As he had silently promised at convocation, Paul never did much homework at Boston Latin, except in eighth-grade physics. The teacher said no one would ever receive a perfect score in his class, and Paul felt so provoked he actually studied for the first test. He got every answer right, but the teacher, a notorious martinet, docked Paul a point for having left too much space between two words. Paul never made that mistake again. From then on he got hundreds on every test in that course. But none of his other teachers realized how easily he could be motivated. An A in physics and then it was back to doing the things he enjoyed—playing his trumpet in the school band; looking for used cars with Danny and their father, and scouring junkyards for brake rotors and carburetors; exploring Boston’s subway tunnels with friends, squeezing against the walls when the trains went by.
Paul was industrious outside school. When Danny gave up his paper route, Paul took it over and managed two routes. In seventh grade, his first year at Latin, he took ten dollars of his paper route earnings and bought a dime bag of pot—from the same man in the North End who sold the boys fireworks. Paul sold the dime bag bit by bit and with the astonishing profit bought an ounce. In a corner of the attic he found a small munitions box that his father had brought home from World War II. He broke off the lock and bought a replacement at the drugstore, and he stored his drugs inside, mostly marijuana and also some mescaline. He hid the box in the eaves of the attic near his mattress. He never came close to getting caught. No one in the family knew, except for Danny, who didn’t get involved and didn’t tell, of course. Paul quit that business after about a year. He could have bought several used cars with his profits had he been old enough to get his driver’s license. He returned to more conventional jobs during high school, working weekends at Medi-Mart and then at Lechmere Sales, rising in both jobs to the position of head cashier.
Long after his own career in crime had ended, Paul heard that Psycho had gone to prison for murder. Curious the difference in their trajectories, and tempting to imagine that it had been foretold in the difference between their Latin School thefts—Psycho’s old-fashioned, Paul’s ahead of its time.
When Paul invented his steal-the-teacher’s-log-in ruse, the Internet was still just a small medium for specialists. The same genus of program would be invented elsewhere later on and become by the mid-1990s a favored and enduring ploy of online thieves, called phishing. Paul’s program was an impressive little feat, considering its time and the equipment he used (already outdated in 1976) and the fact that it was the first program he ever wrote. He had a mind for the age that was coming. He stood on the right rung of the evolutionary ladder.
PART I
FORTUNES
1
The engineering office of the Kayak Software Corporation was murmurous. The collapsible walls that divided two of the conference rooms had just been moved aside, opening a theater barely large enough to hold the voices and the hundred bodies crowding in. Paul English stood behind a table, facing them.
He was tall, about six foot two, and no longer thin, though he didn’t look fat, just big. He had a prominent jaw and a large face that in repose sometimes made one think of raptors, beaked with staring eyes. He still had a boyish quality as well, along with all his hair—dark with hints of Irish red, parted in the middle and curving slightly upward to either side, like water rising from a fountain. It was November 2012. It had been more than thirty years since Paul had taken Catholic Communion, and more than twenty since his last fistfight. The skinny kid with a hot temper and an attitude now practiced meditation. Traces of a Boston working-class accent still surfaced now and then—“cahn’t” for “can’t,” “drawr” for “draw,” “remembah.” And he was still at risk of dropping what his assistant called “f-bombs” in polite company. But these were like the fragments of a memory, buried under decades of experience and the transformations of success.
Paul had joined the world of software engineering some thirty years before, at a time when computers and software programs were becoming pervasive—an underlying part of everything, it seemed, and the source of a great deal of new commerce. It was the era that saw the rise of the personal computer, the Internet, the World Wide Web, the smartphone. An era with its own American success story, the story of the software entrepreneur, which begins in a garage instead of a log cabin. Capitalism had long depended on people with the ambition and daring—not to say greed and recklessness—to start their own companies. But lately, entrepreneurship had become a freshly exalted pursuit. It was a church, and Paul was now one of its bishops.
He was forty-nine. The crowd standing before him in the conference room was on average decades younger. Like most of them, he had been a computer programmer and by his own account uncomfortable in many social settings—or, as he put it, “shy.” One engineer out there in the crowd remembered knowing Paul when they were both much younger, then seeing him again after losing touch for several years. “He seemed different,” the engineer said. “He looked different, less nerdy. He seemed more cool.”
Paul had worked at creating that kind of impression. At various times over the past ten years, for instance, he had asked fashion-conscious women friends to advise him on his wardrobe. He didn’t feel that he had shed all his “shyness,” but in this setting, anyway, he was a paragon of savoir faire. He had natural assets—his size, his prominent jaw, his hair. And here, of course, he was the boss.
When Paul was fired up, he spoke hyperbolically and very fast, dropping the g’s at the ends of words, eliding phrases so that they sounded like one word. But today his performance was muted. When the voices in the room had quieted, he said, in an offhand tone, which seemed strangely at odds with the message: “So I have a big announcement about the company that I want to tell you. We’ve actually agreed to merge with Priceline.”
The crowd turned into doves. “Ooooo,” they said.
Priceline was a large holding company of online travel agencies, and Kayak was a small and unusual but very profitable travel site. Until recently it had done no booking. Rather, it was a comprehensive search engine for travel, often described as “a Google” for finding flights and hotels and rental cars.
