Bits Blog: In the Spirit of the Valley, It’s Silicon This and Silicon That

Corner Office: A Start-Up Spirit, Without the 18-Hour Days

Q. You started working in Silicon Valley early on in your career. Tell me about that experience.

A. The first real start-up I was involved in was Epinions.com in 1999. I was employee No. 1 and my husband was employee No. 2.

Q. What were some lessons from that time?

A. A huge lesson was that we needed more experience when it came to the hard business skills. I think the oldest person was 29. How do you hire people? What’s legal? How do you think about culture? What’s right? What’s wrong? Without that, a culture evolved that wasn’t healthy. It was based on face time — “Just how loyal are you? Well, I slept under my desk. You went home?”

After a year, I left because it was just crazy. We had hired 100 people. No one really knew what they were doing. It became very cutthroat — kind of like “Mean Girls,” but in a company, with people telling on each other. Meetings were conducted at 2 a.m., and even if you were in charge of the project, decisions were made without you if you weren’t there.

Q. You eventually wound up returning to your hometown, Eugene, Ore., and took over the C.E.O. role from your father at Palo Alto Software, the company he started. Tell me about the transition, particularly in terms of the culture.

A. When we first came into the company, I just remember wondering, “Is there a factory bell here?” Because when 5 o’clock came, the office would empty out. My husband, Noah [the chief operating officer], and I struggled with that a bit. We didn’t like the Epinions approach of “Be here all the time, no matter what.” At the same time, we felt like Palo Alto Software was maybe too much of a lifestyle company.

So we started thinking about how we could get more of a Silicon Valley start-up sense here. How do you take the good and not the bad? I mean, working 18 hours is ridiculous. You can’t be creative and innovative. I didn’t want that environment, but I wanted an environment where people were more committed to results, and they were excited, wanted to innovate, were O.K. with uncertainty, and had enough pride in their work and their careers that they would do what needed to be done, and we weren’t going to have to baby-sit them.

Q. So what did you do?

A. We had to make a change with some people. We probably should have moved more quickly, but we were conscious of being respectful of my father, and we also knew all these people. It’s a small town.

But we just had to say: “The company’s changing, and certain people aren’t going to have the skill sets, and that’s just the way it is. We need to move in a different direction or we’re not going to survive. We’re a technology company. It’s grow or die, and innovate or die.”

Q. What were some of the other changes you made?

A. One of the important things is how you hire the right people. We definitely made mistakes and learned a lot from them. One of the things we want is someone who’s able to figure things out, and become an expert. You don’t say: “Oh, I can’t do that. I don’t know it.” You say: “How do I figure it out? What do I need to do?” We live in an information world and you can find out everything, and usually inexpensively. So we want people who aren’t afraid of that.

You can’t really ask that question in an interview, because you’re just going to get the answer they know you want. So we’ve changed our interview practices. Everyone who interviews with us, no matter what position, gets homework. We do an initial phone interview, and then they get homework before the in-person interview. It’s two hours of work. And the purpose of it is not to find the correct answer, but more to see their thought process. But more than 50 percent of the people you send the homework to never even contact you again. It’s great, because we don’t want that person.

Q. What other changes have you made in terms of culture?

A. We started having metrics meetings every Tuesday. They absolutely help us run the company and not have disagreements. If we look at data and metrics, it’s easier for us to make decisions and it’s easier for us to not argue about decisions because it’s all in the numbers. When you’re running a company that sells software, there are so many metrics that help you decide.

Not everybody has to come to the meetings, but they’re all invited, and it’s about sharing all the information. We focus primarily on financial metrics, like sales and expense, and then we look at unique visitors, and time on site.

Those meetings are about flagging the anomalies with all the right people in the room. It’s about recognizing the bad and the good, and then also understanding why, so that we can re-create the good. You want to be anticipating changes, but also reacting really quickly to changes. For the people who don’t attend the meeting, we also send out a confidential recap. And each department has its own metrics meetings. So it really trickles down.

Q. Any other big changes you’ve noticed in the culture?

A. There was a time at Palo Alto Software when we would say, “This company’s so great to work for that people stay here forever.” And that was considered a positive thing. And that’s not something we say anymore, because it’s not true. That’s a culture thing we wanted to change, because just because someone’s been here forever is not really a measure of a great working environment.

