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Remembering Pixelon: A Former Executive Looks Back

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Pixelon is a twisted chapter in the history of online video, a venture capital-backed company created with stolen tech by an escaped convict CEO. The story is so incredible National Geographic included it in its six-part series Valley of the Boom. Read our previous feature on how this amazing tale made it to the screen. 

To get an inside account of what Pixelon was actually like, we spoke to someone who worked through the worst of it: Robert Feldman (right) spent an intense year with the company as its chief technology officer. He told us that Michael Fenne (the alias used by escaped con David Kim Stanley) was far worse than what Valley of the Boom portrayed, and that when he wasn't stuffing hamburgers in his mouth he was shouting abuse at his employees. 

Feldman was there for key events in Pixelon's history, including its first major live event (streaming the Iowa Straw Poll), its enormous multi-million-dollar coming out party called iBash, and receiving $30 million in funding from Advanced Equities of Chicago. He also told us about the late nights, the sadistic environment, and the time he needed to call in a SWAT team.  

Pay a visit to one of the oddest stories of 1990s dot-com excess with this last look back at Pixelon.  

Streaming Media: Start off by telling us what you did before and how you came to work at Pixelon.

Robert Feldman: Sure, so I was a vice president at a public company, an insurance company in New York state, and I ran IT and telecommunications facilities. It was a big company. We had places all over the world. I came up as a tech through the ranks, so to speak, starting out in bio-medical engineering in hospitals. It turns out that a company we bought was Paul Ward's insurance company. You know the name Paul Ward in this story? 

Streaming Media: No, I don't. 

Robert Feldman: Paul Ward was a guy that owned an insurance company in southern California and he was an early investor in Pixelon. He knew that Michael was not a stable character. He met me at a company function along the way before Pixelon had raised money from Advanced Equities. 

He said, "You know, I just got involved in this company out in southern California. Would you be opposed to moving there because I'd love to bring someone like you in because you're a stable kind of nuts-and-bolts guy that knows how to do things. We're about to raise money and we're going to expand the headquarters. We need to build that out and build out a network."  

I went out there for an interview and I met with Micheal Fenne and Paul and a couple other people, investors at Pixelon. It all seemed great. They were offering me the opportunity to be involved in something really cool, because I loved video at the time. It was early 1999. My wife is always up for an adventure and my kids had no objections to moving from upstate New York to San Clemente. It was never going to be permanent, but I said, "You want to give it a try for a year?" They were all in. I took the job.

Titles there were a little on the vague side. This might have been Michael Fenne's strategy of keeping everybody at odds with each other. I was supposed to be the chief technology officer, but I don't know that that title ever stuck because there was immediate conflict as soon as I got there.  

[When I started Pixelon was preparing for a] big event, the very first thing it was known for—the RNC event, the Iowa Straw Poll [which it streamed live online]. It wasn't working. I hadn't moved out to California yet; I had just taken the job and was packing up and getting ready to move out there when I got a call from Micheal Fenne at home saying, "We're having a problem. You need to fix it." And I barely even knew what he was talking about. That was my first encounter with him. It set the tone for how he and I interacted.

I packed it in and I moved out to California, and my family stayed behind. I had the job locked up, but Advanced Equities—the company that raised the $30 million for them—couldn't fund them immediately and Pixelon didn't want to hire me until they had that money in hand.

The offices were just a tiny little hole-in-the-wall in a office park in San Clemente. They had just taken the lease over for a much larger space. My first task was to get that built out and ready to move everybody over because now the money was raised and the floodgates were open. They started hiring contractors without a building permit. The first thing I had to do was go down to the city of San Clemente and plead for them not close down the construction. 

There was a two-year-old running around the whole time. [Fenne's wife] Sheila and the baby virtually lived in the office. They never left Michael's side.

Sheila never went anywhere other than the apartment they had, which was just a couple miles away, to the office, and then back again. He always said that she was a Mormon and that her family didn't approve of him because he was a musician and a CIA spy.

Streaming Media: What were your day-to-day duties at Pixelon? 

Robert Feldman: I was responsible for building out the network. We built a glassed-in room with gorgeous server installations. They were just big MMS servers and we had fiber coming in from Pacific Bell, and a decent amount of bandwidth. We could serve video files from there. And we were doing co-locations around the country. This was '99. Akamai did exist. I remember an early conversation with them, but it never went anywhere. There weren't a lot of options. It's not like it is today, obviously, where there's a whole ecosystem to work from.

One company built these servers on spec. We were putting them in all around the country. This all needed to happen prior to iBash. As soon as I got there we started hiring people. We had a really good bunch of guys. A lot of us, like myself, gave up jobs and lives to go out there because we didn't have the ability to determine ahead of time that the whole thing was wrong.  

But those of us in the back, we knew it was wrong. I went to Paul Ward within a week of getting there saying, "Micheal Fenne is not what you think. He has no technical know-how." I could pick that up from him immediately. And all the techs knew he didn't know anything, but we weren't in the position to do anything about that so we just did what we were told.

Streaming Media: What were your first signs that not everything was cool with either management or the technology itself?

