Even by the standards of Silicon Valley, it was a high-voltage party.
Among the guests were the heads of Apple Computer, Intel and Advanced Micro Devices, venture capitalists Ben Rosen and Arthur Rock, and technology analysts and market researchers galore.
"If someone were to drop a bomb here," Rosen quipped, "I'd invest in Japan."
The gathering's host, resplendent in red tie and white sports jacket as he greeted new arrivals near a buffet groaning with caviar, smoked salmon, roast beef, crab and shrimp, was an unassuming man known to most of his guests simply as "Regis."
For the uninitiated, that's Regis McKenna, Silicon Valley's preeminent public relations man. He has been called a "guru," "czar," "wizard," "Svengali," even "philosopher king." Some of the accolades come from reporters who depend on Regis McKenna Inc. for press kits and interviews with the firm's corporate clients. Clearly, this is a man with clout, and he and his associates don't mind letting people know about it.
"This agency knows more about Apple Computer than Barbara Krause (Apple's in-house public relations chief)," asserts Andrea Cunningham, who is Regis McKenna Inc.'s group account manager for Apple.
McKenna is best known for taking the story of Apple Computer's founding in a Palo Alto garage by a couple of young entrepreneurs and weaving the tale into part of our national folklore. He also helped popularize Intel's microprocessor, or "computer on a chip," and focused attention on the wonders of Genentech's gene-splicing technology.
More recently, by skillfully doling out facets of the story to different publications, he was able to get the story about the introduction of Apple's Macintosh computer onto the covers of no fewer than 16 magazines. Such "multiple exclusives," an oxymoron if ever there was one, rankle some journalists who fear that McKenna can control coverage by determining who has access to a new product.
McKenna's power comes from the fact that good public relations are crucial for hundreds of small technology-oriented start-up companies. "For a start-up, visibility is the name of the game," says Edward R. McCracken, president and chief executive of Silicon Graphics Inc. Visibility can lure investors and customers, he says.
"I think he truly is the best p.r. man around in the high-technology business," says Robert Henkel, editor-in-chief of Electronics magazine and formerly the technology editor of Business Week, who counts himself among McKenna's friends.
"He knows the business, and he knows the publications and their needs," Henkel adds. "But does that always result in good journalism? I'm not sure."
Some journalists chafe at restrictions McKenna imposes when he gives them advance looks at new machines. For example, reporters are asked to sign confidentiality agreements, which preclude them from disclosing details to--and thus seeking comments from--competing manufacturers.
Journalists can, of course, get comments from analysts to whom McKenna has given peeks at a new product. But one reporter frets that "few analysts will risk being cut out of the information flow by dumping on a new machine."
Nor are all of McKenna's clients impressed with what his agency has done for them, especially some clients who were drawn by an adulatory 1982 Fortune magazine profile, which stated that "simply being a client of Regis McKenna Public Relations has become a kind of anointment for a high-tech business."
Take Richard Nedbal, president and chief executive of Personal CAD Systems, a 2-year-old Los Gatos-based maker of software for computer-aided design. "We felt that if Regis picked us, we'd experience Nirvana," Nedbal says.
Instead, he says, his firm's account was assigned to "an account manager who didn't understand our business, and then, after we complained, to another one. Basically, they wanted us to pay them a lot of dollars to educate them."
After six frustrating months, Nedbal moved the account to Franson & Associates, Silicon Valley's No. 2 firm specializing in high-tech public relations. Franson, he says, has helped the start-up company gain the exposure it needed to achieve credibility in its sophisticated industry.
And what about the legendary Regis? "Never met the man," Nedbal says. "He was always on tour giving speeches about how great Silicon Valley is."
McKenna acknowledges that his firm sometimes slips up. "I try to get involved with as many accounts as I can, but sometimes it's impossible."
Being Spread Thin
Nedbal's criticism is echoed by other disappointed clients, who say the quality of Regis McKenna Inc.'s employees hasn't kept pace with the firm's rapid growth. The firm now employs 152, a sixfold increase from 1981. "It's very hard to find good people in this business," one competitor says. "Regis is being spread thin."
McKenna agrees that attracting and retaining good managers has been a problem. Last year, he appointed a president, Paul Dali, former general manager of the Apple II division at Apple Computer. And McKenna is bringing in other top officials from Intel and Montgomery Securities, a San Francisco-based brokerage firm with a well-respected research department. He's also working on a plan to distribute equity in the firm to key officials.
