Palm Computing

Palm Computing's PalmPilot ultimately sold faster than the videocassette recorder, the color TV, the cell phone, even the personal computer that was its great-grandfather. Introduced in April 1996, within 18 months Palm Computing had shipped more than 1 million units of the handheld and some estimate there were 2 million Palm devices shipped in 1998 alone.

"Silicon Valley is about investing in great people, not technologies, " said Bruce Dunlevie, general partner of Menlo Park, Calif.-based Benchmark Capital and the venture capitalist who wrote the check for Hawkins and Dubinsky's new venture. "It was an easy decision," he said.

The irony is lost on neither.

When Dubinsky and Hawkins were struggling to get their first venture off the ground, they had a hard sell on their hands. As Palm Computing was being conceived in the early 1990s, many venture capitalists were still licking their wounds from the ill-fated pen computing movement, which sapped literally millions from prestigious financial firms such as Kleiner Perkins Caufield & Byers. Would-be backers wondered: What was so different about Palm?

Quite simply, the management team, although potential investors could not have known that at the time.

In Hawkins, Silicon Valley has one of its most independent, original thinkers. And in Dubinsky, it claims one of its most methodical, thorough managers. Add a dash of Ed Colligan, the energetic marketing force behind first Palm Computing and now Handspring and you have Silicon Valley's version of what is known in Broadway theaters as a triple threat.

"Jeff has a maniacal focus on the product and the technology and how to use that in a way that can better folks," said Doug Engfer, founder and president of The Windward Group, a Los Gatos, Calif.-based development company instrumental in developing the PalmPilot operating system software. "And I've never worked with anyone better than Donna at building the strategy to support this."

He is no less impressed by Colligan: "Ed is like the wild spark. The gasoline you pour on the fire."

So strong is Engfer's confidence in the team's vision,and business ethics,that he signed on as a strategic partner for Handspring, Palo Alto, Calif.

"Jeff and Donna treat their partners like they're part of the core business," Engfer said. Under its business arrangement with Palm Computing, Windward actually received stock in the start-up.

By all accounts, the three ex-Palm executives have virtually nothing in common aside from an affinity for finding good people and a passion for their work, which they envision as nothing short of rewriting the rule book for personal computing. "I'm a believer in the benefits of appropriate technology for people," said Hawkins.

With the exception of regular weekly staff meetings, where table-pounding is apparently routine, the three ex-Palm executives leave each other to their own devices,trusting their colleagues to sweat the details of their own particular discipline. And therein lies the magic behind the Palm trio.

Hawkins is the technical genius who grew tired of corporate bureaucracy at Grid Systems and took off for the University of California at Berkeley, where he studied neural networks.

"In product design, there's got to be someone in the company that we call the 'product picker.' Someone who is able to synthesize what is possible technically. . . . Jeff is the best product picker I've ever met," said Dunlevie.

Dubinsky is the analytical Harvard M.B.A. with the infectious laugh who bullied her way into the high-tech industry through a customer-support position at Apple Computer Inc. and then worked her way up through the ranks in Apple's sales and distribution divisions. She then constructed the international operations for an infant Claris Corp., Apple's ill-fated software applications spinout.

"I don't think you can separate Donna and Jeff," said Bill Campbell, chairman and interim chief executive of Intuit Inc., and one of Dubinsky's mentors. Her strength lies in wrestling with complex strategic problems and breaking them down into manageable components, Campbell said.

And to get a sense of Dubinsky's chutzpah, consider this: When Hawkins first offered her a job at Palm, she actually turned him down,because he offered her the chief operating officer position and not the chief executive spot. Undeterred, Hawkins altered the title and found himself with a new CEO. More recently, Dubinsky took the liberty of handing in Hawkins' resignation at 3Com,the two apparently had agreed on the strategy beforehand after things at the post-buyout Palm began to change.

"The day that Donna and I resigned, actually, Donna told me I resigned," Hawkins said.

In person, Hawkins is more reticent than his colleagues, letting them do much of the talking, and he volunteers that things like logistics and marketing programs are not his forte. Hawkins jokes he shows up when and where Donna and Ed tell him. "I spend my time thinking about when I am going to get blindsided by new technology. What new companies are doing very creative things. . . . And I lose sleep over that," Hawkins said.

Colligan makes up for Hawkins' low-key demeanor, bouncing in and out of conversation like the frenetic character Tigger from the children's story "Winnie the Pooh." He actually joined Palm Computing a year after Dubinsky, in the middle of its first bona fide crisis, the launch of its Zoomer architecture, a handheld device priced too high and that had lousy handwriting recognition. Although he was a logical candidate to run Palm Computing when Hawkins and Dubinsky left, Colligan opted to follow the pair several months later.

"Ed brought this sort of dynamism. Give him something to do, and dust is going to fly immediately," said Mike Boich, founder and chief executive of Eazel, a Palo Alto-based open-source start-up. Boich was Colligan's boss at Radius Inc. He hired Ed after meeting him through his brother Bud Colligan, the chairman of multimedia developer Macromedia Inc. Boich recalls Colligan holding impromptu meetings in an office crammed with sports paraphernalia and stress toys. "I've never heard a topic on which Ed is ambivalent," Boich said.

With Colligan on the team, Hawkins returned to the drawing board to create the device that would guarantee their spot in consumer products and technology history.

So why did the trio walk away? Diplomacy shades Hawkins' response. "We think we're building one of the most important personal computing companies. The future of personal computing is mobile devices. . . . It's a multiyear commitment on all of our parts to pull that off, and we're not going to do this as the division of a networking company. It just doesn't make sense," he said.

It is clear Dubinsky also has low tolerance for bureaucracy. She is using lessons from the days of building Palm Computing to shape Handspring's operational model. For one, the company relies on a core team of approximately 50 employees focused on design and other strategic functions,including several original Palm engineers,while outsourcing the rest of its functions in a "virtual company" setup.

"We're still trying to find a way of building a big company that's a more flexible and innovative big company," Dubinsky said. "One of my objectives in how to structure Handspring is to create the biggest possible company with the fewest possible people. So we're really working hard at outsourcing all the components of the company that make sense."

Handspring's product line, which launched last month, is dubbed Visor. Models start at $149 apiece. The distinguishing factor is the platform's customizability option, known as Springboard. With it, users ultimately can plug in devices such as MP3 audio players, digital cameras and wireless modems.

It is clear Handspring's Visor picks up where the PalmPilot leaves off.

"My No. 1 worry is growing well," said Dubinsky. "I think it is very hard to put on the table the sort of numbers and scale that we are thinking about, which is significant. I mean we have an ambition to be one of the fastest-growing companies in American business. To do that, and do it well, is a very difficult thing to do."

Silicon Valley money is betting the ex-Palm Computing trio will be able to rise to the challenge and prove once again they know where the handheld market is going.

After all, three heads are better than one.