Why Some Companies Make It And Others Don’t

Why Some Companies Make It And Others Don't - Interview with David Hornik

I spoke to David Hornik, who has worked with technology startups throughout the software sector.  In 2000, David joined August Capital to invest broadly in information technology companies, with a focus on enterprise application and infrastructure software, as well as consumer facing software and services. Prior to joining August Capital, David was an intellectual property and corporate attorney at Venture Law Group and Perkins Coie. In his legal practice, David represented high tech startups in all aspects of their formation, financing, and operations.  In the following brief interview, Hornik talks about why some companies are more successful than others, how to scale a company, build a culture, vetting employees and more.

Dan Schawbel: Why are some companies more successful than others? What does the DNA of a successful company look like?

David Hornik: If you look at the DNA of any great company, you will see an amazing team at the core. While a great team alone is not sufficient to build a successful business, it is 90% of the battle. Great teams can attract other great people. Great teams can build great products. Great teams can raise money from great investors. The last 10% of the equation is a great market. A great team pursuing a mediocre market may be able to build an OK business. But a great team pursuing a great market will be able to build something special.

Schawbel: What should startup founders be mindful of as they create and scale their companies?

Hornik: Company building is hard. And it is a team sport. Find great people and trust them to make good choices. Find great advisors and trust them to give good counsel. Find great investors and trust them to be your partners. Going it alone is a long and lonely path.

Schawbel: How do you go about scaling a company, while maintaining a strong corporate culture?

Hornik: Every company has standard-bearers for the culture. Those folks are the ones who brim with enthusiasm for the company, spread company lore, only wear company apparel, call out behavior that is inconsistent with the mores of the company, etc. So long as the keepers of the culture are treated well and encouraged to spread the corporate gospel, the company values will stay strong no matter how quickly the business grows.

Schawbel: What is your process of vetting advisors, employees and CEOs?

Hornik: There is no substitute for speaking with those who know them best. Talk with people for whom they have worked. Talk with people with whom they’ve worked. Talk with people who have worked for them. You will quickly get a consistent picture.

Schawbel: How do you get every employee aligned with the company vision, especially as the company matures?

Hornik: Great leaders inspire teams to follow. I have seen some amazing entrepreneurs over time and they have no problem engaging the entire company around a shared vision. But great leaders also inspire teams to think independently and to innovate. Company vision can never be static. The best leaders listen to those around them and adapt.

Schawbel: Can you give examples of great leaders you’ve worked with and explain why people follow them?

Hornik: One of the great things about Venture Capital is that you get to work with amazing people. I have worked with stunning domain experts who garner the respect of their employees because of their incredible knowledge, like Kevin Johnson from Ebates or Rene Lacerte from PayCycle and Bill.com. I have worked with incredible managers who are masters of team building and leadership, like Godfrey Sullivan from Splunk or Danny Shader from PayNearMe. I have worked with incredible product visionaries, who invent the future, like Selina Tobaccowala and Al Lieb from Evite. I have worked with charismatic young leaders who are wise beyond their years, like Ashvin Kumar from TopHatter and Bill Clerico from WePay. I’ve worked with brilliant technologists who lead by example, like Artur Bergman from Fastly. I am honored to have the great fortune to work with these amazing entrepreneurs, as well as the many other spectacular leaders I didn’t have room to list.

Schawbel: How do you balance out a team’s strengths and weaknesses? Is it smart to find people who are specialists or generalists to fill gaps in a team?

Hornik: There is clearly value in diversity. But there is no single way to build a great company. Some companies thrive when made up entirely of technical talent. Other companies thrive when founded by business thinkers and product visionaries. Over time, companies can only scale when made up of experts across a range of disciplines (technology, sales, finance, legal, product, etc.). But focus and specialization can prove powerful at the earliest stages of company building.

Schawbel: How do you know if the company is pursuing the right market?

Hornik: Markets are tricky. The biggest and best markets don’t exist when you start out. Great companies create markets. Sometimes a great company creates a market out of whole cloth. My firm funded Atheros Communications when there was no such thing as Wifi, yet Atheros went on to be the leading chip provider for all things Wifi. My firm funded Splunk before there was any discussion of Big Data, yet Splunk went on to become the poster child for Big Data. Sometimes a great company reinvents an old market. My partner Howard was the earliest investor in Skype, which went on to reinvent telecommunications. My firm recently invested in Fastly, which is reinventing the Content Distribution Network, and AvantCredit, which is reinventing online lending. In each instance, there was a massive unmet need and billions of dollars of commerce attached to solving the problem.

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