Thursday, September 1, 2016
So you want to work for a startup!
You've been talking to one that you think is going somewhere and will give you the experience you want, you like the people and the title, job and salary sounds right for you. They make you an offer. Great!
But now is the point where you need to ask three critical sets of questions to determine if this is actually a good company to work for or not. Remember each job you take influences your future career. What you learn, who you get to know, what opportunities you get as a result. Many people peak in their forties (career wise, and for a myriad of professional and personal reasons) and so the job choices you make in your twenties and thirties will affect how you peak.
After 30 years in Silicon Valley, 20 of them as a high tech CEO, and now talking almost every day to people who want company and career advice, I've seen too many bad company structures to take any offer at face value. I recommend you (respectfully) ask questions to explore these three areas - the health of the business, the capital structure and the organization - and if a company won't answer then that in itself tells you this is a not a great situation for you.
1. Understand the health of the business
Health is all about rate of growth. What is the revenue, how is it growing and what other metrics are critical health indicators for the business? so ask:
- What was the revenue for the last 2 years, what is the forecast for this year and next year? You're listening for consistent, sustainable growth and a management team that is making its plans. There is no right answer here because it depends on the stage of the company, but you're listening for b.s. or inconsistency.
- What percentage of the revenue this year is recurring (ie. it renews every year)? Do you expect this percentage to improve? You're listening for the quality of the revenue. Recurring is higher quality than one-time revenue and drives a higher valuation. If a high percentage is recurring then you want to understand how many of the customers renew - i.e. what is the customer retention rate? How much do they churn.
- Are you profitable? If so for how long? If not when do you plan to be profitable? If not, when do you need to raise your next round of investment? Note, if your hiring manager says "we're not profitable and we don't want to be" don't buy the b.s. The ONLY time you don't want to be profitable is when you have easy access to lots of cash and you're truly investing for growth but most good companies would like to be profitable, while still growing, so they stop burning cash. They should be able to talk about how much time and cash it is going to take to get profitable if everything goes to plan.
- What are the other important metrics you track for your business? For example customer acquisition rate and costs, customer retention rates etc? Be sure to listen for real metrics that are about the true health and growth of the business, not just marketing metrics (clicks, downloads etc) but which are not metrics leading to revenue growth.
2. Understand the capital structure and cash
Startups run on cash from investors, not cash from operations and so it's important you know what the terms are and how they might affect the future of the company, so ask:
- What is the capital structure? How many preferred shares are outstanding, how many common and what is the total number of shares including the unallocated options in the employee pool? You want to know the total number of shares so you know what your options may be worth in the future.
The company has raised $5M selling 5 million shares at $1 per share to preferred sharesholders
The founders have 5 million shares
The option pool has 1 million shares priced at 10 cents per share
=> there are 11 million shares and the post-money valuation is $11M
The company is sold for $49M.
$5M is returned to the preferred shareholders so now there is $44M to share
This means $4 per share - you make a gain of $3.90 per option you have vested at that time
- What are the basic terms of the preferred shareholders? Are they participating? - this means they take their money back first as in the example above and then what's left is divided across the total number of shares.
- Do the preferred shareholders have any control on the sale of the company? For example, can they veto a sale below a certain valuation, or veto a capital raise below a certain threshold valuation? You want to know this because if they can, and you think it's unreasonable then you should discount the potential value of your shares. These kind of terms are not typical with high class VCs, but you do see them with PE firms and newer VCs who don't have a lot of experience on the downside effects. And I know of too many founders who lost their companies because of these types of terms. If you are unsure, ask around or check out The Funded to get a measure of the quality of the investors.
- Do any of the executives have 100% vesting on change of control? Some VCs say no to this for everyone, some say only the CEO, some say only the CEO, CFO and VP Sales and so on but most executives want it. This tells you a lot about whether the executives are looking to ramp quickly and sell vs. build a long term company.
- And if they suggest you buy your common stock don't. Look at what happened to the employees at Good Technology, and there are thousands of examples like this where the common holders lost their money because they were behind the VCs. Be patient and pay a little more tax when you make money.
3. Understand the org chart and politics
- Figure out where you fit in the organization. How many layers are between you and the CEO? What is the span of control of your VP? You're looking for a relatively flat organization where you are in a strong part of the organization - i.e. your exec has power.
- Does the organization make sense to you? Do you see what looks like politics between founders (odd titles, responsibilities in places they should not be)? Do you see one CEO by name, but two CEOs by organization? Does the balance between R&D and sales make sense to you? Again, does it pass the sniff test for you?
Remember, you want to work for someone who is really good at their job, a great manager, and who will invest in you and your skills. And someone who you will work for for a decent period of time - like a year. You don't want a weak manager, a revolving door of managers, or ill defined responsibilities between you and other people/teams. The chaos being reported at WrkRiot is certainly unusual, but there are many aspects of this story I have seen and heard when founders don't know what they are doing and don't have good advisors - so be selfish and do your homework.
Most good companies will help you understand these three areas because they will respect that you are making an important decision for your career. The most precious thing you have is your time and the best thing you can get is experience. Not money, or options, or a title but experience. Training, education and opportunity. So measure your startup against those metrics too before you fall in love.
Monday, August 22, 2016
I was highly amused to read the New York Times article that people who read books live longer!
