March 6, 1996
Neoforma’s official beginning can be traced to a day more than three years earlier than our IPO filing. At the time, I would never have predicted the scale and intensity of the course we were about to take...
We had selected this bank not for its prestigious name or its dedication to customer service — it was known for neither — but because it was located a couple of blocks away from the offices we were about to open.
But I did feel a sense of glamour as Jeff and I were directed, along with our wives, to the business desk.
Though there wasn’t much to it, this was our official opening ceremony. We would each sign some forms and checks. These were just about the only physical requirements of this ritual. However, its completion would formalize our willingness to embrace real risk — not physical risk, but lifestyle risk. All risks share the same emotional basis — that one might return with less than one started —
or nothing at all. When this risk is voluntary, it comes with the thrill of potential reward.
Our wives were there because the ten thousand dollars that we were each depositing to purchase the first shares in our new company was being transferred from jointly held accounts. When I think back, I am impressed how much support my wife provided at this big step. It took me a long time to appreciate the emotional investment Anni made that day. We had discussed the details and potential consequences of this investment at length, but in the end, she was making this decision primarily on the basis of faith in me. We were taking most of our savings and putting it into a place from which it might never return. And there was little doubt in any of our minds that this was only the first small step into an uncertain future.
While there was not enough money in the new business to allow me to leave my nice safe job yet, I was certain I was going in that direction. There was no turning back.
It represented a big turning point in my life: a turn away from one of the paths I had envisioned for myself in youth — the creative artist/architect and toward another — the developer of an idea into a business.
The first significant enterprise I had founded was a business I started at fifteen, some twenty-two years earlier, breeding tropical catfish. I convinced three fellow misfits at school that if we each put in $100 (a lot of money for fifteen-year-olds back then), we could create a fun and profitable business. I wish I still had those sheets of the calculations I had created to convince them. They were full of youthfully optimistic assumptions.
After two years of hard work, silly mistakes, small successes, little arguments over division of labor and relatively clean fun, we became bored, closed the doors and sold everything. In the end, we broke even financially, excluding labor. However, we made a huge profit developmentally. That felt pretty good at the time. I liked building a team. I liked the thrill of being emotionally and intellectually challenged.
I can’t say how thoroughly I had evaluated the risks of this new venture prior to writing that first check. I had children to raise and educate. Mortgage to pay, marriage to nurture. I do know that I dismissed the risks quickly as I embraced this new challenge.
Jeff and I had some good ideas and a vision of better things. My new, less youthful, but equally optimistic financial projections indicated that Jeff and I might, between us, be able to make enough money over time to pay off our mortgages if we did things right. We believed that could make up for a lot of family neglect. And we felt that, after this formal ceremony of incorporation, we would go on to be good corporate citizens. Ready to follow the path tread by many before us. To contribute, with a little luck, more than we consumed.