At DecisionPoint, one of the stress releases that we used was to tease each other about our actual and “perceived” shortfalls. In some cases, we joked with individuals because they were from other countries, memory lapses due to age, and many other things. While this may seem cruel to people outside of the company, it was our way to maintain our sanity in a very tense situation. During the joking, we all used a common phrase to respond to each other, which was “know who you are…” In other words, we were all comfortable enough with ourselves that we accepted our limitations.
I use this story as an introduction to the struggles that we faced at DecisionPoint with marketing our product. Overall, our solution was pretty simple by design. As stated before, the goal was to allow customers to implement a data warehouse in record time to facilitate the type of robust reporting and analysis that helps personnel at the customer site find financial anomalies. The goal being that end users could help to maximize the financial performance and efficiency of the organization. Yes, it was a revolutionary idea, but we felt we could change the data warehousing market significantly.
Even though we had a bold new idea and strategy, we still faced a problem at DecisionPoint. Throughout our history, the fact was that we didn’t “know who we were”, or more aptly stated, we didn’t accept who we were. It would prove to be a significant Achilles heel for us, and caused us to stumble several times throughout the company’s history. I often think back of what might have happened had we “known who we were”, accepted that, and used a strategy more in line with what we were. Regardless, I learned a big lesson from this that I think is very important to understand.
Unfortunately, the world of high technology has become one of taking very simple and basic concepts, and marketing and selling them to be much more than they really are. No matter how good our solution was, it always had to be positioned larger than life. It’s expected not only by the industry, but also the analysts that follow the industry and write reviews on new products. We at DecisionPoint fell into that trap several times. Every sales and marketing regime that we had at DecisionPoint would fall prey to this. The solution had to be marketed and sold to be the cure-all for financial anomaly detection and resolution. In some cases, we even built specific products that were marketed to help with Sarbanes/Oxley compliance (SOX), even though our product only helped with a very small part of SOX compliance. As we found out, bigger and more complex was not always better, and it worked against us in many of our sales cycles.
At one point, I did a study of the different types of customers that bought our product, and the marketing message that we were using at the time. In just about every case, customers bought our solution for exactly what it did, which was facilitate efficient financial analysis to improve the financial performance of the corporation. Rarely did they buy it due to the grandiose positioning we were using at any given time. In many cases, we drew false conclusions about the effectiveness of our sales and marketing programs as it related to revenue because we didn’t look closely enough at why customers were buying our product. Customers needed something simple, but effective, and the customers that understood what the solution was truly capable of bought the product for exactly that purpose. We ended up spending a lot of money on “marketing spin” for a product that was so simple and basic in principle. It was a big mistake.
The lesson learned in all of this, and my advice to people considering a startup is very simple. Know what you do well, accept that, and create your sales and marketing programs that exploit that. Don’t try to be more than you are. At the end of the day, grandiose positioning may get you in front of more customers, but the sales people need to be able to understand what you do well and position it appropriately. If the marketing message doesn’t match what the sales people need to sell, you end up training them on a lot of positioning that does not help them more effectively sell your products. It takes a lot of intestinal fortitude to accept what you do well, and position it in a way that it can be effectively sold. If you try to over-position what you do, it just confuses not only your sales people, but also the customers that are considering whether to buy your product or not.
Monday, May 31, 2010
Sunday, May 30, 2010
People Matter
I thought it would be best to start this chapter with an analogy about people. Many of my friends and family are familiar with the fact that I'm a big fan of military books and movies. My favorites are the ones that are based on a true story. Part of my interest has to do with how military personnel are able to survive in some of the most extreme circumstances in the worst of conditions. I am amazed at what some of these individuals have endured in order to protect the freedom that we have each and every day.
One of my favorite movies is "Black Hawk Down". The storyline is fairly sad when you reflect on it. What was supposed to be a simple capture of a military leader in Somalia turns into a disaster after a series of unfortunate events. However, what I find most interesting throughout the movie is the dedication that each member of the armed forces has to other members. Whether it be a close friend in their own squad, or even a member from another squad they don't know, there is dedication to helping each other in some pretty dire circumstances. No matter how dangerous things got, each member of the military wanted to go back out to make sure that everyone got back to the military base safely. Unfortunately, many men didn't make it. However, there were some really remarkable events and feats of heroism throughout the movie. One of my favorite characters in the movie is a character named "Hoot". He is completely fearless, dedicated to his job, and has a very subdued attitude about death (i.e. sh*t happens). Anyway, near the end of the movie, he's getting ready to go back out to save more men when he runs into someone else while eating quickly. His line goes somewhat like this: "When I go back home and people asks me 'Hoot, why do you do it? Are you some kind of war junkie?' I ain't gonna say a god damn thing. They won't understand. They won't understand that it's about the man beside you, and that's all it is..." He then leaves to go back out and find more men. This hits me every time I watch the movie because it's a pretty simple equation. I think people in a startup in the early days are in the same situation. You're all working to achieve something, but at the beginning, all you have is each other. Each and every day you get up and go to work at the startup, it's about the goals of the company, and the people working beside you, and that's all it is.
This leads to the first non-historical topic of this blog that I think is important to cover. It has to do with people. There are a lot of challenges finding the right people when you're in a startup, and when you do find them, setting appropriate expectations. Startups are not easy, and not everyone is cut out to be part of a startup. Some people seek jobs at a startup thinking that they are ready for the freedom and challenge, when in reality, it's just not the case. Also, a hiring mistake at a startup can be catastrophic if there's not a good fit, especially in the early days of the startup where each new person you add brings something important to the table. When I reflect back on our hiring at DecisionPoint, there were definitely a couple of different lessons learned.
My first lesson had to do with mistakes that I made in my expectations of myself and others that came into the organization. Being the founder of the company, I was often the most passionate person about what we were trying to accomplished. I worked many long hours at it because I enjoyed it, and I was passionate at what we were doing. For my entire career, I was a driven individual able to accomplish some pretty amazing feats regardless of the odds. I was an adrenaline junkie. The more stressful and exciting the situation, the harder I would work to deal with it. As stated earlier in the blog/book, I won some pretty fantastic awards as a result of the drive and energy. However, there was a down side to all of this. I had several instances where I ended up in the emergency room for lack of sleep, general fatigue, chest pains, and a body on the verge of physical collapse induced by high levels of stress. I would say that I am far more balanced today, but like any addiction, I always have to be careful about over doing it. If I'm not careful, the next stop at the emergency room is right around the corner.
Probably more importantly was that I carried my expectations of myself, and attempted to measure other people that joined the organization according to the standards and expectations I had of myself. This was a key mistake on my part. As seen above, I could barely keep up with my own expectations. How could I possibly expect others to live up to those same expectations? The bottom line is that those expectations were unreasonable not only for me, but also for the people I worked with. Those expectations did cause a lot of chaos and conflict when I was working with other individuals within the organization. People who had a more balanced approach to work didn't have the drive or stamina that I had, and it was frustrating to me when they were unable to step up when needed. I think everyone in a startup has times when they need to step up and push through a large challenge. However, expecting people to be able to do this all the time is not a very reasonable position to take.
My lesson here is balance, both with myself and with others...
I was such an adrenaline junkie that I honestly believe that some people that joined the organization thought I was truly nuts. The other part of that was that the highs were really high and the lows were really low. I willingly let myself ride the roller coaster of every success and failure, which there were many of both. For me, trying to get off the roller coaster and get more balanced felt like getting off to get on one of the kiddie rides at an amusement park. Just not something I was interested in. Only now, with the chance to reflect on things can I honestly see how destructive this was on my own physical and emotional health. Even today, I suffer bouts of severe depression when a series of negative events happen, yet also experience bouts of mania when things are going well. As I continue to work at taking a more balanced approach to work, it's a daily struggle that I wrestle with much like an addiction to drugs.