According to the NYT "Compared with those who did not read books, those who read for up to three and a half hours a week were 17 percent less likely to die over 12 years of follow-up, and those who read more than that were 23 percent less likely to die. Book readers lived an average of almost two years longer than those who did not read at all."
Well I am on my way to changing my longevity to a long old age surrounded by piles of books. Hooray!
And this Summer, as my first Summer not working full time as a CEO, the books are certainly piling up but by far the best book I have read in a long time is the Silk Roads by Peter Frankopan. This book is a retelling of world history by looking at it through the lens of the development of trade routes, specifically the silk roads, through the center of the world (Persia and it's neighbors). It does a beautiful job of weaving a complex story of how these economic relationships developed in a completely compelling and riveting way, while at the same time it ties the trading relationships into world events as diverse as the discovery of the New World and the Second World War.
It's not perfect - as the Guardian review says "The need for brevity has led to some troubling misrepresentations" but at 646 pages of dense type it is hardly brief. And the Washington Post review is fair in both praising the book, and pointing out it's shortcomings.
But for me much of the fascination with this book comes not from learning any specific new history but instead to see how intimately everything is connected. I, like the author, was raised with a Eurocentric point of view and my education was very pro British Empire. I cringed at times at how critical the author is of the British in the 19th century, but my discomfort was even more acute reading his perspective on the Americans in the Middle East since the second world war. He's harsh, and maybe a little biased against both my countries (I'm a dual national after all) and yet his perspective was thought provoking.
If you are interested in world history this is a book truly worth making the time and effort to read. And even if you are not, this book will open your eyes to a new way of thinking about the history we were taught.
For the rest of my Summer... of the many books I have read I recommend:
Sicily by John Julius Norwich - a loving walk through the history of this fascinating island and a must if you are thinking of visiting.
My Promised Land: The Triumph and Tragedy of Israel by Ari Shavit - gorgeous, rich description of the birth of modern Israel, although a little biased.
Jerusalem: The Biography by Simon Sebag Montefiore - deeply researched sweep through 2500 years of this fascinating city's history, also well written.
Augustus: First Emperor of Rome by Adrian Goldsworthy - a nerdy feast on this fascinating man.
And for a scented confection that makes you want to cook with lemons and get on a plane to Italy my current delight is The Land Where Lemons Grow by Helen Attlee. It is simply perfect!
Thursday, August 18, 2016
It's strange how the tendrils of history weave our lives together in unexpected ways.
This Summer my father told me that he had decided to give a 1925 copy of the complete works of Thomas Paine to his old school in memory of his brother. He asked me to go with him and, thinking it would be a pretty drive on a summer day, I said yes, not knowing I'd peel another layer of his story.
My father's school is Thetford Grammar School in Norfolk, England. It's a very old school, dating back to Saxon times with old flint buildings that were part of a Dominican Friary and a Norman cathedral in the past, and where ruins still stand in the parking lot.
But more importantly, Thomas Paine went to Thetford Grammar from 1744 to 1749. One of the founding fathers of the United States, and author of the radical work Common Sense, went to this little market town school all those years ago. It's in a rural part of England which was surrounded by farms and wealthy landed gentry back then; I have to wonder how many of Thomas Paine's ideas were formed by the feudal attitudes still prevalent in England in those days.
I knew the school meant a lot to my father, but I didn't realize quite how much until I went with him.
My father grew up in Thetford in the War surrounded by air bases, Yanks and the excitement of a war going on around him as a young boy. But he also grew up in a tough household because his father had a drinking problem. He was a bright kid with a positive outlook on life and his schooling had a huge influence on his life - he would say it was how he got out. He was pushed ahead early, supported by his teachers and did so well he got a scholarship to UCL and so escaped his family's life in Thetford.
Without the school he would still be there instead of traveling the world. And this is what he had the chance to tell some of the kids when we went to the school. Little did we know that the new headmaster made an event of my father coming up! We had the local press and a photographer there, the heads of the boys and the girls schools, the chair of the board of governors all there to receive the gift.
The headmaster, Mark Bedford, gave a speech, my father gave a speech, and I teared up. I looked up at the wall and saw his name on the wall board of Bartram Gold Medal winners in 1949. There was his name (with the old apostrophe put into the name in the late 19th century and removed again in the late 20th) recording that his teachers and his own ability pulled him out of a dead end situation at home and put him on a path to an international career in tech. Not surprising that at age 84 he still remembers the names of all his maths teachers!
And he's been asked back to give the speech at the Speech Day at the beginning of term in September, with teachers, parents and students. I'm so proud of him!
Monday, August 8, 2016
I've been working with a number of small companies this year. I'm on a mission to help CEOs, especially women, figure out how to grow their businesses, manage their investors and boards and to create a level playing field for themselves.
But as I have spoken to some of these CEOs I've seen several data points which are very worrying, and which I hope don't make a line! These data points are investors putting money in to companies, and then taking the money back out for services - so effectively reducing the cost of their investment. Double dipping.
For example.... The professional service provider:
This is the case for a small software company, lets call them W. W has developed a software technology to improve building management, and so reduce insurance costs. It wasn't an easy company to raise money for and in the end the CEO raised from angels, one of whom invested $480k. Nice.
