Some thoughts about WebTV Networks and Boxee

Over the last week, Microsoft announced that it was shutting down MSN TV which came from their acqusition of WebTV Networks back in 1997.

And during that same week, Samsung acquired Boxee.

I thought I would share some thoughts since I worked at WebTV before and after the acquisition and served on the board of directors at Boxee.

First, WebTV Networks.

WebTV was my first real startup.

(Technically that’s not accurate, WebTV was actually the second startup but the first one was such a short stint that it’s hard to call it my first.)


(WebTV founders from left to right: Phil Goldman, Steve Perlman and Bruce Leak, 1996)

I loved WebTV. My commute from San Francisco to Palo Alto every day was long but I never cared. I never spent time thinking about my stock options and what they might be worth someday. All I knew was that I was working with amazing people working on something incredible. (I transferred my WebTV car sticker from car to car until 2005. I still possess all of my webtv t-shirts)

The first version of WebTV (1996) was a set top box that you connected to your analog, interlace televison (remember no hd/progresive scan monitors then!) and it delivered the web on your tv that you could control with your remote control. This was before we had ubiquitious broadband and WebTV connected to the internet over a 56k dial up modem.

The first device had 2 megs of RAM and ROM. It was fully compabilitable with Netscape 3.0 on the desktop (except for Java support….long story).

But even with a small pipe and scarce resources in the box, the user experience was fantastic. The browser was lean and mean. All internet content was transcoded in the server to make sure it was optimized for the set top box. The software was tightly integrated with the hardware. Average session duration was off the charts.

The team worked crazy hours to make it happen. It was mighty audaciuos right from the start. The company was acquired by Microsoft for $425MM and became profitable. The technology evolved and we brought the first integrated DVR into the world, and future versions of the technology found their way into the Xbox, Ultimate TV, MSTV and MSN TV.

Many of the friends and relationships from those days continue almost 20 years later. The team has gone in many different directions and have done so many things. Steve is still building incredible things at Rearden. Andy Rubin changed the word with Android. Lee is creating super cool stuff at Nest. Bruce is building a company at CloudCar. Jackie created Sponge School. Naveen is CFO at TiVo. Tim Nichols started Duff Research, built awesome apps and was acquired by PayPal. Patrick Bonnaure is at a new stealth mode startup. Tim Bucher went on to build Zing (acquired by Dell), lead Macintosh Engineering and now Black Pearl. Wass has a crazy cool lab at MIT. The list goes on and on.

That experience taught me so many things. Seek that wonderful combo: working on a product you love with people you admire and respect. I also learned numerous startup and product lessons which left their mark.


(Avner Ronen, Boxee cofounder & CEO, 2009)

About ten years after Microsoft acquired WebTV, I met Avner Ronen – the ceo and cofounder of Boxee. Later in 2008 I wrote about our initial Series A investment here.

After we co-led the Series A with our friends at Union Square Ventures, the buzz around the company continued to grow. The product was still in beta but had an engaged active community. It was a small community to be sure but they wanted Boxee to be successful. It was a taste of something new and exciting. So different than the typical cable experience.

So much had changed in the world since the days of WebTV. We now have super fast connections to the internet (good bye dial up!). We have awesome legal, online video. (most content WebTV displayed was text and jpegs). And Moore’s law was showing us hardare to run Boxee’s software was getting cheaper and cheaper where you could see a path to low cost stand alone devices.

But then the crazy factor began.

Even though Boxee had a tiny team, balance sheet and user base, content owners were worried. They had their video online but apparently they didn’t want you to watch it on your “big screen". They pressured and forced various companies not to work with little Boxee.

I had several conversations with traditional media folks about this. The conversation often went like this:

Me: “Boxee is just like firefox. It’s an open source browser that displays your content. We don’t block ads (unlike DVRs or browser ad-blockers), give you free distribution and make your stuff look great on the big screen"

Them: “Our content is only online for PC and desktop use. Read the terms of service"

Me: “But even without boxee, users can simply connect their MacBook to a big tv or big screen right?“

Them: “We don’t want or expect people to do that”

Me: “Why?“

Them: “that’s not how we do it”

I’ll spare you the rest of this part of the story but you get the idea. It was beyond frustrating. It was one of the important reasons we agreed to sell the company a lot earlier than any of us wanted to.

I want to express my heart felt gratitude to the entire Boxee team that worked tirelessly over the years. They worked most weekends. They made impossible schedules work somehow.

I saw Avner make back to back red eyes, get products out the door, figure out ways to finance his company when it was beyond hard, keep the team intact, deal with crazy corporate bullying, establish critical partnerships and lead a company while one of his parents was dying. He never complained or asked for more or threatened to walked away. He’s an inspiration and Samsung is lucky to have him.

I am also pleased most of the team will work on the future of television at Samsung. I still believe in the future of television that is different than the thing we get today (ie closed, proprietary, packaged, bundled, windowed, crappy ui, black out rules, etc). I hope the team can keep working and improve this madness.

I’ll end this post with a line from an email my friend Bruce Jaffee sent to me when we announced our initial Boxee investment. Bruce was a Microsoft exec when they acquired WebTV.

He wrote, “you can take the boy out of WebTV but you can’t take WebTV out of the boy".