The Corner Office

Entrepreneurs worry too much about what they’re going to develop, make, or market. What’s more important is that they make, develop or market something. The odds that they end up making it big doing something different are apparently pretty high.

Here are 15 companies that became famous, not for what they started doing, but for something that came later. Sure, they may be related, but the point is still valid: better to get started on something; innovative people find a way.

• Backed by French venture capital, DuPont began making gunpowder in 1802.
• McDonald’s. In 1927, brothers Dick and Mac McDonald opened a hot dog stand called “The Airdrome” at the Monrovia airport in California. 21 years later, the company began focusing on hamburgers.
• Nokia was originally a paper mill in Finland. (more…)

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Picture this: You are a top executive at one of the biggest technology companies on the planet. You spent 30 years working your tail off, climbing the corporate ladder, building your reputation, and it all paid off. You’re set for life; you can retire tomorrow and never have to worry about money as long as you live.

So what do you do? You leak all kinds of inside information on upcoming earnings releases and a high-profile restructuring and spinoff to a friend at a hedge fund who you know is going to illegally trade a million shares on the information and let another hedge fund manager in on the fun, too.

But you’re caught red-handed on tape by the FBI. Poof, it’s all gone. Just like that.

So, can you picture that happening to you? Of course not; neither can I. But it allegedly happened, and not to just one guy, but two. 

One is former AMD CEO and Motorola president Hector Ruiz, who yesterday agreed to step down as chairman of AMD spinoff Globalfoundries. Ruiz, apparently caught in the FBI snare, cooperated with the investigation and has not been charged.

The other is Bob Moffat, an IBM senior VP who has been mentioned as a possible successor to IBM CEO Sam Palmisano. Moffat, who was arrested by the feds a couple of weeks ago and charged with conspiracy to commit securities fraud, ended his 31-year career at IBM on Friday.  (more…)

On Friday the SEC arrested and charged a billionaire hedge-fund manager and five others - including high ranking executives from IBM, Intel Capital, and Mckinsey & Co. - with insider trading resulting in $25 million in illicit gains.

While it’s tempting to write this off as the work of a few greedy individuals, I don’t believe that’s the case. If the allegations are true, it would appear that the rampant conflicts of interest and insider trading of the tech bubble is still alive and well. The only difference is that, instead of investment banks, the instigators are now hedge funds.

Just look at the breadth and depth of the allegations that the feds used wiretaps and informants to uncover; this was no Mickey Mouse operation:

• It involves Robert Moffat - a senior VP and prime candidate to succeed IBM CEO Sam Palmisano, Rajiv Goel, a managing director at Intel Capital, and Anil Kumar, a director at McKinsey & Co.
• It involves confidential, inside information about earnings and acquisitions involving Google, Intel, Hilton, Clearwire, Sun, and Polycom.
• The linchpin is Raj Rajaratnam - a billionaire hedge-fund manager and former president of investment bank Needham & Co.   

Insider Trading: Past, Present and Future

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There’s a time and a place for everything. Successful executives, entrepreneurs, venture capitalists, and business leaders all know when it’s time to act and when it’s time to shut up and listen.

Once, in a board meeting of a public company, a top executive presented plans for an acquisition. One of our directors - venture capitalist and former Intel executive Bill Davidow - typically quiet and reserved, launched into a 15 minute dissertation on why the acquisition didn’t make sense because our long-term strategy wasn’t clear.

That was the genesis of a much-needed and ultimately successful strategic planning process.

Then there was a board meeting - at a different public company - where our CEO presented controversial plans to launch into a completely new product direction that would have us competing head-on with Dell and Gateway. When it was time for comments, legendary venture capitalist L.J. Sevin  of Sevin Rosen Funds calmly remarked, “I don’t know. This whole thing just makes my butt pucker.” (more…)

If you’re reading this, chances are your business or company is struggling. I know mine is. But this isn’t my first recession and it won’t be my last. Over the years, I’ve learned to look at down cycles opportunistically. No, I’m not on drugs. Down markets are absolutely the best time to retrench and take risks.

Here are 10 classic CEO quotes that matter now more than ever, along with my takeaway that can help your business today in today’s economy.   

“You have to pretend you’re 100 percent sure. You have to take action; you can’t hesitate or hedge your bets. Anything less will condemn your efforts to failure.”

