What a cocktail in the story about the acquisition of Autonomy by HP? The key questions seem to be:
About valuation
Is HP over paying for Autonomy? Since there is no science with respect to valuation then surely the value is in the eye of the beholder and whether or not the Board recommends and the shareholders accept. At approx $11bn – this certainly places Autonomy as a huge success in terms of how two graduates and a business plan can turn a College Start-Up into a multi-billion dollar exit. An amusing side story is the comment made by a senior Chinese banker visiting Cambridge who commented that success in China is not measured so much by the value of one exit, but more by the number of companies one can afford to buy!! This is like saying that wealth is measured by the number of cattle one owns and perhaps the aggregate total of alimony being paid out too!!
Is it good for Cambridge that a local company is being sold to a US firm?
This is harder to answer. One remains optimistic that the total of 9.1% owned by Mike Lynch and his team will convert to local wealth that gets recycled into new ventures through increased business angel type activity. (Mike owns 8.1%). We might look forward to this after the teams have bought their toys and secured their families I guess. The research component will remain in Cambridge, because the sale of a software company means that, in essence, HP has paid for the talent and this, in the main, is unlikely to move to Silicon Valley.
Mike Lynch will now head up the software division of HP, reporting directly to Meg Whitman the new CEO of H.P. This means for the first time we have a Cambridge CEO of a strategic Division of a multinational. It is great credit to the Board and advisers of Autonomy, for being able to groom a world class CEO. So far Cambridge has imported all its “big hitters”. For me the really big news is that Mike Lynch and his start-up co-founder Richard Gaunt have proved that founding teams can go all the way. Too often we hear from venture capitalists that there comes a time when a founding team has to be replaced by “grown-ups”. Well, at last we have an exception to provide role model effects to future generations of entrepreneurs.
The very public spat between Mike Lynch and Larry Ellison of Oracle seems to have got out of hand, so is the deal really good for Autonomy?
The risk to Autonomy does not come from the public entertainment resulting from Larry Ellison’s statements and allegations, but actually from a deeper concern about whether any of the Silicon Valley giants can be good homes for Autonomy? There are several good reasons for HP ownership: - access to global markets, need for high margin business and the change in strategic direction towards software – especially in intelligent search. However, HP has had as many CEOs as the average Premiership Football Club, governance problems, sackings, failed acquisitions, etc.,etc., So one wonders if this Silicon Valley Giant actually has competent management? And Oracle’s leadership is not much more inspired. Perhaps HP has outsmarted Oracle in its purchase of Autonomy because it gains fresh software, insights and capabilities while Oracle might find itself with ageing software that is built on past needs and not on future growth prospects. So – Autonomy is likely to be good for HP and may well shake up Oracle.
The track record of the big Silicon Valley companies has been quite awesome in terms of their size and reach, especially when they are led by entrepreneurial founders and leaders. But there seems to come a time when the behaviour of the CEOs of these giant companies is more Silicon Alley (cats) than Silicon Valley.
I remain and have to remain optimistic about the future of Autonomy. I am more optimistic that the smart people there will eventually recycle through into new companies and we may get a new generation of serial entrepreneurs, something that has not happened for a very long time in Cambridge. The last wave being when Acorn sold to Olivetti which then sold its research to AT+T who eventually shut down the R+D in Cambridge! Many of the highly successful firms in Cambridge today were the alumni of that set of events.
Good karma!
Showing posts with label Autonomy. Show all posts
Showing posts with label Autonomy. Show all posts
Wednesday, 5 October 2011
Sunday, 11 October 2009
How not to get divorced – lessons from serial entrepreneurs
I was at a dinner at Downing College (Cambridge) where our after dinner speaker was Jody Chatterjee who has had a rich career in many different roles. His honesty about the roller coaster ride of an entrepreneur was engaging! Jody spoke at the end of a long day of thinking about entrepreneurship in large organisations that was being run for Haniel by Ashridge Management College. Haniel is a family owned 35,000 employee organisation from Germany, with a diversity of businesses.
