Interlude - Index of

CEO Lessons | 45
equals, in the sense that he was the CEO and got to make the
final decision, but most of us felt pretty comfortable pushing
back on him if we disagreed, and Mike was generally willing to
listen. I imagine his style was similar when he’d been a university
professor guiding a small troop of graduate students.
The first VC round, in September 1993, brought in almost
$5 million overnight, and that’s when Mike’s management
style really started to break down. The influx of VC money
changed two things: we started growing very quickly, and
Mike no longer needed to spend time fundraising. I think it
was the combination of more employees and more time in
the office that pushed Mike out of his comfort zone as a manager.
He was no longer the right leader. A couple of months
after the first VC round—six months before we hired Tom
Mendoza—James, Charlie, and I felt that change was necessary.
We couldn’t convince Mike ourselves, so in November
we arranged a dinner with Bob Wall, who was an angel investor
and also a board member, to share our frustration. We told
him it was time for a more experienced leader.
••
We had eight employees when that first VC funding came in,
late in 1993. By the following February we were up to employee
25, and by August, employee 50—six times as many people
in less than a year. The more we grew, the more our decisionmaking
process broke down. People would go into Mike’s
office to talk about a new idea or a change to our existing
plans. If they were persuasive, they would come out and say,
“The new plan is . . . ” Those words began to strike fear in my