Interview with Jean Kovacs
Date: August 19, 2008
Jean Kovacs: Sterling Commerce [music]
Lee Kennedy: Hi. This is Lee Kennedy and I'm on the board of NCWIT, the National Center for Women & Information Technology, and I'm also a serial entrepreneur and the founder of Tricalyx. I'm here today with NCWIT and we're doing a series of interviews that we're having with just fabulous women who have started IT companies in a variety of sectors all who have wonderful stories to tell us about being entrepreneurs. Today with me I have Lucy Sanders and Lucy is the CEO of NCWIT, the National Center for Women & Information Technology. Hi, Lucy.
Lucy Sanders: Hello.
Lee: I also have Larry Nelson who's from w3w3.com. Hi Larry. How are you?
Larry Nelson: Hello. I'm a serial entrepreneur, too. So, I love this series.
Lee: Well, great. Larry, also tell us a little bit about W3W3.
Larry: Well, we're an Internet based radio show, and we host and archive everything. We've been doing it actually since 1998, but we have hundreds of shows that we do a podcast with also. But, we love to focus in the high tech arena.
Lee: Great. OK and just to get down to it, today we're interviewing Jean Kovacs. Hello, Jean.
Jean Kovacs: Hello. How are you?
Lee: Just great. We're happy to have you here today. Jean is the former CEO of Comergent Technologies and she also had a number of senior positions at Sterling and other companies along the way. And Jean has a wonderful background and we're excited to have her here today. Jean, before we start in, did you want to just tell us a bit about Comergent?
Jean: Comergent was started in 1998. We focused on e-commerce for the enterprise. So, we sold software to enterprises who wanted to sell over the Internet. So, our customers were companies such as Cisco, Best Buy, JCPenney. We had a lot of bio medical companies selling devices over the Internet. So really, any large enterprise that wanted to sell their products or sell their services over the web.
Lee: Great. So, why don't we go ahead and jump into some of the questions we had for you. Looking at your background, you've worked with a number of different technologies. What are you thinking are some of the really cool technologies today?
Jean: I think the whole area of social networking is extremely exciting. I think the potential there is really untapped. I see more and more people using it, and I see more and more enterprises and people in business using it. So, I think that's an area that we should all be looking at. I also think anything around mobile devices. When you travel, especially outside the US and you just see how people, basically, live on their cellphones. I think there are going to be a lot of applications and ideas around that; how you make the cellphone be the center of the person's universe. Many of these people don't have PCs at home or people, you hear now, don't even have land lines. So, anything that runs on a mobile device, I think, is also a very interesting area.
Lee: Well, and mobility is a topic that we've been hearing a lot about in this interview series. It really is quite a hot industry sector, for sure. So, tell me a bit more about the technologies and social networking that you're thinking about. What strikes you as being the most adventuresome there?
Jean: I look at it and say there's a lot of adventuresome ideas out there. But, being someone who's built a couple of companies -- took one public and sold one -- I look at how do you take an adventuresome idea and monetize it. So, I think that's the big question mark. How do you run these as businesses and make money so you're impacting people's lives? I think a lot of the Web 2.0 technologies that are being used are very exciting and you see just last week or the week before, they announced that Facebook users exceeded MySpace and sites like Linked In and you're seeing these become now more and more used in people's daily lives. I used to get two or three Linked In requests a day. Suddenly, over the last week or two, I'm getting Facebook requests. And so, I think you'll see it's not just young people. It's people that are starting to use this in their daily lives.
Lee: I think social networking is really an interesting area as well and we see young people using that quite a bit. You mentioned that you've built a couple companies, you've taken some public. So, you've seen a lot as an entrepreneur. What we'd like to ask you is why are you an entrepreneur?
Jean: Wow. That's a great question. The first company that I started, which was back in 1990, in a way I almost fell into it. I was with a company. We were looking at selling through the channel. It was a Unix software company and there weren't any Unix channels. And I remember going to some venture capitalist friends of mine and saying, "Is anyone doing this?" And the VCs would say to me, "No. But, tell me more." So, I started thinking about it more and putting together a business plan. Literally, at one point, a very dear friend of mine said, "We are very interested in this. But, you're not going to fund it unless you have a male partner, preferably one with gray hair." Now, this is back in 1990. So, it was a long time ago. Things are very different now. And so, I went out and found someone who was interested in started a company, and we got excited together about it and we went out and raised money. But, it was - I never set out and said, "Ooo. I'm an entrepreneur. Let me go find an idea." I was in a company that needed something in the market that wasn't there. I think that's a really big difference. I think it's a good thing to think about. I've seen too many people think they're entrepreneurs and they go off trying to find something. And I think look for the idea first and then look into yourself and say, "Am I the person that can turn this idea into a reality? And can I deal with the good times and the bad?" It's not all about being the guy that's made $2 billion. There's a lot of ups and downs. So, you really need to have that tenaciousness to get it done.
