Chairman of Shutterfly; chairman of Neoteris; director of DNA Sciences
Born: 1944, in Plainview, Texas.
Education: University of New Orleans, MA, 1971; University of Utah, PhD, 1974.
Family: Married and divorced twice, then married Nancy Rutter; children: two.
Career: University of California at Santa Cruz, 1974–1978, assistant professor; Stanford University, 1979–1982, associate professor; Silicon Graphics, 1982–1994, chairman; Netscape Communications Corp., 1994–1999, chairman; Healtheon/WebMD, 1996–2000, chairman; Shutterfly, 1999–, chairman; DNA Sciences, 2000–, director; Neoteris, 2001–, chairman; Hyperion Development Group, 2003–, coowner.
Awards: Annual Gold Medal in Physics, Research Society of America, 1971; Computer Graphics Achievement Award, 1984; Entrepreneur of the Year, Venture Magazine , 1988.
Publications: (With Owen Edwards) Netscape Time: The Making of the Billion-Dollar Start-Up that Took On Microsoft , with Owen Edwards, 1999.
Address: Shutterfly, 2800 Bridge Parkway, Suite 101, Redwood City, California 94065; http://www.shutterfly.com.
■ James H. (Jim) Clark founded two of the most successful and influential technology companies of the 1980s and 1990s. The first, Silicon Graphics (SGI), was cofounded by Clark and six graduate students at Stanford University in 1982, where Clark was employed as an associate professor. SGI revolutionized desktop computing by building high-performance workstations that could create and display 3-D images in real time, thus allowing engineers to model their designs on a computer screen. The second company was Netscape Communications Corporation, which Clark cofounded in 1994 with 22-year-old
Marc Andreessen. Netscape is credited with launching the rapid growth of the Internet and World Wide Web in the mid-1990s. The company also initiated the IPO and Internet stock-market boom during this period, making many people, including Clark, millionaires and billionaires overnight. After leaving Netscape, Clark went on to start up a number of other Internet companies, including Healtheon, MyCFO, and Shutterfly. Industry insiders, peers, and competitors considered Clark to be one of the most important figures of the 1990s technology boom.
Though extremely successful as an entrepreneur and risk taker, Clark often failed, by his own admission, as a leader and manager. In his book The New New Thing: A Silicon Valley Story, author Michael Lewis describes Clark as a man driven by change and the possibilities of the future, but who was quickly bored with the details of running an established business. According to Lewis, Clark "was keen on things only as they happened, after they had happened he lost interest in them altogether." Even so, the power of Clark's ideas attracted some of the best minds and engineers to his innovative companies. Analysts described Clark as the man who single-handedly rewrote the rules of American business, creating the larger-than-life figure of the entrepreneur and the corporate outsider, rather than the career executive, as the ideal of business success.
Very little in Jim Clark's youth and upbringing would anticipate his ultimate success as an entrepreneur and technologist. He was born in Plainview, Texas, and grew up in difficult circumstances. His father drank excessively and performed odd jobs for income, while his mother worked in a doctor's office. After his parents divorced when he was still a child, he was raised—along with his brother and sister—by his mother on $225 a month. Clark spoke little of his childhood, describing it bluntly to author Lewis as follows: "I grew up in black and white. I thought the whole world was shit and I was sitting in the middle of it."
As a child, Clark was a nonconformist and a prankster. He was suspended from school for igniting a smoke bomb on a bus, and he once smuggled a skunk into a school dance. He ultimately quit school when he was suspended a second time for telling an English teacher to go to hell.
Determined to escape the confines of Plainview, Clark convinced his mother to sign the permission papers to let him join the Navy. His stint in the military started off badly when Clark, along with other recruits, was given a multiple-choice aptitude test. Having never before taken a multiple-choice test, Clark was confused because he thought most answers to the questions were at least partially true. Instead of picking the one answer that was most correct, he circled them all. His Navy officers accused him of trying to trick the computer that graded the tests, and he was sent, with other "delinquent" recruits, immediately out to sea.
Because of his unfortunate start in the Navy, Clark was given some of the most disgusting chores and was treated badly by other recruits and officers. He recalled officers telling him he was stupid and superiors tossing their plates on the floor, only to watch Clark clean up the mess. The experience hardened him and convinced him that he would never be dependent on anyone again.
When he returned stateside, Clark took a math exam offered by the Navy and, to his instructors' amazement, scored the highest in his class. Surprised and encouraged by the results, Clark earned his high school equivalency degree and went on to college, where he ultimately earned a BS and MA in physics, and then a PhD in computer science. It was while earning his doctorate from the University of Utah that Clark first saw a high-performance graphics computer. This experience captured his imagination, showing him the potential of computers, and led to the creation of Silicon Graphics.
