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Interview with Charlie Kroll, President & CEO of Andera, Inc.

BrownHEN interviewed Charlie Kroll, Brown '01, President & CEO of Andera, Inc., Providence, RI

1. Charlie, You have taken a company that was started when you were an undergraduate into one with 30 employees, 50% annual growth, and a revenue run rate of $4 million. You were featured in the Providence Journal as one of "Rhode Island's Outstanding Entrepreneurs." You were named by the United States SBA as the Young Entrepreneur of the Year in New England. Does it get any easier as one achieves more success?

It doesn’t get easier, but the challenges certainly change. We’re still a small company, but we’ve evolved from pure startup mode into execution mode and as a result, we’ve needed to evolve our thinking and strategy. Early on, it’s much more about getting everyone to buy into the vision and believe you can do what you promise. In execution mode, it’s more about managing limited resources to deliver on your promises. Neither mode is easy and both are rewarding when you start to feel things click.

2. Some of the money you raised come from Rhode Island state agencies that are set up to support entrepreneurial activities. Please comment on dealing with such organizations.

The state agencies have been tremendously supportive of us, but my experience is that they need to believe you can in turn help attract talent, money, and jobs to the state. Our biggest supporter has been the Slater Fund, which has both invested directly in us, as well as brought other angel investors to the table. We’ve also found the Rhode Island Economic Development Corporation, the Providence Economic Development Partnership, and the Business Development Company of Rhode island all to be helpful, providing us with much-needed working capital loans when we needed them most (and traditional lenders wouldn’t touch us).

3. Banking is perceived as a conservative business lead by people a good deal older than you. Do you believe your youth (and youthful appearance) is an asset or hindrance in promoting Andera?

It probably helps in most circumstances today, now that the company has a more experienced management team and a solid track record. A few years ago, before we had as deep a team or customer base, I think my inexperience was an obstacle, particularly in the years right after the bubble. Today, I think people are more accustomed to seeing young entrepreneurs succeed—the trick is knowing what you don’t know and filling those inexperience gaps with a great team.

4. Andera's business model has certainly evolved from the early days when you designed web sites for FM America—a radio station in Japan—and Trinity Repertory Theater in Providence. Please comment on how you learned of new business directions and recognized their potential.

We did a complete 180-degree turn. We started the business during the bubble as a Web development firm. Once the bubble burst, it was clear we’d need to develop our own intellectual property if we were going to grow. Fortunately, two of our Web development clients (both banks) had engaged us to build them custom online account opening applications nearly simultaneously, and the idea grew from there. That was early 2002, and our first month with zero Web development revenue was August of 2006 – a four year transition that seemed like forty. We needed that much time since we didn’t raise a lot of outside capital to finance the transition. Almost all our initial product development, sales, and marketing was funded out of Web development revenue during that four-year period.

5. How were you able to attract a very strong staff?

It’s never been easy to recruit good people, including today. We haven’t benefited from a lot of the characteristics that typically attract great people, like a billion-dollar exit potential (we’re trying to build a focused and successful business, but not the next Google), a sexy location (we’re in Providence, not Silicon Valley), a lot of money (we’ve never raised significant capital), or until recently even a strong vision (people used to see us as a Web development firm). These were definite headwinds to team building. Gradually, as our vision crystallized over the last few years, and our customer base and reputation grew, we were able to recruit a few people that became key contributors, and it evolved from there. Today, we have almost no luck with job boards, limited luck with headhunters, and extraordinary luck with employee referrals, which is the way I think it should be when things are humming.

6. You must get nibbles from larger organizations that want to buy you out. How do you respond?

Simple. We are focused on building a successful company, and we’re happy to listen to ideas but are not looking for them. We have a lot of growing to do before changing that orientation.

7. What are the top five qualities you would ascribe to an entrepreneur?

I second Ralph Rosenberg’s answer to this question.

