Founders at Work.pdf

Philip Greenspun 337
the fact that the CEO and CFO hadn’t been doing a very good job. Partly
because they had burned through about $40 million in cash (I had left them
with about $40 million in cash when I turned over the reins), and they didn’t
understand why. The VCs came in and fired the CEO.
There was a period where I wasn’t supposed to talk about them or the company,
but that’s over. But I think they don’t like me talking about the lawsuit,
because being incompetent and running a company is embarrassing enough,
but being totally incompetent in litigation also looks bad.
I had fostered an atmosphere of caring about end-user experience and
education and “we’re going to have fun, we’re going to have the beach house
and a Ferrari.” We did lots of things for free—we had a foundation, we did programs
for high school kids, and we did a one-year intensive computer science
program for people who wanted to transition from being a poet or whatever
into being a programmer. So people thought of me as a hippie. In reality,
ArsDigita was my sixth company, and I knew how to make money, and I was the
investor.
So while I publicly had a persona of doing all this fun stuff and money takes
care of itself, I was watching the bottom line very carefully. I had set things up
so that the company could not lose money while I was CEO, and if there was a
problem, it would be identified very quickly and we would fix it.
If you are a for-profit corporation, your job is to make money, and if you’re
not making money, you’re not doing a good job. End of story. It’s important to
have fun, but once you incorporate for profit, my attitude is that you better
make a profit. When I was trying to retake control of the company, most of the
programmers at ArsDigita were so relieved to be rid of me. They thought,
“Now we don’t have to listen to this guy, we don’t have to have our code
reviewed, and we can all be happy and go home at 5 p.m. and never write anything.
Let the salespeople sell—we don’t have to talk to customers anymore.”
Some of them would email me and say, “Why are you doing this, Philip? We
don’t understand.” I’d say, “Let me explain to you about being a shareholder in
a corporation. I don’t work there anymore. I’m not an employee. The only thing
that you can do for me is send me a dividend check.” I had to lay it out in blackand-white
for them; it was a little cold. Maybe, when I was working there, there
could be some brotherly love and we could all have fun together, and if the
company was losing money, it would be a shared experience. But, right now it
wasn’t a shared experience. I was a shareholder; I wanted my return on investment.
“That’s the only way I’m measuring you, and if that means that you all
have to have a pay cut or your jobs offshored to India, that’s a shame, but for the
shareholders, all we care about is the money.”
The VCs also looked at the Ferrari . . . The Ferrari was something like
$1,000 per month to lease. We parked it in the parking lot; it was a great symbol;
we got written up in Forbes. I had architected the deal so we would never
actually have to give out the Ferrari. You had to recruit ten friends, and then
you only got to drive the Ferrari for as long as you worked at the company. I
figured, “Well, programmers only stay in the job 4 years, 5 years tops. It takes
them 3 or 4 years to recruit their ten friends, they’d drive the car for a year or