Jun 11, 2008, post by Randall Howard
In the tech heyday of the mid-1990’s, my favourite US investment banker, Mark Slater (formerly of Hambrecht & Quist) had a strategy to avoid CEOs that, as he so eloquently put it, “Drank their own bathwater”. Mark had identified the tendency amongst CEOs, even entire executive teams, to become so satiated with the power and glitz of riding the waves of technology/media hype, that the corporate adulation goes straight to their head.
Ego and ambition, never faults in themselves, taken to extremes tend to cloud better judgment. Anyone who has visited their capital city, like Washington, London or Ottawa, has witnessed the same effect that all that marble and walnut lining the corridors of power have on newly elected Members of Parliament or Congress.
I’m sure all of us entrepreneurs have been seduced by the siren call of their own PR. I know I have. But long ago I learned that, no matter how big the entrepreneur’s ego, it is critical to be self analytical and have enough inner humility and judgement to resist the corrupting force of power and spin. Every company has faults, challenges and issues to deal with. In truth, no matter how great the press or the wave being ridden, no company can entirely escape the buffeting of real world forces and the ups and downs of a cruel world. Navigating such turbulent waters is simply another challenge entrepreneurs need to face every day.
Ed Iacobucci, CEO Dayjet
One example, and a person I would consider a mentor and role model, is Ed Iacobucci, founder of Citrix Systems and more recently Dayjet. Ed, an industry visionary, pundit, technologist supreme with energy and a will to win, is a man for whom I have infinite respect. Specifically, Ed has weathered highs and lows like almost no one else I know. For example, when I first met him, he was CEO of an almost bankrupt startup selling multi-user OS/2 technology (go figure). Later, after re-targeting the Citrix product family around Windows NT, his company was a NASDAQ darling and on a roll.
Imagine being in Ed’s shoes when, at the February H&Q conference at the Westin St. Francis in San Francisco, he learned that Microsoft had just informed them that they were planning to compete with their core product, Ed led the charge with the team. First he did the honest thing and issued a press release, which had the effect of instantly wiping out over 80% of Citrix’s market capitalization. Without even going home, Ed flew straight to Redmond and led the 24×7 multi-month battle to save Citrix from being “Quickenized” by Microsoft. A $150 million deal saved the day, but the key fact was that Ed remained honest to himself and his shareholder base throughout, which is no simple task for a major public company given shareholder disclosure rules. Several years later, when his stock price touched $50, making Citrix worth a cool $20 billion, his only comment was a modest and realistic “that stock price is a lot to live up to.” Perhaps this illustrates why I have such admiration for Ed as an individual.
For every Ed Iacobucci, there were many dot com era fibre and telecom firms that, despite all hard data to the contrary, ran their businesses into the ground on the false proposition that the interent was doubling every 90 days. And, make not mistake, sheer hubris was the major contributing factor.
In summary, humility and being self critical (”not drinking your own bath water) coupled with fearless passion (the killer instinct and laser beam focus) are two of the most important qualities in the Entrepreneurial Toolkit. Well balanced, and taken together, they are a winning combination. Most importantly, like almost all personal success factors, they can and must be learned as only a rare few are born with this wiring.
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Jun 05, 2008, post by Randall Howard
“I believe ‘fearless passion’ is a secret sauce of future success.” - Jeff Pulver
Jeff Pulver
This morning, fearless entrepreneur Jeff Pulver, published an truly inspirational blog post that all entrepreneurs (and aspiring entrepreneurs) should read and take to heart. Read “Fearless Passion Knows no Boundaries” and consider, as one comment suggested, printing it out and putting it on the wall of your office or cubicle.
Jeff, a co-investor in our portfolio company iotum, is a prolifically tireless entrepreneur who, among other things, co-founded Vonage and continues to be a visionary innovator in the VoIP community and Internet Video.
Why do we put this as the first item in our Essential Entrepreneurial Toolkit?
In the uncertain world that entrepreneurs must navigate, both in startups and the social sector, Jeff’s advice is right on the money. To outsiders, the sheer bloodymindedness and chutzpah exhibited by many entrepreneurs comes off as arrogance, or even worse, naïveté. In truth, when balanced with other qualities in the toolkit we’ll discuss at a future date, such fearlessness allows them to navigate those inevitable troughs of despair.
And, it’s a good thing. Without such “fearless passion” our world would be a less colourful place and many disruptions that we depend on might well never see the light of day.
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May 06, 2008, post by Randall Howard
I finally found some time to record thoughts on a great conference - last Thursday’s Tech Leadership Conference (TLC) by Communitech.
CEO ROUNDTABLE:
Verdexus once again gathered a few tech CEOs from Waterloo and Toronto, the night before at Charbries, to have an informal and open-ended discussion of key issues in financing, growing, valuing and finding exits for technology startups.
As in past years, we assembled an accomplished group who have built primarily software-based businesses during the last decade and are now executing newer models, whether SaaS or the more esoteric Venture 2.0 Playbook necessary for “so-called” Web 2.0 and Mobile businesses. In an earlier blog, I covered a past TLC speaker and Verdexus advisor Grover RIghter’s Venture 2.0 Playbook.
Numerous war stories about increased complexities of dealing with founders, VCs, groups of angel investors, not to mention simply making enterprise sales highlighted common success factors of perseverence to overcome obstacles, failure and experimentation before ultimate success and just plain good luck around timing. The drying up of VC money and other funding challenges remain a constant theme.
Experience in building great businesses over the last ten years has a lot to teach us today. However, the 2008 market also demands significantly different startup building techniques. To explore that, we spent time dissecting the Web 2.0 phenomenon. Some key questions we analyzed were:
- Q: in building companies for less (e.g. under $10 million, or even $5 million, from start to exit), is this building a complete company? Or, is an exit to a much larger acquirer the only way such nimbly funded companies can be grown to full scale? A: yes and no, we had some quite different opinions on this, so perhaps the jury is still out.
- Q: likewise, are these companies inherently built around smaller applications, that aren’t as technologically deep as earlier startups, or is there a genuine breakthrough in company cost structures? A: yes there are real breakthroughs in outsourcing, virtualization, hardware and network costs, virtualizing management, etc. Furthermore, while some Venture 2.0 companies are big plays, many are ultimately just a piece of the whole product and will ultimately find their true “home” only when acquired.
- Q: in an age of “free”, what are the long term monetization strategies that will build companies of real value? A: see discussion around TLC and Chris Anderson, below.
In addition, we spoke about:
- the right time and stage to start going outside for money, and hence the tradeoffs between purely organic growth and the accelerated growth rates external finance allows.
- how to get and maintain, and perhaps legally incent, alignment between investors and management.
- the difficulties a “closed” mobile environment, particularly in Canada and the US, presents to startups and whether purely web-based applications (a la iPhone) represent the optimal rollout strategy. The emergence of 3G will only enhance this strategy (3G is expected to be 20% of handsets by 2010, but that number would be skewed to non-North American markets).
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