For BrownHen readers, Ralph’s Rosenberg’s answers from our August 2007 interview were:
• Can deal with rejection/disappointment
• Good “big picture perspective”
• Even-tempered disposition
• Good sense of humor, and
• Ability to lead and motivate people.

8. As you know, the entrepreneur’s path is filled with trials and errors, and also failures. What’s a valuable insight for entrepreneurs to keep in mind when they’re experiencing setbacks?

Failure is the best (and arguably, only) way to learn. I think I’d be better equipped to lead a company if I had previously been part of one that failed. Short of that, I’ve had plenty of lesser failures that guide me in the decisions I make every day.

9. Would you speak about fear as a motivation or hindrance toward accomplishment? How has that played a factor in your path, if any?

To me, fear is a very passive word. Are you afraid of missing a payroll or losing a deal to a competitor? Well, that implies that you have no control over such things, which usually isn’t the case as an entrepreneur.

10. What is the latest insight (about life, work, play) that you picked up and would like to share with BrownHEN?

An insight would be for entrepreneurs or company leaders to start a blog and maintain it regularly. I started mine last year and have found it to be a great way to personalize the company and provide context to the otherwise black and white world of marketing collateral and press releases. If you’re balanced in your message, exposing your blemishes as well as bragging about your strengths, THE BLOG humanizes the company and gives the impression you’re open and not hiding anything. It goes a long way.

11. Has becoming a father significantly changed your life?

Absolutely, having a son is the best thing that ever happened to me. He just turned five months old, and my wife and I are having such a blast learning how to be good parents.

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© BrownHEN.org – 2007

Interview with Randy Komisar, Partner at Kleiner Perkins Caufield & Byers

BrownHEN interviewed Randy Komisar, Brown '76, Partner at Kleiner Perkins Caufield & Byers, Portola Valley, CA.

1. Randy, what is the biggest difference between being a partner in Kleiner Perkins Caufield & Byers and working at a startup? What do you miss most about having operational responsibilities?

The great thing about being a partner at Kleiner Perkins is that I am surrounded by a tremendous amount of talent—my fellow partners, the founders and CEOs of our many ventures, the impressive management teams with whom I am privileged to work, as well as the many experts who work with our firm and make us smarter.

What I miss is the single-minded dedication to one team’s mission; the daily camaraderie amongst entrepreneurial team members who work together in the trenches, and the success of the team’s vision and passion, which serve to tie the individuals together.

2. How did an Economics concentrator at Brown and a law graduate from Harvard gain the technological background you obviously have? What advice do you have for aspiring entrepreneurs about learning pertinent technology?

The Brown Curriculum allowed me to branch out and acquire a passable competency as a technologist. Brown’s freewheeling academic environment enabled me to take classes in computer science, biology, engineering, mathematics, and other technical and science-oriented courses that I would not have taken if I were merely focused on acquiring the highest GPA. I was able to broaden my knowledge base and education.

My advice for entrepreneurs would be to obtain a generalist background first. Many universities focus on a very narrow, restrictive curriculum. Brown is an exception; Brown focuses on and excels in undergraduate liberal arts education. At Brown, I discovered how to engage my curiosity and how to learn. The methods and processes I learned at Brown have served me well, including in my current role. Every day I go out and learn something completely new and I tap into expertise from various fields to augment my own understanding.

3. What advice do you have for entrepreneurs writing business plans to secure funding?

In a startup environment based upon taking an innovative leap of faith, all experience will be secondary and tertiary, deduced from markets and the experience of other companies. By definition, you do not have sufficient first-hand experience with the leap of faith to develop a foolproof operating plan. But you do need to put something together in order to aim the venture and to gather the money and talent you will need for the journey.

The notion of a business plan for a startup is necessary but not sufficient. The business plan needs to demonstrate to the investors and team that the founders understand the nature of the challenge they are undertaking. But the team will have to refine and of course correct along the way as assumptions based upon secondary information are tested against primary data from the marketplace.

4. When you are evaluating a particular investment what role does the social contribution, for example, to the environment or to economic justice, play?