While employed as an associate professor at Stanford University, Clark was involved in a project at Xerox's Palo Alto Research Center to enliven computer images with three dimensional graphics. In 1979 he, along with a number of graduate students under his direction, developed a revolutionary computer chip, which Clark dubbed the "Geometry Engine." The chip was the first to process 3-D images in real time, thus allowing engineers, designers, and other users to model designs in a virtual three-dimensional world. Clark recalled his work on 3-D computer processing as a turning point in his life. He told the author Michael Lewis, "the difference was phenomenal, for me. I don't know how many people around me noticed. But my God I noticed. The first manifestation was when all of these people started coming up and wanting to be part of my project." Three years later, in 1982, Clark left academia and, with a handful of his graduate students and funding from a Silicon Valley venture capitalist, started Silicon Graphics.
SGI became the most successful company in Silicon Valley at the time. The company went public in 1986 and saw its stock rise from $3 a share to more than $30. Even so, SGI's internal affairs were in chaos. Though a visionary and entrepreneur, Clark was no manager. He was not interested in marketing or selling or instituting systems that ensured repetitive results. Clark's idea of leadership was to attract the brightest engineers and people with a passion for changing the world, and then let them figure out the details for making his idea work. His style created considerable tension at SGI between the CEO and executive team brought in by the venture capitalist to run the company and the founding engineers, including Clark. What made matters worse was that Clark and his cofounders were forced to sell larger and larger equity stakes in SGI to Mayfield in order to continue operations. By the time SGI made its first sale, Clark and his engineers owned little of the company they started. The experience left Clark bitter about the workings of American business, and he vowed never to make the same mistake again.
Although Clark retained the title of chairman of SGI, he had little power to influence its affairs. He found himself increasingly marginalized by the company's CEO, who was brought in to run SGI by Glenn Mueller of the Mayfield Fund, and by the corporate board. As the 1990s began, Clark became obsessed with Bill Gates and Microsoft, fearing that it was only a matter of time before the personal computer had enough processing power to replace the more costly and cumbersome SGI workstations. At first Clark tried to convince Ed McCracken,. SGI's CEO, and the board to develop less expensive, commercialized versions of its high-end products. He then turned to the idea of interactive television. McCracken and many of the other SGI executives considered Clark's ideas dangerous and destructive to the future viability of SGI and wanted no part of them. Frustrated and angry, Clark sold out his remaining interest in SGI and left the company in 1994.
It did not take Clark long to begin searching for new, young software talent to help him realize his next idea. His search eventually led him to Marc Andreessen, the 22-year-old graduate student at the University of Illinois who developed the Mosaic Web browser. Still obsessed with the idea of interactive television, Clark convinced Andreessen and a few other UI graduates to join him in developing an application that would transform the ubiquitous TV into the interactive and communication tool of the future. Andreessen, however, was skeptical of interactive television as a business, and he eventually convinced Clark that the Internet, and his Mosaic browser, offered more fertile ground for success. Clark invested $3 million of his own money and started Mosaic Communications Corporation, which was later changed to Netscape Communications.
For Clark success meant creating a product or application that was akin to Microsoft's monopoly in operating systems for personal computers. And he was determined to develop his new business on his terms, not the terms of venture capitalists and corporate insiders whom Clark came to see as "bloodsuckers" (as he told Lewis) to the creative and entrepreneurial spirit. After the formation of Netscape, venture capitalists besieged Clark for a piece of the business. One of these was Glenn Mueller, the original backer of SGI. A Silicon Valley legend claimed that Mueller ultimately committed suicide after Clark told him that he would never be permitted to invest in Netscape. True or not, the incident only fed into the power and mystique of Jim Clark.
Within two months of its introduction, Netscape's Web browser, Netscape Navigator, claimed more than 70 percent of the browser market. One year after its founding, Clark made the audacious decision to take Netscape public. At the time the move was considered reckless; venture capitalists typically waited for a new business to have four consecutive profitable quarters before filing with the Securities and Exchange Commission for an IPO and offering stock to outside investors. In 1995 Netscape showed no profits on its balance sheet, and forecasts for future profitability were vague at best. But Clark believed that Netscape's story was appealing, and that investors would purchase the stock for fear of missing out on a boom that was just beginning to take off. Within three months Netscape's stock rose from $6 a share to $140, making Clark and many other people very rich. Many analysts claim that Netscape's public offering kicked off both the IPO boom and the Internet bubble of the second half of the 1990s.
