OK Labs Story (6): The Management Team

Steve is an incredible networker (which helps collecting intelligence, he’s got an excellent machine for picking up market rumours). His network also includes a lot of people whom he can draw on as consultants or employees.

Early in the life of the company he moved back to Chicago, to set up the company headquarters there. We needed a US presence (and parent company) and Steve initially ran it from his home. He soon got an excellent deal for office space in the heart of the Chicago CBD, exactly opposite the Willis Tower. Chicago isn’t the most obvious place, and time-zone wise, the West Coast would have been better, but in the end I don’t think it mattered. Chicago is well-connected and Motorola’s mobile business (who should have been a major customer) was there.

He also went on to hire an executive team: CFO, VP Product Management, VP Marketing, all based in Chicago. The VP Sales (eventually also Chicago-based) took years, including some false starts: one resigned within 2 weeks for family reasons, and a French guy resigned after the first phone meeting (never met either, but maybe they sensed more issues than I thought?) Together with Benno and myself this comprised the initial executive team.

Generally the executives Steve hired in the first round were nice and decent folks, I liked working with them. Rob, the VP Product Management, was a much better choice for talking to engineers than Steve, he didn’t rub them the wrong way and didn’t bullshit. Dennis, the CFO, was a voice of sanity. Marti, the VP Marketing, built a great 3-body marketing team that achieved amazing visibility with a very small budget, they were full of cool ideas and executed quickly and effectively.

A clear issue was the lack of domain knowledge in the executive team. Some of the false-start Sales VPs had it, the eventual Sales VP didn’t (but tried to made up for it by Steve-style bullshitting). Rob came from Wind River and as such the embedded systems domain, which is at least related. He had held a senior position at Wind River, but that didn’t prepare him for defining a product strategy for a startup. In the end he mostly managed the product development process, while the actual product strategy came from Benno.

But the most crucial shortcoming of the executive team was that all but Benno (and me, and maybe Dennis in his quiet way) were yes-men/women, who didn’t ever challenge Steve, and this presumably is why they were picked. No-one who is willing to form and express their own opinion, or dares to confront wishful thinking with facts, is welcome in the Steve world. Such a person would have to go (as it happened with a number of non-executive staff, see Tony and Josh).

Chicago head office was this bizarre perfect world, where everything went to plan and everything always looked good. Benno called it the “reality-distortion field” that was created there, with all those fantastic deals that were just about to happen.

Obviously, such an environment, where fantasy is reality and critical thinking is treason, is a recipe for disaster. It is also extremely painful for someone who spends considerable effort developing bullshit detectors in his students. Unfortunately I had to get used to muting my bullshit detectors whenever I went into a meeting with Steve. Meetings in Chicago were this roller-coaster of having fun catching up with folks, especially our marketing team, and facing this deluge of bullshit. Can’t imagine how others survived that on a daily basis.

The obvious question is, why didn’t I try to do something about this earlier on? It’s a question I still struggle with, I can’t find an easy answer. I can’t claim that I didn’t see the problems, but somehow I felt too insecure to react properly. I also didn’t know how to react, and I didn’t have good mentors to turn to. And I was isolated on the Board.