Mark Leslie - Leadership and Veritas

Copyright M. Leslie 1
The Story of Veritas
And Some Things I Learned…
mleslie@leslieventures.com

Copyright: Mark Leslie 2007
Veritas…The Journey
2
$95K  $1.5 Billion
12  6,000 employees
Startup  Fortune 1000
…In 11 years

VERITAS – A Story of Strategic Transformation 1982 – 1993
Hardware to Software OEM business
 1982 – 1988: Tolerant Systems
 $50 M startup in the high availability fault tolerant systems business,
(Tandem built with microprocessors and Unix)
 1989 – 1993: Tolerant  Veritas the OEM company
 Revenue $0 – $10 M
 “Restarted” from Tolerant Systems (200 12 employees)
 Established industry standard file and disk management software for
Unix
 Novel OEM Business Model
 Closed 60 OEM agreements and became industry standard
 IPO in 1993, $64M market cap post money
 However, the business as constituted would likely top out at
~ $50M / Yr…

Emergence as the leader in Storage Management Software
 Revenue: $15 M – $1.2 B
 Established Strategy for TRANSFORMATION in 1994
 Additional System Products to sell to OEMs
 Build EU products to sell to OEM’s customers and restructure OEM
agreements: Reseller (Revenue Center)+ OEM (Cost Center)
 Acquire Backup Business and Direct Channel
 Enter NT Market
 1995: Acquired High Availability Failover Business (Strategy
Element 1)

Emergence as the leader in Storage Management Software
 1997: Acquired Open Vision
 Veritas and OV each had trailing revenues of $36M (shed ~ $15M of OV
products)
 Acquired Direct and high-end Reseller Channel (Strategy Element 2)
 Entered Backup / Recovery business (Strategy Element 3)
 1999: Acquired Seagate Software and entered NT market (strategy
element 4)
 2000: $1.2 B revenue, F 1000 company

VERITAS – A Story of Strategic Transformation 2001 +
Woulda, Coulda, Shoulda…
 2001: Hired new CEO
 Revenue of $1.5 B – growth in revenue and profit in nuclear winter of
bursting tech bubble
 Next Strategy for company:
 Acquire VMware (2003)
 Acquire Red Hat, Jboss, MySQL, etc., to build the complete server
stack to compete with Microsoft
 Unfortunately…

Great Businesses
 Great Product / Great Market / Perfect Time
 Rich in DEFENSIBLE and SUSTAINABLE BARRIERS to ENTRY
 Intellectual property
 Network Effect
 Unique business models
 Other
 Yields:
 High growth
 High market share
 High gross margins
 High profits
 High stock multiples
 Market consolidation
…And the Rich Get Richer
9

Software is a Great Business
 Making money in high-tech is all about getting paid for your IP
 The better (and more unique) the IP, the more valuable
 In the hardware business the IP is embodied and delivered in the
form of a “machine”
 The business of making and shipping machines is error prone, which
can sap the profit from the business
 In the software business you just deliver the IP – sometimes in the
form of bits transmitted over the ether…
 At Veritas
 At the extreme delivered a $1.50 CD in exchange for $20 million
 Raised a total of $20 M including IPO, and ended with > 2.0 B in cash
10

The More Grandiose the Plan,
the Less Likely to Succeed
 Tolerant Systems, Go Computing, General Magic, WebVan and
Zaplet were “grand plans”
… and so many others
 But many of the great companies started out with small goals and
very little capital, and became “overnight successes”
…after many years
 Like HP, Dell, Apple, Oracle, Microsoft, Veritas, Ebay, Google,
VMware
… and so few others
11

Transformation – The Signature of
Great Companies
BankruptcyStartup
Decline
Peak
Growth
time

Great Companies
Startup
time
Transformation
Transformation

Great Companies (or NOT)
 Apple
 Cisco
 GE
 HP
 Intel
 Microsoft
 Oracle
 Sun Microsystems
 Chrysler
 Computer Vision
 Mainframe BUNCH
companies
 Digital Equipment /
minicomputer companies
 GM
 Silicon Graphics
 Sun Microsystems

And Some Things I Learned About Leadership…

Be a Steward, Not a Proprietor
 T H E F I R S T P R I N C I P L E of leadership
 Proprietorship is about “ME”
…and what you can do for me today
 Stewardship is about “US”
…and what we can build together for the future
Copyright: Mark Leslie 2007 16

Be Visible, Be Invisible
 Be Visible
 There is a large part of leadership which is public (and mostly obvious)
 MBWA
 Many and varied public meetings
 Be exceptionally accessible
 Be Invisible
 The real work of leadership is behind the scenes, OFTEN ALONE
 Leadership is creating an environment where:
 You attract the best and the brightest people
 …who can independently apply their intellect judgment and energy
 …to advance the vision and goals of the organization
 …and achieve a personal sense of accomplishment in their work
 It is NOT “management”, which is accomplishing complex tasks through
others.