Paul and a young businessman named Steve Hafner had founded Kayak nine years ago, in 2004. Since then, many companies had offered to buy them out. But, Paul told the room, Priceline’s offer was the only one with the right ingredients. First of all, the purchase price. “It’s a one-point-eight-billion-dollar transaction,” said Paul.
He made the translation: Kayak’s stock was now worth $40 a share, $14 more than when the company had gone public four months ago, and $10 more than the current price. Paul didn’t say this, but about half of the people on his team owned stock now worth at least $1 million, and some owned considerably more. Paul’s was the largest take, some $120 million.
He didn’t dwell on the money. Many of the newer faces out there in front of him owned little or no stock. And Kayak’s lawyers had warned him not to say too much, lest he give ammunition to the lawyers who specialize in filing suits over the sales of big companies. Nuisance suits and regulatory agencies would probably delay the official closing of the deal, Paul said. In the meantime, things would go on here at Kayak just as usual. And not only in the meantime. This deal, Paul said, would put Kayak in position to become the strongest travel company in the United States and maybe even internationally. Priceline was rich and powerful. Its market capitalization was $32 billion. And—this was the most important thing, along with the sale price—it had a history of letting its subsidiaries run with complete independence. He and his co-founder, Steve Hafner, had never wanted to work for anyone else, and this deal would preserve both their autonomy and the team’s. “And I think we have a great team here. It’s our team, it’s our culture, we hire and fire as we want.” There would be no layoffs. Kayak’s managers wouldn’t even have to attend regular meetings at Priceline. “I’m still here and signed up,” Paul said. “Steve is still here and signed up.”
He spoke these last words in a tone so different from his usual exuberance it made you wonder if he believed them himself. He didn’t seem unhappy about the news he’d delivered—that Kayak, their creation, was now owned by a huge corporation—but he didn’t seem in a mood to celebrate either.
Evening comes early in New England’s November. The windows in the office were darkening by the time the meeting ended. Many of Paul’s team, it appeared, couldn’t wait to take the good news home. The team’s most senior engineer had brought in a five-hundred-dollar bottle of Scotch, and several colleagues lingered in the aisles beside their desks, passing the bottle around. Paul sat at his computer, his broad back slightly hunched as he wrote “thank you” again and again to the congratulatory emails filling his screen.
2
Paul had situated Kayak’s engineering office in the town of Concord, Massachusetts, just a few miles from the Old North Bridge, where the Revolutionary War began. But the immediate environs were a suburban office park, the kind of place you imagine being torn down even while it is being built. Paul almost always went in the back way, across a parking lot, into a brick building, up two flights of stairs, and through a gray metal door.
Business matters were handled by Steve Hafner in an office in Connecticut. The engineering office was Paul’s creation and domain. It occupied two floors, all but identical and connected by a broad stairway. Paul and his architect had designed both floors in the open-room, tidy-industrial style: no private offices; conference rooms with glass walls; heating ducts and pipes left exposed in the high ceilings; everything gray or white with splashes of orange here and there. Most of the floors were filled with gray metal desks, arranged in complex, adjoining geometries. About a hundred people sat at them, in ergonomic office chairs, in front of large-screen iMac computers. They could have been mistaken for a class of high school seniors, with a lot of thirty- and forty-year-old faculty mixed in. Only one was African American. There were many Asian faces and East Indian faces. Collectively, Paul’s crew spoke twenty-one different languages. There was a smattering of women, three of them managers of teams and fourteen others carrying the title of engineer—a large percentage for a software company. The women were all better dressed than the men, who were a motley-looking bunch. Jeans and T-shirts predominated. Two engineers wore shorts and flip-flops in all seasons. There were shaved heads, beards, a ponytail, a funny hat with earmuffs. One fellow wore his pants too high for fashion anywhere outside a nursing home. Some were thin and pale as the winter light from their computer screens. Most were programmers. Looking across the sea of desks, Paul could pick out several dozen whom he affectionately described as odd—“on the spectrum somewhere.”
He used the term loosely and with fellow feeling. He himself had been subject to a diagnosis: In his twenties, as a young programmer, he had been told that he suffered from “bipolar disorder.” None of the young engineers at Kayak knew this, but the condition still loomed over him, and sometimes descended upon him. What his team did know about their boss was that he could seem like a force field of energy, and many if not all were drawn to that energy and lifted by it. At the same time, Paul had made this office into something like a bastion against the mad, work-all-night ethos that he had reveled in back in his own coding days—days of hundred-hour weeks. Kayak engineering was almost always empty on evenings and weekends. One new programmer who hadn’t known any better and worked there all night had been told, when found out in the morning, “Well, okay. But go home soon.”
Paul had arranged various amenities for his team: modernist paintings, which hung near the sofa where visitors sometimes awaited appointments; a kitchen with free drinks and snacks; two coffee bars with expensive espresso makers; a rec room with a foosball table and a pool table and a kegerator, available to anyone at any time but mainly used for “beer-thirty” on Friday afternoons. These perks were modest by the standards of established high-tech companies. On the other hand, the atmosphere at Concord seemed unusually informal. Some other companies in the software business, especially large successful ones, walled themselves in with their secrets, like dragons hoarding their gold and jewels. Here, there were no Keep Out signs on outer doors, no cameras patrolling the interior, no identity cards for employees to show to a scanner, and, for visitors, no nondisclosure forms to sign, not even a sign-in sheet.
