One of the most disappointing aspects of writing about start-up companies is that in most cases there is no secret to their success. Having spoken to founders of hundreds of start-ups companies in the last 10 years, it’s clear that the magic formula is no more of a secret than the recipe for ice.
Amnon Landon knows this as well as anyone. Landon is the chief executive officer of Mercury, a fast-growth Silicon Valley-based software company that develops products to assist companies in managing their software development and technology operations. Israeli-born, Lamnon joined Mercury at its foundation in 1989, and has held numerous positions within the company, including president and chief executive officer since February 1997, and chairman since July 1999. Since his appointment as chairman the company’s revenue has grown by 25 percent each year. He believes Mercury can reach revenue of US$1 billion next year.
Landon’s success is well recognized – he was named by Forbes magazine as its Entrepreneur of the Year in 2003.
Ask him to describe the circumstances that led to both his and the company’s success, and he is circumspect.
“Number one is people,” Landon says. “Having a good collection of people is most important. We have always had and still have, pound for pound, the best talent in the industry. That’s where it starts.”
Next is technology, and then strategy. Within Mercury’s DNA is a mantra of “customer-centricity”, which Landon says gives Mercury some of the happiest customers of any company in the technology industry.
And then there is an element that could almost be called luck: “And we were in an area that happened to be a young, small, but growing area of the market. Put all those together, and there is a good outcome.”
Landon concedes that there is nothing new in this – these statements are made in countless interviews by countless entrepreneurs every year. The key, however, is in the ability to follow through. He attributes his longevity and his company’s success in part to strict adherence to these principals. This year has already been remarkable for seeing several of Landon’s high profile contemporaries in the technology industry stand aside from chief executive rolls in the companies they founded. In July 2004, Michael Dell handed the reigns at Dell Computer over to his long-time management colleague Kevin Rollins, while in March 2004 Tom Siebel recruited a former IBM executive to take over management of his customer relationship management software company, Siebel Systems. While Dell’s decision has been long expected, Siebel’s decision had much to do with three years of lacklustre performance, and the desire to see some fresh thinking introduced.
There are few decisions more difficult for any entrepreneur than knowing when they have reached their used-by date. Many start-ups have suffered for having founders who have been too passionate or stubborn to see that their business would be better served by an injection of fresh blood. Often it is left to the investors or shareholders to make the decisionon the entrepreneur’s behalf.
But according to Landon, those entrepreneurs who do recognise their own redundancy can take heart in knowing they are not exceptions to the rule.
“When you think about it, it is pretty impressive that a founder can stick around for so long,” Landon says. “The skill set required to found a company and to run a company from $0 to $10 million is very different than to take it from $10 to $100 or $100 million to $1 billion. So when you find someone who can actually stick around for so long, that’s clearly the exception.”
“The best outcome is when you are successful and knowing the time to pass on the baton.”
Brad Howarth is a journalist and author of ‘Innovation and Emerging Markets: Where the Next Bulls Will Run’, a study on the challenges facing small Australian technology companies.
