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BNJXD16

Chapter 16 Burn Rate

We were burning through other people’s money, much faster than I ever expected, and I always seemed to have the faint odor of gasoline on my clothes. But it wasn’t just my own extravagances, like my newly acquired slightly used executive-looking Volvo, or my solitary Hugo Boss double-breasted pure wool suit. We suddenly seemed to have so many mouths to feed, every day a hungry new waif seemed to appear, including some who really weren’t our responsibility to feed at all. And just as quickly as we were running out of cash, we were also running out of room in our already cramped crypt.

Shea said we needed new computers too, and better ones. Viglens, he said, the best, the brand Brendan used at the University and not the cheap Amstrad word processors that really had no place in our world any more. We needed more development and test equipment too, so Shea’s team didn’t have to wait in line for their tools. And we always seemed to need even more people, other than strays, to take on an ever expanding list of tasks, even if we had no place to fit them or chairs to seat them.

But in spite of the endless challenges and complaints, we could almost smell the fragrance of optimism through the gasoline. The success of the prototype was now a real possibility, at least on paper, and in months rather than years. But that meant we’d also soon, very soon, need to make even bigger and bolder investments. Like prototyping and manufacturing of the housing for the phone, and especially because buying complete and very expensive phones only to gut and skin them for their plastic cases wasn’t really that practical. And of course we still had to prepare for the mass production that we’d need to so we could get the product cost down to a level that would make our first sale to the Irish army at least modestly profitable.

Sheas was clearly seeing the future more confidently now, but also maybe the differences in our roles in it. We ought to find a decent firm of solicitors, he announced one day, so we could find something to file a patent on. At the same time he casually suggested that I probably shouldn’t be included in the patent because in truth I hadn’t written any of the code for it.

While we thought about a new home for Intrepid, no matter how disruptive that move would be in the middle of developing a complex piece of technology we still didn’t know would really work,  I’d already found a new home for myself. I had decided that my other cold damp home, a small farmhouse far from the office and the center of the city, was no longer an appropriate home for a soon-to-be person of such significance.

The small farmhouse I had lived in for the last year was on a sweeping hill surrounded by stacked-stone walls and in one of the most beautiful locations in Dublin. A windswept peninsula called Howth that overlooked the bay and across the city all the way to the Wicklow mountains. Although I loved the isolation and the bleakness, and it had been rent free, it was too far a drive from anything important. The only person who lived close by, Orla, no longer lived close by or was interested in me dropping by anyway.

My landlord was a moody Anglo Irish gentleman farmer who raised championship Charolais cattle from this small farm, an extension of an even bigger family seat in the center of Ireland. I felt we had much in common, his family seat and mine. We had agreed about a year earlier that in exchange for not paying any rent, not a single penny, I would try to bring the old two-bedroom cottage up to a liveable standard and also help around the farm occasionally.

But he eventually concluded that in light of the great work I had done on making the house modestly habitable and rentable, he would like to start charging me rent, an equally modest two hundred pounds a month. But in addition to the commute, I was tired of living in a cold stone home where the bath was in the kitchen and where I was fighting a constant battle with some kind of worms that kept emerging from the plumbing and into the bath and the sink.

So I gave him my notice and said a tearful goodbye to Zig and Zag, the rescued cats I had raised from kittens, and Schwartzy, my shy timid beautiful Rothweiler. I had rescued Schwartzy from a callous breeder a few months earlier who felt the disappointing litter runt was much too timid to be a good grown-up Rotty and would accept my offer of fifty pounds in exchange for not drowning him in the river.

My new home didn’t allow any pets but luckily the wife of the farmer had fallen in love with Schwartzy and as he grew up he would spend most of the day roaming and running the farm with her. That lovely bond convinced me that as a dog raised on a farm it was best not to break them up, and she was so excited at the offer to have him be hers forever.

As for Zig Zag, they’d already become barn cats and apparently great ratters too and barely recognized me any more. They were now living independently and apparently happy,  and in no further need of my care.

My new home was a large and luxurious two-bedroomed apartment in the very prestigious near-city-center neighborhood of Burlington Gardens, overlooking the back of the popular Burlington Hotel and tree-lined 10-minute stroll from the crypt. The community seemed a haven for the odd and ill-fitting and one of my neighbors, just a couple of doors away, was the then Irish Minister of State. And when I finally moved on from that apartment less than eighteen months later and in complete freefall, the new renter of my apartment was the Minister for the Environment and later Minister for Justice who would later suggest I was in some way responsible for a break-in at his apartment.

I wasn’t completely insensitive to my own personal spending and always made sure I had a roommate to help cover my living expenses. But I knew we couldn’t keep relying on government grants and government-backed loan guarantees to launch Intrepid, not something so ambitious and significant, and especially if we wanted to accelerate the prototypes and get them into production and that first crucial order.