It does play a large role, but interestingly, it is not necessarily altruistic, because our role is to create commercial value. We do ask the question, “How will this company provide significant value for others?” If you look at our firm and its investments, whether it’s Genentech, Sun, Netscape, Google or Amazon; all these companies created significant social value that lead to their creation of impressive financial value.

This significant value can be utilitarian: with Google one can find anything at anytime; with Amazon one can shop and buy anything at one’s convenience; with Netscape, one could browse something called the internet and explore an entirely new digital world. These companies did not just create social value; they revolutionized our society.

A few years ago, appreciating the threat of pandemics in a global society, we raised a fund and brought in experts to focus on investing in innovations that promise to detect, treat and prevent pandemics. Aligning our economic interests with a huge public threat is good business.

We currently have a strong investment thesis related to the environment; half of our investments focus on companies that are in the green tech—clean teach area. Al Gore just joined us as a partner to help accelerate our global efforts in this regard. Addressing a big problem, like global warming, by definition provides the prospects of creating great value for all the various constituencies.

5. Can New England, Providence in particular, hope to become an entrepreneurial center similar to Silicon Valley? What is needed?

To create an entrepreneurial center like Silicon Valley, Rhode Island needs to develop a cluster of people with relevant domain know how and a culture that reinforces entrepreneurship. Boston already has a robust entrepreneurial center.

I’ve spent time in Japan, India, Taiwan, Chile, and other entrepreneurial hot spots around the world. The question is always asked, “Why is one location more successful than another?”

What I have noted to be particularly unique about Silicon Valley is the following combination of factors: a highly educated group of entrepreneurs and scientists, a great university, and a robust business infrastructure that supports startup ventures, including attractive working and living environments, a lot of available risk capital, and access to quality legal, consulting and financial services.

But Silicon Valley is more than just a combination of its parts. Its entrepreneurial culture has taken more than 80 years to develop. Silicon Valley attracts certain personalities, which are reinforced over time. What people don’t quite grasp is that the culture is very dynamic and it is reflected at every level. People who decided to come and stay invest themselves in the local entrepreneurial culture.

The secret ingredient is how a place like Silicon Valley deals with, “failure.”
Silicon Valley doesn’t punish or brand those who fail. If you have acquired experience and you are passionate about your mission, you are given other opportunities. Silicon Valley recycles and reinvests in the entrepreneurial spirit, something that most other business cultures do not do. Successful people also reinvest in innovation; they want to be a part of the next big thing; they want to help mentor, guide and support aspiring entrepreneurs. This reinvestment is probably the most significant reason Silicon Valley is so prolific in terms of innovations.

6. How can subjects like leadership and entrepreneurship, which seem to be based on personal attributes, be taught?

I have been teaching entrepreneurship at Stanford for seven years now. Great leaders and entrepreneurs are determined by an individual’s experience and, more important, character. What a teacher or mentor can do is reinforce aspects that are aligned with leadership qualities and provide insights and tools to leaders-in training.

In business, leaders are too often judged by the immediate results posted by their companies. Over a short term, a lot of people appear to be good leaders. Great leaders should be evaluated over a longer period of time on their sustainable successes.

7. What are the top qualities you would ascribe to a leader, an entrepreneur?

• Integrity
• Intellectual honesty
• Empathy
• Good self-knowledge — who you are and what you care about
• Passion and complete absorption in one’s mission
• Perseverance

8. Would you speak about fear as a motivation or hindrance toward accomplishment? How has that played a factor in your path, if any?

I believe fear is a negative emotion and do not find it useful. A lot of people think that if you are paranoid, it keeps you vigilant. But I do not find it beneficial to indulge in fear or to act out of fear.

9. As you know, the entrepreneur’s path is filled with trials and errors, and also failures. What’s a valuable insight for entrepreneurs to keep in mind when they’re experiencing setbacks?