But he then turned around and sold W the development service to create the product from the technology for $490k. He didn't require it, but it was "expected". Assume a typical margin of 50% then the service cost for the angel to deliver is $245k and he has a profit of $245k. So he got $480k worth of equity in W for $235k. And to make matters worse, when the product delivery was not to the satisfaction of the CEO she found it very difficult to push back on him in the way she would have been able to push back on an independent contractor. It's awkward to say the least, but I think it's what in a public company would be called a related transaction - it is simply not independent and so has the potential for conflict of interest.
The investors with a side business:
Another small app company, raised money from an angel group. The angel group has a strategy of creating an ecosystem from their companies, and providing services to them to drive the market adoption. But, unlike the old school VCs like Mayfield and KP, or even the new large scale guys like Andreessen Horowitz, this group turned around and charged the company (which had only raised $1.5M) $11k/month for marketing. That's $132k per year - which could have been spent on another engineer or a lot more marketing consulting from an independent.
The board member who wants a salary:
This time a technology company in the security space. Killer technology, but a turnaround from a prior (not-well-run) incarnation so raising money was hard. In the end money came in from a PE firm. But after the close the PE firm put in an executive chair to "help" and insisted he be paid $180k a year for a few days a week. Now I am supportive of a board deciding a CEO needs some help and adding in an exec chair if the CEO agrees (or even if she doesn't if it's really needed) but to pull a salary out of a company that is not profitable is very tough on the company. And in the end it's not in the best interest of the investors; it doesn't make sense.
I wonder if I have seen a few outliers and this is not the new normal, or if this is a new trend? Is it a result of the number of angel groups out there who are not professional investors (and so to give them the benefit of the doubt we could assume they don't realize the impact of what they are doing), is it a result of the tightening of investment (and so they can get away with it) or it is a result of the simply huge number of startups and first time CEOs who can be taken advantage of? If you have an example in your own company inmail me on LinkedIn.
Saturday, August 6, 2016
When I stepped back from being a full time CEO 9 months ago I knew there were a few things that would take an adjustment. Most have been a good change for me. And some are just very different.
One of the choices I have made is to spend a great deal more time with my father. He's 84 (almost 85!), lives in England and is physically fit. But he's alone, and slowing down, and long periods alone get him down. So this year I've been going to the UK every other month, and he's come to stay with us, and we've vacationed together in France. And next Winter he's coming to us for several months to escape the long, cold, grey days which England serves up after Christmas.
Life's a very different pace when you're 84. There is routine. Breakfast always at the dining table which is set with china, a trip to the supermarket every other day, time with the paper in the morning after breakfast, the big meal (meat and two veg) in the middle of the day (if possible), a walk through the woods by the house (only if it's not raining), project work (his life story, sorting out photos...), lunch and dinner at the set dining table, and TV after dinner.
It's idyllic. One day each trip we go to London because he has a meeting at the Dyers and I go to a museum, although this time I stretched the day when I arranged to meet one of my young cousins for a drink after work and got a later train home. But I realized it is very tiring to have such a long day if you are 84 (although it was "great fun"). My sister comes by at the weekends and breaks up the routine for us, and some days I leave for a few hours to see old friends. But in general, it's a gentle way to live.
And it's an education for me. An education to help him write his life story, and hear the stories over and over and so realize how important they are to him. An education we are now getting together on self publishing. An education to see how important his lifetime of collecting furniture, art, china etc is to him and how each piece is attached to a memory. An education to hear how important each job was to him, and how much he loved his work, and yet an education to see that all the b.s. he put up with as he was climbing the ladder isn't really meaningful in comparison to the time he had with my mother, and with family, kids, vacations and adventures. I know this myself, and yet it's very grounding to actually live in the reality of someone over 80 for a while.
In 48 hours I'll be on my way back to the hustle of Silicon Valley. Board responsibilities, coaching, the daily tumble of a household and pets. So I try to treasure this gentle pace. And know when it's all over, hopefully many years from now, I'll look back on this as a magical time. But it's also a good reminder that I am not ready to check out of the rat race yet...
Wednesday, July 20, 2016
One of the first decisions an entrepreneur needs to make once she has raised money for her great new idea is to build a board.
This is a conscious act. Yes, your investors probably have board seats, at least the lead investor will. If your investors are angels maybe 2 or 3 of them have demanded to be on your board. But beyond this crew you owe it to yourself to step back and think about who do you want on your board to help you build your company.
It is entirely reasonable for you to put one outside director on your board, and it's an unusual set of investors that will not allow you to bring one new director on. And when you do, you want to bring on a current/former CEO.
Why a CEO? Why not a technologist, or a family friend, or your cofounder? Fundamentally, a current/former CEO is going to have seen your movie before and will bring a wealth of unexpected advantages to your board and your company.
Your board has a duty to represent all your shareholders, but more than that they have a responsibility to care for the company first. For your employees, your reputation, your probability of success. Having a board member who is truly independent of the investors can help bring a broader perspective to the board discussions. I have seen investors who are so focused on their own issues they lose sight of what's best for the company. An independent director can take her role - as the one person who is not worried about the timing and size of liquidity but is instead worried about the long term success of the company - very seriously.
