Sramana: Early-stage entrepreneurs are always wondering about the transition from an entrepreneur-run business to an outsider-run business. What are your thoughts?
Bill Daniel: My first experience with this was Oracle, when it was a small company known as Relational Software Inc. Larry Ellison is legendary, but in those days he was just Larry. I watched what he did and how the company grew and I thought what everyone would think, that I could do it. The second thing I observed is that he assembled a team. The marketing team had 7 or 8 different VPs of marketing during the time I was there.
I have also done three startups as the founder. I have observed that not every founder is going to be a good CEO of a company at scale. Most founders don’t know what they don’t know about that. In this case, one of the founders did not want to be a CEO and the other one who thought he did found out that he really did not. If I were to give advice to the founders of a company that is small with the potential to get big, it would be for them to figure out very quickly if they really want to be a CEO of a thousand-person company doing $100 million in revenue. If you don’t, that’s not bad. You can have a great ride and be very successful and make money doing what you enjoy. Don’t make yourself miserable doing something you don’t like doing or don’t have the skill set to do.
Sramana: Why did the founders leave AllWebLeads?
Bill Daniel: When I came there, I understood what the founders were thinking as founders as well as what would be required if the business were to scale. Going in, nobody knew how big we could make this business. As we grew and brought on managers and VPs, it was not as much fun for the founders. They liked the company when it was five guys in a loft downtown. They were very good keeping their egos in check and listening to their hearts. Even as we grew the company, they kept doing the pieces they loved. They knew we needed a sales organization and a finance team, but they did not want anything to do with that. There is a difference between a founder who wants to be a CEO and a founder who wants to build a great product and make a lot of money. They do not have to be mutually exclusive, but in this case it was. It was their choice to leave the business.
Sramana: What drove them to make that decision?
Bill Daniel: Two things. First, they had made a lot of money and were comfortable with the success they had. Second, they did not want to keep doing what they were doing in a bigger company. One of them has started two new companies and the other is about to start his next company. It was not about the company not wanting them, it was them choosing to back out and take on the next entrepreneurial challenge.
Sramana: You said they made a lot of money, but this company has not excited yet. Did you let the founders cash out?
Bill Daniel: Yes, when we did the acquisition in 2011 we recapitalized the company to include a significant amount of liquidity for both of our founders. That is the way they wanted it.
Sramana: In the past three of four years we have seen more of the these types of exits for founders. Can you comment on that?
Bill Daniel: The thing that I have observed about the founders here is that their egos were really in check. They were more interested in building a successful business than they were in a title. I have been in other situations where the founders can say they want to do that then they have a hard time letting go. Investors and CEOs can be disastrous in these situations as well.