn offered to help. He’d drive his little green Dodge Dart the 60 kilometers to WPI and spend most of the weekend in a windowless office in the computer center, writing Z-80 assembly-language code. On Saturday night he’d crash at the house of Allan Johannesen, who worked with him on the project, or with another friend.
“He didn’t get a penny for it; he didn’t get aggrandizement,” says Johannesen, who ran the computer center at the time and is now VP of technology infrastructure for WPI. “He just did it because it was something he knew how to do.”
Says Debby Meredith, an executive consultant who has worked with Hahn at several companies, “If you give him free time, he’ll do what makes him happy, and what makes him happy is programming.”
At BBN, Hahn was the most junior programmer in a group that worked on the interface message processor (IMP), a specialized computer that handled the comings and goings of packets of information in and out of the network. IMPs gathered packets of information coming in, performed error-checking routines, and then forwarded them on to their destinations. Today we call this a router, and companies like Cisco Systems and Juniper Networks churn them out by the millions. But in 1980 it was a work in progress. A decade earlier, BBN had built the original IMPs out of Honeywell 316 computers. Then BBN made another version of them using its own hardware, the BBN-C/30, but that system simply emulated the Honeywell 316.
Hahn was horrified. For someone who looks for beauty in code, what he found was anything but. And some things were downright ridiculous.
The Honeywell 316 was a computer without a stack—a data structure that lets program functions be queued and lets multiple functions use the same subroutines. “It was probably the last one ever built that way,” Hahn notes. “So you couldn’t write a subroutine and test it and know that it would function reliably, because its behavior would change, depending on what instruction invoked it.” The BBN-C/30 copied this frustrating feature of the Honeywell exactly.
With the energy and optimism of youth, Hahn, then 20, asked his boss, Jim Herman, if he could create a new instruction set, reprogram the C/30 microcode to implement it, and then rewrite the IMP program to take advantage of the new instructions. Herman told him to go ahead. Says Hahn, “I’m guessing that he must have thought that I was nuts, but they were only paying $20 000 a year for me, so it wouldn’t cost them much. And maybe something would come from it, even if they didn’t actually ever put the software I wrote on the ARPANET.”
Herman recalls that he did agree with Hahn that there was a lot of stuff in the IMP software that was old and had been fussed with for way too long. And he was willing to let Hahn tackle the redesign because Hahn was a wunderkind, immensely productive, and would work it out much faster than anyone else possibly could.
Hahn worked feverishly for six months. He built a test network in the laboratory and spent virtually every waking hour there coding like crazy, then testing the program, writing down failure points, and figuring out how to fix them.
Herman remembers walking in on Hahn one day during this period and seeing him sitting with his keyboard on his lap. ”He looked like he was playing the piano, like a musician, he was so fluent and so fast,” Herman recalls.
At the end of the six months, in 1980, BBN began rolling out a version of the IMP that contained Hahn’s new microcode and new program. Besides being easier to work with than the old software, the new system ran about 10 times as fast as the old one. It could accept double the number of connections, so it could process much more message traffic, invaluable during this time of ARPANET growth. The BBN IMPs continued to route ARPANET traffic through most of the 1990s.
Then California beckoned. In 1982 Hahn flew to the Bay Area for a few days of meetings with officials at the University of California at Berkeley, in connection with a BBN project to build a network for the university’s library. He called an old friend and scheduled what he thought was to be a casual lunch; it turned out to be a job interview for Convergent Technologies, in Santa Clara, a company building workstations then sold by Sperry, Burroughs, and others.
“The weather was beautiful, there were girls everywhere, and California was just kind of mythical,” Hahn recalls. And he was getting frustrated with the research orientation of BBN, which specialized in building limited numbers of custom products and shied away from standard, off-the-shelf microprocessors and languages. Hahn wanted to build things for the masses.
