Founders at Work.pdf

Philip Greenspun 327
Greenspun: Yeah, but they didn’t appreciate it that much. Some of the early
people did, but the later arrivals, when the venture capitalists came in and said,
“Oh, you guys should just clock out at 5 p.m. and you shouldn’t write, because
programmers shouldn’t have to do more than code,” they were so happy that
they didn’t have to work hard anymore. “We don’t have people like Philip and
Jin reviewing our code and telling us to redo it to be cleaner and simpler.” They
were so happy to be relieved of those strictures that they very quickly lapsed.
Not everyone, of course, but the majority. We built the company a little too fast,
and consequently the last 50 percent of the people hired really didn’t have
much commitment to the corporate culture.
There were some warning signs. Consider McKinsey, which holds itself out
as one of the world’s leading repositories of knowledge on how to manage a
business. They say they’ll never grow their company by more than 25 percent
per year, because otherwise it’s just too hard to transmit the corporate culture.
So if you’re growing faster than 25 percent a year, you have to ask yourself,
“What do I know about management that McKinsey doesn’t know?”
I still think it’s more efficient—this is just an old Lisp programmer’s standard
way of thinking—if you have two really good people and a very powerful
tool. That’s better than having 20 mediocre people and inefficient tools.
ArsDigita demonstrated that pretty well. We were able to get projects done in
about 1/5th the time and probably at about 1/10th or 1/20th the cost of people
using other tools.
Of course, we would do it at 1/20th of the cost and we would charge 1/10th
of the cost. So the customer would have a big consumer surplus. They would
pay 1/10th of what they would have paid with IBM Global Services or
Broadvision or something, but we would have a massive profit margin because
we’d be spending less than half of what they paid us to do the job.
Livingston: So you’re doing well, have great people, and are profitable, and
then you decide to take VC money?
Greenspun: Here was the problem: hiring businesspeople was almost impossible.
That was one of the things that drove us into the arms of the VCs.
Why is it hard to hire businesspeople for a young company? There was a guy
recently hired by Microsoft to be their chief operating officer—Kevin Turner.
He’s 40 and was CIO of Wal-Mart. Graduated from East Central University in
Ada, Oklahoma, with a bachelor’s in business. That was it. (Cautionary for those
of us in the higher ed biz; this guy never had much of it, but he was apparently
very effective.) They could have hired anybody in the world—they have all this
cash—and they hired this guy. You want somebody who’s a really good manager.
Managing your company might be harder than managing Microsoft because
Microsoft has $40 billion in cash, so they can recover from mistakes that you
won’t be able to recover from. So you need a guy like that.
But entrepreneurs love their babies and never ask themselves, “Why would
a guy like that want to work for me? I have no resources to manage. That same
person could work at Microsoft and have tens of thousands of good employees
to deploy on projects, tens of billions of dollars to invest in interesting projects.