Posted 02.01.99
__ The daughter of a notorious media baron makes a name for herself in the Valley. _
Take a meeting and this is what you get: You get a woman with 48 years of character building under her belt, a tightly wound competitive dynamo. You get a bright cardinal blazer over a sundress, or a collarless black leather jacket cut at the midriff. And jewelry, always lots of jewelry: big shiny earrings, several gold bracelets, often a necklace. Her face is tanned, her short hair naturally curly but gelled down into a wave.
This is not a woman who’s going to disappear into the noise.
You get an ultraprofessional demeanor, you get a Take Me Seriously ray beam focused on you like radar. You get the big guns. The conversation stays locked on agenda. Repeatedly, she will reinforce her declarations with the statement, “I’m not in the business of wasting your time.” If she can’t promise you something, she’ll say so up front, bluntly, which gives credibility to the terms she does promise. All of this is delivered in a voice that is high British, with rapid-fire rat-tat-tat enunciation – a voice that transforms the comically obfuscating dot-com jargon of the Valley into a tool of precision.
Afterward, you get follow-up that is so frequent and point-by-point comprehensive that it’s nearly a live feed – two or three emails a day, and an equal number of phone calls.
This is not a timid woman.
The Internet industry today is a big game of cat-and-mouse deception – everyone taking meetings, giving demos, negotiating partnership contracts, offering guarantees. Players of this game lead each other along, always fishing for a superior option, a better deal, and these conditions have encouraged a style of doing business that is sinisterly two-faced. Someone you talked to every day for two weeks will suddenly ignore your emails. A handshake on terms means nothing. Contracts are loaded with escape clauses. It’s a hurricane that sweeps from one Internet strategy to another, changing the face of the terrain.
With Isabel Maxwell, you get the opposite: an abrupt forthrightness. WYSIWYG, 24/7/365.
Seeing that you get all this, and only this, is a complicated matter for her. She is the daughter of Robert Maxwell, the discredited and deceased titan of British publishing. She is the twin sister of Christine Maxwell, who sits on the board of trustees for Vint Cerf’s Internet Society. She is the ex-wife of David Hayden, chair and cofounder of the fast-track start-up Critical Path. But take a meeting and you don’t get any of that; those facts are behind her, just lessons learned. For the first time in her life, Isabel Maxwell is on the high wire alone, without the family support net. She has found her own style of doing business, and she is proving it works.
But as she inches toward success, it gets even more complicated.
Back at the start of 1998, the developers of Web sites everywhere woke up one morning to the realization that they could keep their users at the site longer – and create a loyalty to the site – if they offered free (ad-supported) email: yourname@oursit.com. The roving hurricane of deals had landed on what is now called branded email. This realization was echoed in the media, and suddenly every director of business development was under pressure to partner with someone who could bring users the status and convenience of a good address. Once a portal company, for instance, had hooked up with a branded-email provider, it could offer its stream of fickle visitors one more tease: their own email box, ficklevisitor@portalcompany.com. The standard terms of this deal were to share ad revenues from the ensuing email traffic 50/50.
Established portals now began choosing between the dozen firms that could provide the service, the biggest of which were iName, WhoWhere?, and USA.NET – and a self-described dark horse called CommTouch (www.commtouch.com). Based in Israel, and with only 25 employees, CommTouch had created the successful desktop email client ProntoMail. Ready to take on the US consumer market, the Israeli company needed a new president, someone with “local clout.”
In February 1997, CommTouch CEO Gideon Mantel got Isabel Maxwell to take the job and jump straight into the email mania.
“We knew exactly what we were looking for,” says Mantel. “Someone who knows her way around the Valley. When you come here from abroad, the greatest shock is how plugged in you need to be to get your company above the noise level.”
After watching Hotmail explode for a year, Maxwell and the company’s board decided to shift their attention away from the desktop app and get in on the webmail party. And to escape the worst of the competition – Hotmail, for one – it would focus on branded email.
Meanwhile, seeing big opportunity, many of the branded-email providers had started virtually buying deals, some by guaranteeing fat advances against future ad revenues. USA.NET, for one, paid Netscape to provide yourname@netscape.com. As the frenzy intensified, Electronic Mail & Messaging Systems predicted that the number of webmail boxes would jump 230 percent in 1998 and that the number of email accounts worldwide would explode from 300 million in 1998 to 1 billion by 2002. Getting in on the action was Critical Path, a new email-hosting service cofounded by David Hayden, who is also Maxwell’s ex-business partner and ex-husband. All these players hoped that by the time the hurricane had passed on, they would have market share and leadership status that would thereafter be self-fulfilling – that there would be winners and losers, consolidators and consolidatees.
