Jim Barksdale, Internet Angel
There will be no lazing on the front porch in a rocking chair for James L. Barksdale. Just a month after completing the sale of Netscape Communications Corp. to America Online Inc., the former Netscape CEO invested $5 million in HomeGrocer.com, a Bellevue (Wash.) startup that takes food orders over the Internet and delivers them with a fleet of trucks. CEO J. Terrence Drayton is ecstatic that Barksdale has agreed to serve on his board. "We're really lucky to get his advice," says Drayton. "He's a business legend."
This is one legend that isn't content to rest on his laurels. The folksy Southerner is launching the next phase of his career--this time as a high-profile financial backer and adviser to startups. After handling day-to-day operations at Federal Express Corp. and McCaw Cellular Communications Inc.--then piloting Netscape for five years--the silverhaired 56-year-old is done with running companies. He believes he can contribute better as an investor. Barksdale pocketed $700 million after Netscape was sold to AOL for $10.2 billion in March. But he wants even more--with the goal of gradually giving it all to charity. "If there's a penny left in my account when I die, it will be because I miscalculated," says Barksdale in his characteristic drawl.
Unlike Ted Turner's pledge of $1 billion to the U.N., Barksdale's give-away scheme has a geographic focus. He wants to improve education and housing in his native Mississippi. The project is intensely personal. Barksdale cherishes his American-as-apple-pie childhood in Jackson, Miss. But he is embarrassed by the state's past racial segregation, so his pride in Mississippi is tinged with shame. Now, he aims to help bootstrap the state.
He got started three years ago. That's when he and his wife, Sally, donated $5.4 million to the University of Mississippi to establish an educational and cultural enrichment program to keep top students. That has inspired others to give, too: Since then, the overall endowment has quadrupled, to $130 million. Says Edith Kelly-Green, a Federal Express executive and fellow alum who donated $50,000 to create a scholarship for minority women: "Jim has been very successful. I think what he's looking for now is significance--which in the end is a lot more important."
"HUGE EVENT." For Barksdale to truly improve people's lives rather than just improve companies, he needs a lot more money. To do that, he's in the process of setting up a venture-capital firm, the Barksdale Group, with partners Peter Currie and J. Quincy Smith, the former chief financial officer and a director of investor relations at Netscape. Although Barksdale will live most of the time in Aspen, Colo., the partnership will have its offices in Menlo Park, Calif., and he'll keep an apartment nearby. The strategy: to invest in four or five Internet companies each year. "The Internet is a huge, transforming economic event," says Barksdale. "We're interested in companies that are participating in a big way."
HomeGrocer.com fits the bill. It aims to roll out a nationwide network of local grocery-delivery services. Barksdale believes the company can create what he calls the first "physical portal" on the Net. Its local-delivery infrastructure will make it possible to sell and ship all kinds of perishable items--from food to flowers. Although some online groceries are struggling, Barksdale believes HomeGrocer has the right mix of service and efficiency to be successful. And he's not alone. Amazon.com Inc., which won't comment, is rumored to be an investor in the cybergrocer, too.
Barksdale's advice should be invaluable to entrepreneurs. He's no techie visionary, but he can offer wisdom accumulated over three decades of managing technology-oriented companies. "He was the first real professional manager brought into the Internet realm," says David Bierne, general partner at venture-capital firm Benchmark Capital. Currie, who worked with Barksdale at McCaw, says he would follow him anywhere. "He rides to the sound of the guns and shows people how it's done," Currie says.
Barksdale certainly doesn't shrink from a fight. At FedEx, he went up against the much larger United Parcel Service Inc. Wireless provider McCaw was dwarfed by telecom giants such as AT&T. And upstart Netscape took on Microsoft Corp. as its Web browser helped usher in the Internet Age. "This guy revolutionized three industries--shipping, wireless communications, and computers," says John Doerr, the venture capitalist who first backed Netscape. "He gave Microsoft the most serious run for the money it ever had."
That feisty spirit should serve him well as an adviser to upstart companies. But it's just one piece of a multidimensional Jim Barksdale. Above all, he's a leader who knows how to motivate employees, from pimply-faced engineers to turf-battling managers. His Southern charm helps mask a relentless drive. At Netscape's new-employee orientations, he'd lay out his expectations. "He said Netscape is a team, but it's not your family and I'm not your daddy," recalls Joel Rothstein, a former assistant to Barksdale. "He was saying it in a nice way--but the serious message was, if you don't perform, you're gone."
HIGH EXPECTATIONS. While Barksdale is demanding, he's not a win-at-any-cost executive. He has a strong code of honor. If he makes a verbal promise to a customer, he makes good on it, even if it means a shade less profit on a deal. He pays a high price for being honorable. At Netscape, for example, Barksdale delayed getting into the lucrative Net-portal business partly because he didn't want to compete with his customers, such as AOL. It felt like a betrayal.
