AUGUST 11, 2000
SILICON VALLEY JOURNAL
Building a Dot-Com the Old Economy Way | Going from Andersen Consulting to a Net startup takes some adjustment
| What's the difference between working at a traditional corporation and an Internet startup? As Jim Greene puts it: Risk, risk, and risk.
The 46-year-old CEO of Internet startup Abilizer Solutions, which produces a Web portal targeted at employees, habitually speaks in bullet points of three, a holdover from 21 years at Andersen Consulting, where he was a managing partner and advised dot-coms on how to expand their businesses. Now, he's practicing what he used to preach.
Greene is one of dozens, perhaps hundreds, of corporate bigwigs who in the past two years have left their staid offices for the Wild West of dot-coms, where they are often 20 years older than most of their employees. Meg Whitman, who left Hasbro for eBay, is probably the most famous example. There's also George Shaheen, Greene's former boss at Andersen, who is now Webvan's CEO. Why do they leave? Because they want to be at the center of the revolution that's transforming business -- and, in many cases, because they hope to get rich.
THE BUG. Since technology stocks took a nosedive in April, fewer corporate execs have been willing to make the switch, according to John Challenger, president and CEO of Challenger, Gray & Christmas, a Chicago outplacement firm. Greene says he has no regrets about his move in February to the San Francisco-based company and shrugs off the market plunge as a temporary setback in a promising industry. "The crash is a rock that has to be moved around in a very long road, and I'm not going to be distracted by an emotional reaction in the stock market," he says. It helps that one move he made shortly after joining Abilizer was to secure $67 million in funding before the IPO window closed, enough to see the company through the next 12 to 18 months.
In any case, Greene says, it wasn't the money that lured him to a startup but the chance to play the game rather than just coach. "The seduction of the creation of the economy in the Bay Area is a bug, and I caught it," he says.
Greene came on board after the company's founders decided their growing venture needed more seasoned management, says Rishabh Mehrotra, who launched the enterprise with Andrew Gray in 1998. Both remain with the company: Mehrotra is chairman, and Gray senior vice-president. "Not too many people understand the intersection of an Internet business with our [big-business] clients," Mehrotra says. Greene brought special expertise because he had worked with both large and small companies. "It's a tough transition to make, both for the new person and the founders," Mehrotra adds. "One out of ten times it works. This is one of those times."
With blonde hair that brushes past his collar, Greene hardly looks or acts like a visitor from the planet of bottom lines. He has an open and friendly management style and is constantly asking employees if they're happy. On the surface, there aren't that many differences between the old world of Andersen and the new world of Abilizer. Greene often didn't wear suits at Andersen, and that hasn't changed. Andersen's offices are open and informal -- employees travel so much, they don't have assigned spots -- and so are Abilizer's. The company resides in an old warehouse with ancient wooden beams, exposed ductwork, and brightly colored walls. No doors on filing cabinets masquerading as desks for this startup. Here, employees have cubicles with a hip, spare look reminiscent of cutting-edge designer Philippe Starck's.
REALITY 101. Since joining Abilizer, Greene says, he has sought to transform it from a creative but unruly startup bent on going public into a structured, more professional company focused on customers and profits. Employees still bring their dogs to work on Fridays, but they've learned to dress up when customers come to visit.
On one such occasion, Greene sent out an e-mail asking employees to lower the volume on their CD players, turn off their video games -- and wear their shoes. Two miffed employees accused him of stifling creativity and innovation. He responded with a terse summation of Client Relations 101: "There's this thing called revenue, and there [are these things] called customers, and if we have to stand on our heads and twirl, we'll do whatever it takes -- as long as it's ethical." Apparently, his comment hit the mark. The employees replied with words to the effect of: "We understand, thank you," he says.
Employees used to have a beer bash every Friday. They still do -- but now, before the bottles are uncapped, Greene stands on a chair for 45 minutes and talks about what's going on with customers, competitors, and Abilizer's own business. "I expect people to act like owners," says Greene.
Other changes Greene has imposed: A detailed budget, performance goals, and performance reviews. The CEO is not the first Old Economy transplant to try to bring such practices to Internet startups. And he isn't the first to encounter resistance from employees. "It's tough for the people in the company, too, to give up the exuberance of the early days for a more disciplined approach," says Challenger, of the Chicago outplacement company.
STAFF SUPPORT. Greene says about 75% of his employees fully support his biggest step to date: Changing the company image and with it, the company's name (until June, Abilizer was known as perksatwork.com.) "The other 25% of us are deciding if they want to be brought in," he says. Still, only 12 employees have left since the new chief arrived, and staff have grown from 90 to 175 under his tenure.
For Greene, moving to Abilizer has meant working not only with younger, less experienced colleagues but fewer resources. For instance, he recently had to decide between spending $3,000 on "swamp coolers" or $65,000 on a state-of-the-art air-conditioning system. He went with the swamp coolers. At Andersen, 10% of every dollar spent went to employee training. Abilizer doesn't have that luxury, so Greene has learned to slow down and explain things more fully.
He is also more careful about what he says, lest employees misunderstand. The CEO learned this lesson the hard way. Once he sent out an e-mail about a possible partnership with a big-name company. Soon a rumor was flying around that Abilizer was going to be sold. "I had to do some calming of the nerves," Greene says.
He has also learned to act on less information than he had at Andersen. Sometimes there isn't the time or money to fully research every possible decision, such as which $5 million computer system is better. "Going to a startup isn't for everyone," Greene says. "You need to be comfortable with ambiguity, knowing 60% of the facts but living with 100% of the consequences."
EXHILIRATING. The task of building the company requires Greene to put in long hours -- about 80 a week, the same that he logged at Andersen. On the plus side, he doesn't travel as much, so he is better rested. Less travel, not to mention the flexibility that comes with being the boss, also mean more control over his personal life, he says.
Perhaps the most gratifying aspect of the switch, however, is that Greene has found being a CEO exhilarating. He relishes the challenge of building a company from scratch: "I would love in three or four years to be able to say to [my employees] that they can look at their spouse and say: 'I don't have to work anymore, but I would love to, and I want to work with these guys.'"
By Cate T. Corcoran in San Francisco
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Copyright 2000, by The McGraw-Hill Companies Inc. All rights reserved.
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