Within months he was in California, first working on communications processors for Convergent computers, which were then migrating into the company’s operating system group. Four years later, in 1986, he was 26 and managing the server products division, with 120 people under him. His group released a powerful server based on the Intel 386 chip that acquired some serious geek chic because Intel used it for benchmarking.
“I was general manager of a successful division,” Hahn says, “and I hated it. I guess it was good for me, but my heart wasn’t in it. Managing a lot of people, particularly a lot of hardware people when I’m a software guy, is not what I wake up every morning wanting to do.”
In 1988 Unisys Corp., in Blue Bell, Pa., acquired Convergent. Hahn hadn’t been entirely thrilled with the Convergent culture, which he says emphasized deadlines above all else and rewarded employees for how late their cars were spotted in the parking lot. But Unisys was worse, with its time-clock, defense-contractor mentality. So he left to join another start-up—cc:Mail, one of the first developers of e-mail applications for computers.
Hahn became vice president of engineering for cc:Mail in 1988. He stayed until shortly after Lotus acquired the company in 1991; he made enough money on his stock options to buy the Palo Alto property on which he later built a five-bedroom brown-shingled house. He and most of the cc:Mail management left Lotus soon after, in disappointment after discovering it really had no interest in the cc:Mail product. Lotus had simply acquired the company for its 21 million users, whom it intended to convert into Lotus Notes customers.
Then came Collabra. And he never could have seen it coming.
After leaving Lotus, Hahn moped around, with no ideas about what to do next. But after a few weeks, partners from Merrill, Pickard, Anderson, & Eyre, a venture capital firm, offered him a spot as entrepreneur in residence. It was pretty much the standard entrepreneur-in-residence deal offered by California VC firms: a salary, a title, desk space, business cards, and a year or so to come up with an idea for a company. The firm might or might not decide to invest in the idea.
For Hahn, the title was the most valuable part of the deal; it enabled him to call executives in Silicon Valley and get answers to questions. He came up with an idea for a company within three months, though he didn’t incorporate it until early 1993.
That company, Collabra Software, built a software package that worked as an add-on to existing e-mail programs, enabling users to share files easily and communicate with each other via discussion boards. It basically made a practical system out of some fairly abstract and complicated concepts floating around until then under the general rubric of groupware. Collabra’s product, called Collabra Share, shipped in 1994; it was a finalist for PC Magazine’s Technical Excellence Award for Systems Software that year, losing the crown to Microsoft Windows NT Workstation 3.5. (As Hahn likes to say, ”That’s a quality problem to have.”)
Netscape acquired Collabra for $100 million in Netscape stock in late 1995, shortly after Netscape’s mammoth and legendary initial public offering. By the time the lockup period ended six months later and the Collabra founders could sell their Netscape stock, its value had jumped to more than $250 million. “Every one of the engineers who had joined us at the beginning made over $1 million,” Hahn recalls.
The sale to Netscape was a relief to Hahn, and not just for financial reasons, says Meredith, Collabra’s vice president of engineering. “As CEO,” she says, “he had the weight of the world on his shoulders. He’s a responsible guy. He wants to always do the right thing, and he wanted a great outcome for everyone who worked for him. But he’s got a little bit of the Andy Grove paranoia in him. He would imagine horrible things that would happen. The acquisition was a relief to him.”
Hahn stayed at Netscape three years, running the server products division and then becoming chief technology officer. He says his biggest contribution at Netscape was in the decision to make the browser an open-source system—a highly controversial move at the time. When Microsoft famously cut off Netscape’s air supply by releasing its free Internet Explorer in 1995, Netscape found itself in crisis. Hahn’s “heretical” view—notably shared by Netscape developer Jamie Zawinski and sales engineer Frank Hecker—was that the only way out of this box was to turn the “lemon into lemonade.” They would rally the goodwill of the Internet and its army of developers around Netscape by positioning it as an underdog. Meeting discreetly at CEO Jim Barksdale’s house in Palo Alto, Hahn persuaded fellow executives Marc Andreessen, Mike Homer, and Peter Currie to pursue the plan.