When it comes to other people, I still struggle with my expectations of people I work with. Especially in a larger organization where things move a lot slower than they did when we were a startup. I haven't found the right answer to what is appropriate to expect of others. In a startup, you have to make it very clear that the person joining the organization is probably going to have to work harder than they ever have at any other job. And while that is the case, that doesn't mean that you can expect them to just keep going and going for long periods of time. Part of it has to do with setting proper expectations with individuals up front about what they need to do. The other part of it has to do with ongoing expectation setting and communication so that if something changes with the individual or the company, appropriate adjustments can be made.
We had many instances at DecisionPoint where we missed when setting expectations with people joining the organization. As a result, some left only after a couple of months while others stayed on board and remained miserable for the time they were with the company. Neither is a healthy situation. With some better communication and expectation setting, we probably would have done a better job in this area. We had situations where it was an individual's first attempt at working at a startup. The individual was very good at what they did, but just didn't have the stamina required to succeed in a startup. They were used to larger organizations where projects and plans had reasonable goals and expectations. They weren't ready for an environment where projects and plans had to be done much faster and required more persistence and endurance at work.
As I look back at what we could have done differently when it came to interviewing and assessing candidates to join the organization, a couple of things come to mind.
First, I think it's a good idea to get a perspective on the projects that a person has worked on in the past. If the projects were fairly aggressive and of critical importance to the organization they were working for, then the person was probably ready for the startup. If the projects were fairly conservative with many delays and "re-plans" the person was probably not ready for the startup. In a startup, delays can be disasterous, and you need people who are not used to working on projects where delays are the norm. They need to have worked on projects where the deadlines don't move, and you have to push yourself at times to meet the deadline.
Second, has to do with a person's expectations regarding salary and rewards. If the person is used to getting good pay and consistent raises along with bonuses upon successful completion of projects, they're probably not a good fit. In a startup, you get paid a salary (in most cases), but the concept of raises and bonuses is foreign. Generally speaking, the only bonus you can get are stock options. However, unless the company goes public or gets sold, the stock options are about as useful as a piece of toilet paper. It can take years before the stock options are worth anything, and in far too many cases, the stock options end up being worthless. People that work well in a startup are those where they get a base salary and bonuses are a "nice surprise" to them.
Third, is a much more controversial topic because there are a lot of legal repercussions associated with this information. As much as you're not supposed to do it, it definitely helps if you can get an assessment of an individual's personal situation. If a person has a new home, kids in college, or anything else that has a consistent financial obligation to it, they're probably not a good candidate for a startup. There is always a chance that the startup runs out of money and misses payroll. Individuals with significant financial obligations can be put under severe stress when these events are looming, even if they never happen. Imagine how much stress a person might go through if they don't get paid once or twice and they fall behind on their financial obligations. Obviously, this is a situation that almost anyone can face. The difference is in how well prepared the person is to handle the situation should it happen.
The last part of this blog entry centers more around ongoing expectation setting rather than trying to hire someone. Many people have worked for larger companies where the expectation of their role in the organization is well known and understood. In a startup, things are constantly changing, which causes roles and responsibilities of individuals within the organization to change on a regular basis. It's important that regular communication happen so that people always know where they stand, and what's expected of them.
There may be situations where you feel an individual is not meeting your expectations. In those cases, it's best to ask yourself "have I clearly communicated my expectations, along with any adjustments in those expectations I make?" In many cases, you'll find the individual isn't meeting your expectations because you failed to communicate the expectations to them effectively. I have had many situations where I've done this well, and many where I have not done it so well. Where I have not done it so well, it was usually the case that the individual would have been more successful if I had communicated my expectations more clearly. It's sad when you lose someone who could have been very good if they had just better understood what was expected of them. However, you also need to be realistic that some people can't handle regular change in expectations no matter how well it's communicated, so there will always be those cases. For those individuals, a startup is probably not a good choice.
One last point on effective communication of expectations. It's vital that you have regular voice to voice communications with people to make sure they know where they stand. The communication should not be electronic, such as email or text messages. Too many misunderstandings happen with that type of communication. It needs to be voice to voice where questions can be addressed and confusion cleared up. This is especially true in today's world where teenagers and young adults are used to using their cell phone more often for text messages than for voice to voice calls.
One of my favorite movies is "Black Hawk Down". The storyline is fairly sad when you reflect on it. What was supposed to be a simple capture of a military leader in Somalia turns into a disaster after a series of unfortunate events. However, what I find most interesting throughout the movie is the dedication that each member of the armed forces has to other members. Whether it be a close friend in their own squad, or even a member from another squad they don't know, there is dedication to helping each other in some pretty dire circumstances. No matter how dangerous things got, each member of the military wanted to go back out to make sure that everyone got back to the military base safely. Unfortunately, many men didn't make it. However, there were some really remarkable events and feats of heroism throughout the movie. One of my favorite characters in the movie is a character named "Hoot". He is completely fearless, dedicated to his job, and has a very subdued attitude about death (i.e. sh*t happens). Anyway, near the end of the movie, he's getting ready to go back out to save more men when he runs into someone else while eating quickly. His line goes somewhat like this: "When I go back home and people asks me 'Hoot, why do you do it? Are you some kind of war junkie?' I ain't gonna say a god damn thing. They won't understand. They won't understand that it's about the man beside you, and that's all it is..." He then leaves to go back out and find more men. This hits me every time I watch the movie because it's a pretty simple equation. I think people in a startup in the early days are in the same situation. You're all working to achieve something, but at the beginning, all you have is each other. Each and every day you get up and go to work at the startup, it's about the goals of the company, and the people working beside you, and that's all it is.
This leads to the first non-historical topic of this blog that I think is important to cover. It has to do with people. There are a lot of challenges finding the right people when you're in a startup, and when you do find them, setting appropriate expectations. Startups are not easy, and not everyone is cut out to be part of a startup. Some people seek jobs at a startup thinking that they are ready for the freedom and challenge, when in reality, it's just not the case. Also, a hiring mistake at a startup can be catastrophic if there's not a good fit, especially in the early days of the startup where each new person you add brings something important to the table. When I reflect back on our hiring at DecisionPoint, there were definitely a couple of different lessons learned.
My first lesson had to do with mistakes that I made in my expectations of myself and others that came into the organization. Being the founder of the company, I was often the most passionate person about what we were trying to accomplished. I worked many long hours at it because I enjoyed it, and I was passionate at what we were doing. For my entire career, I was a driven individual able to accomplish some pretty amazing feats regardless of the odds. I was an adrenaline junkie. The more stressful and exciting the situation, the harder I would work to deal with it. As stated earlier in the blog/book, I won some pretty fantastic awards as a result of the drive and energy. However, there was a down side to all of this. I had several instances where I ended up in the emergency room for lack of sleep, general fatigue, chest pains, and a body on the verge of physical collapse induced by high levels of stress. I would say that I am far more balanced today, but like any addiction, I always have to be careful about over doing it. If I'm not careful, the next stop at the emergency room is right around the corner.
Probably more importantly was that I carried my expectations of myself, and attempted to measure other people that joined the organization according to the standards and expectations I had of myself. This was a key mistake on my part. As seen above, I could barely keep up with my own expectations. How could I possibly expect others to live up to those same expectations? The bottom line is that those expectations were unreasonable not only for me, but also for the people I worked with. Those expectations did cause a lot of chaos and conflict when I was working with other individuals within the organization. People who had a more balanced approach to work didn't have the drive or stamina that I had, and it was frustrating to me when they were unable to step up when needed. I think everyone in a startup has times when they need to step up and push through a large challenge. However, expecting people to be able to do this all the time is not a very reasonable position to take.
My lesson here is balance, both with myself and with others...
I was such an adrenaline junkie that I honestly believe that some people that joined the organization thought I was truly nuts. The other part of that was that the highs were really high and the lows were really low. I willingly let myself ride the roller coaster of every success and failure, which there were many of both. For me, trying to get off the roller coaster and get more balanced felt like getting off to get on one of the kiddie rides at an amusement park. Just not something I was interested in. Only now, with the chance to reflect on things can I honestly see how destructive this was on my own physical and emotional health. Even today, I suffer bouts of severe depression when a series of negative events happen, yet also experience bouts of mania when things are going well. As I continue to work at taking a more balanced approach to work, it's a daily struggle that I wrestle with much like an addiction to drugs.
