Mr. Galloway grew up in Los Angeles as immigrant parents. His father, a charming sales executive who grew up in Scotland during the Depression, had a “terrible relationship with money,” he said. His parents divorced when he was 9 and he lived with his mother, who worked as a secretary.
“It was a huge source of stress that we had no money,” he said. “It was also very humiliating.” Mr. Galloway became obsessed with money and bought his first stock (Columbia Pictures) as an eighth grader. He was not popular. “I looked like Ichabod Crane with bad skin,” he said. In high school, he ran for class president three years in a row and lost every time. He also developed body dysmorphism, he said.
He attended college at UCLA and described his time there, in an unconvincing tone of regret, as a “missed opportunity to be responsible.” He joined a fraternity, rowed crew and gained 20 pounds of muscle mass. “Honestly, my life has changed,” he said. “Suddenly women were very interested in me.”
While in business school at the University of California, Berkeley, he and a classmate founded a company called Prophet Brand Strategy, which advised companies on how to build their brands. Since it was the early 1990s, their advice often boiled down to: Use the Internet. They attracted major clients including Williams-Sonoma, Levi Strauss and Apple. In the dotcom boom, they started a series of businesses, including an e-commerce site called RedEnvelope, where people could buy and send last-minute gifts.
RedEnvelope received an influx of money from venture capital firms, including Sequoia Capital, but Mr. Galloway thought the new financiers were steering the company in a terrible direction. His fight to replace the board failed, but did attract the attention of hedge funds. “They said, ‘We like the cut of your crazy ***,'” he said.