CommTouch simply didn’t have the money to compete for these deals. Instead, Isabel Maxwell would pitch her product’s features, including every bell and whistle known to email – foreign-language spellchecking, spam filtering, SSL encryption and authentication procedures, automatic notification for when the user is on vacation. Impressed, the top Web sites would say, “Well, you’ve got the best feature set, but so-and-so is offering us $3 million. Can you match that?” She couldn’t, she wouldn’t, and so she’d hammer home other reasons to choose CommTouch – the ability to customize the email interface’s look and feel and to keep a user entirely on the site’s URL domain; the option to host the service on the site’s internal servers for extra security. These fine points of her argument were up against the brash guarantee of quick cash.
And then, the craziest thing would happen. There would be a lot of attempted renegotiation, a few weeks of consternation, and then the site would choose CommTouch over the cash. Excite, Netopia/iMac, Nippon Telegraph and Telephone, LookSmart, GameSpot, Business Week. “The ticket to playing the webmail game is parity on product,” says Martin Hosking, senior vice president for distribution at LookSmart. “But you win by being flexible around the partner’s needs.”
CommTouch pushed through the hurricane, pushed through the fad stage, and has emerged as an industry innovator. In June, as the hurricane was at its peak, I took a 6:30 breakfast meeting at Il Fornaio in San Francisco, and Maxwell took a moment to look beyond the current frenzy and outline what she saw as the future of the industry. With Internet usage in Europe growing at 300 percent, studies showed that by 2000, more non-English speakers than English speakers would be on the Web, so CommTouch was also focusing on foreign languages in partnership with foreign brands.
That made sense, I thought, writing down “2000” in my notebook and making a little time-line graph. The next natural evolution would be a translation feature, a button that could roughly convert English to other languages (possibly for a small fee). Yes, that made sense, and I notched the time line to the right of 2000.
Then, Maxwell went on, it made sense that branded email should be available for “the rest of the Web,” in the way that LinkExchange makes advertising available to Web sites not big enough to strike their own deals. She envisioned a Web site for other Web sites, at which they could sign up for such a service, and she believed this would spread like a virus – every little Web site would want to get in on the action. I put another notch farther to the right of 2000, almost off the page.
In the future, Maxwell imagined, email would be just one feature of a true “communications portal,” a one-stop shop with one button each for fax, pager, email, voicemail, and even chat. That seemed a little too far-fetched to deserve a notch.
But boy, I looked at that time line four months later, and I just laughed. Because Isabel Maxwell’s CommTouch had already done all those things. Service is now available in nine languages, with others coming up monthly. The translation filter, as easy to use as the BCC: feature on most other email, has been built. A LinkExchange-like service called ZapZone (www.zzn.com), launched in November 1998, is so easy to use that 4,000 Web sites found it on their own and signed up in the first 10 days. And with every new major partner, the communications-portal features are now standard. By putting CommTouch’s money into the technology, rather than into the deals, Maxwell has won her share of deals anyway. She says she is on the verge of signing a “white whale” of an account, and CommTouch has continued to grow at a rate of 120 percent per month.
“Isabel is a hard-charging ultra-entrepreneur,” says Jesse Berst, editorial director of ZDNet’s AnchorDesk report. “She needs a foldout card to list all the businesses she’s in and all the hats she wears.”
But the question left lingering is what Isabel Maxwell wants, and why she has found it in this unknown foreign firm whose core business is “back end,” destined for a low profile.
Robert Maxwell was the archetypal media giant, Britain’s own Citizen Kane – and he was self-made. Born in Czechoslovakia, he lost his immediate family and 600 relatives in the Holocaust. He escaped through the French Underground at age 16, was put in a British prison camp digging ditches, and got out by volunteering for the British army, which changed his name from Jan Hoch to Robert Maxwell. By D-Day he was a sniper with the rank of sergeant. He led an attack against the 12th SS Panzers, captured a hundred Germans, was awarded the Military Cross, and was then enlisted by British military intelligence.
As the war progressed, Maxwell became interested in scientific publishing and later founded a press called Pergamon, now headquartered in Oxford. He had a knack for conversing in granular detail with physicists and chemists, to make them feel understood. In time, he became the world’s preeminent scientific publisher and built a diversified media empire, buying the Mirror Group Newspapers, publisher of the UK’s Sunday Mail, Daily Record, and Mirror; the book publisher Macmillan; and the New York Daily News. From 1964 to 1970, he served in Parliament. At his peak Robert Maxwell was running not just one company, but 350.