You should look for venture capital, said the IDA, and we know one, they said. And hardly surprising because there was only one. I lost weeks struggling to write a highly ambitious and probably very unreasonable business plan to present to Ireland’s only venture capital company at the time. And then I waited and waited and fully expecting that they would have been instantly infected by the magic too. Or would just do the bidding of the IDA.

It took nearly two months before I finally got through to one of the partner’s assistants who regretted to inform me that they would have to pass on this obviously wonderful opportunity. “My boss joked that he wouldn’t fund anything he couldn’t find in a dictionary,” said the assistant. “We couldn’t find anything on incryption.”

I could have alerted him to his obvious spelling mistake but I knew there was no point. It would have been too big a hill to push back up and there were too many other hills anyway. But it was disappointing, and frustrating, and not least because it was the first real setback and first serious rejection, the first time in a while the magic had not rushed to our aid.

But I didn’t always need the magic. Sometimes my own cluelessness was just enough. A few weeks earlier I’d faxed to dozens of military publications around the world what I thought was a very written and professionally constructed press release. Which in reality read more like a very opinionated and lengthy article. And which is apparently what the Journal of the Australian Naval Institute thought when they chose to publish it, in its entirety.

And it didn’t take very long at all for the exposure from the article in the journal to start attracting a steady stream of enquiries and offers from the most diverse people and places. People we didn’t know existed or could exist, and if we did, would never know how to make contact with.

One day we received a fax from a representative of the Libyan government asking if we could send them a handful of prototypes to test. Apart from the fact that we had nothing yet to give them, the bombing of the PanAm flight over Lockerbie in Scotland was still recent and raw and with Libya emerging as the prime suspect in the atrocity. So while we felt we had plenty of reasons to not respond, we were still thrilled by the attention.

Not long after that we received a phone call from the first secretary of the Soviet embassy in Dublin requesting a meeting and a demonstration of the phone and again we had to decline because it was just too soon. They obviously didn’t know that the photo included in the Naval Institute article was just an empty hollow case we were posting and sharing in the hope of attracting investors rather than customers.

And there was great excitement when a letter arrived signed by Lech Walesa, the newly-elected president of the newly free Republic of Poland, and asking if we’d consider participating in the first ever telecommunications conference in free Poland later that year. The invitation, clearly addressed to me, included a small pewter lapel pin of an eagle holding the word Solidarność in its talons. And I kept it, because it was clearly addressed to me, and often wore it as a symbol less of solidarity and more of significance and success. A trophy and a boast, a celebration of my own to wear on my lapel.

One of the most hopeful offers came in a fax from a Swiss technology broker and an invitation to start a discussion about purchasing some restricted Harris military communications systems from America, to be shipped to Ireland and then forwarded to Switzerland.

Because of some minor export and licensing issues, they said, they felt unable to purchase the equipment directly for their clients, even though they were a neutral and friendly country like us. But because of Ireland’s strong and trusting relationship with the US, and Intrepid’s relationship with the Irish Department of Defense, the purchases should not arouse any suspicion.

By then we were immersed enough in US export controls over sensitive military communications to realize that the offer was probably highly illegal and very dangerous. They never explained how they heard of our relationship with the Irish Department of Defense and I never brought it up. It seemed obvious that in this world everyone knew everyone else’s business, and it also just seemed rude.

The broker suggested a first order of $500,000, for which we would be paid a generous 10% handling fee. The fee could be paid personally to me if that’s what I preferred, and I felt that if I had negotiated just a little they might have raised that offer a little too. The electronics would be shipped to a warehouse in the Dublin docks and we would never see or touch them.

If everything worked out and the transaction went smoothly, they would repeat the same order a few times each year and probably more ambitious each time. What struck me most was how casual they appeared to be in putting this clear breach of military sanctions to paper, and that was the first alarm bell.

So I just ignored them, in spite of our growing desperation, and in hindsight just as well. A discussion a year later with a British military contractor that had a close relationship with GCHQ and the British Ministry of Defense confirmed our first suspicions, that the Swiss offer was likely little more than a trap.

But not all was lost. A few weeks later, Kevin, the handler from the IDA, finally returned one of my increasingly harassing phone calls to share the news that they had an investor who might be interested in taking a look at Intrepid. “He’s a former schoolteacher,” said Kevin and my heart sank. “But then he started selling encyclopedias,” and my stomach followed. “I think he might be worth meeting, we told him all about you.”

It was likely little more than the IDA trying to end the phone calls, I thought, pass us off to some obscure would-be education giant and then wash their hands of us. But as a courtesy, and maybe curiosity, I agreed to call him and meet, and his secretary set the meeting for three days later.

