24-08-15-the-rise-fall-and-rise-again-of-cnet-founder-halsey-minor
Business Management

The rise, fall and rise again of CNET founder Halsey Minor

Halsey Minor starts talking about his career to date… and talks and talks and talks. Several minutes go by on our phone call before I can get a word in edgeways but Minor is no major bore. It’s just that his tale is a remarkable one that takes some telling, extending from leading and investing in some of the internet’s most interesting companies to wealth, fine art and property and on to grief, depression and bankruptcy. Today, he’s bouncing back as founder of Bitreserve, a “cloud money” company promising transparency for the Bitcoin world.

How to tell the story? A quick history of how he made, and ultimately lost, his cash pile might help.

Born in 1964. Boarding school. University of his native state, Virginia and the same fraternity that counted JP Morgan, Charles Scribner, a Bush, an Astor and a Roosevelt among its numbers. Minor worked at Merrill Lynch where he worked alongside Jeff Bezos on an intranet project and then on a project funded by Merrill. He was the perfect age to cash in when the first web era hit.

In 1993 he co-founded CNET with financial backing from Microsoft co-founder Paul Allen, which became, and remains, a powerhouse of technology-centric web publications. Despite its huge success, Minor left the business in April 1995 to pursue fresh fields as the internet began to rain venture money. In 1997 he sold some CNET technology rights to Vignette, at the time the go-to content management system for the web, and CNET got over a third of the company in return. Both CNET and Vignette went on to have money-spinning IPOs that made Minor very wealthy.

He left CNET, he says, to help build Salesforce.com and was the second-biggest shareholder when that cloud computing breakout act went public. There were also hits such as providing funding for the pioneering Rhapsody online music streaming service and for Grand Central Communications (later acquired and branded as Google Voice) as well as playing a key role in developing OpenDNS, recently bought by Cisco.

Among other deals: the sales of web search and directory services tool Snap to NBC that led the New York Times to begin its profile thus: “It is hard for most people, even those who know him, to comprehend the magnitude of Halsey Minor's ambition.”

It’s still CNET that Minor is best known for.

“There really weren’t many examples of companies giving away free media and they weren’t large,” he recalls. “So I had to make this decision to charge or not charge. Ziff-Davis [then the biggest tech magazine publisher] frequently told advertisers not to bother because we were going out of business. It was a pretty big roll of the dice. Unlike anyone else we were making money.”

Of Salesforce he says:

“Marc [Benioff] came to me. He knew enterprise software and I started working very closely with him and the first CEO [appointed by Benioff] was a guy called John Dillon who has been pretty much forgotten but did a wonderful job. No venture company believed everyone would put data in the cloud and Siebel was kind of on fire. I had Tom Siebel screaming at me that nobody made money selling software at less than $1m.”

As an aside Minor tells me that Microsoft could have bought Salesforce for $250m at one point and “ended up passing”. Recently Microsoft was again linked with a Salesforce buy that would have cost more like $70bn.

Another direction in which Minor turned anticipated iTunes.

“I became focused much more on the concept of the cloud and was the first investor in Rhapsody. The whole world thought peer-to-peer was going to be the future of music. It was a new market segment fundamentally around the theft of music. My bet was streaming would be an unsustainable model. Steve Jobs was not a music impresario but he recognised the opportunity to sell music at a simplified price and also deliver a wonderful consumer experience. And that built the world’s most valuable company today.”

All this makes Minor appear a Zelig-like figure, appearing sequentially and providentially at some of the great modern success stories of technology. But he had also embarked on a gaudy spending spree that included high-profile properties, thoroughbred horses and modern artworks by the likes of Richard Prince, Damien Hirst and Jeff Koons.

Some stories depict a Gatsby-like compulsive need to collect as the cause of Minor’s eventual fall. But Minor also cites the financial collapse, banks’ intransigence and another rather shocking reason for why his affairs unravelled amid a string of lawsuits over financing and debt.

“I got divorced in ‘05 and between 2006 and 2012 I went through a pretty significant depression,” he says.

About a decade earlier Minor had gone looking for his biological father who, it turned out, was living only 30 miles away from his son in Benicia, California. Two months later his father committed suicide. These two sad stories somehow fused to create a breaking point in Minor’s life.

“I’d always been a million miles a minute,” he says but now he was descending into a debilitating depressive state.

“I lost contact with everybody,” he says. “I just withdrew and left my life in the hands of lawyers. I was seriously depressed. I don’t think people didn’t talk to me in my time of need, I just didn’t reach out. I used to know so many people and from that part of my life the most disturbing thing of everything was losing track. It doesn’t matter who you talk to, they will all say they haven’t seen me for seven years. I just literally didn’t go out.”

Today he half-jokes that his advice to anyone is not to leave their affairs with a profession that charges by the hour. Whatever the ins and outs, claims and counterclaims - and a web trawl will turn up many bizarre tales - there came a reckoning and in August 2013 Minor filed for personal bankruptcy.

Despite all this, Minor says he started feeling better in 2012. And from that sense of renewed wellbeing came the idea for Bitreserve.

“I was back and started looking around the world and thinking about what’s interesting. Bitcoin is an open exchange for exchanging value and that was interesting because what got me on the net was an open standard for exchanging information [CNET].”

Bitreserve lets currency be moved instantly and for free. The company says that it is currently responsible for $200m in transactions. HQ is Charleston, South Carolina and it has operations in London, Braga, Shanghai and San Francisco.

“The problem with bitcoin is by the time I’ve exchanged it I’ve always got more or less, never the same. I wanted to innovate on top of it and add value and be transparent about the form in which we hold money. Today, fundamentally, banks basically haven’t changed for 30 years and their technology hasn’t changed and they still buy mainframes. Every bank works by holding people’s money so the more money we hold, the more we get to invest. I want to open competition about the stewardship of money. What we’re doing is collapsing it down to a single cloud. Today money has to actually travel: when the money comes into us it just goes from account to account, which is just a transaction in our database.”

Given his chequered past, Minor accepts that he will need to win trust. He’s not the CEO, having handed over the reins to Anthony Watson, formerly CIO at Barclays and Nike.

So where does Bitreserve stand compared to the other industry-changing companies Minor has been involved with?

“My aspiration is to make it the biggest and most disruptive thing I’ve done to date,” he says. “We are the new financial cloud. Banks are going to get pulled apart. Once AOL had my news and had my chat and had my mail and this stupid old internet came along and blew it all up.

“At CNET we used to say when we we’re competing with IDG and CMP we had truth and justice on our side because were free. I think if I had known about what we are doing as a company… it pales in comparison.”

A vituperative article Minor wrote in 2010 supports my sense that Minor may in part be driven by anger at what he believes is the rough justice being meted out by lenders, impacting both high fliers like himself and those least able to pay.

“Going with innovation works. When I was starting out there were 300,000 people on the internet - now it’s three billion. One of the most amazing things was having to buy Sun hardware and databases for $41m and the thing that shocked me later was the maturity of AWS. It’s all open sourced in the web and costs almost nothing. It’s incredibly disruptive. Every time something comes along its cheaper, faster, better.”

Minor says he’s about to raise a round of financing having gone to crowdfunding for his seed money. He has several lifetimes of experience both good and bad squeezed into his 50 years.

“You come out the other side of it,” he says. “I always thought I was very strong and there’s not a lot I’m afraid of anymore. It’s that old adage of what doesn’t kill you makes you stronger. I’m honestly the happiest I’ve ever been.”

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Martin Veitch

Martin Veitch is Contributing Editor for IDG Connect

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