Posted by John McAfee, the eccentric founder of McAfee anti-virus and guy who ran for US President has died of an apparent suicide. It’s speculated that he would rather die than be extradited to the U.S. to face charges of tax evasion, securities fraud and money laundering for things he allegedly did in the 2000’s, which is another story.
What interests me is McAfee anti-virus, a mediocre product that reportedly netted McAfee $100 million when he sold his software company in the 1990’s. How did he do it?
Maybe he was in the right place doing the right thing at the right time.
In 1987 he was working at Lockheed as one of several small computer guys trying to figure out computer stuff. No one really knew what they were doing yet, as it was the wild frontier time of computers.
He left to form McAfee Associates, an antivirus software company. The problems were two-fold – very few people at the time owned computers, and those who did own computers generally thought computer viruses were urban myths (Computers can’t catch viruses, PEOPLE catch viruses!)
Yes boys and girls, there was a time when computer users were that naïve.
Then a little virus names Michelangelo came to McAfee’s rescue, infecting 5 million computers worldwide and scaring people into buying antiviral software NOW, and at ANY price.
In the space of a few days demand for anti-viral software went through the roof and McAfee was positioned to take advantage of the market.
(If you’ve heard how eccentric McAfee was in real life, you may very well wonder if he didn’t unleash Michelangelo himself to jumpstart his company. While I’ve seen no evidence of that, I wouldn’t rule it out, either. As they say, follow the money, and who had more to profit from the first big computer virus than the company selling the remedy? But I digress…)
Two years after Michelangelo, McAfee surprised the business world by stepping down as CEO and selling his shares for $100 million.
If he had hung onto those shares until Intel bought McAfee Associates in 2010, he would have become a multibillionaire.
By 2008 McAfee had an estimated $4 million of his $100 million left. Who knows what all he spent it on. We do know he sold his US property at the start of the 2000s and moved to Belize to begin researching and developing a new form of antibiotics.
I find this intriguing: He invented software to heal computers just in time. Perhaps he also thought he could invent medicine to heal humans just as our current antibiotics became too ineffectual?
But what he intended and what happened are two different things.
McAfee appears to have been sidetracked by big guns, fun drugs and a lot of women.
When his antibiotic company folded because it lost its chief scientist, McAfee operated a ferry and a bar. He lived in a remote area with seven (7!!) girlfriends (one for each day of the week?) and became involved in gang activity. His home was even raided by Belize authorities looking for a meth lab. Sheesh. The stories get even crazier but you get the idea.
McAfee fled Belize in 2012 when he was named a ‘person of interest’ in the murder of his neighbor. McAfee claimed he was the intended victim of incompetent government assassins who entered the wrong house.
Fast forward, and McAfee dies just hours after Spain’s National Court approves his extradition to the US, where he could face up to 30 years in prison if convicted of his charges.
What lessons can we learn from John McAfee? Certainly we can see a lot of things about his life that we should avoid, but there are a few gems here. And if McAfee could speak to you from his grave, I suspect he might tell you these 3 things:
1: The bigger the problem, the more money people will spend and the faster they will spend it.
His company struggled until that first big virus hit. Then people couldn’t give him money fast enough because they had a problem they wanted fixed NOW. There was no negotiating or shopping for price. There was no, “I have to think about” or “I have to discuss this with my spouse” types of objections. Rather, it was, “Take my money NOW, please!”
Very little sales copy or convincing is needed when someone is breaking into a home and you are right there offering that homeowner immediate protection and defense.
I recently hurt my back. Not in a big way, but it was enough that simply getting out of bed in the morning was challenging. I moved like I had suddenly aged 20 years, and the pain was interfering with my ability to enjoy my day, to think and even to sleep.
What did I do? I promptly started buying every spine gizmo I found, including a back brace, a massage gun, a chair massager, a thing you lie on that’s supposed to fix the problem, another thing you’re supposed to roll on to fix the problem, pain pills, anti-inflammatory pills, lotions and creams to relieve the pain, yoga videos… I spent money like crazy. Price was not an issue as much as “Will this help me?” If I thought it would help, I bought it. I had a pressing issue that needed solving and yes, I couldn’t wait to hand over my money to have the problem solved ASAP.
(If you’re wondering, in the end it was the chair massager and patience that did the most good.)
2: Use what worked in one niche and apply it to another niche.
McAfee hit a home run by having a solution ready to go when an inevitable problem hit. He knew, as did many others, that it was simply a matter of time before computer viruses became a major threat to everyone with a computer. Someone had to create the solution, so why not him?
Obviously, it worked.
Something else that people knew was that antibiotics were becoming less and less effective for a variety of reasons. What if he created a new antibiotic that could deal with new strains of antibiotic resistant bacteria? If successful, this new company would make his original $100 million look like pennies.
3: If you want to leave your company, hang on to some stock, just in case it explodes after you leave.
McAfee walked away with $100 million, which back then was an insane amount for a company he started a couple of years previously. But if he had held on to half that stock and cashed out only $50 million, I suspect he could have made it on that money. Fast forward to 2010, and he would have become a billionaire.
To recap:
Find a big problem that is here or on it’s way, and then find the solution.
See what’s working in one niche or industry and apply it to another niche or industry.
And when you hit the big time, retain some of your stock even if you want to quit the business.