Founders at Work.pdf

334 Founders at Work
will only have to listen to their boss. For keeping to deadlines, the programmers
won’t have to do that; we’ll hire project managers to keep the deadlines.” And
then they hired these people who, still to this day, I have never figured out what
they were supposed to do. They were called “client services.” They weren’t the
project managers. I think they were supposed to keep the customer happy.
The new management hired all these people but, if you asked, “Who’s
responsible for making sure that this project, overall, makes money for the
company and who has an incentive to ensure that it’s done on time and the customer
pays?” the answer was essentially, “Nobody.” You had to go way up the
management chain to find somebody who had P&L responsibility. So I told
them that they were taking an enormous risk, that they had no idea what the
consequences were going to be.
Their response was, “Shut up, Greenspun. You’re injuring our self-esteem.
This is how good companies like IBM do it. You don’t know anything.”
They tried to make everything as much like IBM as possible. They were
very conventionally minded. The problem with doing that is that those niches
are occupied. If you have bland, boring marketing materials just like IBM and
you have very high prices and slow delivery, there is a niche for that product
and it’s occupied. IBM is there. The customer doesn’t need you. They just go to
IBM Global Services, if that’s what they want, or their own IT department, for
God’s sake.
In the case of open source software, it can fall apart quickly. If you become
slower and more expensive and more mired in bureaucracy than the customer’s
own IT department, then they’ll just say, “We have lazy, ineffective, slowmoving
programmers right here in our back office. We don’t need you.”
So it was falling apart very quickly financially; I could tell that. The board
meetings got more acrimonious. They actually precipitated the ultimate fight.
They said, “Look, we’re going to kick you off the board and sue you for injuring
our self-esteem. You better talk to a lawyer.”
Livingston: Didn’t you also insult them by describing publicly what it was like
to have VCs run your company?
Greenspun: Only after they sued me. I said it was like watching a kindergarten
class get into a Boeing 747 and flip all the switches and try to figure out why it
won’t take off. That was before I got my pilot’s license. Now I know how apt
it was.
So I talked to my friend Doug, a great lawyer. He said, “You need to talk to
my friend Sam Mawn-Mahlau at Edwards and Angell and figure out what to do.
Sam looked at all the deal documents and said, “You own this company. You are
a majority shareholder.”
I said, “But these guys told me that I have no power because they control
the board, three to two, and it doesn’t matter what anyone else says.”
He said, “Yes, but the shareholders elect the board. Just have a shareholders’
meeting and elect yourself and your cofounders (or whoever else you
want) to the board, and these guys will be back to their two board seats, which
is what they bargained for. They have a minority investment. They bargained