Software CEOs: The right stuff, the wrong stuff

Mary Jo Foley's a smart cookie. Reading through a retrospective piece by former Microsoft coder Joel Spolsky, she was quick to spot this intriguing paragraph:

"Watching nonprogrammers trying to run software companies is like watching someone who doesn't know how to surf trying to surf. Even if he has great advisers standing on the shore telling him what to do, he still falls off the board again and again. The cult of the M.B.A. likes to believe that you can run organizations that do things that you don't understand. But often, you can't."

Spolsky was riffing on what it was like to work for Microsoft in the early 1990s, when Bill Gates was as hands-on a technologist as you might expect from the most successful tech entrepreneur of our times.

He recalled that Gates often was more familiar with the details of Microsoft's software projects than the people he appointed to take care of this stuff for him.

He didn't meddle in software if he trusted the people who were working on it, but you couldn't bullshit him for a minute because he was a programmer. A real, actual programmer.

Spolsky offers an insightful period retrospective, but I'm not sure his one-size-fits-all prescription really works. Gates may have "understood Variants and COM objects and IDispatch and why Automation is different than vtables" as Spolsky writes, but his technology chops didn't prevent Microsoft from committing severe errors. Let's not forget that Microsoft was late to recognize the implications of the Internet when Gates was still running the show as its CEO. He was also at the helm when the Microsoft got sued by the government for engaging in anticompetitive behavior.

But Spolsky offers fodder for a great bar room discussion. Unfortunately, there's no clean way to prove things one way or the other. For fun, I compiled a back-of-the-envelope list of four former software CEOs who used to command the attention of the technology industry. While tech CEOs often combine both technology and business smarts, I'm assigning them into one of two camps based on what I saw when they were running the show. First, the business types:

Jim Manzi: Lotus:
Jim Manzi came out of the world of business consulting. If he was more of a technologist, maybe he would have pushed Lotus to adopt its applications to the then-nascent Windows platform. Manzi recognized the import of the work Ray Ozzie was doing with Notes. Unfortunately for Lotus, the growth of its groupware products wasn't enough to compensate for the freefall in its applications business. The company was doomed, only to be rescued when Lou Gerstner's IBM appeared with an out-of-the-blue (temporarily) hostile buyout offer. Might Lotus have fared better under its more tech-savvy founder, Mitch Kapor? That's like asking whether Willie Mays would have broken Babe Ruth's record if the Giants never moved away from the Polo Grounds. We'll never know.

Mark Cuban: Broadcast.com
I first met Cuban when he was a computer retailer. I don't remember him as a visionary technologist but he was an exceptionally sharp businessman. He was one of the first computer dealers to recognize how to romance business buyers of PCs. That may seem entirely obvious in 2008, but systems integration was a black art when MicroSolutions got going in the early 1980s. In my book, Cuban's sale of Broadcast.com to Yahoo stands out as the most brilliant deal of dotcom-dom. But did he create any game-changing technology that since justified Yahoo's $5 billion purchase price? No matter. He did well--very well--for himself and his company.

Now, the technologists.

Philippe Kahn of Borland
Remember Borland and the "Barbarians?" Philippe Kahn was a geek extraordinaire. And for a while, Borland stood toe-to-toe with Microsoft. Kahn was one of the first software entrepreneurs to embrace object-oriented programming. But that didn't prevent Borland from suffering costly product development delays. If Kahn had more business savvy, perhaps he wouldn't have OK'd the ill-considered acquisition of Ashton-Tate. The company never recovered from those self-inflicted wounds.

Ray Noorda: Novell
A electronics technicians during World War II, Noorda became an engineer and then businessman. In a way, he reminds me of Gates a lot. When he joined Novell, Noorda made a lot of smart decisions early on--in particular his support of Netware. Unfortunately, he decided to take on Microsoft in a foolish battle that sometimes took on the appearance of a personal challenge. Novell went on an expensive software acquisition spree--topped off by the purchase of WordPerfect. Microsoft couldn't have asked for a bigger gift. Noorda was fighting on so many flanks that NetWare was eventually surpassed by Windows NT.

I could go on, but it's late and I need some shut-eye. I shy away from drawing overarching conclusions on the basis of a very mixed record. But it's safe to say that smart CEOs will figure this stuff out on their own--or at the very least surround themselves with sharp folks who'll make them look good in the end. But read Spolsky's essay anyway.

And then drop a note in the TalkBack forum here with your take on the matter.

[Len Bullard]

It cuts both ways. Software engineering (and Spolsky is a great example) is filled with software religions. They believe software is a holy social cause and make simple-minded business decisions without long-term market strategies. They can be the last people in the business to adapt. They have cat mentalities insisting their ability to flip bits makes them smarter or more worthy.

MBAs look down by dint of social programming on people who don't sign checks. They tend toward trendiness (the tipping point mania is a good example). As a result many a Harvard grad has destroyed a company trying to execute The Vision.

Nothing substitutes for real world market knowledge of the specific knowledge, and if the market involves selling computer systems, somewhere along the way an employee should have written some script, compiled, and know with a dead certainty who has the best chops.

If there is any quality that is the best predictor, it is humility. Know what you know, know what you don't, and know who does. Then listen and decide. Do have the smarts to change your mind and do have the guts to stand by the decision.

Everything else is timing. Luck can play a part but you can't trust it.

[royster_live]

More important than anything else, I think having a real passion for technology is the most important quality a software CEO should have. You can hear the difference in how business CEOs vs. a technologist CEOs talk. Customers are always mentioned in the former type while technology is more likely the focus in the latter type. The problem with always listening to customers is that they are not always right and they do not know what the possibilities are in the software world. A software CEO needs to have a VISION of what the future (in a technology sense) should be and have the ability to DRIVE the company towards that future. Those are the things that made Bill Gates so successful as a software CEO. They set him apart from the other CEOs on Coop's list.