Column: Rabbit Feet 2.0

Letter From Silicon Valley

07.24.06, 6:00 AM ET

Burlingame, Calif. -Ancient Greeks touched oak trees when they wanted Zeus to protect them. Irish farmers nailed horseshoes to their doors with the tips pointed up to keep their luck intact. But in this high-tech age, people have progressed far beyond such superstitions.

Or have we?

Poke around Silicon Valley, and you'll find lots of entrepreneurs who rely on quirky habits meant to improve their luck. It takes a while for them to own up to these private rituals. They insist that the can see the future, and that their carefully crafted business plans are bound to prosper. Yet at the end of the day, they're not that different from the hopeful bride who pins something borrowed and something blue onto her dress just before marching down the aisle.

So when tension mounts, even people with Ph.D.s and stock options start relying on lucky numbers, favorite colors and the like. "Everybody's got their own karma generators," says Stephen DeWitt, chief executive of Azul Systems, which sells cost-efficient servers and computing services.

DeWitt's own foibles involve the color blue. The first company DeWitt ran was called Cobalt Networks. Everything was dyed to match: the logo, the corporate tschokies and, at a crucial moment, even the employees. When Cobalt went public in late 1999, all the employees dyed their hair blue. Call it coincidence, but Cobalt's stock hit $158 on opening day.

DeWitt was so blue-focused that when he joined his next startup, he insisted--at a cost of some tens of thousands of dollars in legal expenses, new stationary, signs and the like--that the name go blue. Hence Azul.

Every superstition has a halfway-plausible basis jangling in the background. DeWitt says his blue fetish started with IBM. "When I got started in this business, Big Blue was the kingpin," DeWitt says. "So when I got my opportunity to take a swing, I wanted to emulate the staying power of IBM."

Greg Tseng, who runs Tagged, a San Francisco-based startup that is a social networking site for teens, heeded the suggestions of his Taiwanese mother and made sure that Tagged's main phone number has plenty of "8s"--three of them, to be exact. "In Asian cultures, the number '4' is unlucky, since it sounds like the word for 'death,' whereas the number '8' is lucky, since it sounds like 'prosperity,' " says Tseng.

Vasudev Bhandarkar likes to lay the blame--or perhaps the credit--on his wife. Bhandarkar has started or led three companies. At the outset of each new opportunity, Bhandarkar's wife, along with the wives of his cofounders, have insisted that their very modern husbands pause to offer a tribute to the ancient gods who ward off evil spirits. "All my companies have had very good exits," Bhandarkar says. "Our wives take credit for their success."

Peggy Burke had no one to blame but herself: When she planned to move her graphics design firm, 1185 Design, to a new space in 1999, she fell in love with a building graced with high ceilings and exposed beams.

Too bad, a long-time Vietnamese-born colleague told her when he got a glimpse. The place was packed to the ceiling with bad luck, he explained. (He said that the "pressure" from the exposed beams would create a bad environment for the designers.) The solution? Burke hung several dozen large bamboo flutes, tilted at different angles, from all the beams. So far, so good. "After Sept. 11, 2001, a lot of design firms closed down--but we're still here," Burke says. "Could be something to this."

Bill Coleman laughed when long-time venture capitalist Bill Janeway whispered his own superstition: "Bill told me that as soon as a company gets big enough to have a building with a big lobby, the stock will go down."

Coleman ignored that friendly advice. In August 1998, his company, BEA Systems, was growing briskly, with a healthy stock price in the mid-$20s. Then BEA moved to a new office. "The lobby wasn't huge--but it was big," concedes Coleman. A month later, BEA's stock was down to $8. Coleman now runs software-infrastructure maker Cassatt. Cassatt's lobby, he says, is intentionally downscaled--think Starbucks, not Trump Tower.

Some buildings come complete with their own mojo. Executives from Netscape Communications were always proud to have their offices on the grounds once occupied by Fairchild Electronics, the company that served as the seedbed for Silicon Valley's chip powerhouses. Turns out the karma there was inescapable, though. Netscape, now a small part of Time Warner's AOL, followed Fairchild's trail to irrelevancy.

That may explain why no one has been eager to touch the former site of the once high-flying dot-comer Excite@home. Since the company closed shop in 2001, the building's empty windows have stared mournfully onto Route 101, a central Silicon Valley artery, a haunting reminder that even the best-laid plans of venture capitalists can go bust.

And then there's what many consider the luckiest spot in Silicon Valley: 165 University Ave., a modest building on Palo Alto, Calif.'s bustling downtown street. Logitech, a chip company, started there. Ebay's PayPal started there. And so did Google.

That success has certainly been magical for building owner Rahim Amidi. His family started out selling Persian rugs, but now he invests in real estate and early startups. "We lease the space to special people," says Pejman Nozad, a partner in Amidzad investment group. One condition of any lease: Start ups have to let Amidzad invest.

"I consider myself lucky just walking down the street in Palo Alto," says Nozad. "There are so many smart people here. You can get into a good deal just by talking to a person in a café."

http://www.forbes.com/columnists/2006/07/21/superstition-luck-technology_cz_ec_0724valleyletter.html

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