The Web Hotlist—Web sites worth checking out
Neoforma provides a Web-based community for healthcare professionals that showcases panoramic, 3-D photographic
InfoWorld, November 23, 1998
Forget Disintermediation, Portals: There’s a New Buzzword in Town
Another emerging vortex site is Neoforma.com, a Santa Clara, Calif., purveyor of health-care technology and equipment information online . . .
The Wall Street Journal Interactive Edition, November 24, 1998
Billed as the world’s largest resource on medical products, services and information, Neoforma.com . . . provides online access to an inventory of 13,000 suppliers in 8,000 different product categories . . .
Healthcare Informatics, November 1998
Two months earlier, in September, Junglee, which had been founded three months after Neoforma, was sold to Amazon.com for nearly two hundred million dollars in stock...
This event officially launched Alexander and JP into the league of Silicon Valley Players. They were credited by their peers as having raised Junglee from obscurity to riches in less than a year. I knew that they, and those who had invested with them in Junglee, would receive a huge return on their investment.
Neoforma was to be their next success story. Alexander and JP needed to make sure that everyone knew this.
That’s when Alexander brought in Lori. She was the first key employee who had been hired without my review. He brought her in to get us some exposure. Lori had worked the public relations (PR) for Junglee. Now that Junglee had been absorbed by Amazon, Lori had been put out of a job. That suited her fine.
Lori was credited—particularly by Lori—with having been the key reason Alexander and JP had been successful at making Junglee successful. She had managed the all-important flow of information between the company and the press. Beyond that, she had certainly influenced the message. It had been her idea to dress the somewhat hairy and masculine CEO of Junglee in a shapely black dress, photograph him, and use the photo in a PR campaign.
This might have been amusing at any time, but it was particularly so because it came on the heels of an almost identical photograph that was used in an almost identical ad campaign. The other ad had featured the carefully maintained, and very feminine body, of the CEO of another software company that was trying to climb from obscurity. That other CEO just happened to be Christy Emery, wife of Bret Emery, our newest board member.
Ms. Emery’s very effective ad was controversial in the community because of its blatant use of her physical, rather than her professional, characteristics. Lori’s very effective parody of the ad was only controversial to the Emerys. It was quite funny to everyone else. Junglee achieved buzz. Big buzz.
In the face of possible objection by Bret, Alexander hired Lori for a repeat performance. Apparently Jeff had interviewed her and liked her, so Alexander went ahead and closed a deal with her. When he introduced her to me, during a chance encounter in an aisle, he seemed a bit awkward, “Hey . . . Wayne, this is Lori Peters. Lori ran PR at Junglee. She’s brilliant at this PR stuff. Jeff interviewed her and we agreed that she is just who we need to get Neoforma the attention it deserves.”
I wasn’t particularly bothered by the fact that Alexander had hired a key position without including me, but I was bothered by the fact that he seemed nervous about how I might take the subtle affront to my area of focus—hiring key employees.
Lori was still riding high on her success at Junglee. Her PR campaign had been given an award by an association of her peers. She had a tough reputation to live up to now. She jumped into Neoforma with a strong sense of purpose.
One of her first pet peeves was like deja vu: “The name, the name, we have to change the name . . . Neoforma doesn’t mean anything . . . and it has at least one . . . two . . . maybe three too many syllables. It doesn’t sound hip enough.”
When we made it clear that the name was far too entrenched to be changed, she said, “Well, at least you have to add .com to the name. We’ll get three or four times the valuation as a .com company.”
I didn’t like this idea at all. We had always professed that we were a company that delivered specific solutions to specific problems. The Internet was a great medium to deliver those solutions through, but it did not define us. We had been doing the same stuff before the Internet and we could do it again without the Internet.
However, the other managers and investors seemed unconcerned with my objections, and it wasn’t a big enough deal to me to fight everyone. So at significant expense, we changed the official company name to Neoforma.com. Hey, maybe it would increase our valuation. Who knows?
Lori saw everything through the eyes of the press. And she did not like what she saw when it came to Neoforma. We weren’t sexy enough. Sure, we had been covered by a few niche publications, but not the right publications. Not the major publications. Lori’s two defining characteristics of a successful company were (1) being written about in the Wall Street Journal, and (2) being funded by Kleiner Perkins (KP).
She had made her disapproval very clear regarding the fact that KP had not funded us in our first venture round, but she still held out some hope for us. She knew we were already beginning the process of raising another venture round at the beginning of next year. She wanted very much to have an open channel to John Doerr, the legendary partner at KP. In Lori’s world, that would be the pinnacle of success.
She figured the best thing she could do to get us in the target of KP would be to get Neoforma in the Wall Street Journal. In spite of the fact that Lori came close to getting us covered by the Journal several times, we were always bumped at the last second by breaking news. To her frustration, the Journal didn’t cover us for almost a year. However, through Lori’s work, Neoforma did get covered by an increasing array of minor and major periodicals. They liked our big market and our spinning rooms.
Early in her initiation into the company, Lori often came into my office to brief me on a few of her contacts with the press, dropping names that I was supposed to recognize, but didn’t. Then she would begin chatting. About everything.
I always enjoyed the first few minutes of her briefing. After that, well, I had many things to do, so I would try to look distracted, hoping she’d take the hint. If that didn’t work, I’d say something like, “Well, thanks for the update, Lori. I really need to get back to this report I’m working on.”
After awhile, she spent far more time with Jeff. He was much more inclined toward extended conversation. His natural amiability made it difficult for him to send someone away.
So I suppose it was inevitable that one day Lori would walk into my office and say, “You know, Alexander and I have been talking . . . and we both agree that Neoforma needs to be associated with a single individual. I know that previous articles have focused on both of you as founders, but now the company is getting bigger, and the symbolic role of the CEO is becoming more important. We need to convey that this is not just some start-up company anymore. Neoforma has been around a long time. That will become a major difference between us and the inevitable competitors that will appear.”
Lori was a star-maker. And she liked Jeff. He had charm and good credentials. She believed that Jeff could be made into something of a celebrity, like the CEO at Junglee. It’s even possible that, at this point, she actually believed that Jeff was the only one running the company.
It is one of my biggest fears to be recognized in some public place by someone I don’t know. So I thought, let Jeff be the front man. Let him be the one to wear the shapely black dress in the photos. I had to admit that I’d much rather be the guy behind the scenes.
Now that the VCs were in the picture, I even liked the fact that Jeff, as CEO, had to go to all of the investor networking meetings. I didn’t want to go and he was much better at it than I was anyway. So I really couldn’t complain about her desire to groom him for a role in the public eye. But I was uneasily aware that the warnings from Wally and Denis were gradually coming true. This was clearly one more step toward losing my grip on the company we had created and nurtured for so long.