I met with a big time PE partner (let's call him Adam - not his name) recently, who is sitting on a private technology board. As we talked he told me the CEO was dealing with the issue that he, and the other big time PE firm on the board have different agendas. One is a long term investor, one is interested in liquidity sooner, and the difference is a strategy problem for the CEO. The investors are balanced in ownership and the CEO is caught in the middle. I asked Adam "Why is this the CEO's problem? Surely the CEO's responsibility is to grow a great company and create the greatest value he can, not worry about negotiating between the two of you on the timing of an exit. It's a ridiculous waste of his time". Adam (figuratively) took a step back and agreed. I'm not on this board, but I can still make the case for the CEO not being distracted!
You're going to need advice as you build your company, great advice. Yes your investors may know a few people, but you want to be referred to people who are not looking to your investors for future referrals, again who are truly independent. You'll need lawyers (you want a pit bull in your corner unless you have truly world-class VCs), recruiters, marketing consultants etc. etc. And when you hire them you want to know they are loyal to you, not back channeling to your investors. An independent CEO should have a quality network for you to tap into.
Working for you
There will be times when you need to get something done but you are out of time and need some sleep. You can use your CEO/director to give you capacity. Maybe you need her to build a model for you, maybe you don't know how to present an issue to your board and your director can build a sample presentation for you to help you frame the issue. At a minimum your director can do deep reviews for you of your own presentations, legal agreements, offer letters, compensation plans... with the eye of someone who has done it before.
A high quality former CEO will bring experience of what the job really entails. What are you truly responsible for vs what decisions your board can make (which is very few in reality)? What does it take to build a world class team? What does it take to close your first few big deals? How to focus. Only someone who has done the job for many years really knows what it takes, and there are many investors out there who like to give you advice, but have never been in the role. Your director can be a sounding board for you in the role of CEO.
Being the bad guy
Your CEO director is not your friend, and sometimes she may feel like your enemy, but because her only reason to be there is to help the company, you can trust her even when you hate her. I've always had a former CEO on my boards, and sometimes it's been absolutely maddening.
For example, the time my director attacked me in a board meeting and took me to pieces for a plan I proposed. Afterwards I asked him what the hell was he thinking coming after me in a board meeting? He humbled me by telling me he could see my main investor was winding up to attack and so he decided to attack me first so I did not get into a fight with my investor. He knew me well enough to know that if attacked I would attack back, and hard, and that could damage my relationship with my investor.
And for example, the time my director had a one-on-one with me and decimated my forecast. Destroyed my faith in every deal. Ripped every one of my sales campaigns to shreds. His motivation? To wring every piece of optimism out of my forecast so I knew the worst case and could then focus on what needed to be done to bring the probability up on each campaign.
There are times when things go well, and then there are times which are rough. Raising money can be one of those times. Having someone you can call every day to review how things are going is so very helpful, and you cannot be calling your investors. You need a safe place to call. Someone who has no other agenda but to help you and the company succeed. And someone who has been there. That is a current/former CEO.
You may be thinking "well that's self-serving of her given she's a former CEO who sits on boards". Yes, probably right, but right now I am meeting with many, many interesting entrepreneurs, only one of whose boards I have joined so far (www.savonix.com) and I am hearing too many worrying stories of entrepreneurs who need better board advice and support.
Photo from Buzzfeed
Thursday, July 14, 2016
What do you think of when you think of being sold to? A salesman? Speed and feed? Talking your ear off with feature function? Closing you with obvious closing questions?
Sadly, still today, despite everything we know, many people sell this way.
But actually true selling is just the opposite. The sale is made in the silence.
There are a thousand B2B sales training classes and self help books you can read but they all basically say the same thing. Do discovery, qualify your customer, understand the org chart, understand their needs etc. etc. And yet, despite what we know, the simple concept that the power is in the silence gets lost and sales teams talk too much. They talk more than they listen.
One of the best enterprise sales people I ever sold with told me "Ask a question, shut up, and the first one who speaks loses". People are fundamentally uncomfortable with silence and they speak to fill it up. And when they do they reveal what they are thinking.
When you are selling working with silence allows you to truly deeply listen. Prepare and ask your questions about their needs, process etc. and then listen carefully. Let them speak and then be able to speak some more because you don't jump in to fill the silence they leave.
It also allows you to show respect. I'm always astonished at how often sales people talk over the customer or interrupt them. There is respect in silence. I am giving you the respect to fully express your needs and interests before I jump back in and tell you how great my mousetrap is. People buy from people and showing respect is a critical step to establishing trust.
And it allows you to close. When you ask for the order ask and then shut up. Too often people ask for the order and then immediately gabble on about why, when etc., justifying why they are asking for the order. You should not ask for the order until you know you can provide real value to your customer, and when you know you can, then ask, and wait. Don't explain, talking will not help by this point. And if they speak, they either say no (and you talking wasn't going to change that) or they reveal where they are at and you're on the path to close.
And the same concept applies whether you are selling an idea or a product. People want to be heard. Master the art of asking questions and being silent. Present, silent and listening.
Monday, June 20, 2016
I was struck by the interesting interview with Beth Comstock of GE in the NYT today - where she says "you have the permission to try something new". In this case she is talking about innovation but innovation is not the only area where we are held back by the need for permission. Too often we are stymied in areas that lead directly to our happiness.
