your wish is my command:) here it is--it was published in the Asian Wall Street Journal
<< Personal Journal
Executive Action -- A Founder's Lesson:
Market Realities
Matter More
Than the Mission
By Hal Lancaster
11/12/1999
The Asian Wall Street Journal
PJ4
(Copyright (c) 1999, Dow Jones & Company, Inc.)
SAN MATEO, CALIFORNIA -- Umang Gupta paid the price for hubris.
In the 1980s, he turned his vision of software to manage databases for vast
personal-computer networks into a hot company that bore his name. Gupta
Corp.'s market value eventually peaked at $400 million, giving Mr. Gupta
net worth of nearly $100 million "for a few days," he says.
But when powerful new competitors piled into the market, the company
suffered through seven consecutive quarters of losses and the stock price
plummeted. In 1996, Mr. Gupta quit as CEO, and the company changed its
name to Centura Software.
Mr. Gupta now says he ignored signs of market change, partly because he
listened only to his own voice. That voice was chanting a familiar Silicon
Valley mantra. "The company wasn't a company, it was a cause," he
explains. "We were going to change the world."
That attitude drives much of Silicon Valley, but it's a double-edged sword.
While it can motivate idealistic young technologists to great heights, it can
also blind them to market realities, a principal cause of the career stumbles
you don't often hear about in this land of instant riches. For every new
technology tycoon, there's someone who overestimated the value of his
technology or underestimated the money needed to capture the market.
Now, Mr. Gupta is trying to apply the lessons he learned from his setback
to his new role as chairman and CEO of Keynote Systems. His company
recently had a successful initial public offering, so it has now entered the
hubris danger zone.
Trained as a chemical engineer in India, Mr. Gupta came to the U.S. in
1971 to earn an M.B.A. at Kent State University. After working for IBM
for four years, he returned to India to start a computer company but
realized that the proper place for that was Silicon Valley. He relocated
there with IBM in 1980 and joined Oracle a year later as its 17th employee,
writing its first business plan.
But the entrepreneurial dream lingered, and in 1984, he launched a sparsely
financed Gupta Corp. Instead of shopping it to venture capitalists, he
financed growth with fees from early customers like Lotus and Computer
Associates.
Such a strategy is risky because it requires a lengthy technological lead to
withstand challenges from later, better-financed rivals. Still, the company
had grown to $56 million in annual sales and 400 employees by the time it
went public in 1993. A short time later, Microsoft and Oracle, among
others, challenged Gupta, and the company's performance began to decline.
Oracle offered to buy Gupta, but its founder couldn't sell his mission, a
decision he now regrets.
Mr. Gupta went through a period of dark reflection. Why didn't he see the
market change coming? "I started to think of all the things I should have
done to make the company outlast me," he says.
In today's Silicon Valley, he concluded, companies that are built around the
vision of a single founder will falter unless he surrounds himself with a
savvy team. "No individual is smart enough to figure out all the
technological moves," he says. "Bill Gates and Larry Ellison have done it,
but they also built organizations that can react to change."
Companies need a lot of people who have great antennae that can sense
changes in the market, he says. He didn't have those people at Gupta, or he
wasn't listening to them. "Decisions can't be based just on what the founder
knows or his gut feels," he says.
By 1995, he had decided the company needed to be restructured and that
he didn't have the appetite for it. "The revolution was over," he says.
Mr. Gupta also blames his inattentiveness for not realizing earlier the
importance of the Internet. "I had people leaving Gupta to go to a little
company named Netscape in 1994," he says. "Why didn't I pay attention?"
After he resigned, Mr. Gupta traveled and read a book a day for several
months. He was besieged with offers to join boards or start companies.
Finally, in 1997, he joined the board of Keynote Systems, which measures
the performance of commercial Web sites. But when the board asked him
to take over as CEO four months later, he hesitated. The company was
having difficulty attracting venture capital. Its business plan wasn't fully
fleshed out. Did he want to sacrifice the contentedness and family balance
he had just achieved?
The lure of running a company again was too strong. This time, though, he
vowed things would be different. The business isn't constructed around a
single technological revolution but a variety of technology services. "If all
the Web pages got blindingly fast tomorrow," he says, "there would still be
a need for us to measure other aspects of quality."
And this time, he says, "we have a lot more people reacting to market
situations without my being involved." That means the company can react
faster to change, he says. "You don't hire people to do what you say. You
hire people to worry for you," he adds. "I tell them I judge them by how
little I have to worry about what they're doing."
Another major change: no more cramming as many meetings as possible
into each day. Now, he leaves large swatches of time open so subordinates
can wander in and brainstorm and he can learn what's going on. He also
leaves more time to visit younger companies and attend venture capital
conferences. And he informed his recently hired executive assistant that
her job is to help him, not protect him.
"I'm making sure my peripheral vision remains intact so I'm not blindsided
again," he says. >>
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