When it comes to other people, I still struggle with my expectations of people I work with. Especially in a larger organization where things move a lot slower than they did when we were a startup. I haven't found the right answer to what is appropriate to expect of others. In a startup, you have to make it very clear that the person joining the organization is probably going to have to work harder than they ever have at any other job. And while that is the case, that doesn't mean that you can expect them to just keep going and going for long periods of time. Part of it has to do with setting proper expectations with individuals up front about what they need to do. The other part of it has to do with ongoing expectation setting and communication so that if something changes with the individual or the company, appropriate adjustments can be made.
We had many instances at DecisionPoint where we missed when setting expectations with people joining the organization. As a result, some left only after a couple of months while others stayed on board and remained miserable for the time they were with the company. Neither is a healthy situation. With some better communication and expectation setting, we probably would have done a better job in this area. We had situations where it was an individual's first attempt at working at a startup. The individual was very good at what they did, but just didn't have the stamina required to succeed in a startup. They were used to larger organizations where projects and plans had reasonable goals and expectations. They weren't ready for an environment where projects and plans had to be done much faster and required more persistence and endurance at work.
As I look back at what we could have done differently when it came to interviewing and assessing candidates to join the organization, a couple of things come to mind.
First, I think it's a good idea to get a perspective on the projects that a person has worked on in the past. If the projects were fairly aggressive and of critical importance to the organization they were working for, then the person was probably ready for the startup. If the projects were fairly conservative with many delays and "re-plans" the person was probably not ready for the startup. In a startup, delays can be disasterous, and you need people who are not used to working on projects where delays are the norm. They need to have worked on projects where the deadlines don't move, and you have to push yourself at times to meet the deadline.
Second, has to do with a person's expectations regarding salary and rewards. If the person is used to getting good pay and consistent raises along with bonuses upon successful completion of projects, they're probably not a good fit. In a startup, you get paid a salary (in most cases), but the concept of raises and bonuses is foreign. Generally speaking, the only bonus you can get are stock options. However, unless the company goes public or gets sold, the stock options are about as useful as a piece of toilet paper. It can take years before the stock options are worth anything, and in far too many cases, the stock options end up being worthless. People that work well in a startup are those where they get a base salary and bonuses are a "nice surprise" to them.
Third, is a much more controversial topic because there are a lot of legal repercussions associated with this information. As much as you're not supposed to do it, it definitely helps if you can get an assessment of an individual's personal situation. If a person has a new home, kids in college, or anything else that has a consistent financial obligation to it, they're probably not a good candidate for a startup. There is always a chance that the startup runs out of money and misses payroll. Individuals with significant financial obligations can be put under severe stress when these events are looming, even if they never happen. Imagine how much stress a person might go through if they don't get paid once or twice and they fall behind on their financial obligations. Obviously, this is a situation that almost anyone can face. The difference is in how well prepared the person is to handle the situation should it happen.
The last part of this blog entry centers more around ongoing expectation setting rather than trying to hire someone. Many people have worked for larger companies where the expectation of their role in the organization is well known and understood. In a startup, things are constantly changing, which causes roles and responsibilities of individuals within the organization to change on a regular basis. It's important that regular communication happen so that people always know where they stand, and what's expected of them.
There may be situations where you feel an individual is not meeting your expectations. In those cases, it's best to ask yourself "have I clearly communicated my expectations, along with any adjustments in those expectations I make?" In many cases, you'll find the individual isn't meeting your expectations because you failed to communicate the expectations to them effectively. I have had many situations where I've done this well, and many where I have not done it so well. Where I have not done it so well, it was usually the case that the individual would have been more successful if I had communicated my expectations more clearly. It's sad when you lose someone who could have been very good if they had just better understood what was expected of them. However, you also need to be realistic that some people can't handle regular change in expectations no matter how well it's communicated, so there will always be those cases. For those individuals, a startup is probably not a good choice.
One last point on effective communication of expectations. It's vital that you have regular voice to voice communications with people to make sure they know where they stand. The communication should not be electronic, such as email or text messages. Too many misunderstandings happen with that type of communication. It needs to be voice to voice where questions can be addressed and confusion cleared up. This is especially true in today's world where teenagers and young adults are used to using their cell phone more often for text messages than for voice to voice calls.
Sunday, May 2, 2010
Chapter 9 - Parting Thoughts
As I sit here today typing this, I continue to work for the company that acquired DecisionPoint, pretty much doing the same thing I’ve been doing since I founded DecisionPoint, back in 1996. So, it’s been roughly 14 years from the beginning, and the journey continues even though we are part of a much larger organization that has a much wider variety of product offerings. As I reflect on the experience, there were a lot of ups and downs, and a lot of positives and negatives. Has the experience made me better? Yes. Has the experienced aged me quicker than I had hoped? Probably. However, as I reflect on what has happened, I feel good about what we tried to get done and how we tried to do it. It would have been far easier for everything to go well and for every decision we made to be the right one. However, I wouldn’t have learned as much as I have, and wouldn’t be where I am today without the experience.
I started writing this with the title of “What Happens When Your Best Isn’t Good Enough?” While some would argue my best was good enough because DecisionPoint had some success and was eventually acquired by a larger organization, which has extended its life, albeit in another form. To that, I would agree. However, when I reflect back on my original goals, we weren’t necessarily as successful as I had hoped we would be when I started this journey. I guess what I am saying is that no matter how much I tried or how hard I worked, things were just going to happen the way they did. Does that make me less successful? No. What I learned from this experience is that sometimes your best isn’t good enough, and that has to be ok. You can only do what you do, and things will play out however they do. What you have to feel good about is that you did everything you could, and you did it in a way that was honorable and respectable. If we had been more successful, like going public, but I compromised my ethics and morals, I doubt I would feel good about it. To me, that’s not success. That’s cheating the system. I’d much rather be less successful financially and still be able to hold my head up high, and today, that’s where I am.
The remaining chapters of this blog will cover what I consider to be critical success factors when starting a business along with the lessons that I learned along the way.
I started writing this with the title of “What Happens When Your Best Isn’t Good Enough?” While some would argue my best was good enough because DecisionPoint had some success and was eventually acquired by a larger organization, which has extended its life, albeit in another form. To that, I would agree. However, when I reflect back on my original goals, we weren’t necessarily as successful as I had hoped we would be when I started this journey. I guess what I am saying is that no matter how much I tried or how hard I worked, things were just going to happen the way they did. Does that make me less successful? No. What I learned from this experience is that sometimes your best isn’t good enough, and that has to be ok. You can only do what you do, and things will play out however they do. What you have to feel good about is that you did everything you could, and you did it in a way that was honorable and respectable. If we had been more successful, like going public, but I compromised my ethics and morals, I doubt I would feel good about it. To me, that’s not success. That’s cheating the system. I’d much rather be less successful financially and still be able to hold my head up high, and today, that’s where I am.
The remaining chapters of this blog will cover what I consider to be critical success factors when starting a business along with the lessons that I learned along the way.
Chapter 8 - Acquisition Is Our Last Hope
Going into the New Year, we got a piece of bad news from our venture capital investors. We found out that they had taken their investment in DecisionPoint as a loss, also known as a write-off. Basically, they were saying that they didn’t think DecisionPoint would succeed, so they were no longer counting on making money from that investment. At their request, DecisionPoint was to be sold to another company. The challenge was that since our venture capitalists had already written off their investment in us, we had little leverage when it came to how much the acquiring company was willing to pay in order to acquire DecisionPoint. This was a tough one for me to accept as I thought our company was worth a lot more than other companies were willing to pay. However, we just didn’t have a strong position in the negotiation.