Larry: I like that. Find a need and fill it. Jean, let me ask this. You've been with huge companies. You've been part of buy outs and you've venture capitalists and everything. Along the way, who are some people or a person in particular maybe that has really had a major influence with you?
Jean: Larry, that's a great question and I can't think of anyone. It's interesting. In many ways, I learned more from bad managers than I did from great managers.
Lucy: That is so true.
Jean: And don't worry, I'm not going to say any of those names on the air. When you have a bad manager, you drive home at night and you think about what happened, what you would do differently, how you would never do that to your team and you process it. I don't think when we have a great manager, you drive home thinking about, "Oh, wow." You probably intuit it, but you don't analyze it as much. And so, in many ways, I think it was the managers that weren't so great that I learned a lot more from and just made mental notes from.
Lee: That is so important. We haven't had that observation made yet on this interview series and that is so important because it's important to almost take an anthropological mindset with some of these things and think about a bad manager maybe certainly is a bad manager and perhaps a thorn in your side. But also, somebody that can teach you what not to do.
Jean: I know. It's a funny thing. But, it really does work. So, all you bad mangers out there, keep managing away.
Lee: Yes and we're just going to be studying you.
Jean: Well, and it's a little bit similar to learning from your failures and mistakes from somebody else's failures.
Lee: That's right. Well, that's very sage advice.
Lucy: Well, I guess, sort of along that line one of the questions for you is in your career you've done a lot of really interesting things. What would you say is the toughest thing you've had to do?
Jean: Clearly, we started Comergent in 1998 and developed the product. Cisco was our first customer. We raised an amazing amount of money in 2000, more than we ever thought was possible and then, we hit the downturn. Now, the good news is that we never went crazy with the money, but we did come to a point in time where we needed to restructure the company. That was the hardest thing we ever had to do. We decided to do it differently. We met with the people that we were going to let go. We told them what was happening. We also met with the people who weren't going to be letting go and said, "Hey, the guys in the next room are your co-workers. They're your friends. We're not going to do this, march them to their desks and let them collect their things and sort of skulk on out. They're going to take whatever time they need, take them to lunch and do whatever you need to help them. Nothing has changed except we need to economize a bit, and we're going to try to hire them back as soon as we can. And, you know, we hired back probably 70 or 80 percent. We didn't let go that many, less than 20, but we hired back most of them over the next year. So, we all learned as a company, but it was a very tough thing because at any small company you develop relationships.
Lee: In this series of interviews I think laying off people has been the number one challenge for everyone. It's nice how you did it in a real human way.
Jean: Yeah, because you know it's no fault of anyone. The person that gets let go, it's not because they're the weakest or they did something wrong. Often, it's the dynamics of the business and where you decide to reduce head counts. And so, it just drives me crazy when I see companies go through that, and they march the people through the office and stand there while they clean out their desks. We really said, hey, these are our co-workers. We're going to treat them with respect, today, tomorrow and we're going to do our best to grow the business and bring them back in. And everyone that we could bring back in we did.
Lucy: That is so important. I'm sure we all know of people who were let go in the way that you mentioned. That is very dehumanizing, and so not only is the person out looking for a new job but they often have a crisis of confidence.
Lee: And it can really be a horrible thing for the culture and the morale of the people that are left, and that's why some companies have such a hard time starting back up again because people are feeling like, oh when is it going to be me?
Jean: Right. We were very open through everything, so it's not like it was a surprise and a big ax came down and we took probably 15 percent of the company out, and that was enough and like I said, I mean, it was a good lesson for all of us. Fortunately, a lot of people-where we know of one company in our space that did like seven or eight. Everyone was waiting for the next one, the next one, the next one.
Lucy: And I think, one thing that I'm taking from this as well, in those hard times you do learn a lot, and you learn a lot about dealing with people. If you were sitting here with young people and giving them other advice about entrepreneurship, what advice would you give them. And Larry and Lee, I believe it's right. You're the chair of the board of Build. Is that correct?
Jean: Yes, it's non-profit.