Smart people like to move around. There’s nothing wrong with that. And we’ve lost good people in the last three or four years because they’re starting their companies. We say we want to hire entrepreneurial people, so how can you then be upset when they go off and start their own company? And we’re not. We’ve actually worked with ex-employees and helped them start their own companies.

Chief Tries to Infuse Yahoo With a Start-Up’s Spirit

Yahoo, an Internet pioneer, missed the boat on social networks and mobile devices as the new gateways for information and, in recent years, had been losing advertisers and employees to rivals like Facebook and Google.

Critical to Ms. Mayer’s turnaround effort is infusing fresh blood and ideas into the company by buying creative start-ups and integrating them into the company. So since she took over last July, she has been on a splashy shopping spree, spending tens of millions of dollars to acquire six start-ups.

But in many ways, it has been a tough sell.

In part, that is because of the past problems with acquisitions. Yahoo’s neglect of Flickr, a pioneering photo service that was the Instagram of its time, and Delicious, an early social bookmarking tool that predated Twitter’s rise, are prominent examples of the company’s mishandling of promising acquisitions.

These days, too, Ms. Mayer has to compete against the deep pockets of competitors like Twitter, Google and Facebook, which are also trying to buy great technologies and hire top talent.

Still, there is evidence that she is making inroads.

Increasingly, entrepreneurs say, she is getting personally involved in acquisitions, focusing particularly on mobile-minded engineers. She is also trying to reverse Yahoo’s reputation as a company that acquires talent and innovative technologies and then lets them wither.

Last month, Yahoo made headlines when it acquired Summly, a newsreading mobile app started by a 17-year-old in England, for an undisclosed sum. In October, it acquired Stamped, a mobile recommendation service.

Robby Stein, who sold Stamped to Yahoo, said he was willing to take a chance on the company given Ms. Mayer’s solid track record at Google, where she helped perfect Web search and was largely credited with the clean aesthetic of the Google home page.

“After conversations with Marissa and others, it became very clear that this was a unique moment in time where we could have a phenomenal impact and affect millions of people,” said Mr. Stein, a former Google employee himself, who worked alongside Ms. Mayer on Google’s mail products. “There are few opportunities like that.” (The New York Times Company was a small investor in Stamped.)

Mr. Stein said he was now concentrating on building a “major mobile development center in New York” for Yahoo. He is determined to imbue it with the ethos of an agile, lean start-up, not as an outpost of a large corporation.

Stamped’s offices are covered in chalkboard paint and whiteboards, for scribbling down ideas and code, and also feature a fully stocked kitchen. They are decorated with posters of software applications the employees admire and aim to compete with. The team has also installed two large television screens for testing app prototypes and has built a game room with club chairs.

“I feel remarkably empowered and able to get things done,” Mr. Stein said. “I’m supported to the fullest extent by Marissa and the executive team.”

Ms. Mayer’s other acquisitions include OnTheAir, an online video service; Snip.it, a clipping service for the Web; Propeld, a maker of location-based apps; and Jybe, a social recommendation site.

Despite the string of purchases, some say Ms. Mayer’s pitch — which could be a part of the biggest technology turnaround since Steven P. Jobs’s return to Apple in 1996 — seems as if it is still in rehearsal.

Shortly after Ms. Mayer joined the company last year, one Valley entrepreneur in acquisition talks with Facebook and Google reluctantly met with Yahoo on the counsel of advisers, who told him he owed it to investors to hear the company out.

At Facebook and Google, the offices were buzzing with activity, the reception desk checked him in using shiny new tablet computers and the executives working on the deal were so prepared they “basically knew what size underwear I wear,” said the entrepreneur, who spoke on condition of anonymity because he was still in talks to sell his company. Yahoo was completely different. He arrived to an empty parking lot and deserted offices. He checked in on dusty, clunky desktop computers that ran outdated Web browsers. Worse, company executives made it abundantly clear they had not bothered to read his résumé.

“I found it depressing,” he said. “It was disorganized, they hadn’t done basic due diligence, and offered no clear incentive to go work there.”

His conclusion: “They would have to be willing to pay me twice what anyone else was willing to pay to work there.”

Yahoo certainly has the cash, having reaped $4.3 billion from the first stage of its sale of half its stake of Alibaba back to the Chinese Internet company.