The challenge that we had during the acquisition process was that we had to keep it quiet, so only the management team and a few select other individuals knew what was going on. Most of the employees were not directly aware of what was happening, which is how we wanted it, so they stayed focused on the task at hand rather than giving up and waiting for something to happen. It was personally very difficult for me to be in this situation as I had close relationships with a lot of the employees, and it hurt me to not be able to tell them what was going on, especially given that my travel to the Bay Area had significantly increased. While I really wanted to talk about it with everyone, I didn’t. It was difficult as there was a part of me that felt that I was lying to them, even though I really was not.
There were several organizations that expressed interest in acquiring DecisionPoint, and we had several different meetings with each organization. However, when it came down to it, there were two organizations that were seriously interested in acquiring DecisionPoint. One was a software company, which I thought would be the more likely acquirer. The second was a hardware company that had purchased several software companies over the past years, and was looking to add DecisionPoint as part of that portfolio. After a series of meetings and negotiations, it turns out that it was the hardware company that ended up with the highest interest in DecisionPoint, and eventually would be the company that acquired DecisionPoint.
During the acquisition process, there was a lot of activity once the final decision was made by the company to acquire DecisionPoint. There was investigation into the software being used along with quality information. There were interviews with existing DecisionPoint customers to make sure that we were doing everything we said we could do. There were also discussions about which employees within DecisionPoint would continue on with the new company, and which ones would be let go. I was officially part of the management team, and I was the only member of the management team that would be asked to continue with the new company. Everyone else was given what I call the “paid to go away” contract. They all made some pretty good money just to go away and not come back. I did get a nice job with a good salary and some extra benefits like stock options in the new company. I also got a small amount of money from my DecisionPoint stock as part of the acquisition. It wasn’t nearly what I hoped it would be, but it was more than zero, so it was still pretty good.
The challenge that we had during the acquisition process was that we had to keep it quiet, so only the management team and a few select other individuals knew what was going on. Most of the employees were not directly aware of what was happening, which is how we wanted it, so they stayed focused on the task at hand rather than giving up and waiting for something to happen. It was personally very difficult for me to be in this situation as I had close relationships with a lot of the employees, and it hurt me to not be able to tell them what was going on, especially given that my travel to the Bay Area had significantly increased. While I really wanted to talk about it with everyone, I didn’t. It was difficult as there was a part of me that felt that I was lying to them, even though I really was not.
There were several organizations that expressed interest in acquiring DecisionPoint, and we had several different meetings with each organization. However, when it came down to it, there were two organizations that were seriously interested in acquiring DecisionPoint. One was a software company, which I thought would be the more likely acquirer. The second was a hardware company that had purchased several software companies over the past years, and was looking to add DecisionPoint as part of that portfolio. After a series of meetings and negotiations, it turns out that it was the hardware company that ended up with the highest interest in DecisionPoint, and eventually would be the company that acquired DecisionPoint.
During the acquisition process, there was a lot of activity once the final decision was made by the company to acquire DecisionPoint. There was investigation into the software being used along with quality information. There were interviews with existing DecisionPoint customers to make sure that we were doing everything we said we could do. There were also discussions about which employees within DecisionPoint would continue on with the new company, and which ones would be let go. I was officially part of the management team, and I was the only member of the management team that would be asked to continue with the new company. Everyone else was given what I call the “paid to go away” contract. They all made some pretty good money just to go away and not come back. I did get a nice job with a good salary and some extra benefits like stock options in the new company. I also got a small amount of money from my DecisionPoint stock as part of the acquisition. It wasn’t nearly what I hoped it would be, but it was more than zero, so it was still pretty good.
Chapter 7 - Another Management Team, Another Set Of Ups And Downs
When the new CEO started, it was clear to everyone in DecisionPoint, he knew what our strengths were, and where we needed to go. He had formerly worked for a company that DecisionPoint competed with and knew the market quite well. He backed away from the end user access tool strategy of the previous CEO without completely leaving the market, and re-focused the organization back to our original product line. Additionally, the new VP of Engineering was going to work on re-organizing the engineering organization to align with the new direction and priorities. There was a renewed focus and energy all throughout DecisionPoint, and we were once again optimistic about where we were headed.
Both the new CEO and VP of Engineering were from the Bay Area, and they had no intention of moving to Portland. They wanted to establish a base in the Bay Area, but all of us that were based in Portland would be able to stay in Portland. There was a twist to this early on. We had three key engineers working in Portland, and they had spent the last couple of years working on the end user access tool. Originally, the new VP of Engineering wanted to re-establish the base of engineers in the Bay Area, and convert the three engineers in Portland to implementation resources. I knew that this would be a mistake as they represented the core of DecisionPoint’s collective engineering experience, and that if they were moved from engineering they would eventually leave. I fought hard to keep the three of them in engineering, but ended up settling for having two of them stay in engineering with the third moving to implementation. As expected, the third engineer left shortly after his first customer implementation assignment.
The VP of Engineering also brought in one of his former colleagues as an engineering manager. This individual split his time between Portland and the Bay Area for a while, but his assignment was to start building out the engineering organization in the Bay Area. The engineering manager was quite good at both people and project management, and he was very much a realist when it came to schedules. Also, he already came with the respect of the VP of Engineering, so he was able to accomplish a lot of things to solidify the engineering organization. When we released the end user access tool, it was clear that there were some quality issues, so the first goal of the organization was to clean up all of the quality problems and establish a more rigorous testing of our products before they were released. The engineering manager was pretty picky about the people he hired, and shortly after he came on board, he found two good engineers for the Bay Area office. The goal was to transition some of the responsibilities of the three engineers in Portland down to the engineers in the Bay Area.
The first product to be transitioned to the Bay Area engineers was our original product line, which I have called “plumbing”. This represented our oldest and most stable product line. The technology was a bit dated as the server code was written in C and the client code was written in C#. Additionally, the C# implementation had been done several years prior by engineers that were learning C# as they went. This meant that the client code needed a lot of cleanup and fine tuning. Also, the server code was to be converted to java in order to bring it up to the latest technology. Overall, the transition of the older product lines to the Bay Area engineers was relatively smooth. They handled the transition, conversion, and cleanup quickly, and customers that upgraded to the new code had a seamless transition.
The bigger challenge was how to resolve the quality issues that we had with the end user access software we had built and released. Again, with hindsight, the product was probably released prematurely. We did a lot of unit testing (testing individual pieces) on it, but there wasn’t a lot of integration testing (testing of how things worked together). Plus, we probably should have classified the initial release of the software as either an alpha or a beta rather than production quality. The goal was to get this tool up to the same production quality as the rest of the product line. So, the two engineers left in Portland were assigned the task to do that. Additionally, another engineer had been hired in the Bay Area to help in this area. The challenge would be getting this engineer up to speed quickly. As stated previously, the end user access tool was very complex, and was built using a lot of new concepts and technologies. So, getting any new engineer up to speed on it was going to be a difficult challenge to say the least. We did manage to get the third engineer in the Bay Area up to speed, but it took a lot longer than any of us had anticipated.
Turning back to the sales and marketing side of the equation, we were making real progress. The new CEO came on board with a lot of marketing experience, and he managed to retain our existing VP of Marketing from his predecessor. The goal was to spruce up and improve upon what we already had. He also retained the VP of Sales, so we had some continuity in our sales force as well. We were heading into a new year with a new attitude and new motivation. Our first quarter ended up quite well, and we hit our sales targets. Even better, we hit our sales targets for the second quarter after only being two weeks into the quarter. This was thanks to a large order from a company in the UK. We had done business with this company in the past, but our UK team persisted for close to two years with the customer, and ended up significantly growing the number of products we were selling the customer, as well as, growing the number of different divisions in the customer that were using our product. Out of all of our time as DecisionPoint, this is probably the best success we had experienced in the shortest timeframe. It was also at this time that our venture capital investors decided to give us another $5 million dollar investment.
