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The Wayward Steer

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At Deep Springs, the ranch manager told great stories. He described how they used to drive cattle a thousand miles from Texas to the stockyards in Chicago. In the herd, one steer would take the lead and the others would follow. This alpha steer became recognizable to the cowboys and was a great help if he kept his bearings.  But sometimes this leader had a tendency to veer off to the side, taking the herd with him. Getting the herd back on track was hard work for the cowboys, so if the lead steer swerved too often, there was no choice but to shoot him in the head. Keeping him wasn’t worth the trouble. So many ranching lessons apply in business.  — Dave Hitz co-founder of NetApp

This story was told by Hitz when he and a few others met with the NetApp board of directors after raising $1.5 million dollars from 24 angel investors in chunks of $50K and $100K followed by a Venture Capital seed round of $5 Million.  The CEO was great at fundraising but not a good manager. Given that the initial fundraising rounds were over, and the CEO’s management capability was in question, Hitz worked to oust him.

Two rules for CEO’s of startups

  1. Never keep more in your office than you can fit in a gym bag.
  2. Always keep a gym bag in your office.

After the meeting, the CEO was out.  Replaced with a CEO that could take NetApp beyond preliminary fundraising to product development and marketing.

See the initial NetApp Business Plan Overview from 1992 and “lessons learned” –
https://frrl.files.wordpress.com/2010/09/netappbizplan1992.pdf

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Written by frrl

September 29, 2010 at 1:23 pm

Posted in Uncategorized

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