Young entrepreneurs have plenty to worry about: raising capital, keeping competitors at bay, recruiting talent, acquiring customers, defining new industries and keeping the team focused on innovating at the incredible rate of change the industry demands.
Another is the worry that your board of directors will someday decide to unceremoniously shove you aside in favor of a more experienced, salt-and-pepper executive. Many founders (Mark Zuckerberg, Larry Page, Sergey Brin, Mark Pincus) have gone to great lengths to protect their positions as the leaders of the companies they built.
These efforts include carefully selecting co-founders and entrepreneur-friendly investors as well as architecting stock structures and term sheets so that eternal control is all but guaranteed.
Given all of this, it can come as quite a surprise when you realise that despite all the protective measures you put in place, you want to fire yourself.
About this time last year, I came to that very conclusion. A few months ago I stepped down from being CEO of the business I built from little more than a cool idea into a publicly traded company with more than $100 million in annual revenue.
I never saw myself as a quitter. Silicon Valley powerhouse Ben Horowitz wrote a blog post recently called ‘The Struggle’. In it, he talks about the dark moments entrepreneurs go through when they are building a startup. He describes The Struggle as ‘the land of broken promises and crushed dreams. The Struggle is a cold sweat. The Struggle is where your guts boil so much that you feel like you are going to spit blood’. It is the sickening feeling you get when big deals fall through, linchpin employees bail or an industry leader launches a product that competes with yours. Entrepreneurs rarely discuss or admit to it, except perhaps on the therapist’s chair.
Fighting your way through The Struggle can be harrowing. The technology forest is dark and deep and you need to fight your way past competitive warriors and financial dragons. Many entrepreneurs begin their ventures believing they will never meet such formidable times. For them, The Struggle is not kind. Sometimes the tough times last for months. Often they are fatal.
Like all start-ups, Blinkx has been through tough times. This, however, is not one of them. Blinkx is doing well by all measures. The company is publicly traded with a market cap of $300 million. We employ nearly 300 people and are profitable. Last year we grew more than 70 per cent and brought in well over $100 million of revenue. Of course the fact that we are doing so well makes it difficult to explain why I would want to step down.
I am an engineer. I like to build things. Sometimes I like to take things apart just so I can learn how to put them back together. When I was seven years old, my dad came home one day with a computer. He helped me set it up and then put forth a challenge. He told me if I could learn and master BASIC programming, he’d buy me a video game of my choice. I was fluent in BASIC in less than two weeks but it took me more than two years to call the bet: I found that writing my own games was much more fun than playing someone else’s.
As it turned out, creating a new game was just the beginning. For me, building isn’t just about technology – it’s about the product around the technology, the team that brings it to life and the organisation that builds it, markets it and distributes it. Being seven made turning these fantasies into reality tough, but the naïve optimism of childhood meant I assumed it’d all happen one day soon enough.
Decades later, I was in the right place at the right time and had the opportunity to take some smart technology, build it into a new product and launch a new company. The founding team had a few, understandable nerves, but, realistically, we were never going to say. We founded Blinkx in 2004 and launched the video search engine in 2005 to a great deal of fanfare. We were hailed as the next Google and I was the poster boy for online video, beaming from the pages of The New York Times, The Wall Street Journal, and Newsweek. Two years later we took the company public in London.
Growth at Blinkx was fast and furious. At one point I was flying to London twice a month to talk to investors and spending another week each month in New York, to Chicago or LA, selling to advertisers and content partners. I was invited to conferences from Monaco to Maui, delivering keynotes to audiences of thousands of people. Time zones became an entirely irrelevant concept.
Then I hit a wall. It was April 2011 and I was in London negotiating the acquisition of Burst Media and sharing the news with our investors. We ran into some delays with the deal and before I knew it, my two-day trip had turned into a week. At one point I looked up at the room service trays and papers strewn about me, and I realised I hadn’t left my hotel room in more than 48 hours.
By the time I boarded a flight back to SFO, I was spent. I expected to be elated: I had just acquired a company I was excited about, our investors were happy and I was on the way home to see my family. But I felt annoyingly negative. I tried to shake it off. I caught up on emails and watched a movie.
But there it was again.
