Video: GDL Root Access: The Intersection of Skill and Luck

In the seven-plus years I've run this blog, one of the more frequent discussions is around how the factors of skill, effort, opportunity and luck intertwine to result in a positive outcome (or not) for companies and individuals. Earlier this month, we talked about how you need to do more than just show up in Silicon Valley to gain traction, and back in 2009, I took on the required intersection of skill and luck, wondering aloud how good employees at unsuccessful ventures differentiate themselves from bad employees at successful places. Unfortunately, no magic.

So fellow Googler +Don Dodge and I talked about this very thing on a +GDL Root Access event last week, making it clear that for every great story of startup success you read about on the Web, there are handfuls more that you might not ever hear about, or close down with a whimper. I've long said that celebrating failure never helped anyone, but we should be aware of it, and learn from it. Tune in to our embedded YouTube discussion below. The debate runs just over seven minutes.

 

Video: GDL Root Access: Timing and Market Conditions

Earlier this month, I wrote about how, even in the fast-paced, big opportunity world of Silicon Valley, you don't get any participation medals just for showing up. Sometimes fantastic ideas are ahead of their time, or by virtue of personnel and personality decisions, customer issues, scaling or any manner of factors.

As part of +GDL, the program I own for +Google Developers, +Don Dodge and I sat down to talk about some technologies that took a while to catch on, including Sun's Javastation and the Network Computer. Our discussion on Root Access is captured on YouTube and embedded below, taking about 10 minutes.

Real Valley Stories: "The Missiles are in the Air... Please Stay"

Editor's Note: Part 10 in an irregular series of stories from my 15 years in Silicon Valley. Part 9 talked about the time I emailed the entire company about impending layoffs days before they took place. This time, a story about how, during a stressful time at the office, I got a job offer at a competitor, and over not much more than a weekend's time, rescinded and stayed instead - all while gaining new promises for career growth.

Ten years ago was a time of change, or so it seemed. I'd just gotten married, and Silicon Valley was in the throes of a deep recession. The once-packed highways became easy to drive again. Parking lots were empty and constructed buildings didn't have any tenants. Two-plus years into my job, we'd already seen our unfair share of peaks and valleys. The CEO had been replaced, as had our VP of Sales, and the Marketing team had almost completely turned over, making me one of the more senior folks, surprisingly. But while I believed in our technology, our future was not certain, so when a former colleague gave me a call, asking me to interview at his new startup, I figured I'd give it a try.

At the time, amid a national recession, and extreme risk aversion by our target customer base to test and deploy equipment from startups, meeting our numbers each quarter was challenging, to say the least. On the marketing side, we found our budgets compressed down to nearly zero, and our options were increasingly limited. Our trade show and travel budget was eliminated. Our online advertising budget was deleted. We even took our PR work completely in house, paying only for the typical wire service fees, followed by strategic emails or phone calls from me to press to push the success stories we did have, or try to take the reporters off the scent of how dire things seemed.

The Friend Throws Me a Job Opportunity

Then came the phone call. A former director of product marketing who'd found a new home asked me to come in and interview for the role of digital marketing manager. I polished up the resume and started the process - talking to the hiring manager by phone, and eventually coming in for an interview.

Stepping into the competitor's office was a dramatically different feeling than the quiet library-like ghost town of the startup where I worked. This one sported bright colors and the fresh smell of new venture funding, being bankrolled by one of the Valley's biggest names. The interviews went well, and I remember specifically driving them to be a pioneer in the space, using Google's AdWords, which at the time were untapped waters for the industry, and could be a fast way to get inexpensive leads.

A few days later, on a Friday, I got a phone call, and they wanted to move forward. I got the job. They wanted me to start as soon as possible, which put the ball in my court, to call HR and let my employer know I was leaving. So the next day, on Saturday, I called the VP of Human Resources, catching him at a kid's softball game. I told him I didn't want a lot of drama around my leaving, that I just wanted to be done by that Friday of that week. The sooner out, the better. I was excited about moving on.

