MARCH 26, 2003

ENTREPRENEUR Q&A


"You Must Hire the Right People"
[Page 2 of 2]


  STORY TOOLS
Printer-Friendly Version
E-Mail This Story

POLL INSTANT SURVEY >>
My company provides sexual-harassment prevention training:

Periodically
Once, when the employee is hired
Never
Not sure

VIEW POLL RESULTS >>
  PEOPLE SEARCH

Search for business contacts:

First Name :
Last Name :
Company Name :

PREMIUM SEARCH
Search by job title, geography and build a list of executive contacts

Search by Zoominfo
A: How did you handle internal conflicts with the managerial team?
Q: Well, I felt within a few months that the first CEO wasn't appropriate for this particular job, which made it hard to get along because I thought we were wasting the investors' money and failing to execute. He emphasized hiring a sales force when we didn't have any product ready for prime time, hadn't conducted formal market research, and didn't have a good understanding of the best strategy for our technology.


It took about five months of trying to get DFJ to understand the situation. Eventually, DFJ realized he wasn't the right guy and we made the necessary change, but I took a lot of damage in the process -- it was very traumatic. Ultimately, I turned the company around, and improved the numbers to a point where the investors were happy again, but both the company and I never really recovered enough from the politicking that happened during the period. I had a choice of whether to keep things together or clean house. I chose to keep things together because I was tired of the brutal environment. I should have cleaned house.

Q: When you were in the thick of it, you didn't have the perspective on the situation you have now. What was your viewpoint at the time?
A: At the time, I didn't know any better. I was told that you raise money and then hire people who know how to build software companies. To some degree, that's what you should do if you don't have prior experience -- but you definitely must hire the right people. I trusted people. I generally trust people when I meet them, and I generally give them the benefit of the doubt -- which is a great, optimistic, human quality. Trouble is, it leaves you terribly exposed to a wide range of problems. So yeah, I made a mistake because I trusted a lot of people who ended up taking advantage of me, my team, our employees, and DFJ.

A: So, you would build your team differently now. Is there something you could have done differently then to avoid unwelcome consequences?
Q: There were a lot of hires we never should have made. When I recognized the mediocrity and the selfishness of a number of folks, I should have just cleaned house. The number one thing you need to understand about building a company is that mediocre people drag down excellent people -- they are cancer and you need to cut them out as fast as possible. Don't worry about creating holes in the company -- excellent people are much more productive when mediocre people are removed from their environment. I should have pared it down to the core True Believers. The investors would have hated me, but six months later, when we were cash-flow positive, they would have come back around. Turns out, they weren't that fond of me when I kept the mediocre management team together, anyway. What can you do?

A: What were some of the consequences the company experienced because of mismanagement and inside disagreements?
Q: Mismanagement cost us our IPO, which maybe cost me and the investors $100 million, and the employees something more than that. We had brochures but no market research. The last CEO met with only one customer. One vice-president consistently threatened to walk unless he got his way, and he never got fired. Advice? Fire anyone who tries to hold you hostage! We had one of the best software opportunities in history and squandered it.

Q: So, now you're bouncing back with more tech innovation. Tell me about your new company, Mission Research?
A: Mission Research is an advanced software-technology company dedicated to helping nonprofit organizations (NPOs) focus more resources on core missions and less on running their operations. We spent the first six months conducting research before writing any code. We were stunned at the complete absence of affordable, easy-to-use software that doesn't require training. Those were the top three things NPOs asked for: Give us software that's easy to use, that doesn't break our budgets, and that doesn't require training. We looked at the top 30 software packages out there and were surprised to see how bad they were. So, we're going to do better...the NPOs can spend more time saving the world instead of paying their mission money to mediocre software companies.

Q: How are you going to find the key players this time?
A: I'm starting with a core of True Believers: the core team from Chili!Soft, some friends we made in the corporate commercial-software industry, and some top recommendations from trusted sources. We're taking our time with building this company, so there's no rush to fill positions with people of unquantifiable characteristics. I'd rather have some empty positions than positions filled with mediocre people unwilling to make the commitment to themselves and the company to do great things.

| 1 | 2 |  <<previous page




Get BusinessWeek directly on your desktop with our RSS feeds.XML

Add BusinessWeek news to your Web site with our headline feed.

Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video.

To subscribe online to BusinessWeek magazine, please click here.

Learn more, go to the BusinessWeekOnline home page
Back to Top
MARCH

  MARKET INFO
DJIA 0 0.00
S&P 500 0 0.00
Nasdaq 0 0.00

Portfolio Service Update

Stock Lookup

Enter name or ticker



Copyright 2003, Bloomberg L.P.
Terms of Use | Privacy Policy

Media Kit | Special Sections | MarketPlace | Knowledge Centers
Bloomberg L.P.