The former school teacher’s office was a short walk from ours, only one street away, in an identical three-storey-over-basement brick Georgian and yet, still, a whole world away. The building had been meticulously restored from basement to chimney and from what I could tell housed only three people. The former teacher, his secretary, and a Chief FInancial Officer with an inferior Volvo.

I was greeted cordially by the latter two, offered water, and escorted into the teacher’s office furnished tastefully to represent the time period. One the first things I noticed about him was his quiet but seemingly humble self-confidence. A teacher indeed. Except for perhaps the heavy and worn gold ring on his left pinkie and a sign on his desk with what could be interpreted as his family motto – “Once I thought I was wrong, but I was mistaken.”

I really couldn’t imagine the man in front of me as a teacher though, but certainly as an encyclopedia salesman. He seemed to not only have the grit and the tenacity to sell very heavy and usually unwanted British books door after slamming door, but the indifference to rejection. And I quickly learned why the IDA had put us together.

Just a few years earlier, our potential new investor was one of the first entrepreneurs to recognize the enormous future potential of computer-based training, or CBT. Which is exactly what he called his first startup, an online learning venture he quickly sold to a British company who just as quickly seemed to realize the business wasn’t a fit for them and sold it back to the teacher for less than they paid for it. He later took the company public and established the first footing in a foundation that would make him an elearning billionaire.

I was clearly out of my league and had only come prepared to meet with a teacher. But at least by now I had pretty well mastered the subtle skill of appearing to be an authority on a complex subject about which I hoped they knew close to nothing.

But as a just-in-case and to reinforce my absolute and unchallenged authority,  I always made sure to modestly refer to the fact that the Irish Department of Defence had hand selected me above and excluding all others for this challenge. So whisht!

It usually worked. And it worked this time. I shared my vision for Intrepid – that eventually we could bring the price and complexity down so that every phone call, every fax, and every data exchange in the whole world could be private and completely immune to eavesdropping.

That sooner more than later, encryption would be everywhere and in everything, that we were working on a much smaller crypto engine that could secure any device or network, incorporate any kind of algorithm and key management, and how we were blessed with the unbelievable gift of Ireland’s neutrality in the brewing crypto wars.

“Privacy,” I said. “That’s what security really means. That’s what people want most.” The biggest opportunity, I suggested as a closing, at least for the short term, would be for Europe to adopt our phone as a preferred security device, maybe even a standard. That would not only give us access to all European countries but maybe even all their allies too. It’s much easier to become a technology standard, especially when there’s a drought of options, than it is to be unseated as one.

Then it was the teacher’s turn, and he laid out his vision of nurturing a stable of Irish technology startups, not competing with each other or just focused on themselves but working closely with each other, sharing ideas, technologies, resources, even offices, and funded and guided by he and his team.

And all part of a bigger plan to make Ireland a hub for technology startups and innovations that would rival Silicon Valley. Except with easier access to the increasingly regulated European market and not to mention a much friendlier tax regime. A grand plan and from what I could tell from his success so far, an achievable one. And we were to be a part of it.

I wasn’t sure I really wanted to be a part of someone else’s dream, no more than I was comfortable having a stranger be a part of mine. Especially as my dream involved a much different Crock of Gold and nothing at all to do with cold and sterile technology. But in order to realize my dream, I had to attach it at least temporarily to his.

The meeting was short and cordial, and we both seemed convinced that we’d convinced each other we’d be a good fit for each other. And the teacher had clearly given much more thought to Intrepid before the meeting than I’d given to him. It ended with a handshake to seal an agreement of 11% of the company for one hundred and ten thousand pounds.

Odd numbers, I thought, but more than enough to help us find a bigger and more suitable office, buy better computers, and maybe get us into production and our first sale. I skipped back to the office, less because we had a deal that would likely seal all others, and more because it was a sign that the magic had not abandoned us after all.

The deal would also mean that given our profit margins on the phones and the obvious global appetite, we might even be profitable without having to find another investor and dilute my majority stake any further. Even better, we had a real and really well connected investor who believed in us based on little more than my word, and who would more than make up for all my weaknesses, failings, and insecurities.

All I had to do was to convince Shea, even if he had no legal say in which investors we chose to work with. And not unexpectedly, he opposed the deal as soon as I brought it back breathless to him. If it was that easy, he said, you should have asked for much more. Why didn’t you demand more? Or simply walk away? I suppose you’re not much of a negotiator yet.

After the quick excoriation over my negotiating skills,  his disappointment once again wandered towards paranoia. “He must be up to something,” said Shea, when he also noticed the odd numbers. “Why not offer a hundred thousand for 10%, or maybe a hundred and fifty for 15%? It doesn’t make sense. He’s playing us. Probably in cahoots with the IDA.”  He shook his head again and shuffled back across the border to his side of the office where he brooded and scowled for the rest of the day.