And to those clients who are dissatisfied with the firm's performance, McKenna offers what has become his standard spiel. "Public relations is a process that takes years and years of work," he says, adding that he often tries to dampen the expectations of brilliant entrepreneurs who have spent years nurturing a product and want instant recognition.
McKenna insists that he is no run-of-the-mill p.r. man, and many loyal clients agree. "We are more part of the electronics industry than part of the p.r. industry," he says. "I've never studied public relations; I've studied technology."
McKenna was raised in a devoutly Catholic home in Pittsburgh and studied existential philosophy at Duquesne University. Although four of his brothers became priests or monks, Regis took another path, marrying at age 20 and getting a job as an advertising salesman for a local company that published technical magazines.
Worked for Pioneer
That was his introduction to technology. He was transferred to California, went to work for an advertising agency and soon thereafter took an advertising and public relations job with General Micro Electronics, an early maker of semiconductors.
Today, McKenna is an active participant in the Semiconductor Industry Assn. and is president of the National Commission on Industrial Innovation, a group patterned after a statewide body created by former California Gov. Edmund G. Brown Jr. Its members include Robert Swanson, chairman of Genentech, and Sens. John Chaffee and John Danforth. McKenna avoids membership in associations of p.r. people.
Says Krause of Apple: "Regis is more of a strategist than a p.r. man. He advises most members of our executive staff, and he's a frequent lecturer at Apple." Krause, who has taken some flak from the press for her bosses' "no comment" posture during Apple's current downturn, was unperturbed by McKenna staffer Cunningham's boast about being better informed about Apple goings-on. "We're both well tuned in," Krause says diplomatically.
"Fundamentally," McKenna says, "the best p.r. is a good product. The more you promote a bad product, the faster you'll go out of business." That's because the computer business is driven by word-of-mouth. "If you're happy with a product you buy, you'll tell three people about it," McKenna says. "If you're unhappy, you'll tell 11 people."
Cultivates Opinion Makers
His belief in word-of-mouth led McKenna to recognize, early on, the importance of the computer industry analysts, leading retailers, software developers and other "luminaries" that journalists turn to when shaping stories. And McKenna cultivates these "thought leaders" assiduously.
"Ninety percent of the world's views are controlled by the 10% who are opinion makers," he says. "A good job of public relations demands that you develop relations with relatively few people."
Those few people, in McKenna's view, included editors of business publications as well as the trade press that Silicon Valley public relations people were used to dealing with. "The thing we did differently," McKenna says, "was to talk about technology to the business press. And, believe me, it took a while before Forbes and some of these other magazines began looking at technology as a business."
As evidence, he cites a 1974 letter from Forbes telling him not to send information on West Coast companies with annual sales of less than $50 million that weren't listed on the New York Stock Exchange. (The company McKenna was pitching was Intel, 20% of which is now owned by IBM. The company's 8088 microprocessor is the guts of the IBM Personal Computer.)
McKenna got his big break in p.r. as marketing communications director for National Semiconductor in 1967. Charles E. Sporck, the company's founder, has been quoted as saying: "Regis spread the idea that we were a technological leader long before we actually were."
Sporck couldn't be reached for comment, and McKenna professes to take umbrage at the remark. "What I did with National was to get them exposure in the business press. This was a company whose sales had grown from $3 million to $80 million in four years." (National Semiconductor now has more than $1.5 billion in annual revenues.)
Plans More Books
Today, McKenna insists, you can't fool the public. "Journalists are smart enough to go to the infrastructure"--his term for the industry analysts and others who lend perspective to stories about the technology industry. And, though he admits to cultivating the infrastructure, he says you can't deceive those people, either.
Earlier this year, McKenna's maxims for success were put together into a thin volume titled "The Regis Touch." Reviews have been mixed. McKenna has two more books in the works and, in his spare time, also writes what he calls humanistic and anti-war poetry. A Democrat, he was a delegate for Gary Hart at the National Democratic Convention in San Francisco last year.
McKenna, who lives with his wife, Dianne, and three children, has six personal computers at home--five Apple Macintoshes and one Compaq. But, curiously, his office at Regis McKenna Inc. is computer-free. "I use computers as writing and thinking machines, and I can't think very well in an office environment--too many meetings, phone calls and interruptions," McKenna says.
Summing up, one friend says McKenna is "a bright, hard-working guy who happened to start an agency at the right time in the right place." But this friend, who asked to remain anonymous, doesn't buy the guru or wizard stuff. "When Silicon Valley became hot, Regis became part of the mystique. He became good copy, and he good got press--for himself and his clients."
And few people know the value of good press better than Regis McKenna.