Jimmy Treybig on Success

By Aruni Gunasegaram and Pam Losefsky • Photography by Tommy LaVergne

The next time you retrieve cash from a machine without walking into the bank, or the next time you slap down your little plastic debit card to buy lunch, you can thank Jimmy Treybig ’63. Before Treybig became the founder, CEO, and chair of Tandem Computer Corporation, there were no reliable credit cards or debit card transaction processing systems, and the ATMs that did exist weren’t very secure. Treybig is the architect of the fault-tolerant computer, a device so ubiquitous in the world today that life without it is practically unimaginable.

Jimmy Treybig with his wife, Drew

Back in 1974, people still stood in line to deposit paychecks, paid for groceries with cash, and put big purchases like furniture on layaway plans. It was Treybig’s vision for parallel computing, which enabled financial service firms to establish the foundation for electronic money, that changed these cumbersome processes and made modern life in the Western world possible. And the groundwork was laid during his undergraduate days at Rice University.

A ham radio enthusiast, Treybig entered Rice in 1959 with a love for electronics and majored in electrical engineering. While computers had not yet arrived in Houston, by the late 1950s and early 1960s, the physics, math, and technology taught in the engineering program served him well. “Rice gave me a foundation in how to think, and that is far more important today than anything I could have learned about a computer then,” he says. “Even my art history class was valuable.”

If the electrical engineering program imparted analytical thinking, it was Treybig’s experience working on the college newspaper that sparked his interest in business. Working for his good friend, Dan Tompkins ’63, he made about $500 selling ads for the Thresher during one year, but when he found out that Tompkins had pulled down nearly $16,000 in the same time period, he realized there were a few things about business he’d better learn. A quick study, Treybig took over the business manager position for the Campanile the following year and hired someone else to sell the ads. He made a lot more than $500 that year. With this first business lesson behind him, he resolved to start his own company, but he knew he still had a lot more to learn.

Building Skills Before Building a Business

“I intrinsically understood that success in business was about skills,” Treybig remembers. “I wanted to start a company, but I didn’t have the skills to do it. I knew I had to develop them.” As soon as he was out of college, the first job he took was selling instrumentation for Texas Instruments. Why did he take a job as a salesman? Precisely because he had skill-building in mind, and although he was fairly sociable and outgoing, he wasn’t a salesman.

“At first I had to have my wife go with me to make cold calls,” he laughs. “She’d literally have to push me out of the car because I was so nervous.” But by deliberately placing himself in an uncomfortable position and forcing himself to develop skills that establish direct business relationships with people, he was able to add an indispensable tool to his kit. “Learning to sell not only your products but also yourself is one of the most important things you need to learn in life,” he affirms.

Next stop on the skill-development train was Stanford University. “While getting my MBA at Stanford,” he says, “I learned about organizational theory, marketing, finance, and accounting.” All, he says, are necessary skills for a future CEO. One thing you can’t learn in business school, however, is how to manage. That requires on-the-job training, and Treybig was well aware that managerial jobs were hard to come by, especially for 26-year-olds. So, when he was offered a job working in the new computer division of Hewlett Packard (HP) with Tom Perkins, a man who would later become extremely influential in his life, he had one stipulation: “My main requirement was that I eventually would manage at least 20 people.”

Perkins agreed, and after Treybig had cycled through a couple different positions, he was promoted to marketing manager for commercial computers, where he oversaw four groups that sold computers in different industries: finance and banking, manufacturing, and publishing. He spent five years at HP developing his managerial skills and, at the same time, became savvy about the commercial computer market at a time when few people had any inkling of its immeasurable potential.

A Business Opportunity Emerges

Commercial data processing at that time was enabled by either batch or real-time computing, explains Treybig. This was the era of punch cards and mainframe computers the size of a small house that had limited uses and weren’t available to the general public.

The challenge for the era’s technologists was to increase system performance, and different industries were trying various solutions to solve unique performance and availability issues. “In the publishing industry, for instance,” Treybig explains, “companies would have two IBM systems. If one failed, they’d take the paper tape and reload it into the other one. So they were using redundancy to achieve availability, which was very expensive.”

As Treybig learned more about the market for what would later be called fault-tolerant systems, he estimated the potential. “I decided that if I could start from scratch and build a computer that would not fail and that was good at transaction processing, I would have something.” The new architecture would have to be maintained and expanded while it was working on transactions, and data would need to be protected in the event of a failure. Moreover, the computer would have to work via a communications line to enable live updating, and it would have to be cost-effective.

It was a tall order, but as Treybig wrapped his mind around this business idea, he made one more skill-building move. Following his mentor Tom Perkins, who had left HP to form the venture capital firm Kleiner & Perkins—which eventually became Kleiner, Perkins, Caufield & Byers (KPCB), one of the world’s foremost such companies—Treybig joined as the firm’s fifth employee, working as an associate. “The benefit to me of working at KPCB was learning from Tom,” Treybig says. And being able to see start-ups from the venture capital perspective was illuminating. “You learn about what it takes to start a successful firm and how to raise money,” Treybig explains. “It gives you a whole different perspective—the venture capitalist sees a lot that the entrepreneur doesn’t see.”