Andrew Grove, former CEO, Intel

Takeaway: Come up with an idea, a strategy, a plan, and act! Now.   (more…)

No, The Corner Office hasn’t gone mental. But I’m fascinated by an entrepreneur that came up with a unique business plan that targets 57 million Americans – one in four adults – that have a diagnosed mental illness, not to mention the countless millions that suffer from non-diagnosed disorders related to stress and anxiety.

And this is further evidence of our ever-expanding appetite for “quick fixes” - take a pill, go on a diet, buy a self-help book, join a health club, get an MBA - that sort of thing.

TechCrunch50 is a Bay Area conference where 50 early stage companies get to pitch their “concept” to panels of VCs, entrepreneurs, media mavens, and corporate execs that last year included the likes of Mark Andreessen, Mark Cuban, Henry Blodget, and executives from Facebook, Google, MySpace, salesforce.com, and Yahoo.

In only its second year, the conference has achieved some credibility. Intuit acquired Mint - a startup that launched at last year’s conference - for $170 million last week. (more…)

In yesterday’s post, Tradeoffs Make or Break Careers and Companies, we discussed the role of tradeoffs in major decisions affecting careers and businesses big and small.  The post referenced four examples to highlight the point:

• Whether to stay in a safe job that pays well or take a big risk on a startup or by becoming an entrepreneur
• How Twitter can monetize its business without destroying the viral attraction and simplicity of its microblogging site
• Whether Deutsche Telekom (T-Mobile’s parent company) should risk a failed merger by acquiring Sprint Nextel to grow its U.S. wireless business
• Whether a dentist should move to a more favorable location to gain access to new clients at the risk of alienating existing clients

While these are four distinct situations, there is indeed a common process I use for analyzing these and other complex tradeoffs and making the right business decisions. In every case, the process - which closely resembles a strategic planning process - comes down to three steps: (more…)

What percentage of the important decisions you have to make are clear cut and straightforward? From my experience — as a business entrepreneur and a former corporate executive — the number’s pretty small.

Business decision-making is all about tradeoffs. There are the professional tradeoffs each one of us has to make, like whether to stay in a safe job that pays well or take a big risk on a startup or by becoming an entrepreneur. Then there are tradeoffs that can make or break a company.

Look at social networking phenomenon Twitter, which according to eMarketer, is expected to grow from 6 million U.S. users in 2008 to 18 million this year, a 200 percent growth rate. Nevertheless, Twitter is a venture-funded company that’s raised $55 million to date. Why hasn’t it begun to generate revenue yet?

Well, the management team has an extraordinary challenge of figuring out how to monetize its large and growing user base without losing the grassroots “viralness” that got it to where it is. For example, if it allows advertising on the site, will that have an “AOL” effect and scare people off? (more…)

It’s nearly Labor Day, the kids are back in school, summer vacations are memories, and Silicon Valley is on the move. There’s hiring going on, a classic Carol Bartz internal Yahoo memo, and other interesting, if not amusing, news from the land of tech (where I happen to live and occasionally work):

There Are Jobs in The Valley!

Venture-funded technology firms are hiring, according to Business Week. Not only that, but most senior executives polled by audit firm KPMG are expecting a full industry recovery in 2010, ahead of the rest of the U.S. economy:

Amid the worst recession for tech jobs since the dot-com bubble burst, companies are eagerly adding workers in such fields as cloud computing, computer security, business analytics, and IT services for government and health-care providers. Even some companies hit hard by recession are slowly reopening their doors to new employees amid signs that the tech sector may rebound before other areas of the economy. (more…)

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After failing to turn around the 127 year-old networking behemoth that was once valued at over $300 billion, Nortel’s CEO, Mike Zafirovski, is stepping down. After filing for bankruptcy protection in January, the board of directors has opted to sell the company off in pieces.

In a statement, Zafirovski said that Nortel’s “capital structure and legacy costs coupled with the economic downturn proved too difficult to surmount,” but that’s far from the whole story. In my opinion, it’s a gross, sugar-coated oversimplification of what really happened.

Nortel was done in by incompetent executive management and board oversight, and tens of thousands of shareholders, creditors, and employees are paying the price. (more…)