Robert Feldman: I had a couple of meetings with Michael. You know when you sit with someone and they're using phrases and buzzwords versus when you know that they truly understand what it is you're talking about? We're talking about networking and infrastructure issues, and I could tell he had never had anything to do with any of these kinds of things before. It just rang a little raw to me, but I was warned that he's eccentric.

But the other thing that really freaked me out is he would get on the public address system in the office. He would yell at people over the PA system. I became his favorite whipping boy, because I was the one who had to make things work. So when anything didn't work, he would publicly yell at me saying I'm going to destroy the company and that it's all my fault. Get up here, you're going to get a whipping from the principal. Things like that.  

That all started showing up immediately. He really loved the PA system. My wife, she remembers me talking to her just a few days after getting there saying, "I think this was just an unfortunate mistake." And that, "This guy's a lunatic and I don't know what's going on here. I don't know what to say, but I guess we have to follow through no matter what."

Things just continued to be that way, very wild, irrational. You had to work really long days. Michael wouldn't come in until almost noon. He slept late and then would work until midnight in the office. And nobody could leave unless he left. That is how it became. And then if he ever called at two o'clock in the morning he expected that you where there or you would answer your phone wherever you are. 

Michael Fenne interviewed by Chris Cuomo in an episode of 20/20 that aired around 2000.

Streaming Media: What kind of a leader was Michael Fenne?

Robert Feldman: It was through scare and fear that he led. Everybody was afraid of him. The people that had the most to lose, lower paid people, they certainly thought this was just some crazy genius. The rest of us didn't know how he got to be where he was. The stuff that was the scariest was when he'd start screaming over the loudspeaker at people or he'd come running out into the middle of the office. It was an open office plan and he'd start screaming at somebody in front of everybody and going crazy on them. He did this all day long.

Streaming Media: If he wasn't a technologist, what did he do while working all those late hours?

Robert Feldman: In hindsight, nothing, I would imagine. Probably eating because he seemed like he was always eating. And they were definitely nice to him on the TV show because he was twice that size in reality. I used to say to Sheila, "You've got to do something, Sheila. He's going to kill himself the way he eats." He'd have like five Burger King triple things brought to him in the morning for breakfast. And it was just the grossest thing to have him sit there and shove the stuff in his mouth. We all had to interact with him. He kind of made you do that.

Streaming Media: Tell me about the in-office prayer services.

Robert Feldman: I have an open mind. I feel everybody has a right to do what they want and this was his thing. I know there were a lot of religious Christian folks that worked there. They were drawn to him. I think he met a lot of them at the church that everybody went to, but that wasn't me.

There was a worse thing that happened, which makes me believe that he might have been anti-Semitic. It was during Yom Kippur, which is the holiest holiday in the Jewish religion. I'm not a religious person by any means. I'm more cultural, but that's the one holiday a year that I take off no matter where I am or what I do, I try to take that day off, mostly for my father and mother. I said, maybe a week or so before, I'm going to be off that day but I might be around. If anybody needs me you just call me. So he went off on me in such a horrible, nasty way telling me that the company was going to fail because of me, because he scheduled an important meeting for that day. He's bringing people in from the outside and I need to be there because I'm the person who knows all the stuff about this and that. It was one of the worst things I had to deal with there.

It made me a little richer though because the board granted me all this extra stock afterwards because they didn't want me to sue him for whatever I could have sued him for. I was sure I was going to get fired the day after Yom Kippur.

I went to the office at three o'clock in the morning. And I'm Xeroxing all the paperwork I've got on everything thinking that tomorrow they're going to fire me and I'll never get access to any of my stuff again. And I'm thinking this is like Tom Cruise in The Firm where he's Xeroxing things in the middle of the night because he's got to have a case. And I can't even believe this is all going on in my life because I'm a pretty normal person.  

Streaming Media: Let's talk about the technology itself.Did it work at all?  

Robert Feldman: There's the story about how he acquired the digital motion encoders. That was the on-demand stuff and yeah, there was some good encoding, but it wasn't really anything more than MPEGS being played.

This guy, Troy up in Northern California, he came up with the Pixelon player, but it was really a skin over Windows Media Player. This took its place and you really couldn't find signs of Windows Media. They figured out a way to change the file name extension. So they weren't WMVs or anything common. They were making up these extensions and they had a way of masking that, which I didn't understand until after I had been there a while and was able to figure out what was really happening.

From a technology standpoint it wasn't so much an invention as it was a deployment, and the fact that we did get these servers out and co-located in good places and that we had a distributed network working was something to be said for that. We had a methodology for storing the files and a way to distribute them, and we were working on a really cool flashy interface for picking file names. So, that was all there. 

At one point, I was tasked with building out an encoding lab with 20 stations. We're going to be encoding seven days a week. I said, "Great. Where is this content now?" "Well we don't have any customers yet, but this is what we expect to do." And this was Micheal Fenne just dictating, "This is what I want you to do." Every encoding station was very expensive equipment. In those days it was the Sony recording playback devices that were like $30,000 each. And a big encoding computer and a workstation and then a person. And he wanted it to be staffed 24/7. They were just encoding the same content over and over again because we didn't have anything new coming in.

So I argued, "Well can I build out five?" "No." And this is where I begin to have my conflict because I was trying to apply rationale to things, which didn't really work there.

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