The Secret Life of a Serial CEO
Bob Cramer has piloted six companies to big paydays. Now he has found a start-up that offers something else--excitement, poetry, a legacy.
Chris Buck
HOW TREO, WILL TRAVEL: After selling his company, Bob Cramer was flooded with calls from VCs.
Chris Buck
WHAT'S NEXT: Cramer started entertaining offers from a New York-based software start-up.
October 31, 2006
Papa Razzi Restaurant, Wayland, Mass
Coming in out of the light drizzle to this pop-tony restaurant in this swell Boston suburb, Bob Cramer looks like a man whose burdens do not include doubt, regret, or second-guessing. He is both energetic and at ease, confident and engaging. He occasionally checks the incoming messages on his Treo in an offhand way, as if he's doing so not out of need or concern, but rather out of mild curiosity and vestigial habit. He is trim and looks younger than his 48 years. He's dressed in a blazer over designer T-shirt and jeans--like a man who could afford to be in a $2,000 suit but wouldn't be caught dead in one.
He's here to explain to me what it's like to be a serial high-tech CEO between fast-growth companies, and what he plans to do following the success of LiveVault. Cramer brought that online data-storage company to $20 million in sales; in December 2005, the company was acquired by Iron Mountain (NYSE:IRM) for more than $50 million. Cramer made a bundle on the deal and believes he could have made perhaps twice as much if the founders had followed his advice to hold off on selling while the company was still growing like crazy. But he dismisses the hypothetical lost millions with a wave and a smile. He's plenty well-off. "I don't have to work," he says. "I can live off the interest."
At the moment, he is being courted by a small horde of top VCs who are intimately familiar with his string of successes--which dates back to Oracle Software, where he was a key sales executive during that company's legendary explosive growth, and runs through several other software companies, the last three of which he ran as CEO. "I've never had a failure," he says. The VCs began calling right after LiveVault was sold. But Cramer told them to give him some space for a year. He wanted to spend more time with his wife and young children. He wanted to reconnect with two of his passions, painting and music--he played in a band as a kid; now he practices in a small studio he's put together in his basement. He travels to Mississippi to help build houses for victims of Hurricane Katrina. He and his wife take in foster children. And right now, he's not quite ready to give all that up to go full bore into company-hunting mode. "Exploring opportunities can make you busier than a full-time job," he says.
Still, he recently started taking calls from select VCs, just to get a sense of what's out there. Nothing seems seriously tempting. "I have an offer to run a data-storage company," he says. "Maybe I'll think about it if I can't find anything else." In the meantime, he's networking with a group of CEOs that meets once a quarter or so. And he's advising a couple of small companies. One consists of a few guys who want to take a new approach to producing video advertising for the Internet. Another is a music start-up that lets independent bands manage themselves online. Though neither seems like the kind of high-powered opportunity he's looking for, he appreciates the chance to combine business with his artistic side. Cramer's degrees were in engineering, he cut his teeth at Bell Labs, and his companies have all been hard-core software ventures. But now he's thinking that when he does finally pounce, it just might be on a start-up with a little more poetry to it than offline storage or database software. "I'd love to find something that I can personally relate to," he says.
Perhaps that's being a bit fanciful, he concedes. But when it does finally come to taking the reins of a company, he's developed certain rules and constraints that he won't compromise. For example, he doesn't want to create a company from scratch; he wants to take over a start-up that a founder has already piloted against all odds to real promise. Another rule: When you take over, take over. "You have to step in and assert immediate control, even if others in the company aren't ready to accept a new leader," Cramer says. At the same time, he adds, you have to find a way to win over people, especially the founder, without bludgeoning them. And finally, he wants a company that can attract customers virally on the Web--that is, by finding a way to get Internet users to spread the word to one another. LiveVault hit it big, he notes, after he ordered up a funny video, starring John Cleese, that was downloaded some 300,000 times. "If you can't pull something like that off, then your cost of customer acquisition will kill your margins," he says.
Meanwhile, he says, glancing absently at his Treo, there is no need to rush to try to find the perfect company. He seems to have no idea that it has already found him.
Febuary 26, 2007
Starbucks, Wayland, Mass.
Four months later, Cramer seems a little different than I remember him. He appears a bit sharper-edged, a little faster to pull out his Treo. He's speaking more quickly. Maybe it's just the coffee.
He explains that he stopped taking calls about CEO opportunities shortly after our last meeting. "It's like looking for a house," he says. "After a month, you've seen everything promising on the market, and there's no point in looking anymore." But he recently started looking again. There's a biodiesel start-up that looks interesting, but he's made a decision: He doesn't want to settle for something interesting. He's determined to build the Next Big Thing online.
Any promising prospects? As a matter of fact, he knows one outfit that might come close, though it's not one he intends to run. He recently joined the board of that band-management start-up, which is called Nimbit. The real money in the music business, he points out, has traditionally been in high-profile bands that are promoted by major record labels. But now that music is freely sold, bought, and shared on the Web, artists don't necessarily need the big-money backing of a label. They can do nearly everything themselves online--and make more money because they get to keep most of it. As a result, the money flowing to independent bands is expected to grow from about 20 percent of music industry revenue to more than half; indie music is already a $16 billion market, he says. There are plenty of online sites that help independent musicians sell MP3s, and sites that sell CDs, and sites that sell merchandise, and sites that sell tickets to concerts, making for a heavily fragmented industry. What's missing is a service that coordinates and monitors all of these activities. That's Nimbit. "I love the vision," he says. "And it addresses that artistic side of me."
