Management Principles from Chairman of Intuit

Management lessons from the Coach's playbook

The Valley guru Bill Campbell (Chairman, Intuit, Board Member Apple) keeps a low profile but his rules for success are a growing legend. Many approach him on a regular basis for advice, and if the companies he is involved with are anything to go by they may be worth listening to - what do you think about these 5 principles?

Think big with talent

Campbell believes startups often hire "early stage" people without thinking about whether they will succeed as the company grows. They should instead hire major players who know how to scale up. Once they're in, Campbell uses a review system that measures four areas: on-the-job performance - the typical quantitative goals; peer group relationships; management/leadership, or how well you develop the people around you; and innovation/best practices.

Be honest - and accountable

"I remember him describing me as a human missile," says Danny Shader, CEO of Jasper Wireless, who at the time was a disgruntled employee at Go Corp. Campbell, the CEO, sat him down, saying, "Here are a bunch of things you need to do to improve yourself and things that I need to do." By talking straight with employees - and committing to helping them succeed - Campbell helps create a team dynamic.

Skip the chief operating officer

Most Campbell-led or -mentored companies (Google and Intuit, for example) have no COO. Campbell thinks the COO often takes over management details that the CEO should be deeply involved in. And COOs often end up isolated, with star managers insisting on reporting to the CEO.

Invest in the future

Campbell believes technology companies should never slack on innovation. "He is a huge advocate of having to be on the leading edge," says Marc Andreessen, co-founder of Netscape, Opsware, and Ning. "He was always on us [at Opsware] with the budget about having to invest more in R&D."

Empower the engineer

Campbell thinks engineers are the innovation core of any tech company. Giving engineers the freedom to create, free of marketing dictates, is critical. On Campbell's suggestion, Intuit CEO Brad Smith gave his engineers four hours a week of unstructured time. The result: six new products in the past year.

Brilliant post by Barry Ritholtz

We rarely do this on the Goldrock blog...a place where we try and express our proprietary brilliance and thoughts. But I saw a blog post by a financial commentator from Bloomberg and CNBC - Barry Ritholtz - from my brother - Ben Ram. the post is called Unless & Except. I couldn't have said it better or funnier myself, so here is the text:

Yeah! The Greeks Voted!

For the X^n-th time, important events took place in Europe that either did or did not resolve an impending crisis, one that is either imminent or not.

This was absolutely and unequivocally crucial, unless it didn’t matter at all. Either of which is an equally likely outcome.

Indeed, this past week was absolutely critical, except that it wasn’t. The Greek elections determining their future relationship to the EuroZone was simply of the utmost importance, unless, as it turns out, it was not.

Yes, they did not matter; No, it was quite important. Unless it was the other way around. In which case it did/didn’t was/wasn’t important.

The ‘mother of all central bank interventions’ is going to save Europe, unless it doesn’t, in which case it is back to square one for the EU. Everything has changed, except that nothing is different. Nothing has changed, except for everything. Unless it wasn’t, in which case it was. (Glad I got THAT off my chest).

We also are closely watching the fiscal responsibility issue, which as many of you know is the single most important issue ever, except for the past half century, when it didn’t matter at all. This has been resolved once and for all, permanently and completely, by postponing it yet again.

Then no, not so much.

Here in the States, the upcoming Fiscal Cliff is the most important issue of our time, except it has never mattered and is likely to be resolved without incident. Unless not, in which case, so sorry about that credit outlook downgrade.

Indeed, this is the most important election of our lifetimes, except for all the other ones. They were super important, except not.

This week’s FOMC meeting will reveal whether QE is imminent, which it is, according to those who know. Unless its not, which is equally as likely.

Operation Twist could be extended. Or expanded. Or canceled. Unless not.

The Fed will be releasing their announcement at 2:15 on Wednesday. Unless like last time, they are late, in which case it will be 2:30. Ish.

This will cause another Risk On rally as traders anticipate the Fed’s action, unless it doesn’t, as traders don’t. And if they don’t, or in case the Fed doesn’t. Or won’t. It starts to get fuzzy around this juncture.

The key is not whether they won’t or didn’t, but more importantly, were anticipated to have done of of those, which is of course dependent upon how slavishly you are devoted to the proper usage of past verb tenses. Which as this writing implies, I am not.