With the revenue growth and the additional venture funding, we started to grow the business again. However, this time around, we were a lot smarter in how we were growing the business. We had a sales, marketing, and product plan that were in place, and our goal was to add people that would allow us to better execute that plan. Unlike other growth spurts, we weren’t heading in a lot of different directions at once. We simply wanted to execute what we were doing better and faster. It was working well as we finished the year very strong, and were able to have our first official sales reward trip for sales people that exceeded their quota for the year. It was quite a good feeling, and I was feeling like the people that we were adding to the organization were high quality. A lot of things were moving in the right direction for us, and it felt good.
Shortly after we returned from the sales trip, we realized that we were up against our first hurdle with the new management team. We were staring at our first quarter of the new year wondering where the revenue was going to come from. We had a lot of customers in our pipeline, but the question became how many of them would buy something before our first quarter would end. It became a real challenge with a lot of sweating from all of us as customers we thought would buy in the first quarter ended up holding off on their purchase until later in the year. We did manage to find a large retailer that we were able to get closed by the end of the first quarter, and it helped us make our sales target for the first quarter as the deal was quite large.
We were hopeful of the second quarter given the number of customers that had deferred their purchase from the first quarter. However, as the second quarter approached, things were not looking good. Again, there were a lot of customers in the pipeline, but nothing that seemed imminent to be closing. As the second quarter came to a close, we missed our sales targets badly. The management team got together to come up with a plan for how to avoid that from happening again. There were some ideas that were thrown out, but we didn’t have a lot more that we could do other than close deals faster. We did offer our sales people some additional incentives, and even extended some discounts to customers. However, both of these had limited impact on our sales, and we would close the year significantly short of our sales targets.
As we were winding down the year, several employees decided that our future looked unstable, and that they were moving on to other companies. It was a difficult thing for me to accept as we had hired a lot of good people. However, the fact that they were good made them appealing to other organizations that were having more success. So, I really couldn’t blame any of them for wanting to leave. It was just a result of the situation, and there wasn’t a whole lot I, or anyone else could do about it. It is what it is as they say.
Both the new CEO and VP of Engineering were from the Bay Area, and they had no intention of moving to Portland. They wanted to establish a base in the Bay Area, but all of us that were based in Portland would be able to stay in Portland. There was a twist to this early on. We had three key engineers working in Portland, and they had spent the last couple of years working on the end user access tool. Originally, the new VP of Engineering wanted to re-establish the base of engineers in the Bay Area, and convert the three engineers in Portland to implementation resources. I knew that this would be a mistake as they represented the core of DecisionPoint’s collective engineering experience, and that if they were moved from engineering they would eventually leave. I fought hard to keep the three of them in engineering, but ended up settling for having two of them stay in engineering with the third moving to implementation. As expected, the third engineer left shortly after his first customer implementation assignment.
The VP of Engineering also brought in one of his former colleagues as an engineering manager. This individual split his time between Portland and the Bay Area for a while, but his assignment was to start building out the engineering organization in the Bay Area. The engineering manager was quite good at both people and project management, and he was very much a realist when it came to schedules. Also, he already came with the respect of the VP of Engineering, so he was able to accomplish a lot of things to solidify the engineering organization. When we released the end user access tool, it was clear that there were some quality issues, so the first goal of the organization was to clean up all of the quality problems and establish a more rigorous testing of our products before they were released. The engineering manager was pretty picky about the people he hired, and shortly after he came on board, he found two good engineers for the Bay Area office. The goal was to transition some of the responsibilities of the three engineers in Portland down to the engineers in the Bay Area.
The first product to be transitioned to the Bay Area engineers was our original product line, which I have called “plumbing”. This represented our oldest and most stable product line. The technology was a bit dated as the server code was written in C and the client code was written in C#. Additionally, the C# implementation had been done several years prior by engineers that were learning C# as they went. This meant that the client code needed a lot of cleanup and fine tuning. Also, the server code was to be converted to java in order to bring it up to the latest technology. Overall, the transition of the older product lines to the Bay Area engineers was relatively smooth. They handled the transition, conversion, and cleanup quickly, and customers that upgraded to the new code had a seamless transition.
The bigger challenge was how to resolve the quality issues that we had with the end user access software we had built and released. Again, with hindsight, the product was probably released prematurely. We did a lot of unit testing (testing individual pieces) on it, but there wasn’t a lot of integration testing (testing of how things worked together). Plus, we probably should have classified the initial release of the software as either an alpha or a beta rather than production quality. The goal was to get this tool up to the same production quality as the rest of the product line. So, the two engineers left in Portland were assigned the task to do that. Additionally, another engineer had been hired in the Bay Area to help in this area. The challenge would be getting this engineer up to speed quickly. As stated previously, the end user access tool was very complex, and was built using a lot of new concepts and technologies. So, getting any new engineer up to speed on it was going to be a difficult challenge to say the least. We did manage to get the third engineer in the Bay Area up to speed, but it took a lot longer than any of us had anticipated.
Turning back to the sales and marketing side of the equation, we were making real progress. The new CEO came on board with a lot of marketing experience, and he managed to retain our existing VP of Marketing from his predecessor. The goal was to spruce up and improve upon what we already had. He also retained the VP of Sales, so we had some continuity in our sales force as well. We were heading into a new year with a new attitude and new motivation. Our first quarter ended up quite well, and we hit our sales targets. Even better, we hit our sales targets for the second quarter after only being two weeks into the quarter. This was thanks to a large order from a company in the UK. We had done business with this company in the past, but our UK team persisted for close to two years with the customer, and ended up significantly growing the number of products we were selling the customer, as well as, growing the number of different divisions in the customer that were using our product. Out of all of our time as DecisionPoint, this is probably the best success we had experienced in the shortest timeframe. It was also at this time that our venture capital investors decided to give us another $5 million dollar investment.
With the revenue growth and the additional venture funding, we started to grow the business again. However, this time around, we were a lot smarter in how we were growing the business. We had a sales, marketing, and product plan that were in place, and our goal was to add people that would allow us to better execute that plan. Unlike other growth spurts, we weren’t heading in a lot of different directions at once. We simply wanted to execute what we were doing better and faster. It was working well as we finished the year very strong, and were able to have our first official sales reward trip for sales people that exceeded their quota for the year. It was quite a good feeling, and I was feeling like the people that we were adding to the organization were high quality. A lot of things were moving in the right direction for us, and it felt good.
Shortly after we returned from the sales trip, we realized that we were up against our first hurdle with the new management team. We were staring at our first quarter of the new year wondering where the revenue was going to come from. We had a lot of customers in our pipeline, but the question became how many of them would buy something before our first quarter would end. It became a real challenge with a lot of sweating from all of us as customers we thought would buy in the first quarter ended up holding off on their purchase until later in the year. We did manage to find a large retailer that we were able to get closed by the end of the first quarter, and it helped us make our sales target for the first quarter as the deal was quite large.
We were hopeful of the second quarter given the number of customers that had deferred their purchase from the first quarter. However, as the second quarter approached, things were not looking good. Again, there were a lot of customers in the pipeline, but nothing that seemed imminent to be closing. As the second quarter came to a close, we missed our sales targets badly. The management team got together to come up with a plan for how to avoid that from happening again. There were some ideas that were thrown out, but we didn’t have a lot more that we could do other than close deals faster. We did offer our sales people some additional incentives, and even extended some discounts to customers. However, both of these had limited impact on our sales, and we would close the year significantly short of our sales targets.
As we were winding down the year, several employees decided that our future looked unstable, and that they were moving on to other companies. It was a difficult thing for me to accept as we had hired a lot of good people. However, the fact that they were good made them appealing to other organizations that were having more success. So, I really couldn’t blame any of them for wanting to leave. It was just a result of the situation, and there wasn’t a whole lot I, or anyone else could do about it. It is what it is as they say.
