IT Employment

Traditional techniques, tech savvy help start-ups take off

Diane Greene used her experience working with top technology companies and her entrepreneurial know-how to start VMware. In this week's TechWatch, columnist Bob Weinstein explains how Greene leveraged her skills to launch a successful software company.

Two types of people start technology companies. One type is the technically-savvy person who sees the market value of a great product. The other type is the trained techie who has an IT (Information Technology) or IS (Information Systems) background or a computer science or engineering degree.

Crafting breakthrough technology is tough enough, but launching your own company with goals of producing, marketing, selling, and eventually reaping a profit is even more difficult. For many techies, who may lack critical marketing and production skills, it’s more than they expected.

With a Master’s in Computer Science from University of California, Berkeley, Diane Greene qualifies as a “hard-core” techie. In addition, the 44-year-old thoroughly understands not only technology’s nuances but also the fiercely competitive nature of the business.

In January 1998, Greene started VMware, Inc., a Palo Alto, CA-based software company that allows users to run multiple platforms from a single PC.

Business and technology experience
Unlike many techies, Greene had both entrepreneurial and technological experience when she formed her company. Her resume included stints at big-name companies like Tandem Computers (now owned by Compaq) and Sybase, Inc. In 1995, she also helped launch Vxtreme, a company that was bought by Microsoft in 1997.

When she started VMware, she had the background to build a company that crafted virtual machine technology software to run multiple operating systems simultaneously.

“The software gives you the flexibility to run any combination of operating systems and also get full isolation as well,” Greene said.

The software, which is available on the VMware Web site, is selling briskly. But perfecting the software was both difficult and expensive.

“Virtual machines date back to the 1960s,” Greene said. “IBM had them on their big mainframes. I cofounded this company with a group of researchers at Stanford who had been working on this software for almost six years.”

The founders worked around the clock for 10 months in a small two-room office perfecting the software. They later raised $3 million in angel financing. But that shot in the arm came after Greene had bolted through about $500,000 of her own money while her partners worked for practically nothing.

Unlike some dot coms that burn money faster than they can raise it, Greene said she was amazingly thrifty. By the time the software was perfected, 10 people had joined the staff.

Greene’s frugality paid off. She expects to be profitable by 2002 and is in the process of securing a $20- to $25-million round of financing with a corporate strategic partner so the product can be aggressively sold and marketed. VMware now employs 83 people.

Hiring the right people
It wasn’t luck but meticulous planning that got Greene this far.

“Our goal was to build a strong company,” she said. The key to success, she insists, is great people, because “incredible technology is not going to go anywhere without the right people.”

The business team must match the technology team, a factor overlooked by many techie entrepreneurs. “You must know what skills are needed to run your company,” Greene adds. “I can’t overestimate the importance of a good VP of marketing, for example.”

Just as it’s important to hire wisely, a potentially disastrous mistake is over-hiring too early. “Wait until you can attract the right people,” Greene advises. “If you have great technology, it’s easy to attract top technical people.”

A critical early hire for VMware was a seasoned office manager. “An experienced office manager can create the structure and put the right businesses in place,” Greene said.

How will you make money?
What does it take to build a successful company? Before you even start, know how you are going to make money, Greene advises. You’d be surprised how many companies start out with a concept that is poorly defined. Again, she stresses the importance of strategic hiring and building a strong core team to attract others.

Once you’re up and running, pay attention to details. “Don’t ever let the company run away with itself,” says Greene. “As you get bigger, more controls are needed to manage your growth so you don’t go off in a million different directions.”

Finally, “under-promise and over-deliver,” Greene adds. “That’s the only way to function at peak efficiency.”

Bob Weinstein's weekly syndicated column, Tech Watch, is the first career column covering the exploding technology marketplace. It appears in major daily newspapers throughout the United States.

Are you a “hard-core” techie with business savvy, or are you a businessperson with technology skills? How have you used both to further your career? Which has been more valuable? Share your experience with us in an e-mail, or sound off below.
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