More importantly, you must be on the look out for rumors or reports that may or may not be true and do or don’t matter. Or not.

In which case yes, thank you, I will have another.

I hope this clarifies the state of things . . .

Can Dell be Model for Nurturing Innovation?

I read with interest the launch announcement for the Dell Innovators Credit Fund. Dell has set aside $100m in financing to be allocated in $150,000 chunks to qualifying innovation led companies. For more details check it out - http://eir.dell.com/


Some might see this a vendor financing through the back door, and I wonder if the $100m is the street price of the equipment they will be funding or the COG's? It is also worth noting that this is on the back of Dell's continued inability to allocate internally to innovation (stuck at around 1% of turnover).


In any event I wonder what similar initiatives could be created in the UK market to spark much needed innovation.


I quickly figured out the $100m is about 0.5% of Dell's market cap. Given the allocation they are talking about this could potentially expose them to hundreds of new and interesting companies. Many of these companies will not yield any value add to Dell, but I am sure that something of interest will come out of it!


Wouldn't it be great if "UK Tech Ltd" took 0.5% of their value and found creative and sensible ways to foster innovation. Of course each company would have the criteria that might support their wider aims and needs in life.


As a possible suggestion the recently announced StartUp loan scheme could be leveraged by tech companies if they offered to match the government funding if the start-ups met whatever criteria the corporate partner would set (sector, geography, size etc).

As a simple example, wouldn't it be great for the North East if Sage launched such a scheme to support 20 ventures a year matching the government funds by 5x for young entrepreneurs in the region starting a business in the areas of software, IT, SaaS or other relevant spaces. This would be a £250,000 program and everyone would be a winner.

• Sage would encourage innovation in its back yard, which it could exploit as and when they mature. 
• They show that government and business collaborate successfully. 
• Of no less importance Sage would show that in an era of globalisation it still believes in the importance of giving back to the local community and fostering future talent that Sage and others in the region could benefit from.

By way of comparison if Sage spent the same proportion of its market value as Dell it would be allocating £16m (about 10% of its R&D spend) to this type of activity - now that would be radical!!

Innovation and entrepreneurship needs to be fostered, and the established tech companies have a responsibility to take part in that. More than that it is squarely in their interests to do say, as without home grown innovation it will not be possible to stay competitive in a globally demanding and dynamic market place.

Buyout funds are growing their activity in Israel

Here at Goldrock Capital, as a tech-focused growth equity investor, one of our investment theses since 2008 has been the expected emergence of international and local buyout activity to complement the existing strategic M&A activity within the technology markets in Israel.

This activity is a growing reality in Israel and we expect the trend to spread throughout the market. Many institutional shareholders in Israel have been reluctant to embrace this liquidity event, since generally the feeling is that strategic acquirers pay more than private equity buyers. This of course is true. But since many Israeli technology companies are "sub-scale" for large strategic acquirers, often a recapitalization is best for the company to continue strong growth and access opportunities that would otherwise be closed off within their existing capital structure.

We look forward to this continuing trend! Below is a list of funds and their respective buyout / recap transactions (in parenthesis) over the past few years:

JMI Equity (Paradigm Geophysical - 2012)
Apax (Paradigm Geophysical - 2012)
TPG (iMDSoft - 2012)
Summit (Touro - 2008, Answers.com - 2011)
TA (Answers.com - 2012, Alma Lasers - 2007)
Battery Ventures (Direct Insurance - 2010)
Premira (Netafim - 2011)
Citi Ventures (Ness - 2011)
W Capital Partners (Conduit - 2012)
Taldan Capital (Teledata - 2012, Sintec Media - 2011)
Susquehanna (Netformx - 2009, Skybox - 2011)
Great Hill Partners (Plimus - 2012)
Francisco Partners (Attenti - 2009, Ex-Libris - 2008)
Vector Capital (Aladdin - 2009)
The Riverside Company (NovaMed - 2008)

An important common denominator on the above purchases is that there is seldom a venture fund invested prior to the buyout. We believe that will change and more venture-backed companies will partner with buyout funds in the future.

I am sure I may have missed a few. If i did, please add them into the comments.