Too often, as working professionals, and especially women, we are held back by our fears. Fear of failure, fear of what other people will think, fear of the unknown, fear of being less than. We live in the world of Lean In and male-dominated tech, where I know and have personally experienced that to get ahead you have to work twice as hard, and be twice as smart, as the men around you. This doesn't leave much room for permission to change, or to be rested, or happy.
So what's the solution. I think it's to consciously, and overtly, grasp the nettle and give yourself permission.
Permission to stop caring what other people think. As Cindy Gallop (entrepreneur and change agent extraordinaire) says "Fear of what other people will think is the single most paralyzing dynamic in business and in life. You will never own the future if you care what other people think". And yet so often we worry endlessly about what the people around us think. Our boss, our peers, our parents; the people who have opinions about our title, or car, or house, or how much money we make. But in the end, the only people whose opinion really matters is our closest friends (who if they love you will support you no matter what you do, or how your screw up) and our partners in life (who do have to be in the boat with us). No one else matters. Truly.
Permission to try something completely new - like start a company. Scary. What if I am no good at it, don't like it, fail at it? Well, so long as you do some basic financial planning so you can survive a temporary misstep what are you afraid of? Chances are you can always go back to what you did before. I have seen this many times in Silicon Valley - value accrues to failure. People try something completely new, it fails and they go back to what they did before. But they are often now actually more valuable. They have more experience, they may be humbled and so be a better leader and more compassionate. They will be changed, and usually for the better. Or maybe permission to try something completely new for yourself means going to back to school and taking the chance you can create a whole new career path for yourself.
Permission to not check your email 24/7 on vacation. Permission to not keep a perfectly tidy house. Permission to wear flats to work. Permission to leave a job you hate, or a boss you hate, even if it means making less money. Permission to pursue a sports passion which may mean you don't climb the corporate ladder as fast as your peers. Permission to experiment with your career.
I had to take myself through this process as I made the decision to change my professional life. I can get wracked with guilt that I am no longer driving the feminist CEO agenda. I can get down on myself that I stepped back when other women are running companies and setting the agenda for key technologies in the valley. I, like so many successful women, continue to fight the demon of feeling like a failure inside every day. And so I give myself a talking to - sometimes physically in the mirror! Permission to try a new way of life. Permission to be with my family, and travel, and read, and write. And to stop caring what other people think.
For a while at least!
Wednesday, May 25, 2016
The strange story of the lost Poussin the "Destruction And Sack Of The Temple Of Jerusalem" and my Uncle Ernie
Sometimes truth is stranger than fiction. This is a true story of a great masterpiece, lost in time for 350 years and found in our family.
My great-uncle Ernie was born Ernest Onians on August 14th, 1904 in Liverpool. He was the youngest of 6, and his immediate elder brother Frank, with whom he was close friends as a young man, was my grandfather. After working together as salesmen selling animal food in East Anglia, Ernie recognized a huge business opportunity - taking waste food at the back door of London restaurants and turning it into pig food which he would process at his mill in Suffolk and then sell to the farmers. He was very successful, a ladies man, and became wealthy.
As he traveled around Suffolk he became interested in art and to educate himself he read extensively, subscribed to art magazines and developed an eye for beautiful things. During and after the War many large houses were being forced to sell their paintings and furniture because of death, taxation and the poor economic situation in the country. As my cousin John wrote "during the 'forties and early fifties' he visited many a house sale and county auction, bidding - or more frequently leaving bids - for literally thousands of objects which, like the girlfriends of his youth, caught his curious and sensuous eye. The honied toned ivories, the fresher colors of porcelain, the weave of tapestries, the smooth escapements of watches, the chimes of clocks, the polished veneer of furniture, and above all the flesh, flowers, fruit, animals and landscape found in paintings, all called him to possess them."
But sadly, although married for a while, he became a hoarder and a miser. He collected so many pieces that he filled up his house and three sheds in his garden with paintings stacked vertically in dirty conditions. As a child I remember my uncle and my father taking me through the piles of paintings, tapestries and clocks which were not insured because Ernie didn't want anyone to know. My father would visit him frequently (out of loyalty to his own father) as would two of my father's cousins who were in the art world themselves, one John the professor, the other Dick the artist.
Typical family stuff - until one day one of the sheds burned down. As a result of the fire Ernie did ask his nephews for help to get a review of his pictures. Christies came to the Mill for 2 days and told Ernie and his nephews that there were 7 paintings that should be fully researched before they were sold.
But as is so often the case, his treasures obsessed him. Arguments erupted about what was going to be in his Will and Ernie decided he did not want anyone to get the benefit of his treasures after he died. My father, despite having spent 30 years visiting his uncle and trying to help him, in the end would not be a part of it because, after many iterations, Ernie insisted that his whole estate be tied up in a trust that would last for 30 years after his death. Only a few of his great nieces and nephews who he hardly knew would benefit, and only if they did not get divorced in the meantime.
As a result, when Ernie died at age 90 in 1994 the paintings were not researched and his executors gave the sale of the estate to Sotheby's. A quick one day sale later the estate fetched £2M.
But unbeknown to the experts, and to my cousins who administered his estate, there was a treasure in among the paintings.