During the browser wars, Netscape was really fighting two battles: the Microsoft battle was public and oft-reported, but less known were the company’s internal struggles. Netscape had experienced years of hypergrowth. It had created an environment where speed was valued—users expected new products, and investors expected new revenues and profits. But, Hahn recalls, that also meant that developers rarely had time to do things the ideal way. The developers couldn’t reliably add new features without destabilizing the existing, fragile code. Whenever he could, Hahn would ask each of a product’s engineers to “sign the box” before a product shipped—in essence to publicly declare personal pride in the work. ”If we couldn’t do that, it probably was too soon to ship the code,” he says. And in fact they weren’t able to do it often. “We were in a fight for our lives,” he adds, “and speed usually won out over other concerns. But I’m not complaining: war is hell.”
Not every feature was unstable. In fact, one of Hahn’s major triumphs was created in the heat of battle: he turned the Lightweight Directory Access Protocol (LDAP) into the Internet’s de facto directory standard, allowing users to search white pages and directories for the first time. ”Looking up e-mail and Web addresses was very easy to do after LDAP,” Hahn says, ”and very hard to do before.”
Before 1996, the wilds of the Internet provided no standards for directories. Commercial users found that especially troublesome. At a company with 50 000 employees, there was no good way for one employee to look up another employee’s e-mail address. Although commercial vendors existed—Novell Netware, for example, had a proprietary directory program—it was by no means Internet-wide, and in fact usually not even companywide. “One group would have Novell, another would have Microsoft, another had Unix, and it was a mess,” Hahn recalls. “People forget, but in the early ’90s every company had a different proprietary e-mail system—you couldn’t even reliably send e-mail outside your company.” That problem was fixed early with SMTP and POP, but the directory problem lingered for another decade.
Then Hahn heard about Tim Howes, a graduate student at the University of Michigan. Howes was solving the problem as part of his dissertation, but he was limited by what he could do as a student. Hahn plucked him out of Michigan and dropped him into Netscape, which put its full force behind the protocol. In 1997, LDAP, Version 3, won PC Magazine’s Technical Excellence Award for Networking.
In the end, Netscape was no match for Microsoft’s deep pockets and ultimate weapon—the ability to bundle its browser with operating system software. This practice was later slammed by the U.S. Department of Justice as anticompetitive, but the resolution of the antitrust action against Microsoft came too late to help Netscape. AOL acquired Netscape in 1998 mostly, analysts said at the time, for the Netscape brand, Web site, and other nonbrowser software.
Hahn left Netscape just before AOL came in. He had promised to stay two years after the Collabra acquisition, and he fulfilled that promise; he had never planned to stay longer. He wanted to spend more time with his young sons—which had been impossible with the rigorous travel schedule Netscape demanded. He was hoping to slow down a bit after cc:Mail and Collabra. At the time, most friends and colleagues said he should join a venture capital firm.
Hahn turned down offers from a number of VCs. “I was worried about all those breakfasts and luncheons and that I’d have to wear a suit and that I wouldn’t get to be hands-on with the technology,” he says. He also decided against doing a start-up as a CEO, realizing that would be all-consuming. He looked into angel investing but decided that was too hands-off a relationship.
So he did something pretty interesting: he began “mentor investing.” Hahn finds people who have an idea for a company and have started to pitch it to venture capitalists but are still trying to fill in the nitty-gritty. He writes a check, typically between $100 000 and $1 million, which buys him a piece of the eventual company and the right to be involved with developing the idea, hiring people, figuring out the marketplace—and even writing code. He often gets an office at the company and spends time there on a regular schedule. He holds the company retreats and holiday parties at his house.