Lucy: Non-profit that really focuses on underserved kids and getting them interested in entrepreneurship. We're especially eager to hear your answer about this.
Jean: I think part of what makes a great entrepreneur is positive energy and tenaciousness. There's very few companies, you know, I'd say probably less than one percent, where you just hit the ground running and everything works and the market was ready and you never have an up or a down. You never had a day where you thought you were going to close a sale on and you didn't, or the product you thought would be ready to ship wasn't, or you were going to get X number of users and you didn't. So, part of it is just his tenaciousness and saying, "OK, what have we learned? How do we keep going?" It's the most important part. And how do you keep your team focused and feeling good about it?
Lucy: That's really true. Those are definitely qualities that you have to have because I've never seen any startup that didn't go through times where you had to be tenacious.
Jean: Right, and that makes you better. I mean in a weird way it polishes your ideas, and it hardens the team, and fine tunes thing. During the bubble, we did see quite a few companies that just had an idea and through something on the web, and went public. Very few of them had the type idea -- we used to say it's the three P's, the P2P -- pass way to profitability, as opposed to B2B and B2C. All of a sudden the market dropped out, and they didn't have the technology, or the customer base, or the market need really understood. So it was a lot tougher on the company in some ways I believe.
Lucy: Definitely. One of the other things that we've seen and heard from many of the entrepreneurs we've talked to is that building a company can take your heart and soul, and lots of hours. How have you found you've been able to balance into your personal life as well as your professional life?
Jean: I don't have. [laughter]
Lucy: I love that honest answer! I've heard that from people.
Jean: It's very tough. It is 7/24, and I think the only way to do is to have a spouse who is understanding, and who is as committed as you are, and to have some kind of a support infrastructure, whether it's relatives or nannies or neighbors, or something, because when you're doing the start up it's 7/24. Often the biggest breakthroughs you have are 11:00 at night or 8:00 at night, when you're still there and someone walks into your office. You start talking, and suddenly something pops or the weekend. So it really isn't for someone who goes, "Oh, yeah. I want to have this balance." I've never been able to find it myself.
Lucy: We've often spoken about it as also being integration. A balance often indicates that things are done in equal proportions, but finding a way to integrate the various aspects of your life becomes important when you are in those 7/24 situations.
Jean: I actually like the term 'integration' a lot more than balance, because you're right. Balance sort of suggests that you're going to be there for every kids birthday, and every school play, and every time you want to, and it's just not going to work out.
Lucy: It's not. Yet I also think that kids also value seeing what you do at work, and learning from what you're dong. So, there are big lessons there as well.
Jean: You know what? I think daughters especially. I want my girls to see that I go out and work. We talk about business things at home. I think it's healthy for them.
Lucy: Yeah. So, see my sons when they were little would go in the lab with me. We'd be testing the multimedia communication exchange at Bell Labs. One of my sons designed a logo for it on the whiteboard, while he was bored. [laughs] But it was fun, and they still remember it.
Lucy: So, Jean, you've really achieved a lot. We're very curious to know what's next for you.
Jean: I think you know that I left. I sold Comergent to Sterling Commerce, which is a division of AT&T. I stayed there a year-and-a-half to do the integration. I just recently left. Right now, I've been asked to be on a couple of boards and advisory boards, and I've been meeting with a couple. In fact, this afternoon I'm meeting with some entrepreneurs who have an idea. In the fall, I'll probably start talking to a few venture capitalists, and maybe work with companies in their portfolio. So, no startup again. I've done a couple, but I think I want to work with a bunch of different companies.
Lucy: A diverse portfolio.
Larry: Wow! Well, we're going to do a follow-up on this one, for sure.
Jean: Well, it's fun because I'm seeing a lot of different ideas and learning a tremendous amount. It's really exciting to me to see what's happening out there, especially, as I said, in the mobile space and the special networking space.
Lucy: Well, Jean, thank you for talking with us today. I'm sure our listeners are going to glean a lot of good advice and information.
Larry: I'm going to vote for "learning from bad managers."
Lucy: Me, too. Larry is writing a book. I think that this should be a chapter in your book, Larry. It's not too late, is it?
Larry: It's called "Mastering Change" and I think that would really fit.
Lucy: Learning from the black hat manager.
Lucy: So for listeners out there, you can find our other podcasts at W3W3.com, as well as NCWIT.org.
Larry: Alright. Thank you much!
Jean: Thank you so much.
Lucy: Thank you, Jean. Thank you so much. [music] Transcription by CastingWords