This painting had a small, very dark photo in the glossy catalogue (a copy of which my father keeps on his shelf as a reminder of life's ironies). It was "Attributed to Pietro Testa" as The Sack of Carthage and estimated to fetch £10,000-15,000. But experts watch the sales and as the Guardian reported four years later it was "picked up at the Onians' auction for £155,000 by the London gallery Hazlitt, Gooden and Fox, after its advisor, the distinguished Poussin expert Sir Denis Mahon, spotted a photograph of it "the size of a large postage stamp" in the catalogue and ordered them to acquire it "at any cost"."
Hazlitt's cleaned it, restored it, had it confirmed by the Louvre and it was then that we learned that it was actually the glorious masterpiece the Destruction And Sack Of The Temple Of Jerusalem. Painted by Nicholas Poussin in Rome in 1625-1626, it had been commissioned by the Pope's nephew Cardinal Barberini as a gift for Cardinal Richelieu! It fetched £4.5M when it was sold to the Rothschild foundation who gave it to the Israel Museum in Jerusalem where it is now the pride of the museum.
I visited the painting in Jerusalem in March of this year and as I stood in front of it I wondered at the mystery of its journey.
If the executors of Ernie's will, or Sotheby's, had had it cleaned as Christies had advised, they would have known what it was immediately. In the middle of the painting is a large menorah being carried out of a Roman temple. And it is the traditional shape of menorah that Poussin would have seen in Rome on the Arch of Titus (who was the general, and future emperor, who sacked and destroyed the Second Temple in Jerusalem in 70CE in a brutal, fiery battle to put down the Jewish rebellion - and until 2009 that was the earliest depiction of a menorah found). Any historian would have known it to be destruction of the Temple as documented by Josephus, an event that was the beginning of the diaspora and is mourned even today by Jews around the world.
But the story didn't stop there. My cousins sued Sotheby's for negligence in 1999 when this all came to light. The suit went on for several years until, in 2002, as Sotheby's realized their £3M insurance policy was running out, they settled (the BBC reported "Pig swill estate wins Poussin war" !! ) and £1.4M went to the estate with the rest going to the lawyers.
In the end my father bought a beautiful painting and a clock out of the estate which he cherishes in his home, and a cabinet which was in our house for many years as he lovingly had it restored for his uncle is now in a museum in Los Angeles and known as the Onians Cabinet. Hopefully many people are enjoying the many paintings Uncle Ernie saved, and millions of people will have a chance to marvel at the Poussin in Israel.
Is it sad that the family did not recognize the painting? After all, the children will get plenty of money from the estate in the end. Or is it instead perfect that a painting that depicts such an enormous event in Jewish history was lost, picked up for pig swill cash, not researched by the family, and so was available to be bought by a benefactor who gave it to Israel so Jews from all over the world can cherish it? Personally, I think it's ironic and perfect.
Notes on the painting from an exhibition at the Israel Museum, Jerusalem
Nicolas Poussin was the foremost exponent and practitioner of seventeenth-century Classicism. This work from his early Italian period (1625-1626) was commissioned by Poussin' patron Cardinal Francesco Barberini, nephew and secretary of Pope Urban VIII, and was offered as a gift to Cardinal Richelieu, the French head of state. Barberini led a papal legation in a vain attempt to reconcile France and Spain, at the time engaged in a bloody war. Poussin draws a parallel in the painting between his patron, the would-be peacemaker, and the enlightened pagan emperor Titus, who tried unsuccessfully to prevent the ruin of Jerusalem and its temple. The composition is divided between the image of the Temple engulfed in flames in the background and the chaotic struggle, dominated by the striking figure of Titus on his white mount, in the foreground. A sense of drama, with the clash of arms and flashes of golden light from the Temple vessels, suffuses the entire work. Classical Roman architecture and sculpture provided sources for Poussin's painting. The scene seems to be a Roman city: the soldiers' dress is taken from reliefs on Roman sarcophagi; the facade of the Temple resembles that of the Pantheon; the figure of Titus was inspired by the equestrian statue of Marcus Aurelius in the Capitoline; and the menorah derives from the famous depiction on the Arch of Titus. After Richelieu's death, the painting was inherited by his niece, who then sold it. It changed hands many times and eventually reached England. Its whereabouts were unknown from the late 1700s until 1995, when it was rediscovered by the art historian Sir Denis Mahon, restored to its original state, and donated to the Israel Museum in 1998.
Tuesday, May 17, 2016
The NACD (the National Association of Corporate Directors) held a discussion afternoon in San Francisco in late April designed to make directors smarter about current events (not hard to do since so much is always changing!)
The agenda was politics, a cyber attack simulation, CEO succession planning, and the economic outlook. All interesting, but the cyber attack simulation was chilling.
The simulation was run by Mary Galligan who was with the FBI for much of her career. She’s an expert in crisis management having been the supervisor of the FBI investigation into 9/11 and she was the commander on the ground in Yemen following the attack on the USS Cole. She’s now at Deloitte.
The simulation was an attack on a pharma company that sells generic drugs online and through stores. The attackers, #Hackme, gave the management team 11 hours notice before they would release confidential information (personal information of the directors and executives). They took down the stores and the web site 9 hours into the notice period; the company could not stop the attacks, or meaningfully respond within the notice period. It was on headline news before the notice period was up because it leaked. It was based on a real case. The simulation was the executive team (all drafted members of the audience) trying to figure out what to do against the deadlines.
