In this section, we explore some of the ways in which Philippe draws parallels between life and business. In the process, we discover his exchanges with Netscape’s know-all CEO Barksdale and Philippe’s next few mistakes.
SM: So you have now quit IBM, what next? PC: I went extreme skiing for 9 months. I have done that every time between job – take a sabbatical. It allows me to digest what I have learned. To digest and forget, essentially, and then I come back fresh and new.
I went from Physics to Mini Computers, to Medical Imaging, to Email Software and then I took another year off, and then went to Enterprise Software, and then into Online Payments, and I took a sabbatical again, and now I am in Security. I have been chancing all over the technology marketplace, I have been changing segments, and I took the time off because I could refresh myself and come in with a new fresh look. I think life is the same. There are segments, components of life, everywhere, and you need time to reflect.
SM: Life is the same, business is the same… business is still gross margin and revenue and earnings. PC: And customers. This is the thing everybody forgets, customers. It’s customers.
SM: So you came back from skiing, what was going on in your mind at that point? PC: When I went extreme skiing I learned a lot of lessons. I learned to push myself from a physical standpoint. The biggest thing I learned to address was fear. If you look at the trees, the ski slope and the rocks, you have to acknowledge the obstacles in your path.
In business it is the same. If you look at your competition, if you are afraid of your competition and you focus on that, and you don’t look at where you should go, then you get lost. The big trick in business is to transcend your fears and be aware of the obstacles, and then focus not on the problems but on the solutions.
I learnt it at the physical level but I can transform it into the mental. It is much easier to strengthen the ability that I had now, because it was not as good as it is now.
Because I have experienced all kinds of things, I am now more highly aware and extremely focused, which is what every champion in tennis says: everything moves much more slowly, you can see the spin of the ball, you can see the court … it is peak performance.
After learning that for 9 months there was no doubt I could do the same at the mental plane. More and more about the ability to be very focused and very precise and yet be capable of watching the passage of events and translate that into business decisions. I realized that I was instinctively doing this before but now with a well developed strategy and philosophy in mind.
SM: Yes, much of Eastern philosophy deals extensively with chiseling the mind to focus. So what happened after this ski sabbatical? PC: So there was a company called Verity. The VCs were not very happy and they were looking for someone, and I saw the opportunity to essentially restore the company. The company was doing very sophisticated search to the CIA and the agencies, and I saw the opportunity to bring search to the enterprise. I contacted Verity and told them I can do a lot of things, and because of my turnaround trackrecord I got the job and began to completely restructure the company.
SM: How big was verity at the time? PC: About $15 million dollars and 120 people. There were 13 or 14 VPs 🙂 I essentially completely changed the business model. That was where my trips helped me, because we went from a $1500 per user price point to a $100 per user price point the next month. I told the VCs we have got to take the hit now, we have to package the technology and we have to reach the masses.
SM: What where you selling at the time, Enterprise Search? PC: Exactly, it was essentially Google for the Enterprise. By repackaging our technology we were able to emerge as the standard for Enterprise Search.
SM: Did you see the Internet coming? I mean, Search was going to be a big deal … I’ve always looked at Verity as a squandered opportunity! PC: Yes. While I was vacationing with the extreme skier, we were organizing a trip to peninsulas in Russia and we needed to get a helicopter lift up by the Russian army. So we had these extreme skiers who were connecting with the Russian army via the internet, and when I saw the email back I could see the entire chain of command from the Russian army going all the way back to Moscow.
So the view I had was, wow, the Internet is connecting the planet. Then a few years later at Verity they showed me the first version of Netscape browser from the University of Illinois. Instantly I recalled the extreme skiers. I said, “Boy, this is it, the planet is going to get wired”. You could now send very rich content and I was instantly in love with the internet. This was the future and it was going to be very big. I tried to push Verity into going to search the Internet. We were very successfully to get search into Netscape, and I tried to get Yahoo. Interestingly enough, Yahoo had humans managing the data at the time.
SM: Yes, Directory Search. I remember. PC: Exactly, and it was interesting because you could find exactly what you were looking for, and you could also expand your knowledge. I thought that was wonderful. They had a much better search experience than anyone else at that time. I tried to push us that way, but our engine was not scalable enough. I tried to get the technology, but the VCs were throwing a lot of money at Search, so Verity, in a big way, missed the search opportunity on the Internet because our engine could not scale fast enough.
SM: A real shame. Netscape missed that opportunity as well.
Another interesting experience I had was when I realized what Microsoft was doing, by giving away the browser for free. Netscape was dominating the browser marketplace at that time and they were trying to integrate email, and Microsoft was coming out with IE 4.0. So I went to Netscape and I told them they were making a big mistake because they were not giving away their browser for free, and they were compounding the problem because they wanted to create a new email paradigm.
Enterprise had spent 10 years working to get enterprise email working; they were not going to switch that easily. So I told Barksdale they should create NetCenter and put the effort on creating a platform so people could do search, directories, and they could encapsulate email, encapsulate Microsoft. His answer was, “Thank you very much we like people who root for us. We have already thought of all that, and if and when it becomes something we should do, we will do it”.
And you know the rest! It is amazing, and the reason is, again, because they were looking far too much at Wall Street not customers. I told them they should make their money from their NetCenter. They could have been Google!
SM: Nonetheless, you took Verity public? PC: We missed the Internet market. The reason we missed it also was we took the company public a little bit early, the hype of Wall Street … and I have since learned my lessons, Wall Street is a demanding master.
SM: What year was the Verity IPO? PC: I can’t remember, I think it was 1993. What I learned was that Wall Street loved you as long as you had earnings growth, and if you don’t … it’s not that they hate you …
SM: … They ignore you. PC: They discard you. Essentially, they say OK you are a great guy, and then as soon as you miss your expectations, they say “we are finished”. They are a difficult master. So when you go public you must be brave enough to resist the pressure they put on you.
SM: How big was Verity when you took it public? PC: I think it was $40 million. After that I took another sabbatical, went elephant tracking in the Golden Triangle in Thailand.
(to be continued)