Founders at Work.pdf

432 Founders at Work
Gruner: I had a couple of very clear criteria in my mind. I wanted to build a
business that had a recurring revenue stream. At Data General—and Alliant
even more so, because it sold computers that were in the half million to one
million dollar range to large defense companies, universities, and the government,
who had very sophisticated purchasing agents—we typically generated
80 percent of our revenue the last 2 weeks of the quarter. People don’t believe
this today, but it’s true.
And we were a public company. So if we had to make $15 million in revenue
in a quarter, we’d be 2 weeks from the end of the quarter and we might have
$3 million on the books. We were fairly confident we’d close the other $12 million,
but it was horrible.
I remember one time we got a call on a Friday, the last day of the quarter.
The call was from a very large defense contractor located in Sunnyvale,
California. It was a purchasing agent saying, “Well, it’s 5 o’clock in Boston right
now, isn’t it?” I said, “Yes, sir, it sure is.” He says, “It’s the last day of the quarter,
isn’t it?” I said, “Yes, sir, it is.” He said, “Well, let’s negotiate.”
So we went into extended negotiations with this guy for a couple of hours,
until 7 p.m. our time, until he signed the contract and faxed it to us. Having
been through that, I said, “I really want to build a strategy that has a recurring
revenue stream.”
The second thing was, having been chief executive at Alliant for 10 years,
about halfway through that process I realized, “As the boss, I’m spending
40 percent of my time on things that don’t directly contribute to getting computers
out to customers.” In other words, raising money, dealing with investors,
dealing with lawyers, those kinds of issues. So I said, “In the next company I do,
I want to be able to spend 98 percent of my time focused on the customer and
only 2 percent on secondary factors that lead to that.”
I said, “I want to start a company that I can bootstrap up from a small
amount of capital that gives us an opportunity of being a big fish in a
small pond. Because I can’t be in a big pond if I’m going to take just a small
amount of money. I can only do so much. And then just let the thing grow
organically, just take our time.”
I actually made the conscious decision to, rather than put together a 5-year
business plan, put together my basic thoughts on strategy and manage the company
quarter to quarter. Turn quickly if things have to change, but manage it
that way.
The third requirement, having been through Alliant with all people working
in good faith but losing control of the company, I said, “I ain’t going to lose
control. I want to be the sole owner. I’m going to be the majority owner of the
company. I want to be the sole founder. It may be harder that way because I
have to do most of it myself, but I’ve got control.”
My notion for the new company was something I would not have expected
when I was at Alliant. It was to go into shareholder communications, which was
a micro-niche. The way I got that idea was two things kind of segued in my
mind. First, when I was at Alliant, we actually had an investor relations person;
we were leading in that in the ’80s. She and I spent a great deal of time talking