Founders at Work.pdf

444 Founders at Work
Livingston: The stars were aligned.
Gruner: Yeah, they were all aligned. Somebody told me a long time ago that
generally companies are bought, not sold. And that’s what we did. We didn’t
hire an investment bank or anything like that to go off and sell us. We just
waited for the right opportunity.
Livingston: Is there anything you might have done differently with
Shareholder.com?
Gruner: Well, I think that bootstrapping the company on a quarter of a million
dollars made us a little myopic. We became so proud of that fact that we didn’t
find the middle ground. I think that in ’98, ’99, or 2000, we could have taken a
million, $2 million of capital, at a very attractive valuation, and retained control
and grown the company twice or three times as fast as we did. Perhaps that was
a mistake, not doing that. I don’t know, because everything worked out fine.
And when you only have so much money, it makes decisions much easier.
Here’s an example: back when the whole Internet thing was getting started,
I hired a computer consultant to come in and advise us about what our Internet
infrastructure should be. He was a well-credentialed, Microsoft-accredited
engineer, etc. He came in and said, “You need to buy x number of servers and
this kind of software and all that, and it’s a quarter of a million dollars to do it
right.”
We said we couldn’t even come close to doing that. So I went down to
Barnes & Noble, bought several books, including some of the Dummy series.
And we built our first Internet servers, which lasted us several years, on
Gateway desktop computers, using Microsoft Access as our database system
and using basically off-the-shelf server software. We did that for $3 [thousand]
or 4,000, and it worked great.
Livingston: Did having a background in technology give you an edge? I would
think a lot of financial services companies at the time didn’t.
Gruner: Well, in financial services, that may be. But we were kind of a different
breed of cat in financial services. We were a technology company providing
great service to public companies. So we were always viewed as a technologist
kind of company, and many companies liked that. Some didn’t like that so
much. But that was our niche. That was our differentiation. We understood
technology better.
Livingston: Who did you learn from? Did you have any mentors?
Gruner: I had several. I tried to learn and listen to them. The whole founding
group at Data General were really smart people. There were four founders
there: Ed de Castro, who was the president, who was an investor in
Shareholder.com, and who remains a friend after 35 years; Henry Burkhardt,
who was the VP of software; Dick Sogge, the VP of engineering; Herb Richman
in marketing. They’re all really smart guys, and I learned a lot from watching
and listening to them.