Saturday, July 13, 2013

Corner Office: So Who Says a New Business Has to Be Small?

Q. Did you have the entrepreneurial itch early on in your life?

A. I did. My parents were entrepreneurs. They ran a small ad agency in upstate New York.

Q. What were your high school years like?

A. I never did particularly well in school, but I did get really into things. I used to build robots, and dove right into computers to the point where my schoolwork suffered. Then I really became inspired by people like Steve Jobs and Bill Gates. In high school, I started my first company, called M Cubed Software. We named it that because it was me and two other guys named Mike.

Q. So did you bypass college?

A. My dad died from cancer when I was 18, and my mom was in a really tough spot. So I wanted to try to help at home. I had started doing some technology consulting. Then a friend of the family got me an interview at I.B.M. They hired me basically as an intern, and they told me not to plan on being there beyond the internship. They also said they don’t hire anyone who doesn’t have a degree.

But I was determined to make sure that I became so valuable that they couldn’t let me go. And that was what happened, and they eventually hired me full time. I.B.M. was my college education, effectively. They were very good at teaching you management.

Q. And the next big step?

A. I left I.B.M. in 1989, when I was 22, to start a company called Paper Software.

Q. What did you learn from that?

A. The first lesson was that I’d bought all these business books because I hadn’t gone to school. And I really got into the theoretical aspects of starting a company. Then what I finally realized after about six months is that I just needed to do it. I just needed to actually build something. And that was a good lesson — do something, build something and everything will happen from there.

I was able to recruit three really awesome I.B.M. engineers. I had to pay them a lot of money to join. One day, two of them said, “Hey, can you come outside and go for a walk with us?” They told me they were going to quit and start a company that was basically going to do what we were doing. I had two other guys working for me who were up-and-coming engineers, and I was paying them a fraction of what I was paying these guys. I came back to the office and I pulled my small team together and said: “O.K., I have good news and bad news. The bad news is, we just lost half of our engineers, but the good news is we kept the best half.”

And that was a great moment, when I learned how you rally people around hardship, and give them the opportunity to step up. You can actually get better output from people when you give them more than what they normally would be expected to handle.

Q. You eventually sold Paper Software to Netscape and moved to the West Coast to join Netscape. Lessons from that experience?

A. One of the biggest mistakes I made at Netscape was to focus too much on competition. Microsoft was trying to kill us. And that caused us to think about what we were going to do about Microsoft. What we really should have been thinking was: How do we focus on what our users want? Why did they love our product? How do we make it more of something that they love? So my advice is, every time you have a thought about the competition, replace that with a thought about your customer and you’ll do far better as a business.

Q. Other lessons for would-be entrepreneurs that you’ve learned over the years?

A. I think a lot of entrepreneurs go into building a start-up thinking they should focus on a niche, and do the simplest thing that can be done. But there is a problem with that approach. In fact, it may be even harder to build that kind of niche company than it is to build a giant company that might someday be able to change the world. It’s going to take the same amount of life force. You’re going to get up in the morning, work 12 to 15 hours every day. You’ll make huge, hard decisions, hire and fire people and build teams. It literally takes the same amount of energy.

So what I think is counterintuitive is that if you focus on the big idea, the biggest thing you can possibly do, that’s actually somewhat easier, because you can attract more investment that way. You can attract more talent that way. It’s more fun, and you have way more room to maneuver.

Q. How do you hire? What qualities are you looking for? What questions do you ask?

A. I ask people what’s driving them, and what’s motivating them. I’m looking for answers along the lines of: “I want to be a part of a great team. I want to learn from really great people. I love the people I’ve met here, and I’d love to just be part of this.” I also look for people who are into doing something really meaningful and great. So I’m looking to see if their answers are centered around those two pillars. I’m trying to build a culture that’s focused primarily on the camaraderie of the team, because we’re going on a really big, important and giant journey together.

I don’t hire anyone who doesn’t genuinely share that motivation, no matter how good they are on paper. Because you have to have a durable team so that when you do hit hard patches, people are just as motivated to continue to drive forward. The team sticks together. That’s what is really required in building a company. You’re going to hit those hard spots, and you’re actually defined by how you come out of those at the end.

Q. What other questions do you ask?

A. I’ll ask them about the hardest situation they’ve ever been in, and how they navigated through it. I’ll ask: What’s your greatest triumph? What’s the thing that you’re most proud of that you’ve done in your career? And then: What are some of the core lessons you’ve learned? You can have a 90-minute conversation just with those questions.

This interview was edited and condensed. (The New York Times shares content with Flipboard through a revenue-sharing agreement.)

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