The Best Phone Call from HR Ever - and a Note from the CEO

The next morning, Sunday, I checked my work email and saw a rare message from the CEO, with a simple subject line: "please stay". The body of the message too was short, but said he was traveling to Europe, didn't want to lose me, and to reach out any time. That was interesting.

Later that day, the VP of HR emailed to say he wanted to talk that night. So I awaited his call. Overnight, I'd gone from having two feet out the door and feeling like a low-level peon to someone who'd gotten the attention of senior management. My wife, appropriately, rolled her eyes, and told me to be wary.

Which Direction to Take?

That night, he called. It was after 10 in the evening, and I paced back and forth in my apartment kitchen, telling him how with our company's situation, and recent changes in the marketing team, I just didn't see a route for us to be successful. Citing Bush's comments at the time as we started battles in Iraq, I said, "Marketing needs a regime change." Seconds later, he answered with the coolest line I've ever heard from HR. "Louis, the missiles are in the air."

From that moment, the tone changed - not from one where I was on the way out, but to one where I said what I would need to stick around, including the obvious meeting or exceeding in compensation, but additional responsibilities, and transfering to a new boss, whom I'd already had a ton of respect for.

Never Take the Counter-Offer?

That made Monday awkward. In addition to putting through my usual tasks, I met quietly with the HR VP again and practically every roadblock I saw as preventing me from staying was knocked down. I was promised the salary match, a title change, and a changed reporting structure. The people who had limited my ability to succeed were going to be out of the way. And all it took was my sending a note back to the competitor that I had rescinded the offer. I obviously couldn't tell them why, but I had to let them know.

You read in career guidance books to never take the counter-offer. Despite any financial gains, the reason you were interested in leaving is usually still the same. The people are usually the same. But I drafted a "Sorry but..." letter and sent it off. This no doubt surprised them, and it really burned my friend, who'd brought me in, as he left me a livid voice mail which landed me on his bad list for years to come.

And yes, I was immediately worried I'd flubbed the decision - especially as I saw this company eventually launch, put out their share of positive releases, and have glitzy booths at our mutual events. But their star faded, even as I got more opportunities to own our strategic direction and help the company grow out of its darkest points through new product introductions, several cycles of upgrades, dramatic customer expansion and eventually, an IPO filing - although we never did quite make it.

The biggest surprise in all this, even during the darkest times for us as a company and as an industry wasn't that I could find a new role, or that things ended up right after all, but that I had allies higher in the food chain than I had ever anticipated - people who agreed with my views, and respected me to the point that they would give me an opportunity to succeed on a path I saw made sense.

And those missiles that were in the air? They landed, and eventually the people that were slowing us down and making roadblocks for me and the company found new roles somewhere else. As for the company that almost pulled me away? They never went public, instead selling back to their primary investor. They burned bright for a short minute and eventually faded away. It turned out I had made the right choice.

You Don't Get Any Participation Medals for Just Showing Up

"I need some record of you being in this class," hissed my 8th grade math teacher, looking at me and pointing to my lowly 5% grade to date in his course after ten assignments, by far the lowest mark in the class. My not so glowing 50 points out of a possible 1,000 was the product of many days' not turning in homework, as my continued refrain of "I'll get to it tomorrow" started to become an impossibility to tackle.

Each day I told myself I'd eventually get to the previous day's assignments, taking a penalty for my lateness, but part of me knew I'd just float through the day to day and try to make it up on the tests. For me, it was proving I knew the answers - conveying mastery of the subject. Yet for my grade, it was proving that not only did I know the answers, but I was willing to do the work. Just showing up wasn't enough.

For the past 15 years, I've been working in Silicon Valley, and I've encountered an incredible mix of people who perform as if they are on different gears. Some work incredibly hard, and are driven to succeed at practically any cost, refusing to let traditional limits get in their way. Others seem almost crestfallen if they can't keep up with those gracing magazine covers simply by being in the right place at the right time. And the truth is that life's not perfect. There is an intersection of skill and luck that very often sees great employees at bad businesses punished for their career choices, while less impactful employees at incredible companies gain the benefit of their colleagues' work.