The others contributors were Claudio Marinelli from Nokia, Dan Sandhu from ACIS and Rob Stewart from Stevenage Packaging.
Each painted a rich picture for us to think about.
They were pretty unanimous on the fact that entrepreneurs work with a passion to make things better or to make better things – that solve problems.
Entrepreneurial people are driven by seeking freedom and autonomy to make decisions. This is a dominant theme from the conversations. If entrepreneurial people involved did not have this freedom to act and to act quickly they would wilt.
Entrepreneurs are impatient to get things done; making them hard to live and work with, but the passion to make things better comes with the impatience to get it done. The impatience also comes over as being somewhat “crazy”. So they are seen as disruptive influences within the organisation!
Very low tolerance for internal politics – in the end is it possible to be an entrepreneurial employee in a large organisation to succeed without “political skills”?
On a very personal level – everyone acknowledged the role played by their family in supporting them. The short hand was framed in the evening as “find out how not to get divorced”. The point being – what is the purpose of entrepreneurial success if in the end it breaks up the things that in the long term are what matter – family?
In the past – in my consulting role when I have been mentoring people with their ambitions to start and to grow their businesses – the key question that has stopped people in their tracks about what they want to do – has been to ask – Do you have a “contract” with your family? Do they know you will put the house on the line, the level of risk you want to take, that you will behave in a totally obsessive ways for months, not sleep much, get irritable if things are not going the way you want, feel highs and lows of emotions and you will hardly be around either mentally, physically or emotionally? The family needs to understand this in order to be able to truly support you!
Entrepreneurs I have met who have managed to be realistic about the work load and the risks and been able to get the support of the family – whether this is their partner or their parents or siblings have been truly amazing because they have a kind of freedom that others who are trying to balance their entrepreneurial ambitions with family obligations simply do not have.
It is unlikely you will find the answers in books and videos, just talk openly to a friend with wisdom.
The others contributors were Claudio Marinelli from Nokia, Dan Sandhu from ACIS and Rob Stewart from Stevenage Packaging.
Each painted a rich picture for us to think about.
They were pretty unanimous on the fact that entrepreneurs work with a passion to make things better or to make better things – that solve problems.
Entrepreneurial people are driven by seeking freedom and autonomy to make decisions. This is a dominant theme from the conversations. If entrepreneurial people involved did not have this freedom to act and to act quickly they would wilt.
Entrepreneurs are impatient to get things done; making them hard to live and work with, but the passion to make things better comes with the impatience to get it done. The impatience also comes over as being somewhat “crazy”. So they are seen as disruptive influences within the organisation!
Very low tolerance for internal politics – in the end is it possible to be an entrepreneurial employee in a large organisation to succeed without “political skills”?
On a very personal level – everyone acknowledged the role played by their family in supporting them. The short hand was framed in the evening as “find out how not to get divorced”. The point being – what is the purpose of entrepreneurial success if in the end it breaks up the things that in the long term are what matter – family?
In the past – in my consulting role when I have been mentoring people with their ambitions to start and to grow their businesses – the key question that has stopped people in their tracks about what they want to do – has been to ask – Do you have a “contract” with your family? Do they know you will put the house on the line, the level of risk you want to take, that you will behave in a totally obsessive ways for months, not sleep much, get irritable if things are not going the way you want, feel highs and lows of emotions and you will hardly be around either mentally, physically or emotionally? The family needs to understand this in order to be able to truly support you!
Entrepreneurs I have met who have managed to be realistic about the work load and the risks and been able to get the support of the family – whether this is their partner or their parents or siblings have been truly amazing because they have a kind of freedom that others who are trying to balance their entrepreneurial ambitions with family obligations simply do not have.
It is unlikely you will find the answers in books and videos, just talk openly to a friend with wisdom.
Thursday, 29 January 2009
Mike Lynch tells it like it is
Mike Lynch – CEO of Autonomy comes with a very credible track record – especially for a technology entrepreneur in the UK (and Cambridge). He is one of the very few people I know that has taken a company from the bedroom to being a $500m sales company in software/high tech; done IPOs, acquired a US competitor and remained CEO. The usual story in the UK is that the founders are either fired by the investors in one of the funding rounds or make an exit to take up new careers as business angels, non execs and so forth. In a way the high tech founders are serial entrepreneurs and not global CEOs.