Saturday, May 1, 2010
Chapter 6 - A New CEO and a New Product Frontier
We had trimmed back, and our board of directors was well on its way completing the search for a new CEO. Along with the new CEO, it was decided that we could use a new round of funding. So, they were looking not only for a new CEO, but also one that would attract additional venture funding. One of the requirements of the new CEO was that they needed to be someone that not only started a company, but also was able to see it through until the company went public. We, at DecisionPoint, weren’t necessarily looking to go public, but we were looking to some sort of outcome whether it be going public, being acquired, or another positive outcome. The board of directors did let us interview the final candidate, but it was more of a formality than anything else. They would end up making the final decision unless there was something concerning about the CEO. There weren’t any major concerns so we moved forward hiring the person.
The first assignment of the new CEO, as stated above was to find additional financing from venture capitalists. Through this process, I did get to the new CEO quite well. He was driving the process, and I was the main technical resource that could explain what we were doing and how we were doing it. The new CEO was based in the Bay Area as were the venture capitalists we were talking to, and the rest of us were in Portland. So, there were a lot of trips between Portland and the Bay Area for me as we had the meetings with each venture capitalist. The meetings were the typical meetings where the venture capitalists are most interested in how you’re going to make them money in the fastest amount of time you can. Technology is typically a sidebar conversation that happens after the money discussions. As a technologist, it was frustrating as you wish the people investing in your company would take a bit of time to understand what you do and how you do it. However, that’s not the way “the game” works, so you just have to go with it.
At the end of the process, we were able to get an additional $5 million in venture funding, which was a good amount of money. We continued to do what we do in all areas until the new CEO had formulated a plan for how he wanted to move DecisionPoint forward. This is where things got a bit complicated, which I will mention here briefly, but cover in a lot more detail in another chapter called “Regimes”. With each new CEO that took over DecisionPoint, they would always bring in some of their “trusted staff” from previous companies they have worked with. Sometimes this works, but in a lot of cases, it causes a lot of friction. The friction is that the new people have the CEO’s ear, and may have a much different perspective on things than existing employees. Resolving disagreements between the two groups of employees is absolutely critical. You can’t let things fester. Unfortunately, our new CEO let things fester in a lot of different areas hoping that things would resolve themselves. That just never happened.
One approach that the new CEO had was to bring in executive level “trusted staff”, and then let them build out the organizations the way they felt would be best. There were some individuals already in these positions, such as myself, but there were a lot of new faces also. This created quite a bit of chaos within the organization as there was a lot of confusion amongst DecisionPoint employees about why we were becoming so top heavy with management. Also, many of them were worried whether they would fit in with the plans of the new management team. Generally speaking, everything was resolved fairly quickly, but there were some employees that did end up leaving DecisionPoint as they discovered they weren’t in the long range plans of the new management team. For me, it was sad as there were quite a few people that I had worked with for a couple of years, and it was tough to see them go. Like always, I soldiered on even with the changes.
There was one radical change in product direction that would come about as the result of a combination of events. Traditionally, DecisionPoint had focused on simplifying complex data so that end users could use it to analyze the business. We were always focused on what could commonly be called “plumbing”, which was the process of getting data out of source systems and into a useable format. There was another part of the equation that we dabbled in, but never made a serious effort at participating in. This area involved providing tools for end users that made it very easy to access the data that we had simplified. We always stuck to our “plumbing”, and left it to other software companies to provide the access tools.
Our CEO had come from a company that he had started, and his specialty along with the other members of the management team that he brought on board was creating the access tools. Additionally, DecisionPoint had a couple of talented engineers that were interested in doing something new. They were growing tired of continuing to work on making our “plumbing” better. So, with the new CEO and his staff along with a group of engineers wanting to do something new, a decision was made that DecisionPoint would go full force into the market of access tools by building our own.
In hindsight, this probably wasn’t a good choice for a lot of reasons. There were a lot of other companies already in that space of the market and we were roughly starting from scratch. It would take a Herculean effort for us to build a product that could adequately compete in that market. Probably more importantly was that this direction caused chaos and confusion in our customer base. Our existing customers weren’t necessarily interested in buying an access tool from us as they already had one they were using. So, they were naturally concerned whether this new direction would significantly hamper our ability to improve the “plumbing” products that they bought from us and were so dependent on. It wasn’t as big of a disruption as I thought it might be, but we did lose a couple of customers that decided to do something different when their maintenance had expired and was up for renewal. This also created a bit of a rift in the engineering organization as there was a clear division between those engineers working on the new direction with the access tool, and the engineers that continued to work on the base product that we had been selling for years. There were a lot of internal conflicts and a lot of undercurrent within the engineering and product management organizations as the result of this, and it was never dealt with or managed properly.
We continued to sell our existing product line with moderate, but not great success. We did close a couple of important deals with new customers, and even had some add-on business that we did with existing customers that decided to buy additional products from us. However, we never really took off like we thought we would. Part of it had to do with the confusion for customers between what we were selling (the existing product), and where we were going (the new product – access tools). Another part of it was that we were seeing more competition than we had in the past. Existing software companies and new companies were starting to creep into our space with new and different products. None of them really could do what we did as well as we did it, but they were able to confuse the market a bit and appear as they were a better option than what was available from DecisionPoint. It was fascinating and frustrating to me that these companies could appear to compete with DecisionPoint from a marketing message perspective, but did not have nearly a complete a product as we had at DecisionPoint.
As if things weren’t as chaotic and confusing enough, I had a personal event that contributed to everything else that was going on. While playing soccer as a goalkeeper, I ran out to make a save, and when I bent over to pick up the ball, my hip socket popped. It’s a very long story, but I had fractured my hip socket years prior to that, and as time went on, the hip socket would re-fracture and the fracture would fill in with scar tissue. So, even though what I was doing on the soccer field was something simple I had done over 100 times before, the hip socket finally completely gave way. I was taken to the emergency room and admitted to the hospital where they conducted several xrays, cat scans, and MRI’s. Late in the day after I was admitted, my wife Leslie and I met with a doctor we thought would be performing the surgery to repair my hip socket. He gave us the news that there was a lot of scar tissue in the fracture and he wasn’t sure what it was. There was a chance it was nothing, but there was also a chance it was bone cancer. I was being transferred to another hospital where I would be under the care of one of the top bone oncologists in the area. Leslie was devastated by the news, and I was too drugged up on pain killers to really understand the seriousness of what was going on.
Things got even more complicated as I was scheduled to be transferred to the new hospital and the doctor was waiting for me, but the new hospital didn’t have a room to put me in. So, my only option was to lay and wait and think about all of the different possible outcomes. I tried to push it out of my mind, but when you’re potentially facing something as serious as bone cancer, you have a lot to think about. It turns out that I was in the original hospital for about two days before I could finally be transferred. My kids, Andrew and Becca, were in 8th and 5th grade respectively, and they both played competitive soccer. So, Leslie had to deal with a lot on her own. Fortunately, she was working at the local elementary school part time, and they gave her the time off she needed to deal with things. We also had some fantastic friends that helped take care of our kids and get them where they need to be when they needed to be there.
In the end, I had the surgery and the scar tissue in the bone was not cancerous. I do have a 13 inch scar along with a plate and six screws behind my left hip socket as a result of a bone graft along with the repair of the hip socket. From start to finish, which when I started walking around again, it was about eight weeks of recovery. In some respects, it was like I was taking a forced sabbatical from DecisionPoint. I remained in contact with different employees within DecisionPoint to stay in touch with what was going on, but I was given a temporary break from the day to day activities. As I reflect on it, while the hip socket injury was pretty traumatic, it couldn’t have come at a better time. There were a lot of changes and associated chaos within DecisionPoint, and I had been with the company since the beginning. Having a forced break from it probably helped me keep my sanity so that I could stay with DecisionPoint.