Back then, Isabel might come home from school to find Sir Robert Robinson, the Nobel laureate in organic chemistry, at the dinner table, or Mrs. Pandit Nehru, the wife of the prime minister of India. Or Professor Murray Gell-Mann, who was awarded the Nobel Prize in physics for discovering the quark. Politicians, too – like former British prime minister Harold Wilson. Like her father, the dinner guests were all of heroic stature. Life was grand, but death was always nearby. Her younger sister died of leukemia, and her oldest brother died after six years in a coma that resulted from a car crash.
There was no place for dilly-dallying in life of this scale. Over every mistake, every mishap, her father would demand, “What did you learn from that?” He made her think. “Why did you say that?” he would insist, pushing for clarity. He berated people for what he called “mental laziness” and for stumbling, vague conversation. “He had boundless confidence,” Isabel recalls, “but over time his manner became authoritarian. He could dress you down pretty rotten. If it was time for training, it was time.”
And what did Isabel learn from that? She captained sports teams, and she learned to lead by example rather than by command. But Isabel also learned to avoid his disapproval – which she accomplished by being indirect. “It was very hard not to defer to Dad. I couldn’t stand up to him.”
When they got older, Isabel’s brothers and sisters went to work for their father, but Isabel refused (and continued to refuse till he died). She wanted to know that she could succeed on her own. She was a sororal twin, though she and her sister Christine look similar enough that many people assume they are identical, and between her father and her sister it was hard to feel independent. Wherever she went, coworkers sneered, with the assumption that her dad – whose reach was vast – got her the job, got her admitted, got her the assignment. While she showed plenty of initiative, she also remembers having a “nearly genetic-level inclination to defer to men.”
In 1972, when she graduated from Oxford, she went to the University of Edinburgh – as far north from London as she could get – became a television producer, and made a student film adaptation of Jonathan Livingston Seagull (set in Edinburgh) and another film about lesbian culture. In 1981, she came to the US for love and continued to produce and direct documentaries for PBS.
Then, a decade later, in the midst of a world recession, her father’s debts were called in by the banks. Robert Maxwell never drew a line between his personal life and his professional life – his empire was a patchwork of public and private companies. He’d learned from the war to survive at all costs. In an attempt to prop up his own stock price, he misappropriated about £450 million from his employees’ pension funds.
In November 1991, he was found floating dead in the water near his yacht off the Canary Islands. Isabel heard the news on the radio while sitting at her desk in Berkeley, California. Robert Maxwell died as he was born – penniless. In a dawn raid, the British government seized all his assets and indicted Maxwell’s sons, who had worked for their father’s companies. They were ultimately exonerated.
The death of her father was a life-defining point for Isabel. She and her sister wanted to circle the wagons and rebuild. Christine was running a mostly online information-brokerage company, Research on Demand, so it was only a little hop from there to the Internet.
In early 1993, the sisters and their husbands created McKinley.com, a directory with a ratings system – a kind of Michelin guide to the Net – that evolved into the early search engine Magellan. They saw it as a chance to re-create a bit of their father’s legacy, combining media and science as he did, and spent two and a half years building the McKinley Group. Isabel’s husband David Hayden was the CEO, Christine the publisher, and Isabel the senior vice president. She struck partnership deals with Microsoft, AT&T, and IBM, but she didn’t step up as a leader until the company struggled and shifted from crisis mode to disaster mode.
In late February 1996, the company was on the verge of being the first search directory to go public when Robertson Stephens dropped Magellan in favor of Excite. The IPO market collapsed before McKinley could get out in a second attempt led by Lehman Brothers, and by June the cash was running out. The investors were furious, and the board fired Hayden. Christine was about to leave, and in the end there was nobody left to salvage the company but Isabel.
“I’ve never been in a more tense situation than those final few weeks,” says Mike Sullivan, then at the law firm of Pillsbury Madison & Sutro, which represented McKinley.
Maxwell closed a deal with George Bell of Excite to sell McKinley for $18 million in Excite stock. She had to meet one of McKinley’s investors in San Francisco’s civil court for the deal to go through. She had to lay off 20 of her employees. But she held the center.
“During our acquisition of McKinley, Isabel was the most reliable and stable of the senior managers and was the sole reason we were able to conclude the deal,” George Bell recalls. “I have a lot of admiration for her. At the time, she had to separate difficult personal issues from present business issues to get this deal closed.”
“What you have to know about Isabel is that she never ducks in a crisis,” says Gideon Mantel of CommTouch, who has seen this behavior several times. “She always charges. She has no fear. Of course, it is from her father. It is in her blood.”
“What did you learn from that?” her father had always demanded, and after the sale Isabel took three months off to contemplate that question.
“At the end of the day, all the responsibility had been mine. And I survived. After that, I felt that I could handle pretty much anything in business.” She had lost her father, and now she had lost her marriage, lost her company, and strained her relationship with her sister. She had nothing left to fear. “Once you get your fear out of the way, you let go of all those early childhood survival techniques that you just don’t need as an adult. It’s an amazing revelation.”