Failure is not personal if you acted with integrity and have given it your best shot. In Silicon Valley, the only real failures are the people who have fallen short because they were lazy, stupid or corrupt. The inability to achieve results does not make you a failure; it can ultimately lead to positive experience that can result in success.

Most leaders with great successes have had moments of personal doubt, and have endured failures along the way.

10. Do you have a mentor who has helped you in career path / personal development?

I have many mentors. The most significant one is Bill Campbell. I worked with Bill at Claris and Go Corporation in the ‘80s and early ‘90s. We met at Apple more than 20 years ago. He is a terrific mentor. I also learn from my colleagues and associates as well as the many young entrepreneurs I work with.

Most important is that a mentor invests in your success, reinforces your abilities to succeed, extends himself/herself to you, and helps provide what you need for your own personal success, however you define that. While a teacher gives you tools to achieve an existing definition of success, a mentor helps make you a better you.

11. What motivated you to write the very well respected, “The Monk and the Riddle?”

The book started as a rant. It expressed the disgust that I felt during the middle of the dot.com boom. I feared that entrepreneurship was losing its meaning and purpose. It was being co-opted by the carpet baggers and the get-rich-quick crowd who were no longer pursuing entrepreneurship with passion and purpose, heart and soul. The book came out just in time, a month before the crash. To some extent it is gratifying that it is still so well received and used at numerous universities around the world, but its continual success reflects the fact that the base excesses of the boom are never far away.

12. Since the book was written, sometimes it seems like people are being less kind to one another than they had been. What hope do you have for the world?

That is a big question. The human condition is one where we are challenged and tempted by ego, greed, self-interest; many celebrated role models for success are aggressive, brutal and uncaring. It is hard for most people to rise above that and discover that it is the love and support for others that ultimately determine one’s level of satisfaction and fulfillment. Until we rise to that level of kindness, hope will be in short supply. But I am at heart an optimist and believe that people truly want to be kind, so I will hope for that.

13. What is the latest insight (about life, work, play) that you picked up and would like to share with BrownHEN?

To live a satisfying and purposeful life, you have to make a contribution. I find it very useful to live a life of integrity in a literal sense—to be integral—to incorporate my principles and values in my livelihood, to express my values in my daily life genuinely and authentically, and to engage empathetically with the host of wonderful people with whom I am privileged to cross paths every day.

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© BrownHEN.org – 2007

Interview with Josh Silverman, CEO of Skype

BrownHEN Interviewed Josh Silverman, Brown '91, CEO of Skype, London, UK.

This interviewed took place while Josh was CEO of Shopping.com in 2007. Josh was also co-founder of Evite.com.

1. Josh, please describe how you co-founded Evite.

Late 1998, I was brainstorming with my friend and colleague Javier, with whom I had worked at Netscape and came up with ToGather.com. The Internet was exploding. I was working 90 hours a week in medical imaging. I had no time left for ToGather so I had to quit my job to write the business plan. It was scary, but the great thing about it was that it forced me to succeed. If I had stayed with a cushy income, it would have been too easy to decide not to take risks.

I was doing market research while writing the business plan, and had a healthy dose of luck. I came across a company with three people: two talented engineers who had five products, including using Evite to go after the online calendaring space. I had the business expertise; they had two fantastic engineers who were Stanford grads and a Haas b-school grad. So Al Lieb, Selina Tobbacowala, John Bracken, and I got together.

The first six months, we did not raise outside capital. We focused on the business model and put our product in front of users. We lived on Rice-a-roni; by the time we raised money, we had already given the company a lot of soul and substance.

2. What were some of the lessons you learned from running a start-up?

We had to perform all the basic operational tasks that you take for granted; we had to go and prove to a landlord, a law firm, and a PR firm our potential worth, which took a lot of energy and time. We had to figure out how to create noise in the press—how to get our company to stand out amongst hundreds of new startups.