While I was away, the engineering team working on the new end user access tool had made significant progress on the product. I returned in time to witness the completion and release of the new end user access tool. We had a couple of customers that bought the tool, and continue to use it today. Generally speaking, it was successful as a product. However, it was a very complicated product based on some brand new technology in the market, and we built a lot of different features and functionality into it. As we started to install it at different customer sites, there were several problems that we had to work through. It was a lot more complicated than anything we had built before, and therefore, required a much deeper level of implementation and customer support than we had planned for or had experienced with our other products. Additionally, there were very few engineers that understood the entire product as many of them had been working on individual pieces with only a few working across all of the pieces.
There was a big lesson learned from this experience. As I said before, we were entering a market where there was already a lot of stiff competition. So, not only did we have to build what we thought was needed, but we also had to build something that would allow us to adequately compete in the market. Additionally, our engineering team was quite small with about 10-15 people compared to our competition, who had hundreds or thousands of engineers working on their products that were equivalent to ours. We also dramatically expanded the number of users for our product at each customer site. With our “plumbing” product, we had one or two IT administration folks at a customer site that worked with our products. With the new end user access tool, we would suddenly have hundreds of users that were using our product. Both the depth and breadth of our product and types of users had greatly expanded with the release of the end user access tool. This caused quite an additional burden on our implementation and customer service staff, and they were not quite setup to handle the change in their world. However, they did the best they could and managed to maintain a high customer satisfaction level in spite of everything that was going on.
In the sales arena, we had done some additional customer business, but we were sort of at a plateau. With all of the changes in the product line and marketing messages, the sales teams had a tougher time selling and communicating to customers exacting what our product did for them. We made a technology decision to venture into a market we had not spent a lot of time in before without thinking about the repercussions on our marketing, sales force, or even our customers. This is pretty typical of what happens when you make technology decisions without thinking about the downstream or long term effects on other parts of the organization. The new product line wasn’t directly responsible for our stall in sales, but it was a contributing factor. What turned out to be a good outcome in engineering was not the case for the rest of DecisionPoint.
It was around this time that the venture capitalists that gave us the $5 million started to send in some people to “snoop around”. This is somewhat typical for struggling companies. When a company is struggling, the venture capitalists will find someone that understands the product and the market you are working in, and have them do an assessment of where things are at. This is the first warning sign that the venture capitalist is concerned about things, and may be looking to make a change. We had two guys come in to look around, and they were both very sharp and understood the market very well. A lot of different people spent time with them, but I spent the most time with them getting them up to speed on our products, what markets we were in, and what I thought we should be doing moving forward. I had several very good meetings and interactions with both individuals and came away impressed with both of them.
What I didn’t understand at the time is that the venture capitalists had pretty much already decided that our CEO was not doing a good job, and it was the job of the two individuals to help decide DecisionPoint’s fate. There was a chance we could be shut down, a chance we could be sold, or a chance that we could give it a go with a new CEO. It turns out that both individuals felt we had a viable business, and recommended to the venture capitalist that we continue to try. It also turns out that these two individuals would join DecisionPoint in prominent roles. One would become our CEO, and the other would eventually join as our VP of Marketing after a short stint at another company.
Throughout this process, there was an interesting dynamic going on. We were scheduled to have a board meeting, and the member of the venture capital firm responsible for managing their investment in DecisionPoint was flying up the night before, which was unusual. He usually flew up the day of board meetings. Something didn’t seem right. Our existing CEO was in the process of hiring a new VP of Engineering, and had finalized his decision on the person he wanted to hire. Also, sensing that something was going on with the two individuals “snooping around”, our existing CEO decided we should have a layoff to reduce expenses. So, we had the layoff the day before the board meeting, and our CEO was fired at dinner with the member of the venture capital firm later that evening. The next morning, everyone arrived at work to see the existing CEO pack up his desk to leave, and see the two individuals show up at the board meeting where one of them was introduced as our new CEO. Everyone knew that something was up, but this was a lot more dramatic than anything we had anticipated.
There was a bit of a shock within the organization, and it would take a while for all of the changes to sink in. However, after watching the management team dramatically grow and then shrink under our existing CEO, it was clear a change was needed. Our existing CEO was a nice guy, but after he was let go, we all seemed to agree it was the right decision. A lot had happened under his leadership, and so there were a lot of things we had to clean up and deal with. Fortunately, the recovery wouldn’t be as painful as we had anticipated. And, as it turns out, the person who was hired by the existing CEO as the VP of Engineering decided to stay with DecisionPoint even after the change in CEO’s.
The first assignment of the new CEO, as stated above was to find additional financing from venture capitalists. Through this process, I did get to the new CEO quite well. He was driving the process, and I was the main technical resource that could explain what we were doing and how we were doing it. The new CEO was based in the Bay Area as were the venture capitalists we were talking to, and the rest of us were in Portland. So, there were a lot of trips between Portland and the Bay Area for me as we had the meetings with each venture capitalist. The meetings were the typical meetings where the venture capitalists are most interested in how you’re going to make them money in the fastest amount of time you can. Technology is typically a sidebar conversation that happens after the money discussions. As a technologist, it was frustrating as you wish the people investing in your company would take a bit of time to understand what you do and how you do it. However, that’s not the way “the game” works, so you just have to go with it.
At the end of the process, we were able to get an additional $5 million in venture funding, which was a good amount of money. We continued to do what we do in all areas until the new CEO had formulated a plan for how he wanted to move DecisionPoint forward. This is where things got a bit complicated, which I will mention here briefly, but cover in a lot more detail in another chapter called “Regimes”. With each new CEO that took over DecisionPoint, they would always bring in some of their “trusted staff” from previous companies they have worked with. Sometimes this works, but in a lot of cases, it causes a lot of friction. The friction is that the new people have the CEO’s ear, and may have a much different perspective on things than existing employees. Resolving disagreements between the two groups of employees is absolutely critical. You can’t let things fester. Unfortunately, our new CEO let things fester in a lot of different areas hoping that things would resolve themselves. That just never happened.
One approach that the new CEO had was to bring in executive level “trusted staff”, and then let them build out the organizations the way they felt would be best. There were some individuals already in these positions, such as myself, but there were a lot of new faces also. This created quite a bit of chaos within the organization as there was a lot of confusion amongst DecisionPoint employees about why we were becoming so top heavy with management. Also, many of them were worried whether they would fit in with the plans of the new management team. Generally speaking, everything was resolved fairly quickly, but there were some employees that did end up leaving DecisionPoint as they discovered they weren’t in the long range plans of the new management team. For me, it was sad as there were quite a few people that I had worked with for a couple of years, and it was tough to see them go. Like always, I soldiered on even with the changes.
There was one radical change in product direction that would come about as the result of a combination of events. Traditionally, DecisionPoint had focused on simplifying complex data so that end users could use it to analyze the business. We were always focused on what could commonly be called “plumbing”, which was the process of getting data out of source systems and into a useable format. There was another part of the equation that we dabbled in, but never made a serious effort at participating in. This area involved providing tools for end users that made it very easy to access the data that we had simplified. We always stuck to our “plumbing”, and left it to other software companies to provide the access tools.
Our CEO had come from a company that he had started, and his specialty along with the other members of the management team that he brought on board was creating the access tools. Additionally, DecisionPoint had a couple of talented engineers that were interested in doing something new. They were growing tired of continuing to work on making our “plumbing” better. So, with the new CEO and his staff along with a group of engineers wanting to do something new, a decision was made that DecisionPoint would go full force into the market of access tools by building our own.
In hindsight, this probably wasn’t a good choice for a lot of reasons. There were a lot of other companies already in that space of the market and we were roughly starting from scratch. It would take a Herculean effort for us to build a product that could adequately compete in that market. Probably more importantly was that this direction caused chaos and confusion in our customer base. Our existing customers weren’t necessarily interested in buying an access tool from us as they already had one they were using. So, they were naturally concerned whether this new direction would significantly hamper our ability to improve the “plumbing” products that they bought from us and were so dependent on. It wasn’t as big of a disruption as I thought it might be, but we did lose a couple of customers that decided to do something different when their maintenance had expired and was up for renewal. This also created a bit of a rift in the engineering organization as there was a clear division between those engineers working on the new direction with the access tool, and the engineers that continued to work on the base product that we had been selling for years. There were a lot of internal conflicts and a lot of undercurrent within the engineering and product management organizations as the result of this, and it was never dealt with or managed properly.
