UPSIDE’s 1999 Hot 100
. . . They won because we believe they are the hottest private high-tech companies of 1999 . . . Neoforma, founded in 1996, operates an online marketplace linking buyers and sellers of all kinds of medical products. The company is a rising star in the lucrative business-to-business market . . .
UPSIDE Magazine, June 1999
Ariba IPO Goes Through the Roof
It looks like the Internet IPO market is still alive and well. Shares of e-commerce software provider Ariba went through the roof on their first day of trading on Wednesday . . . Ariba stock priced at $23 and closed at $90, a remarkable gain of 291 percent . . . E-commerce software looks hot, hot, hot.
E-Commerce Times, June 24, 1999
Web Firm Neoforma Names to Top Post Zollars From Cardinal
Neoforma Inc., in another example of an Internet company recruiting top management from traditional industries, said it is hiring a senior official of Cardinal Health Inc. to be chairman, president and chief executive . . .
Wall Street Journal, June 28, 1999
We had provided its first monetary food. We had reared the company, nurtured it, guided it, imposed our will and ingrained our personal ethics. But we did not control Neoforma...
Jeff and I were much better at creating diversions than avoiding them. Our primary motivation was the release of outside control over us rather than the imposition of control over others. Both of us found ourselves increasingly fighting the need to direct others.
Our roles were still much too significant to ensure that our diversions didn’t disrupt, or even destroy, the company. We needed to hire someone to keep the company on course for the long run. Someone who cared more about the business than the idea of the business. The sooner the better.
I have dabbled in and been transfixed by the workings of power, but in the end I get uncomfortable with its trappings and its unit of measure — money. I like money, but I don’t like the pursuit of money. It is not satisfying. I like to design things. I get a thrill out of helping people create something beautiful, something useful, something original. However, in most cases the pursuit of beauty, usefulness and originality is not enough to run a company. A small company, maybe, but not a large one.
To me, Neoforma was like a child. I had loved it and nurtured it, but now it was growing up. I still loved it, but I didn’t necessarily like everything about it. It wasn’t quite as cute anymore. That is the nature of growing up. I was a part of Neoforma, but Neoforma was becoming a much smaller part of me. I increasingly resented any display by Neoforma of dependency on me.
Jeff was pretty much the same way. His response was not quite as extreme as mine, but he didn’t like the constraint of keeping so many people content. It kept him from pursuing what he really liked to do—he loved to tinker.
When Jeff and I originally became friends, it had been because, not only was I willing to listen to his ideas, but I was able to take them to the next level. Once I did, he’d fiddle with them for awhile. Then I’d receive the dreaded, middle-of-dinner, or seven-in-the-morning phone call. “I have a brilliant idea!”
No hello, no niceties, just out with the idea. He’d call from his kid’s soccer practice. He’d call from an airline counter, interrupting his call with me to yell at the unfortunate messenger of his latest luggage mishap. He’d call from a restaurant restroom, nearly dropping the phone after each plumbing fixture activation.
For cheap entertainment I would sometimes hang up immediately after he said: “I have a brilliant idea!” Then I’d wait to see how long it took him to call me back.
I knew that he wanted to express his displeasure at my rudeness by withholding his wisdom from me, but he found it physically impossible to bear the weight of one of his own brilliant ideas alone.
So he’d always call back. He learned to give the niceties a try, “Wayne ... uh ... how’s it going ... hey I have a brilliant idea!” No pause for me to answer the question. But he was trying.
This year, Jeff hadn’t been calling me as much. He was not himself.
Until Jeff’s rebellion during the last funding round, most of our investors and Board members believed that finding a professional CEO was important, but not critical. In spite of the fact that Jeff and I had both made it clear from the beginning that we did not think we were the right kind of people to run Neoforma in the long run, they had believed that Jeff could do the job for as long as necessary. Now they were finally listening to Jeff’s advice to pursue hiring an experienced CEO.
The investors smelled an IPO. Hints of possible big returns were everywhere. They panicked at the idea that this rare opportunity could slip away. They fished every day, but only caught an IPO once in a great while.
The investors also knew that the placement of a very well-known CEO could substantially amplify their returns. Earlier, they had been unwilling to give up a large part of Neoforma to get a top CEO. Now, they were willing to give up a bigger percentage of a much larger pie.
They hired the best recruiter they could find:
The Top 25 Power Brokers in Silicon Valley JOHN T. THOMPSON, 49
Top dog in Silicon Valley for high tech’s key headhunting firm, he is the one that troubled companies call to find that executive savior . . . Thompson’s latest job may be the toughest: finding a replacement for Gilbert F. Amelio, who was ousted as CEO of Apple Computer in early July.
BusinessWeek, August 25, 1997
I was aghast when I learned how much equity he would receive. “How could anyone be worth that much?” I argued.
“You’ll see,” was the reply.
I was even more concerned when I met John. He was a bespeckled man of average stature. He seemed neither strikingly charming nor particularly engaging. He seemed to be far too self-conscious to be the kind of powerful communicator I had imagined. I couldn’t visualize him relating on a first-name basis to the country’s top executives. But I was told that was exactly what he did for a living.
I was skeptical, but I’d have to put some trust in our investors. They had a lot to lose too.
About a month after we officially hired John, he was ready to present his list of candidates. He hadn’t communicated with us much during the process, so we had no idea what to expect.
On the morning of the day we were scheduled to meet with John, we received an email link to a private website that contained biog- raphies of his proposed candidates. The moment I read the list of candidates I knew why we had hired John. These candidates for the top job at a little company like Neoforma were of a much higher caliber than I had expected. And many of them had already expressed some degree of interest. Reading through the biographies, I knew that Neoforma was about to change completely. Or, maybe it already had and I had simply chosen this moment to accept it.
Included on the list were a few heads or seconds-in-command of large logistics companies. There were even a couple of candidates from the executive suite of Fed Ex, which I would later find out was typical of a high-level search.
There was the legendary head of one of the largest healthcare software companies, the previous head of a large hospital GPO, and the number-two guy at one of the big accounting firms. There were senior executives in the number-two or -three positions of some of the largest healthcare product distributors. And there were a few other candidates too.
What surprised me was that these executives were running businesses with tens of thousands of employees. We didn’t even have a hundred yet.
Everyone on the Board had a slightly different opinion of what we should be looking for in a candidate. Jeff and I believed that healthcare experience was crucial. So did Wally. Others believed that a technology background was most important. Still others believed that aggressive management skills were all that was necessary.
But I can say that, when we viewed the candidate list, all of us would have been thrilled to get almost any of the candidates.
To be continued...