From the outside looking in, Silicon Valley might look like a technology-centric Disneyland, where the future can be experienced today, where dreams can get funded, and you can't walk down the sidewalk without knocking shoulders with millionaires. But every success story you read, and those people who become household names, be they Steve Jobs, Meg Whitman, Larry Ellison or Marissa Mayer, came not as a product of pure luck, but the application of effort against risk.

Risk Is Often Required If Something Is Worth Doing

I remember sitting around our corporate boardroom one afternoon ten or so years ago, as an account manager on our team explained why we had been unable to close a once-promising deal. He said, paraphrasing with some angst, "In his business, the IT manager's job is to reduce risk. At our stage, we're all about risk." And it was true. While our more established competitors didn't have all the whiz-bang capabilities our devices did, what they did offer was a track record of success, integration with top partners, security, and all those things that moved risk out of the data center. We had to look elsewhere to find customers more willing to take a bit and absorb some risk, in exchange for our differentiation.

Which brings us back to "just showing up".

I spent my first three years in the Valley working at two very small startups. The first didn't have any revenue, and some odd ideas. When the founder was let go, the sister company asked me to stay on, and we worked hard at bringing traditional office tasks to the Web. The work was good, and our customers liked our products, but we weren't growing fast enough. When we went out to raise a $10 million B round, we came up light, and that was the end of my tenure. But as we were plodding along with our incremental growth, it seemed like everyone around us was going public, making money and buying homes - which to us was pure fantasy. Some of our best engineers took other jobs, and spoke openly about the frustrations they felt when all their friends were getting rich, while we were still bringing our food in a bag lunch and eating at our desks.

Even in a bubble, showing up wasn't enough. At my next company, where I spent 8+ years, we had enough spikes and troughs to fill a novel. Maybe some day I'll write it. We scored several rounds of venture funding, several rounds of layoffs, and filed to go public, not once, but twice. The company eventually sold for a good amount after I had left, but not before a number of upstarts had soared past us, having much more profitable exits, at valuations anywhere from 4 to 5 what our exit had been. And while we could feel bad about not having hit a home run, I was all too aware of the many other players in our industry who had already gone bankrupt, or returned money to the original VCs, lacking a business model, and other former colleagues who had bounced from company to company in search of something that stuck.

I've always been raised with the mantra that nine out of ten startups fail. I've seen other ratios with different numbers, but the truth is that the overwhelming majority of small business concepts, even those with venture funding, don't have a positive exit, and it's a much rarer one that sees the founders and employees strike it big. For every market sensation like Facebook, Twitter, Instagram, Tesla or Spotify, you have scads of others with software products few wanted, or website plays that have seen their URLs turn into dead links.

In the big race of keeping up with the Joneses, especially in an area ripe with exceptional people who have impacted history, seeing others' success can make it seem easy. Easy to start a company. Easy to start a venture fund. Easy to find customers. Easy to do practically anything. But it's not. I remember the wave of aspiring dotcom millionaires who came from around the country sporting MBAs, only to return when things got tough. And I remember the stories of former Business Development managers loading luggage at the airport when jobs were scarce. Success is not doled out equally and fairly, and the best products and best people don't always get rewarded. But the equation improves with incredible market study, exceptional effort, and the self-awareness to make change where it's required at the right time.

Do read up on the world's successful people, as I remember doing in college, checking out "The Difference Between God and Larry Ellison" from the Berkeley city library. Do make yourself aware of their smart strategies and innovative products. But don't forget the hard work and effort required that set them up with a greater likelihood to succeed. Or you'll be like I was in 8th grade -- getting dressed down publicly by my teacher who questioned why I was even there at all if I wasn't going to do the bare minimum.

Disclosures for fun: I worked at BlueArc from 2001-09 and owned options, as well as stock acquired in the company's 2005 AA round. These converted to shares when HDS purchased the company in 2011. I currently work at Google, and any references to their competitors or partners are just part of the story and presented without intended bias.