Netscape's meteoric success sealed Clark's reputation as a genius to many in Silicon Valley and on Wall Street. But Clark knew that Netscape's near monopoly of the browser market would not last for long, given Microsoft's sudden focus on the Internet and launch of its own browser. Though Internet Explorer commanded only a small percentage of the market in 1995, Clark knew that it would not take long for Microsoft to catch up with Netscape, given its dominance in personal-computer operating systems and Bill Gates's personal drive for success. Clark remained actively involved in Netscape, but he left the day-to-day operations and execution to others better suited to building a corporate structure. At the height of Netscape's dominance and market capitalization, Clark was already thinking of his next new company.
While he was chairman at SGI, Clark was badly injured in a motorcycle accident that required physical therapy and frequent trips to the hospital. During these visits he was struck by the bureaucratic and inefficient nature of the health-care system, especially the redundant forms and paperwork that doctors, hospitals, and insurers all filled out by hand and exchanged by mail or fax machine. Given the sheer size of the health-care industry—as large as $1.5 trillion, according to some analysts—Clark immediately recognized a business opportunity to streamline and automate all of the paperwork, making the system work more efficiently.
The enormous wealth he amassed from Netscape offered Clark the chance to put his next idea to the test. In 1996, only months after Netscape became a public company, Clark founded Healthscape, which was later renamed Healtheon. More than SGI and even Netscape, Healtheon symbolized Clark's fascination for big ideas and his willingness to follow his instincts into uncharted territory. Neither Clark nor his newly hired engineers understood the U.S. health-care system and its complicated network of doctors, patients, hospitals, and insurers. But the idea of a company at the center of this vast network, using technology and the Internet to streamline and facilitate transactions, made sense. It was a powerful idea, and best of all it was Jim Clark's idea, which meant to many that it had to be a success. As such, the venture capital firms shut out of Netscape came clamoring for a piece of the action. Like SGI and Netscape, Healtheon attracted plenty of investors during the Internet boom years, and it achieved a market capitalization of more than one billion dollars. Thus, Jim Clark became the first entrepreneur to create three different multibillion-dollar technology companies.
SGI, Netscape, and Healtheon all fell on hard times. With the growth of the personal-computing industry, as Clark foresaw, SGI no longer dominated high-end computing. Netscape fell victim to Microsoft's dominance—again, as Clark anticipated—and was purchased by AOL in 1999. Healtheon failed to attract the numbers of doctors, hospitals, and insurers that Clark and others had expected; it merged with WebMD in 1999 and became more of a health-information portal than the central clearinghouse for all health-care transactions that Clark had envisioned. Clark abruptly resigned as chairman of the company in 2000. MyCFO, another company Clark founded in 1999, was sold to Harris Private Bank in 2002.
Following the dot-com bust in 2000, Clark's ventures received much less attention. In 2003, he turned to real-estate development, forming Hyperion Development Group in Miami, Florida, with his longtime friend Tom Jermoluk, the former CEO of Excite@Home. In a brief article in BusinessWeek , Clark indicated he had left Silicon Valley for good. "We're developers now," he said. "We've gone back to making money the old-fashioned way." In an interview in the San Jose Mercury News in July 2000, Clark summed up his business philosophy this way: "Set out to build a longlasting company. Focus on the market, not the technology…. Use the IPO to raise money, not make money. If you want to build a longlasting, successful company, you'll have to do that. If you want to get quick riches, you won't have a successful company."
See also entries on Netscape Communications Corporation and Silicon Graphics Inc. in International Directory of Company Histories .
Clark, Jim, and Owen Edwards, Netscape Time: The Making of the Billion-Dollar Start-Up that Took On Microsoft , New York: St. Martin's, 1999.
Festa, Paul, "Netscape Founder Sells Start-Up My CFO," CNET News.Com , http://news.com.com/2100-1023_3-960749.html .
Hall, Eric A., "Top 10 Most Influential People: No. 4—Jim Clark," Network Computing , October 2, 2000, p. 60.
Hamm, Steve, "From Netscape to Seascape," Business Week , September 8, 2003, p. 10.
Holson, Laura M., "Healtheon Is Expected to Join Forces with Internet Provider," New York Times , May 15, 1999.
Kanter, Larry, "Jim Clark," Salon.Com , http://www.salon.com/people/bc/1999/11/24/clark .
Lewis, Michael, The New New Thing: A Silicon Valley Story , New York: W. W. Norton, 1999.
Mariano, Gwendolyn, "Jim Clark to Board New Venture, CNET News.Com , http://news.com.com/2100-1023_3-872215.html .
Seipel, Tracy, "Business Question and Answer Column: Leading Entrepreneur Clark on Building a Start-Up," San Jose Mercury News , July 23, 2000.
Wright, Rob, "The Next Evolution—A Series of New Products Is Pushing Security Technology to New Frontiers," VARbusiness , July 22, 2002, p. 41.