Serialisation: eBoys - Part 2

Beirne sent Borders over to pitch Kleiner's John Doerr. This, a deal that could redefine a huge swath of the economy, was sure to excite Doerr. And it appeared that he had taken graciously Beirne's decision to join Benchmark instead of Kleiner, saying at the time he would like to work jointly on a project with Beirne.

Border's presentation at Kleiner Perkins did not go well, however. He spent most of his time talking about the bricks and mortar and the trucks. And he back-pedalled the neighbourhood depots, he said, could be retail stores, too. So he had not given up on his original concept after all.

It mattered not a bit. Doerr appeared to be uncharacteristically exhausted during the presentation, and Borders was not impressed. And it dawned on Beirne that Doerr, notwithstanding his polite offer of wanting to work together, might not really be interested in doing so, and might actually wish for him to fail in a satisfyingly spectacular way - a scenario that this deal, with its outsized ambitions, seemed well-suited to bring about. Kleiner was out.

Beirne next turned to Sequoia Capital, which, like Kleiner Perkins, was founded in 1972, and whose partner Mike Moritz had backed Yahoo, a connection that Beirne thought would be valuable in sending online customers to Webvan. The presentation went well. Don Valentine, Sequoia's crusty founder, who was known to ask a visiting supplicant, 'Who cares?' (or, in a more vulgar rendering when impressions of Valentine were performed, 'Why the **** should we give you our money?'), seemed pleased. He had no compunction about asking the question that everyone else in the room had to have been wondering about but hadn't asked: Louis, your family alone could fun this. Why the hell are you talking to us?

"When I came out here ten years ago," Borders said, "I had a cynical view of venture capital - vulture capital." But he had subsequently seen that "in order to be able to attract the best people, you need to have the backing of winners. It's not the money" - he did not realise that that was the exact phrase eBay's Pierre Omidyar had just used when he'd gone to Benchmark - "it's the Rolodex, it's being backed by the venture firms that have a record of knocking it out of the park."

Valentine beamed. Sequoia was in, and Mike Moritz joined Beirne on the Webvan board.

Borders now had two venture guys who were telling him the same thing: Don't even think about restoring the original idea of retail storefronts. Stick to online ordering and home delivery. Cut out everything initially but groceries, on which the average household spends $5,000 a year - a considerably larger figure than the annual household expenditures on books. And, Louis, you've got to reduce the number of SKUs for your launch.

Slowly, slowly, Borders backed down. From one million SKUs, to 500,000, 200,000, 100,000, 50,000, then down to 30,000, only 50 per cent more items than a huge Safeway carried.

Want to know how the story panned out? Already know and want the juicy details - come look out for part III. Tomorrow - eBay's IPO.

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