In an industry that thrives on new, shiny objects and next-big-things, Gene Banman has successfully led technology startups and divisions for nearly four decades. After directing the Workstation business, thin client development, and the Nihon-Sun division as part of the senior management team at Sun Microsystems, Banman began his CEO career, holding the reins at three companies over the past 15 years before becoming CEO at DriveScale, maker of software composable infrastructure for data centers.
Banman is just one of many tech veterans chosen to lead Silicon Valley startups in recent years. I asked Banman about the leadership lessons he’s bringing to the table at DriveScale and why “experience” is back in vogue on tech executive teams.
M.R.: Considering DriveScale is producing a completely new type of software product, how does your leadership experience from prior CEO posts help you to drive success in your new position?
Gene Banman: For the past eight years I’ve been a serial entrepreneur, and each CEO position – at NetContinuum, Zero Motorcycles, ClearPower Systems and now DriveScale – has taught me something new. My days leading companies built on the first chapter of my career at Sun Microsystems during its heyday from 1985 to 2000, where I was a product manager, sales rep, President of Sun Japan and GM of the Workstation business unit. Instead of taking the path of least resistance after departing Sun and going to another large technology company, I took the road less traveled and dove into the startup world. In each company I joined, we set out to create a new category. Perfect training for what we are doing at DriveScale!
At NetContinuum, I worked to establish a new kind of cybersecurity technology called application layer firewall, which provides smart protection against hackers to the world’s commercial websites. An important leadership lesson I learned during this post was that the technology strategy had to match the “go-to-market” strategy. ASICs are for high volume applications with multiple OEM customers, not for a single end user product in a new category. High burn rate companies can’t survive the incubation time to build a new category. NetContinuum got sold to Barracuda Networks. Our competitor, Imperva, just went public after 10 years of building the market. They were a software-only solution with a small team.
While CEO at Zero Motorcycles, I helped bring electric drive technology to the fun part of the transportation industry while putting the company on the map. I will always be thankful for deep analytical marketing and financial training imposed on me by Zero’s investors. They are the most sophisticated investors I’ve ever worked with. They taught me the value of analysis.
Leading the waste heat generator company, ClearPower Systems, I learned that categories have their time “in the sun” and no matter how positive the business plan, when the “sun goes down,” no one is going to invest. Silicon Valley VCs had lost so much money in Green Tech, that their LPs were telling them “no more green tech deals!” We couldn’t raise money beyond our seed round. We ended up selling to one of our customers.
M.R.: As an industry veteran, what changes have you seen in Silicon Valley leadership culture over the past few decades?
Gene: I am an almost 40-year veteran of Silicon Valley and have witnessed the meteoric rise of this region to the tech mecca that it is today. At that time, M&A wasn’t what it is today. Sure there were some mergers, but in the 1980s, every startup’s goal was an IPO. If successful, entrepreneurs expected to run their companies for decades.
In the ‘90s, Cisco, Symantec and EMC along with many others, created an environment where success could also mean selling your company. These big companies had a strategy of building their businesses through acquisitions rather through organic growth, which created a thriving M&A market.
The 2000s brought consumer marketing to Silicon Valley in a major way. Sure the PC industry had brought some of this in the ‘80s and ‘90s, but that was “nerdy” consumer marketing; speeds and feeds still dominated the discussion. We were mostly selling IT equipment B2B. Sure, we wore chinos and sport shirts to work, rather than suits. But in the 2000s, jeans and T-shirts hit the non-engineering departments, (engineers had always worn jeans and T-shirts). Design became super important. And the new breed of entrepreneurs was focused on the Web and consumer apps, not data center infrastructure. The social media companies became the exemplars of Silicon Valley rather than the chip and computer companies. Free food, massages, laundry service, and other perks became part of the competitive environment for attracting top employees.
2017 may be seen as the watershed year in which startup managements realize that running a company is about more than providing employees with great snacks, gourmet cafeterias, posh gyms and flexible work hours. Amid the ongoing fallout from the scandals at companies such as Uber, leadership teams must place integrity and honesty at the forefront of their companies’ ethos – creating and supporting more initiatives to inculcate and sharpen these qualities and (hopefully) turning the tide of the perceived (negative) culture of Silicon Valley. If everyone at the top becomes more aware and makes the behaviors of integrity and honesty a priority for both internal and external communications, 2018 could well be a turning point for the tech industry in restoring its reputation.
M.R.: How does experience help you overcome the challenges of running a tech startup?
Gene: There are pros and cons that come with both youth and experience. The young entrepreneur can bring incredible focus and energy to his or her company. The experienced entrepreneur, on the other hand, knows what works – and what doesn’t – and therefore, can work much more efficiently.
To a young entrepreneur, success may seem like life or death. An experienced entrepreneur knows that success isn’t worth compromising ethics, honesty and responsible behavior. In fact, ethics, honesty, and responsible behavior help a company be successful!
Seasoned execs have extensive networks of contacts. They know the right person to hire for each opening, often with just a phone call. They can call on their old business acquaintances in prospect companies and short circuit months of cold calling.
At DriveScale, we’re creating an entirely new category and solving a very complex technology problem: creating the first software composable infrastructure solution for the mainstream market. Our executive team has decades upon decades of combined experience in developing products for this space. We know how to build supportable code, high availability designs, security built in from the start – and on and on. Why? We draw from decades of on-the-job training.
M.R. Rangaswami is the co-founder of Sand Hill Group and publisher of SandHill.com.