3. What advice do you have for entrepreneurs regarding raising money?

The ideal situation is never. Otherwise, take as little money as you need. If you can get to revenues quickly, that would be optimal. Figure out what the customers are willing to pay, build your company and keep operating costs low while generating customer value. Also, recognize that raising money from a top-tier VC may be perceived as a sign of success, but is not necessarily a true indicator. The hardest people to get money from are customers, not a VC.

4. Recently, you were CEO of Shopping.com. How did Shopping.com gain such as impressive market share in Europe?

We had a business model, a playbook for running an operation; it took us several years to refine that in the U.S. market and export that to Europe and Australia. Fortunately, it has translated very well from market to market. eBay acquired Shopping.com for $635M; it was publicly traded in NASDAQ and has grown quite nicely since acquisition.

5. Conventional wisdom is that eBay is an example of "winner takes all.” Do you worry that a competitor could dislodge eBay from its supremacy?

I think eBay would argue that it competes in segments such as auto dealers, apparel dealers, etc. It is more apparent in the past few years that with the onslaught of competitors, those who exclusively sell through eBay are now multi-channel e-tailers. The competition has much gotten fiercer and eBay’s roles as well as its competitors are disrupted by technology, and I imagine they will continue to evolve.

6. How can an aspiring entrepreneur gain the knowledge and experience required to work effectively outside the United States?

I think it is hard enough to be an entrepreneur in one’s home market. Going to a foreign market adds new levels of challenges and complexities. I believe it is important to show curiosity and interest in the culture. Even though the business language is English, I learned enough Dutch to facilitate my interaction with the locals.

I found wonderful talent in my Netherlands team and I had great opportunities to acquire some great startups in Europe. I noticed some common traits amongst U.S. and European entrepreneurs:
• Tenacity
• Vision and ability to sell one’s vision well
• Attention to customers
• Expertise
• Ability to attract great talent

Differences include:
• Regulations
• Market conditions
• Environments for raising capital
• Tax structure

In general, although the European economy was well structured to encourage entrepreneurship, the culture has not favored entrepreneurial efforts as Silicon Valley has. Entrepreneurs have garnered more respect that they did five or 10 years ago, but when I was in Holland, it was still harder to access capital.

7. How valid are the ideas you learned about Public Policy at Brown in the environment you work in now? How about what you learned in your MBA?

Public Policy was great training, surprisingly relevant. After Brown, I worked for a senator and this served me well in leading large organizations. I learned to articulate extremely complex ideas in two sentences or less. I also learned a lot in the classrooms during b-school at Stanford and have found value in the alumni network.

8. Would you speak about fear as a motivation or hindrance toward accomplishment? How has that played a factor in your path, if any?

When I quit my full-time job to go work for Evite, I was terrified. My biggest fear was my fear of failure. That said, I also recognized that as an entrepreneur, I had more control over my own destiny. I chose to use my fear as a motivator; I told everyone what I was doing. I was very open about what I was doing: starting a company. This forced me to commit in a public way and pushed me toward achieving success in ways that I would not have had I stayed with an established company.

What else did you learn?

I learned to manage very stressful situations and to remain calm. I also learned entrepreneurs need to stick with their vision in the face of strong adversity and yet possess enough judgment to know when to adapt or when to quit.

I thought that Evite was about saving time—a utility similar to email or a calendar. When we talked with our users, we learned that they were passionate about the sense of community that was created around the event before the event. So Evite was more about marketing a community device: we had gotten the core value proposition wrong. We were smart enough to listen, adapt, and build our service based on what our consumers wanted. As a result, Evite continues to be a great brand.

9. Did you live in The Netherlands when you were responsible for that market? What did you enjoy during your stay and what do you miss?

My wife Shirin and I enjoyed a very high quality of life in Amsterdam, which is a very nice and walkable city. We would ride our bikes home from dinner at 11PM. Our daughter Leila was born at home, in the traditional Dutch way. We enjoyed and missed being in the center of Europe; I had a wonderful opportunity to run one of the great European Internet brands—Marktplaats—a true blue Dutch brand.

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© BrownHEN.org – 2008