Paul remembered the time when a young woman came to the front door and asked him for a job. She said she worked next door and through the walls it sounded as if a job at Kayak would be a lot more fun than hers. In fact, the atmosphere was congenial. There were parties, and members of Paul’s team shared lunch and took breaks to chat with each other in the kitchen. Occasionally they called to each other from their desks. You didn’t sense seething animosities. If any existed, they were subtle. Otherwise, Paul would have rid the office of them. He liked it that some of his team were boisterous extroverts. A few were given to practical jokes—wiring up a ballpoint pen so that it would shock anyone who tried to use it, and other proofs that some minds can race ahead without leaving middle school behind. But during most of the working day, when you looked across the sea of desks, what you usually saw were faces staring at computer screens.
These two rooms in Concord were Kayak’s central factory, indeed most of what there was to the factory of a company that had just been sold for nearly two billion dollars. For many of an older generation, a sum like that evoked images of a vastly different industrial America, of factories like fortresses, of blast furnaces and vats of molten steel, of workmen with bulging forearms carrying lunch pails. Paul and some of his team were the children of such men, but for this generation, coffee break meant espresso.
Concord belonged to what was now a mighty segment of new American industry, mighty and yet utterly unmuscular-looking. A stranger walking into this office—a stranger who, like most of humanity, knew little about software—would have had to wonder what these eccentric-looking kids could possibly be doing to generate any money at all, let alone a fortune. Not for the stranger but for his team, Paul had tried to offer an answer. Programmers are always in danger of becoming happily abstracted from the consequences of their work. Paul had arranged to show his crew the fruits of their labor, a representation of their product’s achievement—a representation in numbers, an abstraction itself.
A screen hung on each of the far walls of the second floor. One screen was large, big enough for an art house cinema. If you had looked up from your desk—say at 3:32 on the afternoon of November 7, 2012, the day before Kayak’s sale was announced—you would have seen, in bold type at the center of either screen, this number:
2,737,926
Digits changed at stopwatch speed. Two seconds later the display read:
2,738,816
No explanation was provided, but everyone who worked here knew that this number represented the day’s running tally of travel searches. The searches, that is, that visitors made between one midnight and the next on the Kayak website and the Kayak mobile application.
The display was old news now. You rarely saw anyone stop and stare at it, but seen afresh, it was mesmerizing. Mesmerizing just to watch the number grow, like fractions of seconds flying past—by midnight it would reach at least five million, and more than that during times of holiday travel. Paul had meant the number on display as a message to his team, his way of saying to them, “Good job. Let’s do more.” And it was also one of his ways of trying to put them in vicarious touch with customers. If you knew that the number at the center of the screen signified searches, it was bound to dawn on you that watching the digits grow was the same as watching millions of people typing at computers and swiping fingers over the screens of smartphones and electronic notepads as they brought up the Kayak website on their browsers and began to look for information about flights, hotels, rental cars. And you were also watching a machine at work, responding to all those people—a complex machine made out of software and silicon that was spread across a large part
of the world, connecting millions to the world.
As the search numbers grew on the screen, you also began to understand Kayak’s purchase price. The business worked this way: A user goes to the Kayak website, finds a desirable flight or hotel room or rental car, and then is sent to the website of an airline or hotel chain or car rental company, or to one of the online travel agencies, such as Expedia or Orbitz. Kayak receives a fee from those other companies just for the referral, seventy-five cents for a flight and two dollars for a hotel, and considerably more if the user actually books the car or the room or the flight through one of those other companies. So every number added to the tally of searches conducted on Kayak was like a sale rung up on a cash register. Advertisements on the site, demure by industry standards, added more. In the course of fiscal year 2012, Kayak’s users made 1.2 billion searches. These brought commissions and ad revenues amounting to $292.7 million, and to profits of $65.8 million. Remarkable figures, not for their size but because only 205 employees had been required to produce them. In 2012, Kayak’s revenues came to nearly $1.5 million per employee, one of the highest ratios among all publicly traded companies.
How do entrepreneurs succeed? There is a form of business romance that says you must be “passionately” committed to your idea, your industry, your product. But what was there in Kayak’s business to feel passionate about? Making sure that an ironing board was included in the first hotel room their website showed a traveler, or that a customer received accurate information about the prices and availability of seats on airplanes? Paul and his people cared about how to discover that a certain traveler was more apt to book a room with an ironing board than one without. They cared about delivering accurate flight information. (Not an easy or perfectible job, but well managed now by Kayak’s six-member team of mathematicians and computer scientists.) And as a group, Paul’s team cared about making the Kayak website produce, within seconds, an elegant-looking listing for that room or an accurate listing of flights between, say, Boston and Cleveland. They cared in part because doing those things increased the chances that customers would keep using Kayak and recommend it to their friends.