Andy Palmer Talks About Start Ups, And Leadership On The Interview

While searching through some of the most linkedin people in the Boston area I found Andy Palmer's profile in linkedin.com. He is current CEO & Co-Founder at Vertica Systems, a database company that is revolutionizing the way databases are built, Andy has an extensive start up background and is a veteran of the industry, I thought I'd spend some time asking him about his experiences with start ups, marketing, social media and Vertica.

John: Tell me a little about your background.

Andy: I am a start up veteran, I am working on my 5th start up, and four were software and the other a biotech company. I was always attracted with working with scientists and technologists, and wanted to help commercialize their ideas.

John: What makes a successful start up?

Andy: I think that there are lots of clichés you can apply to this question, the real thing however is that start ups are an emotional process, people do it because people have a passion for a start up. Nowhere is this more true in a biotech, as there's no financial reason to start up a biotech company, people want to do this because of the emotions people have to want to help human health. From time to time you get a Genentech, for me to be in a start up you have to have a passion, its very emotional process.

There are more fundamental principles, many of which are cliché:

One, to be audacious, and make sure you have aggressive goals, to go for it. The only time you get significant return is when you are actually trying to do something big.

Two, always hire the best people, it's always a challenge finding them, hiring the best people you can find is critical to the success of a company.

Three, do not over react, things are never as good or bad as you think they are, start ups have a whole series of ups and downs, never, really as good as bad as you think it is, its important not to make critical decisions at a high point or low point.

John: That's interesting, what happens if you get some really good news, does that mean you don't make a decision then?

Andy: I sleep on it. Sometimes those problems fix themselves, you need to be a balance in the really good and really bad times. So much ambiguity, be confident, calm and thoughtful. Otherwise it's so tempting to get caught up in it.

Four, irrational exuberance, be positive about the company almost all the time, believe strongly in the mission, even if you have so many things that point to failure. I'd call it almost positive ignorance.

Five, interesting dynamic whether you are going to raise money or not, I've run two start ups that have been boot strapped, three have been venture backed, many companies cannot be bootstrapped, depending on the requirements for a company, if they can bootstrapped, they should. Bain capital highlighted the start up companies that were most successful; the ones most successfully had the least amount of capital. A colleagues company, Tivoli, raised $7m and sold for $1billion to IBM.

Really it's about using any resources raised wisely, I think you should always manage the company so that the people think about spending every dollar.

John: Do you think talking with all employees about the financial situation helps that?

Andy: I really believe in transparency, all the people should have an equity stake in the company. A clear view of the company also comes with responsibility, but keeping numbers transparent makes sense, people in the company deserve to know, serves you in good times and bad, if people think things are worse than they are, its not good, however if people understand, employees dig in and want to keep the company alive and going. Treat everybody as an owner.

John: If people are important for a successful start up. What does the management team have to do to develop a successful corporate culture?

Andy: Strong culture reflects the values of the leadership team. Communicate the values of the organization, creating strong culture, constantly communicating how the leadership feels about problems, and is acting as role models, demonstrating those values. The cliché in a start up is that you have to sacrifice life and limb. Rather if you value people, they need breaks, and flexibility, you cannot force them to make sacrifices in their personal lives, if you are building something big, retention in long time is important, respecting the fact they need a break, management team needs to reinforce that, if the management team is on vacation, don't call in, this very different from the classical stereotype manager.

People, who come to Vertica Systems, work really hard. We have tons of people who work from home. A lot of time we give people flexibility to work from home. Often it takes two hours a day to commute, telecommuting, people are not only happier, but spend more time and are loyal because we have the flexibility in our work culture. This helps in recruiting in a broader area. The market in the Boston area for great software engineers has really tightened up.

John: Do you think that has something to do with the baby boom generation retiring.

Andy: The economy is rebounding; Google is building their office here. Hiring just a few hundred extra employees is having an impact on rest of the market.

John: What does marketing mean for a successful start up?

That's something that's changed over the last ten years, marketing is more closely tied to measurable demand generation, young companies create and reach online customers, through search engine marketing, and search engine optimization. Customers register with you on your website, its a totally automated process, replacing the need for an internal structure, marketing has a whole different set of activities, any of those activities, centered around how to find out what the customer is interested in. very different from building a lot of physical infrastructure, tremendous online component. This has brought marketing and sales more closely aligned, demand generation, much more integrated function. It is cool, with my company with only 30-40 people what we can do, in terms of reaching a broad audience, giving those customers the tools they need to self qualify, so that they can tell you what they are most interested in. very self service. Not everyone wants to do that. Every minute you spend on the phone, very valuable use of time and resources.

John: How are you listening and talking with your customers?

Andy: We have been spending a lot of time, running webinars, interested customers come to the webinars, as opposed to going on site, very good way to reach them quickly and efficiently.

John: Have you done anything to get feedback?

Andy: We do a lot of surveying; we have a cool support function, you can even start an instant message to contact customer service. It's a very different set of resources from a few years ago. Many of our customers are database architects, when you talk to someone in technical support, that person does not have to be someone physically here in the office.

John: Can you recall any times in your start up career when things were not going well with a company, how did you get out of that situation?

Andy: More downside, more situations than I care to remember, lessons that I've learnt however would that that I remember those situations and there context to make a decision, my last start up Infinity Pharmaceuticals, we were running experiments all the time, some times experiments don't work, when things worked we were creating something from scratch that supports lots of customers.

John: What is your style of leadership?

Andy: I am a very collaborative leader, I work for the people who work for me, find the best talent and empower them as much as possible.

John: What's more important for new customers, sales or public relations?

Andy: I don't view those as mutually exclusive, the real goal is to communicate with potential prospects and make those prospects interested to buy our product, PR is an integrated part of our communications, PR is one tool, to help get the word out, among all kinds of activities, lots more ways to reach people to promote a message today. It's essential and important to realize, that press releases, and industry trade shows are one element you can also use blogs, and the web to communicate with people.

John: Are you using any social media, I noticed a few blog posts about the company?

Andy: We really believe in all sorts of communities that come up around our product, the most powerful component in the medium team is that we have a lot of advisors, computer scientists who are very active within their communities, constantly in the world, who write all their ideas, and talk about what the company.

John: Is anyone using your databases for online media measurement? If so how does the database help to reach answers more quickly or at all?

Andy: We think this is an area where is definitely going to be used. There are a couple of people applying our technology to click stream analysis, which is an interesting application.

John: Thanks very much for an excellent interview.