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| Home - CEO Spotlight - Feb 03 Issue |
CEO Profile: Glen Meakem, FreeMarkets
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Angel Mehta: Are you saying the founder floundered because the company failed, or do companies fail because the founders are incompetent?
Glen Meakem: It’s all about the people. What I’m saying is if the entrepreneurs aren’t really good and really talented the company is not going to succeed. If you talk to John Doerr, John Doerr will tell you it’s all about the entrepreneur. If the leaders of the companies - the entrepreneurial leaders of the companies aren’t good, the company is not going to be successful. This notion during the Internet bubble of ‘oh I’m going to found a company for 12 months and then move on and bring in professional management’ - that doesn’t work. The chances of bringing in a CEO to actually be successful are like nil.
Angel Mehta: You mentioned John Doerr…how active have he and the other original investors remained in Freemarkets.
Glen Meakem: Our original investors and venture Board members - they’re long gone. We made a transition right before the IPO where we brought on a Board that was a public company Board and we’ve continued to grow that Board. We’re continuing to enhance the capability level of our Board. Our Board is an independent Board that represents investors in an independent way; they’re not tied to any single VC. Ray Lane, who replaced John Doerr on our board, does not act like he’s here to help KP cash out; he’s here to help the company.
Angel Mehta: I want to come back to the whole topic of entrepreneurs because that was really interesting to me. I think your point is contrarian….or at least against the common wisdom in silicon valley. What advice would you, then, have for would-be entrepreneurs? How do you know whether you’re good so to speak and that you are capable of staying with a company until $100 million or whatever it is?
Glen Meakem: Every company is different. What I look for when I’m investing in people or when I’m hiring people is I’m looking for a lifetime of achievement. Has this person been successful at each stage of their life? If somebody is mediocre at the last stage in life what makes you think they’re going to be outstanding in this stage of life?
Angel Mehta: Has there ever been a period in FreeMarkets’ history where you have been intimidated? Where you wake up in the morning and say, “Wow this is going way faster then I think I can handle?”
Glen Meakem: Frankly, the Year 2000 was a tough year. We had a great year in terms of our performance but it was a tough year because of the bubble. Building a company and running a company is a struggle. There are some great victorious moments but there are some really low moments too and, overall, it’s a struggle, it’s always a struggle. I don’t know which Japanese business leader said this but it’s a common term, “Business is a perpetual war” that’s what it is. Business is a perpetual war. I guarantee you the competitors we defeat and kill today will be replaced by new people we have to defeat and kill tomorrow. I have a graveyard chart. The graveyard of companies that have been in the B2B commerce phase in some form were founded, raised a lot of money and went out of business is incredibly long. A lot of those companies made HUGE amounts of noise when they had their funding and when they had their first investors or whatever but that doesn’t mean they’re not stone cold dead today. There are people out there who are alive and kicking today who are going to be stone cold dead tomorrow. One reason we’ve survived is we’re focused on customers. The other reason we survived is we can take a kick in the teeth. When someone kicks us in the teeth we come back swinging very very hard.
Angel Mehta: Psychologically?
Glen Meakem: No, I mean in business. It’s not like war where you shoot guns at people. Somebody comes out with a new and inventive product with a customer or two. You go and develop a better product and you target those customers and you take them back and you put that company out of business.
Angel Mehta: You talked about people before. There’s a cliché that goes, “The way to win is to hire smart people”. Usually investors are talking about IQ points. ‘The more IQ points an organization has the better you do.’ True or False?
Glen Meakem: True but not complete. You know our friend, [Name deleted]?
Angel Mehta: I know him but I don’t consider him a friend.
Glen Meakem: I’m glad you don’t. [Name deleted] has an incredibly high IQ. Look at the way he’s run circles around the competitors…the guy is really really smart but he’s also an incredibly immoral, unethical and evil individual. I don’t just look for smart people, I look for smart people of really high integrity and strong character and if you find great smart people of really high integrity and really strong character not only will they create great things but customers will love them and they will work together well because they’ll respect each other and treat each other well. If you have a bunch of smart egomaniacs who are out there….just out for themselves and are relatively without ethics and morals then you’ll implode. A lot of companies have done that.
Angel Mehta: Do you see a turnaround anytime soon? People have been hoping for a recovery for a while now. What do you think 2003 holds for software?
Glen Meakem: 2003 is really tough.
Angel Mehta: Tell me why.
Glen Meakem: All the stuff I read; IT budgets are flat at best so I think ‘03 is a really tough year. In the 90’s the IT industry, whether it’s services, hardware or software, people were used to the IT industry leading the economy. “Gee it’s 1994 and things are still kind of sluggish” but all this Y2K and ERP spending is going on and the IT industry is what lead the U.S. economy in the 90’s. If things were a little sluggish throughout the economy it didn’t manner because high tech was leading. Now, IT spending has been cut way way back and we’re following now; we’re not leading the economy. We’re waiting for the rest of the economy to gather enough juice to start corporate spending again. The rules of the game are different, different environments. It’s hysterical for me to read this stuff everyday. I was reading this report on the Web today, “When are the good old days going to be back?” They never do. I think ‘03 is a tough year again and we do believe it will be proven in ‘04. The only reason there will be an improvement in ’04 is the rest of the economy will start to percolate along in ’03 and will finally draw IT back to the table in ’04.
Angel Mehta: The venture firms have a ton of uncommitted capital and, at the same time, are not doing deals. Would you take the same approach, then, if you were to venture forward?
Glen Meakem: They should give their money back to their investors.
Angel Mehta is a Managing Director with Sterling-Hoffman Management Consultants, a retained executive search firm focused on enterprise software companies. He can be reached via email at: angel@sterlinghoffman.com.
For more information about Glen Meakem or Freemarkets, email Karen Kovatch: kkovatch@freemarkets.com.
 
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