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Speaker: Dr. Mike Lynch, Founder & CEO of Autonomy
The speech - 'The history of Autonomy and the lessons learned'
Event Review:
The history of Autonomy and the lessons learned
• Autonomy is the largest software company in the UK with a $6bn cap.
• Founded 12 years ago by two people
• Autonomy is purely a software business
- 92% gross margin
- Operating margin 45-50%
Where it all started
• No formal business experience
• Academic at Cambridge
• Had the idea to create a business
• Finance required:
- Banks
- Venture capital
- DTI Innovation award, SMART awards etc.
• Hung around in pubs and a Rock Group Manager lent us £2000.
• Learned what really matters to do with the money
Focus • Technology is a perishable asset
• The company grew and went to the U.S.
• Had problems getting started - played to the American view of the British
• Decided to go public – the world took no notice
• A Fund Manager in Milwaukee bought lots of stock because he liked the name
• The dotcom crash happened
• The business was valued for less then cash at 80p
• The company grew and took over one main US rival – Verify – for $500 million
• Zantaz and Interwoven takeovers followed.
What have we learned?
1. Focus – work on the 5 emails that matter and get it done well and quickly
2. Stopping things – always more difficult to stop things happening
3. ‘Knife Fight’ – Don’t even go to a knife fight unless you are carrying a gun. Don’t start something unless you have an unfair advantage
4. The myth of ‘properly’ – do exactly the opposite. Infects all businesses – ask why something is being done.
5. ‘The high class problem’ – worry about today’s problems and not those that might happen in the future.
6. ‘The Hungry Wolf’ – When there are no elks around, wolves will eat lichen off the rocks if necessary
7. ‘Rusty & The Clown’ – based on a Larson cartoon. Do something irrational to completely floor them. Don’t get drawn into a fight on someone else’s terms.
8. ‘Seedling trampling’ – stop shooting down any good ideas. Sometimes it’s easier to trample on a good idea in order to look good.
9. ‘Who’s who on the bus’ – get the right people
10. Culture – get the culture right. Autonomy rewards good people.
11. ‘Frankenstein’s Castle’ – acquired companies have a different culture. There needs to be a clear understanding of what is acceptable or not.
12. ‘Turning up the contrast’ – the brightness covers everybody whereas the contrast highlights individuals. Autonomy looks after the people who are good – gave a quarter of the people a pay rise.
13. ‘Entrails’ – People are expected to be clairvoyant i.e. foresee when the recession will end. We need to plan for what to do when certain things happen
14. ‘Market practice’ – when you find good advisors, hang on to them i.e lawyers, accountants, merchant bankers etc.
The recession environment
Autonomy has lived through the dotcom era. The economy is like farming – things will come and go in cycles. Winter will come, summer will come and you need to plan for both.
We are experiencing an explosion of information right now and undergoing a period of extreme change. At times like these we need to look for one of the constants in life – like Chairmen having lunch at Claridges!
Date: Tuesday 2nd June 2009