But Gordie Campbell felt good in 1984. Seeq's sales were booming from $9 million to $43 million. The company would turn its first profit in the third quarter of the fiscal year. Campbell, for the first time in his career, felt as though he had arrived. He had a hot company and a hefty stock position. This was sweet.
Frank Caufield didn't think so. He wanted Seeq to stop burning money and start making it. From late '82 on he'd seen a succession of missed schedules, delays, and poor yields. Caufield knew where the company was weak -- operations. Come on, Gordie, let's change some of these people. Campbell dragged his feet.
Why was Caufield leaning on him? Maybe, thought Campbell, he had given his venture capitalists too much of the company. Why don't they go nurture their younger start-ups and stop tinkering with Seeq?
Campbell wanted the chairmanship. He saw his forte as reaching out to the larger world -- forging strategic alliances, raising even more money. He wanted to bring in an operations chief under him. OK, Caufield said, but he found Campbell's candidates potentially subservient.
Soon after the September meeting with Kvamme, Campbell played a higher card in his bid to be chairman. He submitted, then later withdrew, his resignation. Campbell had thrown down this gauntlet during a dicey time for high tech. A lot of high fliers that had gone public in '83 were going into the tank in '84. Kleiner Perkins had taken 10 companies public; not one had failed. With Seeq, the once brightest star, it wasn't really the money that mattered. Kleiner Perkins had already distributed its shares. The firm's name was on the line.
A few weeks later the board met at Seeq around noon. Campbell resurrected the resignation issue. It was accepted. By 2:00 p.m., on October 17, 1984, Campbell was out the door for good.
* * *
Seeq now drifted into the twilight zone. Campbell's successor, Bob MacPherson, Seeq's vice-president of operations, was a man who enjoyed poring over chip designs, not stirring up the troops.
For McCranie, who had come to see Seeq and Campbell as indivisible, Campbell's leaving cut the heart out of the place. But was that really true? McCranie himself had risen in an unspoken way to rival Campbell. It surfaced at company meetings in the form of lively repartee between the two men; Campbell challenging McCranie to sell every chip he made; McCranie chiding back that Campbell couldn't make enough. The employees warmed to this clash of egos. They found something to hew to in the form of the alternative set of values McCranie put forth. In McCranie, Gonia saw "a sense of reality." McCranie was tough but fair. He strived to meet schedules; he kept his word. He recognized individual effort. Campbell's was a more forgiving, elusive presence.
From January through June 1985, sales dropped to $17.2 million from $22.7 million for the same period the year before. Worse, losses rose to $7.8 million from $900,000. Layoffs ensued. They came in waves, only affirming the fear that the company was in a free-fall. People kept wondering when their numbers would be up. In July, MacPherson's was. He was let go and succeeded by a three-man office of the president that would operate on an interim basis: Floyd Kvamme, Gerald Robinson, and Dan McCranie.
The troika was an artifice, a stopgap imposed from outside while Seeq looked for a CEO. They spent a fortune on headhunters, but no one would touch this pariah.
Kvamme thought maybe McCranie could. The two had little in common; one the techno-philosopher, the other the gun for hire. Yet for all McCranie's bravura, a measure of doubt lay close to the surface. Kvamme liked that after Campbell's brazen assurance. The more he studied the man, the more he saw Seeq's next CEO.
McCranie's father's Depression experience had taught McCranie to play it safe, yet that was only one resonance from his past. McCranie's grandfather, a farmer, had traded commodities. Cotton futures. There was appetite for risk as well. McCranie's hunger grew when he confronted his private horror: ending up 60 years old, camped out in the lobby at Hughes Aircraft, trying to sell chips to "some 27-year-old snot-nosed engineer." It was time to jump at the job.
* * *
Dan McCranie is a dark-haired man of medium height and boyish charm, ardent about staying in shape. He walks on his hands to exercise his upper body, routinely covering 100 yards before the blood rushing to his head makes him dizzy.
When McCranie was thrust into the presidency of the company, all he had known was the business equivalent of putting one foot in front of the other -- sales. But selling Seeq out of its dilemma wasn't going to cut it. By May 1986, Seeq, the company that had raised nearly $70 million, had $13,000 in the bank. In its most recent quarter it had reported losses of $4 million on sales of just $8.5 million. Overhead was so high that for the year it would spend $54 million on the way to revenues of only $30 million. A rigorous restructuring was in order, but when McCranie looked in the mirror he saw a "fiscal midget." He needed to learn to walk on his hands again.
He closeted himself with books on finance and listened intently to the "tutorial" given him by the company's chief financial officer. McCranie got a few customers to pay their bills ahead of time to tide Seeq over, and then -- reflexively -- he hit the road, hat in hand, looking to sell as much of the company as people would pay cash to buy. "The Valley syndrome always had been: 'You get into trouble, you ask for more money.' " This time the ploy didn't work. "One investment banker told me my case was hopeless -- at any price." At least he was honest. A lot of the money men would string McCranie along, tell him maybe and tomorrow when they really meant no. That made him mad; they were wasting his time. He was more comfortable with customers. At least they spoke his language. Or used to. . . .