And so... the learnings were led by Mary Galligan at the end.
What Directors should now understand about cyber attacks and how to respond:
1. You must have a plan
- do you have a plan for how to respond to a cyber attack?
- do you have a plan and has the management team practiced it?
- who will run the response, who will run the company?
- you must assume you will not get enough information in the time you need it to respond, so you must have a crisis response plan
- you should also assume you will get incorrect information, even from your own IT who will be scrambling
- map out “what will happen if” so you have response scenarios for the things you can imagine, but also have a process to respond to the things you did not imagine. Don’t only do scenario planning because the type and scale of attacks is changing fast. Enough companies have paid of Ransomware now that it has grown exponentially in the last 60 days
- the tail of a cyber incident is very long, prepare for how you are going to trade off the stress between team members
2. Know the stakeholders
- who do you need to notify and in what order?
- board, major customers, insurance, investors etc.
- what should be escalated to whom and when?
- keep it to the top (execs and directors) - must assume if ANY employees know it will leak - this is human nature (stressed this applies to all crisis management). The existence of a cyber attack typically leaks within 2 hours.
3. Directors responsibility
- to have done their duty to ensure the company has prepared
- to ask questions, review the plan, ensure management has practiced it
- review the bill going into the senate that would require every board have a cyber expert on it - but it mat not pass because there are not enough cyber experts in existence today to implement it so pay attention to the SEC’s opinion on the issue.
4. Extortion events are on the rise and are increasingly not about money but about moral/ethical issues. “hacktavists” and most events fall into one of five types:
1. Stealing information or IP
2. Disrupting operations
4. Destroying software and hardware
5. Releasing confidential/personal data (of the directors and management team)
Altogether eye opening and a rapidly developing area to watch! These photos are from the simulation.
Friday, May 13, 2016
I am not a shrinking violet. I am confident and speak my mind. And yet there is a behavior that, unless I am really determined, makes me go quiet: men aggressively, deliberately talking over me.
I’m in a meeting making a point the prospect does not like. He raises his hand (shows me the palm) and starts to talk in a loud, dominant fashion. He mansplains to me. I listen for a while, then try to politely interrupt, but it’s useless. He’s aggressive, determined to dominate, and rude. The bully in the workplace.
I’m at dinner with a friend. He’s mad about something and is determined to speak over me to prevent me making my case. As I speak he puts his hand out onto my wrist, holds it down and as every time I try to speak he speaks over me. Again and again until I give up. I can’t think of a way to be heard without being downright rude. I get mad. I go quiet (for a moment).
I’m in a board meeting and we’re discussing the need for diversity. And one member insists on mansplaining to me that diversity is not an issue at the company. I’m the only woman in the room, meeting after meeting, but I get explained to me why we don’t need another diverse board member. And when I speak I’m not listened to because he assumes I have an agenda. I do, but it’s the agenda of good governance.
I’m fed up of it, but I know I am going to keep experiencing the behavior. (Some) men trying to dominate women by talking very aggressively isn’t going to stop in my lifetime. So I have to deal. I talk a tough game. 3 years ago I was so mad I wrote a short, cryptic post on a day when only I knew why I was so mad. Titled Enough. But it’s never over. So I just have to put my big boys pants on and stride back out to change the world a little bit every day.
Thursday, May 12, 2016
It’s always nice to talk about all the things you can do right in your career and in the office, but sometimes it’s worth focusing on what you should not do because it’s so hard to recover.
There are two ways I have seen people break trust in the office that are almost always fatal. They are not the only two, of course, but when they happen it’s always a surprise to me because these mistakes are always visible - whether you think they are or not.
1. Make, and stick to, a bold faced lie
This mistake is often about the use of information. You, the manager, share a piece of information with Angela. Maybe Angela sits in a meeting where she hears it, and you stress in the meeting how confidential it is, or maybe you need to share the information with Angela so she can do her job. But, for whatever reason, Angela just cannot keep the information to herself. She shares it with John. Maybe she shares it because it’s just too juicy not to, or because it gives her sense of power to show John that she has the information, but once she does it’s out.
John is shocked by the information and asks his manager, Bill, is it true? Bill asks him how he heard and John tells him, and shows Bill the text Angela sent him. Bill calls you to discuss the leak. So you, the manager, know the source. You confront Angela, and she lies, and sticks to the lie. She doesn’t know you have evidence so she won’t back down.
This is a real scenario I experienced, and it’s not unusual. In a recent seminar on cyber security an FBI instructor told us that in the case of a security breach the average time to leak is 2 hours because employees cannot sit on the information, but they deny it because they are afraid. Decisions like layoffs and reorgs which affect people’s lives spread fast, as do knowledge of in-office sexual relationships.
But as the manager, once you have an experience like this with an employee, will you ever trust them again? If you know they will lie like that? Probably not.
2. Break a serious promise
Strong teams are formed on human relationships. Trust, relying on one another, knowing that you have each other’s back. And so, at times, employees make commitments to one another. A commitment to stick with a project until it’s done, not matter how hard it gets. A commitment to stay on the team through thick or thin until the mountain is taken. A commitment not to lie to one another. A commitment to take on the customer travel for the team because they need to focus on the project within HQ. A promise to protect someone’s job when they go on maternity leave.
