Shareholder Representative Services’ latest Q&A features Sebastiano Tevarotto. Tevarotto led Wanova to an acquisition by VMware. A veteran of the global IT, telecommunications and media industries, Tevarotto brought both startup and large company management experience to Wanova, including having served as Vice President and General Manager of Communications, Media & Entertainment Worldwide Business at HP. He discusses the transition from a founder-led company to a management-led company, go-to-market challenges, and the magic of Silicon Valley.
Q: What challenges did you face when you were brought in to manage a company that was led by founders?
A startup must transition from a founders’ company to a company that is managed by professionals. Sometimes the professionals that manage the company can also be the founders, but there needs to be a fundamental shift in how decisions are made. At first, the founders make all the decisions–whether it is the color of the walls of the office or more fundamental decisions or anything in-between. That works extremely well at one stage. When you start growing the company and you look to bring in other people–good managers–they need to have the ability to make independent decisions. So, you have to move from a decision-making pyramid with founders on top to decision-making that is more distributed and has a management team at the top. At Wanova, understanding that change was very, very important, and it took us a while.
For founders, this is a difficult journey. Founders start from a position where they are the center of everything and everything comes to them and evolve to where things happen without them knowing. Psychologically and emotionally, it’s quite an adjustment. As the CEO, you have to develop trust with each of the founders. You can’t be emotional, and everyone needs to respect each other’s roles and try to live through the change.
Q: Where do inefficiencies typically arise in a startup?
There are three processes that are fundamental to managing a successful company. The first process is turning a lead to a sales order and then into cash. This process involves understanding where the lead came from, what happens, and who does what. The goal is to shorten the cycle and optimize it. Another process is turning an idea into a product. This includes the ability to continue to evolve the product, capture market feedback and customer needs and cultivate that information for the future. The third process is achieving resolution. When a customer has an issue, it must be resolved effectively. Those are the three processes, and the beauty and the complexity is that they are not limited to a single function. They cut across the company. That’s where you find of a lot of inefficiencies.
Q: What go-to-market challenges did you face at Wanova?
Wanova had great products with a potentially huge market at the beginning of the demand curve. So the situation at Wanova was almost exactly the opposite of my experience at HP. We had this jewel and we had to figure out the best way to get it to market. At HP, I had a big highway system. I could go anywhere I wanted, but I needed cars–those cars were the innovation, companies and initiatives–to go as fast as I could. Wanova was one of those cars, but we didn’t have the highway system.
If you want to go to the moon, you better have a rocket. If you think you can go to the moon with a bicycle, the plan will not succeed. As simple as that sounds, it happens over and over again. First, we had to do a good job analyzing the market, without over-analyzing it, and understanding the specific dynamics. The enterprise market has certain rules, cycles and attributes. Customers have organizational complexity to deal with. You have certain channel partners to help serve those customers. The sales cycle takes time, and you and your investors have to acknowledge that. A board can be a zoo of personalities and experiences. The CEO needs to manage those relationships around a constructive plan that is feasible and gets executed.
Q: How has the cloud changed the way CIOs buy technology?
There are different ways to look at the cloud. One is from the standpoint of managing the infrastructure more efficiently–building the cloud specialization and bringing applications there. So, it enables more efficient management of infrastructure not just in the data center, but also for all the ways that you need to provide services and access to your users. The other major change is that consumer and professional users are the same people. The major revolution that is happening is that the users want to access business applications with the same level of simplicity and the same level of fun that they have with their personal applications. CIOs are trying to understand how to handle that, and they’re really waiting for professional tools that allow them to deliver that to their users, while at the same time, respecting all of the requirements that you typically have in the enterprise.
Q: How did the deal with VMware come about?
We were looking for a round of funding. We reached a point where we demonstrated that the market was there, that the pipeline was there, and that we could manage the business. So, we wanted to accelerate the business with another round. When we got the offer, there was a discussion about whether it was the right time to sell. This is always the issue for a successful company that is executing. If we waited a year and we did what we said we were going to do, we could have potentially sold for a lot more money. At the time, there was a lot of uncertainty, and I think we made a short-term decision, but it was definitely not the wrong decision.
Q: As an Italian and an entrepreneur, what is your take on entrepreneurship in Europe versus the U.S.?
First of all, it’s not the U.S.–it’s Silicon Valley. People from all over the world come here. For some reason, they keep going west. The question is: why? When you go to Europe, there is history that makes it a lot harder to do anything. So you have two choices–either you work in a place where you have to fight the environment or you work in a place where the people and the infrastructure allow you to focus on what you can do, as opposed to fighting a battle. I think that’s the best way to put it.
Q: If you keep going west from Silicon Valley, you end up in Asia. Is that the next frontier for venture?
Keep going around and come back here. There is a vibe about this place that is hard to beat. There are some other countries that share this vibe, like Israel and Singapore and so on, but at the end of the day, this is where things are happening. In the old days, not everything happened in Rome, but everything that happened went to Rome.
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