With CommTouch, for the first time in her life, nobody can accuse Isabel of riding the family coattails, and she finally has a true chance to prove herself: “No family, no money, no support. I have nobody to defer to. I’m noticing that I can do it.” Her resolve was tested this spring when, according to Maxwell, her ex-husband proposed coming by the office. (Hayden’s spokesperson insists it was Maxwell who made the first move.) Critical Path had just received a high-profile first round from investors, including Benchmark Capital and Mohr, Davidow Ventures, and Hayden was offering to play a back-end role in CommTouch’s email hosting. Her gut reaction was to tell him to buzz off, get out. But Maxwell referred Hayden to Gideon Mantel. “If the deal he offers is good for our company,” she told Gideon, “do it.” No partnership came of it, and now they remain competitors.
Both CommTouch and Critical Path maintain that email is “a huge space” – i.e., this town is big enough for the two of them – and Hayden and Maxwell have gone head to head only a couple times. Until recently, when Critical Path began eyeing a larger market, they had been targeting different types of partners (Critical Path pitches webmail that is “carrier class,” “bullet-proof,” and “mission critical” – read: pay a premium and don’t lie awake so many nights worrying about network security). They don’t talk, and Maxwell insists that her ex-husband is no different than any other competitor.
But the man who hired her, Gideon Mantel, chuckles, lifts his eyebrows, and says, “She doesn’t reveal it, and doesn’t talk about him, but she must feel something. How could it not affect her?” He repeats, “Like her father, she is a fighter.”
Being a fighter is a lot of what CommTouch’s corporate culture is about. All the Israeli employees have spent two to three years in the military. “They have a trained mind-set,” Maxwell says. “They’re much more willing to attack a task without complaint or whining, and when they have a problem they report it, rather than bury it.” Gideon Mantel was in a special bomb-squad unit, and he offers another consequence: “We work much better under stress. With-out stress, I disperform. But in this business, it is always a crisis.”
It is part of Israeli culture not to sink money into fancy offices when it could otherwise go into R&D or marketing. “Spartan” is a generous term for CommTouch’s Sunnyvale headquarters (also a generous term). Maxwell’s office is maybe 9 by 11 feet. The furniture is of the ready-to-assemble variety – chosen, it seems, by dropping an office supply catalogue to the floor and ordering from whatever page falls open. Her workdays are frequently 16 hours long, and three mornings a week she’s at the gym by 6:30. For lunch, she grabs a 16-ounce blended juice in a styrofoam cup from across the street at the mall.
All of which begs the question: Can running a one-of-the-pack branded-email company out of an anonymous office in Sunnyvale possibly satisfy the intellectual ambition of a woman whose father drove her to excellence, a woman who as a girl came home for supper to find the president of Liberia or Valentina Tereshkova, the first female cosmonaut, at the table? (Of course, she remembers what her father always told her: “They all use the same potty.”) She’s incredibly well read and well versed, a woman who’s been just about everywhere in the world. How can a little email gig be enough for her?
On the professional side, there is one answer. According to Maxwell, email is not just today’s killer app; it’s the serial-killer app – one that kills and keeps on killing. In the webmail category alone, the number of active mailboxes has leaped from 18.8 million to 61 million.
“Twenty years ago, you could have said that the telephone’s been done – it’s become ubiquitous. But the market kept coming up with new variations – the cell phone, voicemail – and the market kept growing. In the coming years, there will be uses for email that nobody can even imagine today. Yes, everyone has email. But now that everyone does, the comparative advantage goes to who has the best email. And that’s me. I’ve got the best.”
On the personal side, there is a different answer. Here in the Valley, the Maxwell name means almost nothing, and I’m sure she likes it that way; people’s attention spans are too short to remember much more than that Robert Maxwell was some sort of famous businessman who mysteriously drowned. Silicon Valley may be the only place in the world where Isabel’s life can be her own. Of her upbringing, she says, “While that life was wonderfully stimulating, and I feel extremely fortunate to have had the experience, it was lived at a big price. It meant zero privacy, it meant always being ‘on parade’ – a huge distraction.”
Not here.
Combine both elements of this explanation – personal and professional – and it starts to make sense why CommTouch is such a good fit for Isabel Maxwell. She’s a competitive person, and she’s not going to give up in her fight to make her company great. But that it’s still largely based in Israel, and that it puts other companies’ brand names first, that its function is to be as seamless and unnoticeable as the copper is to a phone caller, allows her to remain somewhat behind the scenes. She can stay low profile enough for her life to be her own and yet still pursue her ambition. And her ambition is not tame. After all, it means taking charge of a serial killer.