The Forlorn Server; or, Don’t Mistake Unrequited Love for an Actual Deal
If there’s only one passionate party in a relationship it’s unrequited love.
Here’s how I learned it the hard way.
The Dartmouth Football Team
After Rocket Science I took some time off and consulted for the very VCs who lost lots of money on the company. The VCs suggested I should spend a day at Onyx Software, an early pioneer in sales automation in Seattle.
In my first meeting with Onyx I was a bit nonplussed when the management team started trickling into their boardroom. Their VP of sales was about 6’3″ and seemed to be almost as wide. Next two more of their execs walked in each looking about 6’ 5” and it seemed they had to turn sideways to get through the door. They all looked like they could have gotten jobs as bouncers at a nightclub. I remember thinking, there’s no way their CEO can be any taller—he’s probably 5’2″. Wrong. Brent Frei, the Onyx CEO, walks in and he looked about 6’8″ and something told me he could tear telephone books in half. I jokingly said, “If the software business doesn’t work out you guys got a pretty good football team here.” Without missing a beat Brent said, “Nah, we already did that. We were the Dartmouth football team front defensive three.” Oh.
But that wasn’t the only surprise of the day. While I thought I was consulting, Onyx was actually trying to recruit me as their VP of marketing. At the end of the day I came away thinking it was smart and aggressive team, thought the world of Brent Frei as a CEO and knew Onyx was going to succeed—despite their Microsoft monoculture. With an unexpected job offer in hand I spent the plane flight home concluding that our family had already planted roots too deep to move to Seattle.
But in that one day I had learned a lot about sales automation that would shape my thinking when we founded Epiphany.
I Know A Great Customer
A year later my co-founders and I had formed Epiphany. As other startups were quickly automating all the departments of large corporations (SAP in manufacturing, Oracle in finance, Siebel and Onyx in sales) our first thought was that our company was going to automate enterprise-marketing departments. And along with that first customer hypothesis I had the brilliant hypothesis that my channel partner should be Onyx. I thought, “If they already selling to the sales department Epiphany’s products could easily be cross-sold to the marketing department.”
So I called on my friends at Onyx and got on a plane to Seattle. They were growing quickly and doing all they could to keep up with their own sales but they were kind enough to hear me out. I outlined how our two products could be technically integrated together, how they could make much more money selling both and why it was a great deal for both companies. They had lots of objections but I turned on the sales charm and by the end of the meeting had “convinced them” to let us integrate both our systems to see what the result was. I made the deal painless by telling them that we would do the work for free because when they saw the result they’d love it and agree to resell our product. I left with enough code so our engineers could get started immediately.
Bad idea. But I didn’t realize that at the time.
It’s Only a Month of Work
Back at Epiphany I convinced my co-founders that integrating the two systems was worth the effort and they dove in. Onyx gave us an engineering contact and he helped our team make sense of their system. One of the Onyx product managers got engaged and became an enthusiastic earlyvanglist. The integration effort probably used up a calendar month of our engineering time and a few hours of theirs. But when it was done the integrated system was awesome. No one had anything like this. We shipped a complete server up to Onyx (this is long before the cloud) and they assured us they would start evaluating it.
A week goes by and there’s radio silence—nothing is heard from them. Another week, still no news. In fact, no one is returning our calls at all. Finally I decide to get on a plane and see what has happened to our “deal.”
Instead of being welcomed by the whole Onyx exec staff, this time a clearly uncomfortable product manager met me. “Well how do like our integrated system?” I asked. “And by the way where is it? Do you have it your demo room showing it to potential customers?” I had a bad feeling when he wouldn’t make eye contact. Without saying a word he walked me over to a closet in the hallway. He opened the door and pointed to our server sitting forlornly in the corner, unplugged. I was speechless. “I’m really sorry” he barely whispered. “I tried to convince everyone.” Now a decade and a half later the sight of the server literally sitting next to the brooms, mops, and buckets is still seared into my brain.
I had poured everything into making this work and my dreams had been relegated to the janitor’s closet. My heart was broken. I managed to sputter out, “Why aren’t you working on integrating our systems?”
Just then their VP of sales came by and gently pulled me into a conference room letting a pretty stressed product manager exhale. “Steve, you did a great sales job on us. We really were true believers when you were in our conference room. But when you left we concluded over the last month that this is your business, not ours. We’re just running as hard and fast as we can to make ours succeed.”
I realized that the mistake wasn’t my vision. Nor was it my passion for the idea. Or convincing Onyx that it was a great idea. And besides not being able to tell me straight out, Onyx did nothing wrong. My mistake was pretty simple—when I left their board room a month earlier I was the only one who had an active commitment and obligation to make the deal successful. It may seem like a simple tactical mistake, but it in fact it was fatal. They put none of their resources in the project—no real engineering commitment, no dollars, no orders, no joint customer calls.
It had been a one-way relationship the day I had left their building.
It would be 15 years before I would make this mistake again.
- When you don’t charge for something people don’t value it
- When your “partners” aren’t putting up proportional value it’s not a relationship
- Cheerleading earlyvangelists are critical but ultimately you need to be in constant communication with people with authority (to sign checks, to do a deal, to commit resources, etc.)
- Your reality distortion field may hinder your ability to realize that you’re the only one marching in the parade
- If there’s only one passionate party in a deal it’s unrequited love