We continued to sell our existing product line with moderate, but not great success. We did close a couple of important deals with new customers, and even had some add-on business that we did with existing customers that decided to buy additional products from us. However, we never really took off like we thought we would. Part of it had to do with the confusion for customers between what we were selling (the existing product), and where we were going (the new product – access tools). Another part of it was that we were seeing more competition than we had in the past. Existing software companies and new companies were starting to creep into our space with new and different products. None of them really could do what we did as well as we did it, but they were able to confuse the market a bit and appear as they were a better option than what was available from DecisionPoint. It was fascinating and frustrating to me that these companies could appear to compete with DecisionPoint from a marketing message perspective, but did not have nearly a complete a product as we had at DecisionPoint.
As if things weren’t as chaotic and confusing enough, I had a personal event that contributed to everything else that was going on. While playing soccer as a goalkeeper, I ran out to make a save, and when I bent over to pick up the ball, my hip socket popped. It’s a very long story, but I had fractured my hip socket years prior to that, and as time went on, the hip socket would re-fracture and the fracture would fill in with scar tissue. So, even though what I was doing on the soccer field was something simple I had done over 100 times before, the hip socket finally completely gave way. I was taken to the emergency room and admitted to the hospital where they conducted several xrays, cat scans, and MRI’s. Late in the day after I was admitted, my wife Leslie and I met with a doctor we thought would be performing the surgery to repair my hip socket. He gave us the news that there was a lot of scar tissue in the fracture and he wasn’t sure what it was. There was a chance it was nothing, but there was also a chance it was bone cancer. I was being transferred to another hospital where I would be under the care of one of the top bone oncologists in the area. Leslie was devastated by the news, and I was too drugged up on pain killers to really understand the seriousness of what was going on.
Things got even more complicated as I was scheduled to be transferred to the new hospital and the doctor was waiting for me, but the new hospital didn’t have a room to put me in. So, my only option was to lay and wait and think about all of the different possible outcomes. I tried to push it out of my mind, but when you’re potentially facing something as serious as bone cancer, you have a lot to think about. It turns out that I was in the original hospital for about two days before I could finally be transferred. My kids, Andrew and Becca, were in 8th and 5th grade respectively, and they both played competitive soccer. So, Leslie had to deal with a lot on her own. Fortunately, she was working at the local elementary school part time, and they gave her the time off she needed to deal with things. We also had some fantastic friends that helped take care of our kids and get them where they need to be when they needed to be there.
In the end, I had the surgery and the scar tissue in the bone was not cancerous. I do have a 13 inch scar along with a plate and six screws behind my left hip socket as a result of a bone graft along with the repair of the hip socket. From start to finish, which when I started walking around again, it was about eight weeks of recovery. In some respects, it was like I was taking a forced sabbatical from DecisionPoint. I remained in contact with different employees within DecisionPoint to stay in touch with what was going on, but I was given a temporary break from the day to day activities. As I reflect on it, while the hip socket injury was pretty traumatic, it couldn’t have come at a better time. There were a lot of changes and associated chaos within DecisionPoint, and I had been with the company since the beginning. Having a forced break from it probably helped me keep my sanity so that I could stay with DecisionPoint.
While I was away, the engineering team working on the new end user access tool had made significant progress on the product. I returned in time to witness the completion and release of the new end user access tool. We had a couple of customers that bought the tool, and continue to use it today. Generally speaking, it was successful as a product. However, it was a very complicated product based on some brand new technology in the market, and we built a lot of different features and functionality into it. As we started to install it at different customer sites, there were several problems that we had to work through. It was a lot more complicated than anything we had built before, and therefore, required a much deeper level of implementation and customer support than we had planned for or had experienced with our other products. Additionally, there were very few engineers that understood the entire product as many of them had been working on individual pieces with only a few working across all of the pieces.
There was a big lesson learned from this experience. As I said before, we were entering a market where there was already a lot of stiff competition. So, not only did we have to build what we thought was needed, but we also had to build something that would allow us to adequately compete in the market. Additionally, our engineering team was quite small with about 10-15 people compared to our competition, who had hundreds or thousands of engineers working on their products that were equivalent to ours. We also dramatically expanded the number of users for our product at each customer site. With our “plumbing” product, we had one or two IT administration folks at a customer site that worked with our products. With the new end user access tool, we would suddenly have hundreds of users that were using our product. Both the depth and breadth of our product and types of users had greatly expanded with the release of the end user access tool. This caused quite an additional burden on our implementation and customer service staff, and they were not quite setup to handle the change in their world. However, they did the best they could and managed to maintain a high customer satisfaction level in spite of everything that was going on.
In the sales arena, we had done some additional customer business, but we were sort of at a plateau. With all of the changes in the product line and marketing messages, the sales teams had a tougher time selling and communicating to customers exacting what our product did for them. We made a technology decision to venture into a market we had not spent a lot of time in before without thinking about the repercussions on our marketing, sales force, or even our customers. This is pretty typical of what happens when you make technology decisions without thinking about the downstream or long term effects on other parts of the organization. The new product line wasn’t directly responsible for our stall in sales, but it was a contributing factor. What turned out to be a good outcome in engineering was not the case for the rest of DecisionPoint.
It was around this time that the venture capitalists that gave us the $5 million started to send in some people to “snoop around”. This is somewhat typical for struggling companies. When a company is struggling, the venture capitalists will find someone that understands the product and the market you are working in, and have them do an assessment of where things are at. This is the first warning sign that the venture capitalist is concerned about things, and may be looking to make a change. We had two guys come in to look around, and they were both very sharp and understood the market very well. A lot of different people spent time with them, but I spent the most time with them getting them up to speed on our products, what markets we were in, and what I thought we should be doing moving forward. I had several very good meetings and interactions with both individuals and came away impressed with both of them.
What I didn’t understand at the time is that the venture capitalists had pretty much already decided that our CEO was not doing a good job, and it was the job of the two individuals to help decide DecisionPoint’s fate. There was a chance we could be shut down, a chance we could be sold, or a chance that we could give it a go with a new CEO. It turns out that both individuals felt we had a viable business, and recommended to the venture capitalist that we continue to try. It also turns out that these two individuals would join DecisionPoint in prominent roles. One would become our CEO, and the other would eventually join as our VP of Marketing after a short stint at another company.
Throughout this process, there was an interesting dynamic going on. We were scheduled to have a board meeting, and the member of the venture capital firm responsible for managing their investment in DecisionPoint was flying up the night before, which was unusual. He usually flew up the day of board meetings. Something didn’t seem right. Our existing CEO was in the process of hiring a new VP of Engineering, and had finalized his decision on the person he wanted to hire. Also, sensing that something was going on with the two individuals “snooping around”, our existing CEO decided we should have a layoff to reduce expenses. So, we had the layoff the day before the board meeting, and our CEO was fired at dinner with the member of the venture capital firm later that evening. The next morning, everyone arrived at work to see the existing CEO pack up his desk to leave, and see the two individuals show up at the board meeting where one of them was introduced as our new CEO. Everyone knew that something was up, but this was a lot more dramatic than anything we had anticipated.
There was a bit of a shock within the organization, and it would take a while for all of the changes to sink in. However, after watching the management team dramatically grow and then shrink under our existing CEO, it was clear a change was needed. Our existing CEO was a nice guy, but after he was let go, we all seemed to agree it was the right decision. A lot had happened under his leadership, and so there were a lot of things we had to clean up and deal with. Fortunately, the recovery wouldn’t be as painful as we had anticipated. And, as it turns out, the person who was hired by the existing CEO as the VP of Engineering decided to stay with DecisionPoint even after the change in CEO’s.
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