“Glamorous” is the Opposite of
Leadership
 Don’t get confused -- It is not about “ME”
 A Leader must always think of others and put them first
 You can be a comrade to your followers, but you can never be
one of them
 When you are doing the “glamorous things”, you are just doing
your job on this team
Warning of Danger:
GLAMOUR IS VERY SEDUCTIVE…

If You Are Loyal to One, You Are
Loyal to None
 A leader must be loyal to the mission above all else
 A leader is responsible for the well being of ALL of his
people
 A leader is the keeper of fairness and equity in the
organization

The Further You Are from a Problem
the Less You Know About It
 Trust those on the front lines – they really do know more than those
“back home”.
 The first line manager knows less about the specifics, and THE
NEXT manager knows even less.
 When you get to the top you don’t really know anything about
anything anymore!
 You trade situational knowledge for judgment, experience and
perspective

The Higher Up you Get, the Fewer
Decisions You Should Make
 Everyone “offers” you the decision
 What is the impact of the decision
 Have they thought about it?
 Are they, more or less, in the right quadrant?
 What is the downside?
 Allowing others to make decisions has real meaning to them, and
develops their judgment and maturity

The More Power You Give Away,
the More You Have
 You empower individuals by giving them
 Knowledge;
 Authority; and,
 An acceptable margin of execution error
 “What I know that you don’t know makes me more powerful than
you.”
 A leader has the power to level this playing field!!!
 And diminish politicization of the organization
 Empowered individuals will be loyal to the company and loyal to the
leadership
 A loyal empowered workforce is a force multiplier for the leader

Know Thyself
 We all want to know everything, and be best at everything
 It is a hallmark of great leaders that they know their own
 Strengths (the easy part) and
 Weaknesses (the hard part)
 Likes
 Dislikes
 Augment your weaknesses with other people’s strengths
 If possible find others to do the things you don’t like
 Check to see if your self-assessment is shared by others

Trust and You Will Be Trusted
 The first level of trust is based on the “fair play” that is visibly
exercised
 Great leadership comes from a deep sense of trust between the
leader and the led
 As a leader, you MUST take the first step, you must trust first!
 You may occasionally get disappointed, but the payoff is greater than
the cost

Listen to Everyone, but Trust your
Own Judgment
 Each business is complex and unique
 There are no formulas, fads and gurus with quick and easy answers
 Be genuinely open, listen constructively and learn
 Hold your opinions in abeyance while you collect information – this is
counterintuitive to all we have learned. It is very hard to do!
 At the end of the day, trust your own judgment
“If something does not seem to make sense…
…it most probably isn’t sensible”

Confront the Issues Directly,
But be Thoughtful, Gracious and Caring
 There are many tough things that you need to do
 Firing one of your executives who is a friend
 Negotiate hard deal
 Go after a competitor
 Reduce your work force
 But you can do all things with caring and grace
 Treat each and every person (and company) you meet with dignity and
respect
 And…, you never know when you will run into them again…

The Truth, the Whole Truth, and
Nothing but the Truth…
 A key job of leaders is to “Fix Broken Stuff”
 If you do not know what is broken, you can’t fix it
 Everyone wants to tell you what they think you want to hear…
 … in a way that will make them look good…
 You must find a way to convince people that you need to know the
truth…
…and you must always “Honor the Messenger”

There is Life after Death
 In the course of events there WILL BE black days
…days so black that all you will see is despair
 Everyone will be looking at you!
 Communicate candidly and directly
 Be calm and show them a little bit of light at the end of the tunnel, but
not false hope
 Focus on the things that you can do to make a difference
 Overcoming adversity together forges teamwork and trust
 Dark days are “leadership opportunities”
 When things are great, remind people that there will be dark days
again

Only Those Who Are Both Paranoid
and Courageous Will Survive
 Every Idea has a finite lifetime
 You never know where and how the world might change – it’s just a
matter of time
 It is all about Strategic Transformation
 Do it early rather than late.
 You may have to put your whole company at risk in order to save it
 You need the courage to stay the course in spite of many who tell you
otherwise
 It is the critical differentiator – it is what makes
Great Companies Great

There is No Finish Line…
 Building a great company is like building a cathedral
 Those who start it hopefully will not see its completion
 Each accomplishment is a prelude to the next challenge
 The IPO is not a “harvest”, simply one step on the long
road

Values and Culture make it
worthwhile
 We spend more time “at work” than any other single activity in our life
 The outcome of our efforts is not always predictable so the quality of
the daily experience is important
 Values and culture define the character of the company
 Values and culture permit us to do our work with integrity, and to
conduct business in a civilized and honest environment
 Values and culture help the organization to recruit the best, the
brightest, and the principled
 Values and culture do NOT sap the competitive capability

We All Have to Make Choices
 Each time we make a decision, we leave a “road untaken” – we can
never know what “could have been…”
 Success in anything requires:
 COMMITMENT
 FOCUS
 INTENSITY
 ENDURANCE
 Whatever success we achieve, we will by definition sacrifice other
dimensions of life’s opportunities

If you want a friend…
…Buy a dog
ROXIE

One Final Thought…

it is regret for the things we did not
do that is inconsolable.
Sidney J. Harris (1917–86)
Regret for the things we did can be
tempered by time;

The Story of Veritas
mleslie@leslieventures.com

Mark Leslie - Leadership and Veritas

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