In 1974, when he was 34 years old, Treybig was ready to venture out on his own. He knew the market opportunity inside out, he had a wide array of skills, he had incredible connections, and he had arrived at what he believed was the solution to the 100 percent availability problem: parallelism. As Treybig conceived it, multiple processors with the capacity to handle the maximum load run simultaneously (or in tandem), and if one fails, it isolates itself and, while the others continue to do its work, it corrects the problem. Having discovered the way to conduct reliable transaction processing, he founded Tandem Computers that year and delivered its first product two years later. The company issued public stock in 1977, and by 1980, it was dubbed the fastest growing public company in America by INC. magazine. In 1984, Tandem made the Fortune 500, and when it was sold, it was a $2.5 billion company.

Treybig founded Tandem on the premise of identifying and understanding the market and the market needs before building the products. It was an uncommon strategy at the time, but it proved to be a huge financial success. “The first customers were exactly who we thought they’d be—the financial institutions, banks, and stock exchanges,” Treybig says. The first wave of commercial use of Tandem’s systems gave way to a myriad of telecommunications and electronic commerce applications in the years to come, leading to the electronic age as we now know it. The impact of reliable transaction processing on the evolution of computers and networking simply cannot be underestimated.

Treybig served as Tandem’s CEO and chair until 1996, when he and his team sold the company to Compaq, which in turn recently merged with HP. He proved wildly successful in both starting a new, entrepreneurial company and in running a large enterprise—a rare feat involving such a wide variety of skills that few are able to pull it off. Entrepreneurial companies require vision, drive, and the ability to influence people. In large companies, leaders need those qualities as well as the ability to manage and implement process. For his accomplishments, Treybig joins the likes of superstar businessmen Bill Gates, Steve Jobs, Michael Dell, and Larry Ellison and has been recognized by Upside magazine as one of “100 People Who Changed Our World” and as a Visionary Silicon Valley pioneer by Silicon Valley’s Software Development Forum.

Measuring Success

When he thinks about success, Treybig is reflective. “There are successful leaders,” he says, “who attract young people, promote them quickly, make money off of them, burn them out, and get rid of them as soon as another young superstar comes along.” He believes there are many companies today whose leaders live by such a philosophy.

That kind of success, however, isn’t something he values. “I admire leaders,” he says, “who, in the process of building wealth, try to build an encouraging, enriching, and energetic culture where people can achieve things they never realized they could and, in turn, take what they’ve learned to help their communities and eventually build new businesses that foster the personal growth of more people.” Those who are in business just to make money too often don’t care about people, and that’s where Treybig believes the difference lies between leaders who are just financially successful and those who are successful both financially and in the larger sense of the word.

“I don’t feel like I was successful because I made a lot of money, although that’s a nice byproduct,” Treybig reflects. “I feel like I was successful because I changed, in a positive way, the way many people experience their own world.” That holds true for the millions of people who enjoy the conveniences afforded by electronic commerce as well as for the employees who were directly affected by their experience at Tandem and those who currently work with him.

Living in Austin, Texas, Treybig now is a venture partner with New Enterprise Associates (NEA), one of the largest venture firms in the world. Prior to joining NEA, he was a venture partner at Austin Ventures. He continues to work with and serve on the boards of several high-tech start-up companies, lending his wisdom to the leaders of the next generation. Two of the companies whose boards he has served on—HelioVolt, provider of solar power thin film for commercial and residential use, and Motion Computing, a developer of Tablet PCs—recently were selected by Ernst & Young as Texas companies with technology that will change the world.

“Jimmy could easily have joined a couple of public company boards after leaving Tandem,” notes Peter Selda, former Tandem employee and former CEO of WholeSecurity, which was sold to Symantec in 2005. “Instead, he works hard at identifying, nurturing, and funding start-ups each year. He always is striving to win while building something lasting.” Selda believes Treybig’s participation as an active board member at WholeSecurity was an integral reason for its success.

“I think a lot of people graduating from college or business school just look at how much money they can make,” Treybig says. “If I could give any piece of advice to young people today, it would be to look at job opportunities in terms of what skills they can build. The money will come later if they get the skills they need.” It follows that taking the time to build their own skills enables future leaders to see the importance of growing the potential of their employees and helps them to develop into the kind of successful person who has a positive impact on the world.

“I don’t want to sound morbid, but in the end, everyone dies, and you won’t be remembered much past your grandkids,” Treybig observes. “So I believe it’s how you initiate or help perpetuate a positive experience for people in your current lifetime that counts. If you can positively affect people by giving them a job and helping them make money to care for family members who pass it on to more people, you end up leaving a lasting and powerful, if often unquantifiable, legacy on the world.”