It took some tough introspection but by the time I landed I figured out why I was upset. Yes, I was overtired, and yes, I missed my son. But there was something else. While I was abroad, our CTO met with Ask.com, an early partner who had always pushed us to do more. They were brainstorming future products, innovations in video search and new directions for the industry. It was the type of meeting I used to live for. As founder I never wanted to be that out of touch with what we were building. I felt like a part of myself was missing.
A week later I was still feeling just as unhappy..
I still loved what we were doing. The flame of passion I once had for my job was not dead. It just wasn’t being used. Instead of thinking about the future of video online I was worrying about legal, HR and investor issues. Calculating. Negotiating. Reacting. The bigger your company gets, the more it probably needs a Jack Welch-type CEO. You need structure, organisation, automation. As a founder, if you are successful, you will one day need to ask yourself if that person is you or someone else. I believe one of the most important things a CEO does is inject energy, belief and optimism into the company and I knew that if I didn’t find a way to get closer to the creative part of this role again, it would kill my ability to do that and, in the long run, kill the company.
A few weeks later, I told my board what I was thinking. I am lucky enough to have on my board a group of people whom I respect and who have all been in my shoes before. If you are an entrepreneur and still building your board, you want to be careful to invite people who understand first-hand the challenges and opportunities that come with building a company. Armchair CEOs are great at running armchairs, but nothing more.
Asking for advice
One of my mentors and directors Mike Lynch, the founder and former CEO of Autonomy, has been the visionary tech founder as well as the operational CEO. After all he had done to help me get to where we were as a company, I was afraid he would see this as a failing. Instead, he said, ‘You are not alone. Most founders go through this process at some point. First you need to figure out what you want. Then,’ and here he fell back onto one of his catchphrases, ‘make it so.’
I flew to Hawaii for a week with my family and spent much of the time sat on the beach thinking. Did I want to leave the company altogether?
I realised that the reality of the operational job was getting in the way of what I enjoyed most and what I believed still had to be done: thinking about where the puck was headed. I can run things well, but I am best at the moment of disruption; building a new thing in a void or changing the status quo.
Online video is still in its infancy, this sort of focus on disruption is still required. For Blinkx to continue to be successful, I needed to split my role into two – find someone to run the company, lead it and grow it and, in doing so, give myself the space to keep working on technology and the next generation of our product, the next disruption in our world.
When I came back I realised I had two difficult tasks still ahead of me: finding my replacement and telling my team. We talked to search firms, we looked at people we already knew in the industry and I ran potential executives through a model in my head countless times.
Obviously we needed someone who could execute and lead the company as it continued to grow, someone understood the complexities (and vagaries) of the online video and advertising markets. But, most important and most difficult, the person had to understand and fit into the culture that had made the company successful. No one felt right.
In November we acquired a company called Prime Visibility Media Group, an online performance advertising network and digital marketing agency. PVMG’s ad network reaches more than 600 advertisers and 350 publishers. The idea behind the deal was that that Blinkx would integrate PVMG’s platform with its own.
After a few months of working with Brian Mukherjee, PVMG’s CEO, I recognised the future leader of Blinkx. I asked Brian if he was interested in the position and he jumped at the opportunity. We announced the change in early August.
If I’m really honest the hardest part of the transition is when I tell outsiders about my decision. Some people understand and are supportive. Every now and then I pick up on something behind the eyebrows – a subtle judgment behind a question. People assume no one would voluntarily step back from running their own company.
One thing that makes Silicon Valley so good at what it does is the undying optimism that pervades every aspect of its culture. In that sort of reality, people tend to deny that the tough times exist and, logically, if times aren’t tough, why would you ever quit? When they hear you are no longer CEO they assume you must have been shoved aside or, worse, you do not have enough ambition.
What they’re missing is that there is nothing rational about starting a truly innovative company. The statistics leave little doubt that most who try will fail miserably, losing money, relationships and time.
You need a deeper passion that overrules common sense evaluation of the situation and, if you don’t keep that flame alive, you run the risk of ruining what you have built. At times like that, changing yourself out is just the next disruptive move, still driven by the passion that got you started in the first place.
Both logically and emotionally, I know I am doing the best thing for my company. Every now and then I step back to take a look at how far we have come in six years. It helps me visualise how much farther we can go.
I love that we live in a market and a time and an industry that allows us to build something inspiring out of nothing. I love that I was able to turn my inspiration into reality and I love that I am still an active part of its future. For all we know, this could just be the beginning.