Mike talked about building the dream team – in fact he talked about how to do this and what the background grunt and grind is – to make such a thing happen. Here are just a few tips:
The need to set a cultural tone to the business – to ensure it remain entrepreneurial by having the vision and energy of the entrepreneurial founder on tap, visible and ensuring the sense of urgency, flexibility, hunger remains at the of the agenda on a daily basis.
To hire the best people- being elitist – because the marginal extra cost of hiring the best person is minimal to the cost of hiring a second best person.
Try and get people who are obsessive about what they do, with a passion for their professional skills. They may get hard to manage – but they will have a preference for action and ensuring their work is to a high standard.
The cultural tone needs to be one where people can admit mistakes , learn and get on. You need to avoid the “myth of properly” – i.e. people who say things like “if only we did things properly around here” – because there is no such thing as properly – only things that meet customer needs.
Ask yourself – who would want to work for entrepreneurs?! the initial pay is low, there is no job security, the journey will be a roller coaster ride..The only reason someone will work for an entrepreneur is because of the likely upside, the fun and because they have bought into a strong vision of the possibilities. On this point Mike also had advice for people applying to work with entrepreneurs who have a strong vision – when you do get invited to join – don’t ask where the coke machine is!!? Entrepreneurs want to hire self-starters, people who “get-it” and will make up their own rules and get things done – not people who need a lot of nursing from the founder.
On the other side to all this rock and roll – is the simple human factor – treat people fairly, reward them fairly, take care of them when they go through some personal life issues. And work hard to kill off politics in the organisation and the potential spread of cultural poison – negativity can hurt.
The implication for leaders is that they need to remain upbeat, energetic, have a sense o f fun and at times be willing to take tough decisions – quickly.
Mike had a lot more to say (about doing business) and he was videoed – and this video will be edited and placed on www.cfel.jbs.cam.ac.uk in due course along with some of the other lectures that have gone onto to site (under resources)
Mike talked about building the dream team – in fact he talked about how to do this and what the background grunt and grind is – to make such a thing happen. Here are just a few tips:
The need to set a cultural tone to the business – to ensure it remain entrepreneurial by having the vision and energy of the entrepreneurial founder on tap, visible and ensuring the sense of urgency, flexibility, hunger remains at the of the agenda on a daily basis.
To hire the best people- being elitist – because the marginal extra cost of hiring the best person is minimal to the cost of hiring a second best person.
Try and get people who are obsessive about what they do, with a passion for their professional skills. They may get hard to manage – but they will have a preference for action and ensuring their work is to a high standard.
The cultural tone needs to be one where people can admit mistakes , learn and get on. You need to avoid the “myth of properly” – i.e. people who say things like “if only we did things properly around here” – because there is no such thing as properly – only things that meet customer needs.
Ask yourself – who would want to work for entrepreneurs?! the initial pay is low, there is no job security, the journey will be a roller coaster ride..The only reason someone will work for an entrepreneur is because of the likely upside, the fun and because they have bought into a strong vision of the possibilities. On this point Mike also had advice for people applying to work with entrepreneurs who have a strong vision – when you do get invited to join – don’t ask where the coke machine is!!? Entrepreneurs want to hire self-starters, people who “get-it” and will make up their own rules and get things done – not people who need a lot of nursing from the founder.
On the other side to all this rock and roll – is the simple human factor – treat people fairly, reward them fairly, take care of them when they go through some personal life issues. And work hard to kill off politics in the organisation and the potential spread of cultural poison – negativity can hurt.
The implication for leaders is that they need to remain upbeat, energetic, have a sense o f fun and at times be willing to take tough decisions – quickly.
Mike had a lot more to say (about doing business) and he was videoed – and this video will be edited and placed on www.cfel.jbs.cam.ac.uk in due course along with some of the other lectures that have gone onto to site (under resources)
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