What drives him? His fiercely competitive ways came from growing up as one of six boys in a crowded house. His father was a well-to-do banker who ran an orderly household and had high expectations. If a son came home with a 97 test score, Barksdale's mother, Mary, would say: "Why didn't you make 100?" "That wasn't a put-down. It was a challenge," says Rhesa H. Barksdale, a brother who is a judge on the U.S. Court of Appeals. Once a week, Barksdale's parents handed out a "Boy of the Week Award" for a good deed around the house. The winner found a silver dollar under his plate at Sunday supper.
There was plenty of fun in the Barksdale household, too. Young Jim played sports--though he couldn't match the exploits of his oldest brother, Jack Jr., a basketball star. He danced in a high school production of Carousel. Barksdale liked to party, but he steered clear of excess after he got a stern lecture from his dad when he was 17 and had broken his midnight curfew on a date. "Father sat me down and told me I had the potential to go into any man's office in the world--and I should never do anything that takes that great asset away," Barksdale says.
Leadership came easily--and early. Barksdale was president of his eighth-grade class. At the University of Mississippi, he led the school's chapter of Sigma Chi fraternity, where his sense of fairness surfaced again. Barksdale was outraged during his freshman year when then-Governor Ross Barnett prevented a black man from entering the whites-only university--which resulted in riots and, for many years, a dark cloud over his alma mater. "The historian Shelby Foote says the South is hampered by a triple whammy of bad feelings--guilt, poverty, and defeat," says Barksdale. "To a certain extent, that motivated me to succeed. I wanted to overcome that."
ON BENDED KNEE. Barksdale has always set ambitious goals and gone after them--even in matters of the heart. On his first date with Sally, the beanie-wearing freshman brashly predicted that they would spend their lives together. "I'm going to marry you," he recalls telling her. Four years later, he did.
Barksdale's persistence hasn't always won the day. After graduating with a business degree in 1965, he followed in his brother Jack's footsteps and took a sales job with IBM in Memphis. His first target was the First Tennessee Bank account. He worked on winning the account for two years--to no avail. Lesson learned: You've got to understand a customer's business and be able to tell that customer how your product will make a difference. "I can still remember the pain of that loss 30 years later," says Barksdale.
When he joined FedEx, Barksdale brought the latest technology to the shipping business. His crowning achievement was building the first computer system that could keep track of millions of packages. "He revolutionized not just our business but the whole transportation industry," says Frederick W. Smith, the company's founder and CEO. Promoted to run day-to-day operations, Barksdale established a quality program that won FedEx the coveted Malcolm Baldrige National Quality Award. He was so determined to bring about change that he got a pilot's license so he could better communicate with the company's strong-willed aviators. "I try to put myself in the other person's shoes without being a milquetoast," he says.
As president of McCaw, Barksdale put his organizational and communication skills to immediate use. The company's 22 goals were boiled down to three. And he compelled fiercely independent regional managers to play nicely together. That established a truly national network worth $11.5 billion when AT&T bought McCaw in 1994. "He took a great mergers-and-acquisitions company and made it into a great operating company," says founder Craig McCaw.
At Netscape, the formerly buttoned-down Barksdale reinvented himself to lead a children's crusade. He rallied young staffers at all-hands meetings with a cheer he made up. Barksdale would spell out the letters N-E-T with his fingers and shout "Netscape! Everywhere! Team! Fight!" It was silly--but he pulled it off. The result: fierce loyalty from the troops. "I'd kill for him," vows Dov Andrews, an earring-wearing engineer who goes by the nickname comrade.cid.
Barksdale put his money where his mouth was. For two years in a row at Netscape, he refused to accept a salary because the company's performance wasn't up to snuff. Last year, when executives from Siemens complained about delays in delivering an E-commerce product, Barksdale left a family reunion and flew to Munich. He pledged to hand over $500,000 of his own money if the Germans weren't satisfied with Netscape's performance--an offer that he never had to follow through on.
Barksdale has made his share of mistakes, too. He continued to charge for the browser long after Microsoft began giving its browser away--which sent Netscape's market share skidding. He challenged Microsoft and IBM in large corporate accounts but didn't deliver the quality and service that those customers demand. And he realized too late the value of the company's Web portal. "Jim was an inspirational leader," says David B. Yoffie, a Harvard B-school professor and co-author of a book about Netscape, Competing on Internet Time. "But he clearly had his limits. He missed the chance to be Yahoo!"
"NEW CHAPTER." Barksdale has some regrets. At the last all-hands meeting at Netscape on Mar. 24, he lamented that the company couldn't remain independent. "I know a lot of people are feeling sad. And I've had some feelings like that. But this is just a new chapter in the story of the Internet," he said. "We were part of the greatest industrial development in the latter half of the 20th century, and that's something to be proud of." A day later, at a good-bye party, Barksdale greeted employees for two hours and signed copies of a collection of his sayings. It was like the reception line at a wedding--or, someone noted, a wake.
But that's history. Now, Barksdale's back in action--helping to build a new generation of Internet companies, such as HomeGrocer.com. "I couldn't just go out and play golf," he says. It's likely that a lot of entrepreneurs will be glad he didn't.
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