No Spin From Greenspun
Jessica Livingston interviews a boatload of founders (32 to be exact) of startup companies in her book “Founders At Work“. The most fascinating interview that I’ve read to date is with Phil Greenspun. It’s especially fascinating because it strongly reinforces “my belief system” that most corpo SCOLs are incompetent and most venture capitalists are obsessed with greed. You know how it is, relentlessly seeking out and amassing stories and evidence that irrefutably “prove” that you’re right while ignoring any and all disconfirming evidence to the contrary.
After reading the Livingston-Greenspun dialog, I was so giddy with ego-inflating joy that I wanted to copy and paste the entire interview into this post. However, I thought that would be too extravagant and probably a copyright law violation to boot. Here are some jucilicious fragments that prove beyond a shadow of a doubt that I’m absolutely right and anyone who disagrees with me is absolutely wrong. Hah Hah! Nyuk, nyuk, nyuk!
We talked to a headhunting firm, and the guy was candid with me and said, “Look, we can’t recruit a COO for you because anybody who is capable of doing that job for a company at your level would demand to be the CEO.” And I thought, “That’s kind of crazy. How could they be the CEO? They don’t know the business or the customers. How could we just plunk them down?” In retrospect, that was pretty good thinking; look at Microsoft: it took them 20 years to hand off from Bill Gates to Steve Ballmer. He needed 20 years of training to take that job. Jack Welch was at GE for 20 years before he became CEO. Sometimes it does work, but I think for these fragile little companies, just putting a generic manager at the top is oftentimes disastrous.
The guys on my Board had been employees all of their lives. You can’t turn an employee into a businessman. The employee only cares about making his boss happy. The customer might be unhappy and the shareholders are taking a beating, but if the boss is happy, the employee gets a raise.
Some of my cofounders and more experienced folks were also stretched pretty thin because of the growth. I thought, “We just need the insta-manager solution.” Which, in retrospect, is ridiculous. How could someone who didn’t know anything about the company, the customers, and the software be the CEO?
A lot of the traditional skills of a manager were kind of irrelevant when you only have two or three-person teams building something. So it was almost more like you were better off hiring a process control person or factory quality expert instead of a big executive type.
The CEO was a guy who had never been a CEO of any organization before, and he brought in his friend to be CFO. His buddy didn’t have an accounting degree and he was really bad with numbers. He couldn’t think with numbers, he couldn’t do a spreadsheet model accurately. That generated a lot of acrimony at the board meetings. I would say, “Things are going badly.” And he’d say, “Look at this beautiful spreadsheet. Look at these numbers; it’s going great.” In 5 minutes I had found ten fundamental errors in the assumptions of this spreadsheet, so I didn’t think it would be wise to use it to make business decisions. But they couldn’t see it. None of the other people on the board were engineers, so they thought, “Well, he’s the CFO, so let’s rely on his numbers.” Having inaccurate numbers kept people from making good decisions. They just thought I was a nasty and unpleasant person, criticizing this guy’s numbers, because they couldn’t see the errors. From an MIT School of Engineering standpoint, they were all innumerate.
Meanwhile, because these people didn’t know anything about the business, they were continuing to lose a lot of money. They hired a vice president of marketing who would come in at 10 a.m., leave at 3 p.m. to play basketball, and had no ideas. He wanted to change the company’s name. This was a product that was in use in 10,000 sites worldwide—so at least 10,000 programmers knew it as the ArsDigita Community System. There were thousands and thousands of people who had come to our face-to-face seminars. There were probably 100,000 people worldwide who knew of us, because it was all free. And he said, “We should change the company name because, when we hire these sales-people and they’re cold-calling customers, it will be hard for the customer to write down the name; they’ll have to spell it out.” And they did hire these professional salespeople to go around and harass potential customers, but they never really sold anything.