So a bad deal all around and entirely my fault and yet another escalation of tensions between the north and the south. It was becoming obvious that the office had been divided, between the front and back – my small administration team comprised mainly of women and Shea’s utterly vital technology team at the back.

If the house fractured, Shea had all the advantages. He had the product, the code, the designs, and the entire development team squarely at his end of the dance hall. And with no legal agreements in place over the ownership of the intellectual property, my only hope was to make Shea happy. But I had long suspected that no matter how happy I made Shea, his plans for my company and my product and my dream didn’t include me.

Tensions were constant with Shea, as though he were baiting or testing me. Any efforts to formalize the management and ownership of the code and designs were rebuffed, even though we were getting to a point when it would have to be made very clear who was in charge and in control.

I had at least managed to get him to agree that for everyone’s safety, copies of all essential designs, codes, circuits, and anything else we didn’t want to lose should be stored in the vault and that I Gemma and I would have copies of the key.

Shea’s team wasn’t any more cooperative and I suspected they were being coached, even conspiring. The rare times I ventured across the border to the backlands, the looks and sounds would change, as though Shea’s team were determined not to give anything away that might strengthen my position up front.

Any request I made to them on almost any matter was usually met with “I don’t really know, you’d have to ask Shea.” I wanted to scream at them that they were only here because of me, only employed and paid because of me, only successful because of me, but I had neither the strength nor the stomach for open hostilities with Shea. I’d have to deal with him later.

“What’s the first thing an entrepreneur does when he makes it to the top?” Shea asked when he heard the news about our newest investor. “He pulls up the ladder.” Shea believed that entrepreneurs were not generous or magnanimous by nature, it just didn’t make any sense in the world of capitalism that when you achieved success you would do anything whatsoever to help another achieve the same.

Pots were only so big. You were just creating another threat and competitor, he said, and someone likely to repay you by taking away everything you’d won or at the very least divide and dilute it.

It was always a central part of his relentless rantings about the bourgeoisie and the elite, as though they were both new concepts to everyone or that Ireland suffered from neither. I think his disdain came from frustration that in spite of the fact that he was much smarter than they, and his family just as old and established, he would never be regarded as an equal because of his inner city working class roots.

And I suspect he was envious too, and he would happily complain as he took their money so that he too could eventually be them. He was like a Bolchevik who secretly dreamed of being a Czar, and never realizing that it was probably a dream shared by most Bolsheviks. Except he had even more disdain, even shame, for his fellow Boleheviks.

But before we even had the time to ink a deal with the teacher, we had another offer and one that this time I decided not to share with Shea, at least not yet. It would need to brew a little. It came from another of my brothers, a younger one, one who had left Ireland a decade before and headed for America in search of an education and a life and a wife.

He had mentioned Intrepid to a colleague and friend of his wife’s family who to his surprise not only recognized the world of secure telephones, but was very interested in helping us fund and market the venture.

His name was Gordon and over a series of phone calls over the next few weeks he described himself as a fixer and facilitator for projects like ours, and with strong connections to various governments and military and especially to the CIA.

He was so confident he could raise us at least a million dollars through his connections that he wrote a letter to our bank stating as much, confirming that the work we were doing was as significant as we had claimed, and asking for time to complete negotiations and make arrangements.

The bank quickly rejected his overture as just plain silly and not nearly a good substitute for a direct and immediate investment, and it only increased their demands that I start repaying at least some of my personal debt. The only debt they had leverage over.

Not to worry, Gordon reassured us, he had connections with a bank called the Bank of Credit and Commerce International, or BCCI, who apparently were always looking for investments just like ours and especially when they involved military purchases and neutral countries.

BCCI also had lots of famous clients, he said, speculators and angel investors who were always looking for creative ways to move their money around. Deep-pocketed and globally-connected investors who could also be customers? It sounded just perfect,

I hadn’t heard of BCCI but I was delighted to allow Gordon to make the connections and introduce some investors. It was easy for me to imagine the look on Shea’s face when I shared that news. But I never got that satisfaction.

Just a few weeks later we all learned exactly what BCCI was when the bank and its operators were ordered to shut down and wind up after a British Government report found the bank had been little more than a money laundering service for clients like Saddam Hussein, Manuel Noriega, and the Medellin Cartel.

As if the cut couldn’t go any deeper, not long after that the newspapers disclosed that BCCI was the very same bank used by the CIA to channel funds in something that would later be called the Iran Contra affair.

A few weeks later a US Assistant Attorney named Robert Mueller announced that the US Government had also been investigating BCCI for years and in part in connection with the Iran Contra arms deal. Then we just stopped hearing from Gordon. We found out later that he had died suddenly.

 

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Cuckoo! The Completely True Story Of The Man From Intrepid