Q&A with Michael J. Saylor
"I let down a lot of people who depended on me"

High-tech highflier MicroStrategy Inc. took a stinging hit when it restated its sales and profits last spring after being too aggressive in booking revenue. Today, CEO Michael J. Saylor must not only guide the company through a Securities & Exchange Commission investigation into its accounting practices but also rebuild a company that has been hit with layoffs and is struggling with financing. In his 14th-floor office overlooking the Beltway in Tysons Corner, Va., Saylor recently sat down with Business Week correspondent Christopher H. Schmitt to discuss MicroStrategy's travails. Here, exclusively online, are edited excerpts of their conversation:

Q: What have you learned?
When you're building a company, you need to continually strengthen every component -- finance, strategic partnerships, executive team, and relationships with every last constituency. If there's a lesson there, it's clearly to always be considering the most conservative possible conclusions people can come to and make sure you've got a pretty strong basis of support there.

Q: How do you feel personally about everything that has happened?
It's very humbling. It was massively painful. I let down a lot of people who depended on me. In my life, this first really big setback.

Q: How do you view things differently?
I see that you're not the owner of a business, like, "This is my business, I built this." Now, I feel much more like the mayor of a community. But the mayor doesn't own the town, right? The mayor the will of the people, as long as they're happy to have him or her. Decisions that you might have made as a proprietor don't make any sense as a leader.... You have to give up a lot more control to get anything done in a public company.

Q: How else has your perspective changed?
I've developed a much greater respect for our politicians and every high-tech CEO. It's very easy to read about the things they did that you, of course, would have avoided in hindsight. But when you're there and you've got a thousand phones ringing simultaneously and a thousand stimuli, then I think you start to empathize with them much more, and maybe you conclude they're actually much smarter than you thought.

Q: MicroStrategy was something of a media darling.
I grew up in a family where no one had written a newspaper or magazine article about anybody in my family for a hundred years, right? Then, all of a sudden, we're getting one millennium's worth of media attention in six months. People were saying, "Be careful, because if you go up too fast, you'll come down." They had all this advice for me. I didn't understand any of it. How would you understand? You have to live through the full boom-and-bust cycle before you understand how things that are really good for you in one context can be really bad for you in another.

Q: How has the business changed in the wake of the troubles?
Over the past six months...we had to basically strip the business down to zero and build it back up again and check all of our premises. We concluded we needed to change the cost side of the business. The idea used to be, "Drive as much revenue as possible, and we can control cost -- it's not that hard." Well, it turned out to be hard.

Q: Some have suggested that, in order to demonstrate the ultimate commitment to turning the company around, you need to leave. How do you feel about that?
When Oracle blew up, people made the same statement about Larry Ellison. When AOL blew up, there were articles all the time saying Steve Case must go. Sometimes it's true, sometimes it's not. If there's a sell sign for a company, it's when the founder and CEO steps out the door.... I have a lot of work to do during the next decade to make sure that all the constituencies that depend on us find their trust returned.

Edited by Douglas Harbrecht

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