Bill Lee, who founded one of Hahn’s investments—RemarQ, a company that developed and operated Web-based discussion boards for companies including Amazon, eBay, and Novell—recalls that Hahn committed to spending a certain amount of time each month at the company but always exceeded that. “He got down to the level of critiquing the code,” Lee says.
So far, more than 10 of his dozen-plus investments (a few are not public knowledge) are successful or on track. “I think of myself as the blue-haired lady in Atlantic City sitting at the slot machine with a box of quarters,” Hahn says. “Success for me is simply not running out of quarters so I can keep playing.”
Besides Red Hat and the recently sold Opsware, his hits include Good, which builds technology to keep travelers continuously connected wirelessly to corporate computers; Proofpoint, which makes an e-mail security product; and RemarQ. Four of his investments have already been sold; three others have gone public. And he’s had two blatant failures: Disappearing Inc., an e-mail add-on, and Bing, a peer-to-peer project. The Bing experience is still fresh; he started the company in early 2006 to help people back up their computers, using free disk space on friends’ computers. Hahn, three engineers, and a marketing executive worked feverishly for nine months to develop the product, but by the fall of 2006, Hahn recalls, “it became painfully clear that our thinking was flawed.” People just wouldn’t trust their friends’ PCs with their data. In early 2007 he admitted defeat and returned the investors’ capital, consoling himself that “with start-ups, if you don’t have a few failures you’re not taking enough risk.”
Because in his current role he can do just about whatever he wants, Hahn’s coding again. “I see the same aesthetic in code as I do in music or art or poetry,” he says. “For me, coding has always been a creative and aesthetic joy, not just a technical joy. That creative outlet has always been the draw.” Lookout, one of the companies that was sold, started as a personal project in 2002, when Hahn was looking for an excuse to program. He decided he could really use a search engine for his e-mail, and so he wrote one in C# for Microsoft’s popular Outlook e-mail package. Today desktop search engines built into operating systems search e-mail as well as standard documents, but in 2002 that wasn’t the case.
From the moment Lookout sprang to life, Hahn says, he “could no longer imagine not having it.” He posted it on the Web for his friends to download and use. The software spread rapidly, with thousands and then tens of thousands and soon hundreds of thousands of users. And they all were turning to Hahn for support.
“I’d get bug reports from Norway saying, ‘Hey, this weird thing happens when I run it in the Norwegian character set,’ ” Hahn recalls. “And I’m thinking, Norwegian character set? Huh?”
And then Hahn would stay up late trying to fix the bugs or adding features users requested. ”When there’s end-user passion, it’s intoxicating,” he says. “Franz from somewhere would send me a message, and I would find I really wanted to make him happy.”
Hahn ran into Lookout users everywhere. On a family trip to Panama, visiting a coffee plantation that got power only a few hours a day, he spotted Lookout software running on the plantation’s single PC. Within a year, though, it got to be too much. “I was hemorrhaging under the love,” Hahn says. He hired Mike Belshe to work on the project full time; other friends helped when they could. He had no business plan. There was no income—he paid Belshe and the others out of his own pocket.
But for Hahn it was still emotionally rewarding. And more important, it made him a programmer again. “It was all about the code,” he says. “I wrote 60 000 lines of code, and it was a product, and people liked it.”
In 2004 Microsoft offered to buy Lookout, making, says Hahn, a generous offer for “what was basically two guys and a dog.” Hahn and Belshe, who was by then a partner, sold it.
But once coding was back in his life, he wasn’t going to give it up again. These days, though busy with Zimbra, he’s still trying to solve the computer backup problem that he tackled with Bing.
“I wonder,” he says, “how many programmers are trapped in the bodies of Silicon Valley executives. We tend to leave programming jobs because they just don’t pay enough to support kids and mortgages here in Silicon Valley. But increasingly, when people have some material independence, they revert.
“It’s a lot better than buying a football team,” he says.
To Probe Further
To find out more about Eric Hahn’s mentor investing efforts or to submit a business plan, see http://www.ingroup.com.