Founders at Work.pdf

328 Founders at Work
Why would they want to come work at my company where everything is constrained?”
So it’s not as simple as hanging out a shingle and saying, “Here’s our
small company; we have $15 million a year in revenue and we’re profitable; now
we need a manager.” The people you are likely to attract, by definition, are
people who couldn’t get a job at General Electric.
We were having trouble because the handful of good people who wanted to
work at startups were all dazzled by the names of the venture capitalists. They’d
say, “If you don’t have backing from Kleiner Perkins, we don’t want to work
for you.”
We talked to a headhunting firm, and the guy was candid with me and said,
“Look, we can’t recruit a COO for you because anybody who is capable of doing
that job for a company at your level would demand to be the CEO.” And I
thought, “That’s kind of crazy. How could they be the CEO? They don’t know
the business or the customers. How could we just plunk them down?” In retrospect,
that was pretty good thinking; look at Microsoft: it took them 20 years to
hand off from Bill Gates to Steve Ballmer. He needed 20 years of training to
take that job. Jack Welch was at GE for 20 years before he became CEO.
Sometimes it does work, but I think for these fragile little companies, just putting
a generic manager at the top is oftentimes disastrous.
There was no way we could have hired first-rank businesspeople in that
environment. There were too many companies that were low-risk and had
more assets that were hiring the best people. All we were going to get were the
second-raters. We’d get first-rate programmers because we had a company
where programmers were the stars and we already had great colleagues for
them, so we were going to attract great programmers, just not great businesspeople.
Because we were not GE or Microsoft, we were not a place where a
great businessman rationally would have wanted to work.
We did get one good guy, Cesar Brea, who had done a lot of software consulting
at Bain. He came by the house to check us out because he had heard
about us from a friend of a friend and was looking to work at a company instead
of being a consultant. What sold him on us was that, when he came to talk,
there was a check for $500,000 from HP on the coffee table that we hadn’t
bothered to deposit yet. He knew that if we could leave a check lying around for
a few days, then we must have been doing OK.
The other thing was that the original sales pitch that I made to employees
was, “Come work here. You’ll make $150,000, maybe $200,000 a year if you do
a great job and you make your customer really happy. We can just do that forever,
making the customers happy, not spending too much. We’ll pocket the
profits, we’ll have fun offices, a beach and ski house that everyone can go enjoy
and go there for a week and do some writing. We’ll collaboratively have this
great lifestyle.”
But they felt like they were dumb because every day they were reading the
newspaper about people who had worked for 6 months at some company and
now they were worth $20 million because of an IPO. They’d ask me, “Why
aren’t we doing an IPO?” And I’d say, “Because we have profits.”