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Gruber, too, has proved to be quite a chameleon. A physician by training, he founded three biotech companies before a fascination with computers lured him from medicine in 1994. He developed a method for streaming video over the Internet, which became the basis of San Diego-based Intervu. In February he sold Intervu to Akamai for $2.8 billion. Now he's working on his second Internet invention, Kintera, which provides interactive tools for nonprofits raising money via the Web. "The Internet enhances TV and other media that nonprofits use to deliver their messages," Gruber explains. Maybe so, but convincing nonprofits to move beyond the fund-raising vehicles they've been using for centuries is likely to be Gruber's biggest challenge yet. Of the $200 billion donated to charity last year, only 5% was generated online. Chronically strapped for cash, nonprofits have been late to adopt new technology, Gruber says. And many of those interested in the Internet are reluctant to shell out money to hire companies like Kintera. "They often say, 'I can do this myself,'" Gruber concedes. DRUGS TO STREAMING VIDEO. Gruber always seems to find a way to invent solutions for tough challenges. He grabbed his first patent as a 27-year-old in 1980, when he developed a class of compounds that helped reduce injury from heart attacks and strokes. That invention became the basis of Gensia, which continued his research while also working on gene-therapy treatments for cancer and AIDS. Gruber spun off Viagene and Aramed, and took both companies public in the early 1990s. In 1994 he sold Viagene to biotech giant Chiron for $150 million. By then he had grown frustrated with drug development. "I like to see things move at a fast pace," says the soft-spoken entrepreneur, "and for that, I needed to change fields." A casual conversation with a neighbor provided the idea Gruber needed to make his move to the Internet. The neighbor, a real estate agent, asked why she could get data about houses delivered to her computer over the phone lines, but not video footage of those properties to show clients. Gruber thought about the problem and decided the only way bandwidth-devouring video could be delivered over the Internet would be to use a network of servers operating simultaneously. "That way, if one server went down, the video would automatically be redirected through the next-closest server," he explains. But when he approached venture capitalists, they balked at the idea. "At the time, they were only backing products, and we were a service," Gruber says. So he spent a year bootstrapping $10 million from angel investors. Ultimately, Intervu was a huge success, with a giant stable of customers such as NBC, Bloomberg, and CNN. Gruber took Intervu public in 1997 at a market cap of $100 million, which tripled within two years. Then came the sale to Cambridge (Mass.)'s Akamai, a deal that netted Gruber $146 million worth of Akamai stock. Gruber wished neither to retire nor to move from sunny San Diego to work for Akamai, so he stayed and launched Kintera instead. He had formed the idea for the company before the Akamai buyout and appointed his brother Allen to start working on it. Intervu had built sites for a few nonprofits, and their online fund-raising successes convinced Gruber that the niche had potential. "We found that charities were raising an average of $100 per person per hour online," he says. GOLDEN OPPORTUNITY? It's the nature of the Internet that draws in the money, Gruber says. Wealthy people tend to be heavy Web surfers, and the Internet allows them to interact with charitable organizations in ways that can be more personal than watching a TV telethon or responding to a direct-mail piece. Some charities have used live chats and e-mail to communicate with potential donors. For Fleetweek, San Diego's annual fund-raising benefit for the military, Kintera devised trivia games for each branch of the armed services. One week into the six-week event, Fleetweek organizers were nearly halfway to their goal of raising $2 million. "The Web gave us a head start," says Ginger Hovenic, CEO of the San Diego Chamber Foundation, which sponsors the project. "Fund-raising is tough business, and this gives us a wider net to cast." But many charities have been reluctant to hire Kintera. Some are fearful that an outside company won't design a site that adequately reflects the charity's values and messages. Others are reluctant to hand over the fee -- which ranges from 10% to 20% of the total funds raised. Gruber has managed to sign on about a dozen clients so far -- a feat his brother attributes to his patience and subtlety -- traits he developed during his medical training. "He doesn't go in with hard-charging sales tactics," Allen Gruber says. "He listens carefully to their needs and takes an orderly approach to diagnosing them." Gruber has always had a knack for scientific thinking. As children, he and his brother spent hours in the basement playing with chemistry sets. "Everything turned black, so we ended up with a lot of shoe polish," Gruber jokes. A product of an exceptionally close-knit family, Gruber and his brother roomed together at the University of Pennsylvania medical school. Their sister, Hope, also became a doctor. Today, Gruber prefers to spend his downtime with his wife, Joan, and their three children. "This is not a guy who enjoys golf," says Dennis Berman, vice-president for corporate development at Kintera. "Work is fun to him -- and beyond that, it's family." And beyond that, Gruber has taken an interest in philanthropy. He has endowed two scholarships at the University of Pennsylvania medical school, where he serves on an alumni advisory board. He has also donated to dozens of charities, including Mothers Against Drunk Drivers, the American Heart Assn., and PBS. He estimates that he has given away almost $1 million. And he has poured about $200,000 of his own money into getting Kintera off the ground. "The Web will become a very significant place for charitable organizations to raise funds using audio and video," he says. Now all he has to do is invent a way to convince the charities that he's right. Weintraub covers technology companies for Business Week in Los Angeles. |