Jeff is leading a small team taking on a significant challenge for the company. He knows it’s going to be hard, and he’s worried about it before, but he commits to his manager and his team that he’s going to see it through. He won’t quit on them and they’ll win together. A month later he gets a better offer and quits. He’s an important player but do you try to turn him around?
When someone breaks an explicit commitment/promise to you, or to their team, would you ever work with them again, or give them a reference? Probably not.
Everyone is human, and everyone slips up sometimes. And it’s not only early on that people that make these mistakes, but experience has taught me that age has nothing to do with breaking trust in the office. And so what do you do if you make one of these mistakes?
My advice is as soon as you realize you have made one of these mistakes you come clean. Go to the person you have betrayed, tell them everything, and sincerely apologize from your heart. Don’t try to explain it away, or explain why you think there were extenuating circumstances, or why your actions were really OK but you got caught. Just take the blame squarely on the chin and, if you believe can, make the commitment to never make that mistake again because you understand the cost to their trust in you.
Trust is fragile. It takes time to build and, once broken, can be very hard to rebuild. Admitting your mistake is a good first step to rebuilding trust.
Tuesday, May 3, 2016
15 years is a milestone I think. Short enough that I still remember, long enough that is seems far in the past.
We took Simplex public 15 years ago today. May 3, 2001. It was the culmination of a wild ride, and the beginning of another. Going public is a rite of passage. It's not a birth (founding a company), it's not a marriage (M&A), it's not a death (shutting down) so maybe it's like a bar mitzvah or confirmation - a rite of passage into adulthood. You take a company public when you are large enough that you want to fund the company into the next phase of growth on the public markets, and you want to provide liquidity to your investors. In 2001 that meant revenue of about $50M was needed, profitability, and steady, predictable growth which we had. We loved our company, and we were proud of our technology and our customer relationships.
With the Simplex IPO we threaded the needle between two significant market crises. In April 2000 the dot com bubble burst. We were not a dot com, we were a real company in the semiconductor space selling very nerdy software to chip designers. We filed our first S1 on September 11, 2000. Yes, 9/11 but a year earlier. (Actually we sent the docs to the SEC on Friday Sept 8 but we missed the cutoff so the filing date was 9/11).
Even by Sept 2000 there was little appetite on Wall St for a tech IPO because everyone had been burned by tech valuations based on a faddish bubble. But by late March 2001 we still needed cash to keep growing (we were opening international offices and hiring people behind our growth). I met with Larry Sonsini and Frank Quattrone (both kings of the Valley at the time) and we all believed we could price the deal. So we went on the road.
One of the most intense experiences of my life. 3 weeks of meetings 7-8 meetings every day. Paris, The Hague, London, New York, San Francisco, New York, Chicago, Minneapolis, Dallas and finally Houston. I drank too much vodka and took smoking back up for the 3 weeks (I did quit again at the end thank goodness). I lost 12 lbs in 15 days because I was not eating much. It seemed as if I was always presenting over breakfast and lunch so when was I going to eat?
And then, on May 2, in the late afternoon in Houston, we priced the deal, sold 4 million shares to CSFB, brought in $44M in proceeds for Simplex and hopped on the private jet to New York to be there for the market opening the next day. I slept on the plane, but not much when I got to New York.
May 3 was a round of interviews. Radio, Bloomberg TV, CNN's finance network at Nasdaq, and time on the floor with the CSFB trader who was making the initial market in SPLX stock. We opened at $12 and closed over $21. The book was 11X over subscribed and we were one of the very first tech deals to get done successfully in 2001, opening up the market for many more that had been waiting. Maybe we priced too low, maybe not, there was no way to know because the market was so skittish.
But, of course, we were only public for 4 months before September 11, 2001 hit. The market collapsed, our customers delayed orders and our stock dropped to $8. A violent roller coaster is too gentle a term for what this felt like. The gripping stress of how to make sure the company, our employees and our customers were OK. When Cadence approached us to buy us in January 2002, a deal we eventually closed on June 2, 2002 for $300M, it was the right outcome for the company. As one of my board members told me "there's a war coming, you are too small to survive it".
Thursday, February 4, 2016
Thinking of starting your own company... or you're already in it? There's a fun new self-help book out for entrepreneurs called "Build Something Great!: Fifty Best Tips for High-Tech Startups" that is a must read and excellent reference book for anyone wanting to win the first time.
Written by two of the Simplex founders, professors Resve Saleh and David Overhauser, it boils down valuable startup advice into 50 tips on how to build your own successful venture.
And yes, I admit I'm biased since Resve and David hired me to be their CEO. But we learned a lot together as we built a world class team and important technology family into a really fun company and a very successful IPO.
The book is full of useful and easy to consume advice on the steps you'll take in building your company. As Aki Fujimura, who was on our team and COO at Simplex, says in his foreward:
"There are a thousand ways to fail and only one or two ways to succeed. Trying to learn what not to do from a failure only makes it 1/1000th less likely to fail again. We all make plenty of mistakes of our own. We can learn from failures in real life without reading a book. The only way to learn from a book is to learn about what leads to success. The 50 tips here will guide you to help make your company more likely to succeed."
The book is available on Amazon in both paperback and Kindle formats.