Mr. Galloway grew up in Los Angeles to immigrant parents. His father, a charming sales executive who grew up in Depression-era Scotland, had a “terrible relationship with money,” he said. His parents divorced when he was 9 years old and he lived with his mother, who worked as a secretary.
“It was a huge source of stress that we didn’t have the money,” he said. “It was also very emsculating.” 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 each time. He also developed body dysmorphia, he said.
He went to college at UCLA and described his time there, in a completely reassuring tone of regret, as “missing an opportunity to be responsible.” He joined a fraternity, boarded the crew and gained 20 pounds of muscle. “Quite frankly, my life changed,” he said. “Suddenly the women were very interested in me.”
While in business school at the University of California, Berkeley, he and a classmate started a firm called Prophet Brand Strategy, which advised companies to build their own brands. In the early 1990s, his advice was often as follows: Use the Internet. They attracted large clients including Williams-Sonoma, Levi Strauss and Apple. In the dot-com boom, he started a series of companies, including an e-commerce site called RedEnvelope, where people could buy and send last-minute gifts.
RedEnvelope got cash flows from venture capital firms including Sequoia Capital, but Mr. Galloway thought the new financier was taking the company in a terrible direction. His fight to replace the board was unsuccessful, but caught the attention of hedge funds. “They said, ‘We like the cut of your crazy jib,'” he said.