When to Say Goodbye to a Founding Partner
Roberto Angulo is founder and CEO of AfterCollege, a San Francisco company that connects college students and alumni--who post in university and department-specific networks--with employers. AfterCollege is on track to earn $7 million in 2012. Angulo told his story to Inc.'s Leigh Buchanan.
In 1999, I flew to Mexico for my grandmother's funeral. I was talking to my great uncle, whom I hadn't seen since I was a kid, when I noticed that his gold watch had a GTE insignia on it. GTE, the giant telecom company, had just acquired my employer, the Internet pioneer Bolt, Beranek, and Newman. So naturally, I asked about his experience there. It turned out my uncle, too, had worked for a smaller company that was swallowed by GTE. He spent 30 or 40 years there, eventually becoming head of engineering, with something like 4,000 people reporting to him.
I was incredibly impressed. But this was a funeral, and I was thinking about mortality, about regrets. I asked myself: Will that be enough at the end of my life? A gold watch? My early career and my uncle's had run almost parallel. But suddenly I knew I wanted more. I quit my job and got down to work on AfterCollege.
I had started AfterCollege in my dorm room two years earlier, when I was an economics major at Stanford. At BBN, I'd kept it running as a free service--just for fun. Three other people were instrumental in turning it into a business. First my girlfriend--now my wife. She was my original partner, but we battled constantly over strategy and the business plan. When we realized we couldn't work together without killing each other, she dropped out of day-to-day operations. (She's still on our board.)
Needing help, I returned to Stanford and recruited two recent grads, one to manage sales and the other to manage relationships with universities and academic departments. The three of us were as close as co-founders could be. We made all decisions by consensus, usually beer-lubricated consensus. We hung out together and traveled together. I remember the three of us taking the redeye to New York for an early-morning business meeting and struggling into our suits in a parking lot. We spent the next three weeks driving all over the East Coast. A lot of bonding goes on when you're stuck at a tollbooth with a highway full of honking cars and no change because we don't have toll roads in California.
But diverging visions can break apart the closest partnerships. In the middle of the past decade, we were growing 30% a year. I thought that was too slow--we should be doubling. I had huge ambitions. One of my co-founders agreed with me, but the other thought we were fine. He wanted us to take our time, expand as we developed people from the bottom up. But none of us had any meaningful experience as managers outside the business. How could we develop new managers inside it? And how long would that take?
You could argue it was overkill for a company of 16 or 17 to hire professional management. But I wanted to work top down--bring in experienced people and let them develop the employees under them and shape our organization. I wasn't used to pulling rank. But I was the CEO, and this was my call.
In 2007 and 2008, I hired vice presidents of sales, engineering, and university relations. And everything changed. No more everyone-weighs-in-on-everything. The VPs became responsible for their functions. The new hires made decisions quickly and backed up their arguments with data. With these guys on board, it was like Star Wars. The Force was with us.
My co-founder didn't like it. Increased speed meant increased pressure. He had to give up a few of his reports. He didn't hide his unhappiness, and I could see where the relationship was heading. But I didn't do anything to stop it. It reached the point where my old friend and I weren't comfortable being in the office together.
In 2008, he told me he was moving on. Although we were polite, we were both angry. He moved to the East Coast and took a job with an energy company. We didn't speak for two years. Then one day recently he contacted me with a question about the stock options he still holds. We started corresponding--formally, at first, and then in warmer tones.
Your friendship or your company: It's a tough choice. As CEO, I think you have to choose your company. Given time, you may end up with both.