The Stockdale Paradox for entrepreneurs

Bambi Francisco Roizen · May 12, 2009 · Short URL:

Former MySQL CEO Marten Mikos on faith over optimism

Marten Mickos was brought into MySQL when the open-source icon had 12 people in 2001. He grew the company to over 400 people and eventually sold the company to Sun Microsystems for $1 billion in January 2008.

In this segment, Mickos advises entrepreneurs to seek wisdom in the words of Admiral Jim Stockdale, the highest-ranking American prisoner in the Hanoi prisoner of war camp from 1965 to 1973, who through  unwavering faith believed he would one day be set free from prison. In Jim Collins' book "Good to Great," he introduces the notion of the "Stockdale Paradox," which is to "retain faith that you will prevail in the end, regardless of difficulties, and at the same time, confront the most brutal facts of your current reality, whatever they might be." 

Here is an edited version of Bambi Francisco's interview with Mickos at the Innovate!Europe conference in Zaragoza, Spain.

MM: One piece of advice is things take longer than you planned and an entrepreneur must be optimistic and believe in big things. Entrepreneurs have to live in the duality of having very ambitious plans and realizing that some things take more time.

BF: So being realistic, and realizing that things do not happen overnight.

MM: No. As an entrepreneur, you need to be optimistic.

BF: But you mean being realistic as well as remaining optimistic, right?

MM: You must have two sides to yourself. A pessimist wouldn't survive in the prison, they'd give up, the optimist wouldn't survive, because they are too hopeful. But those who have unwavering faith that they'd ultimately get out yet face the brutal truth of everyday - they eventually get out. Entrepreneurs must believe that one day everything will be perfect and until then, you have to go through whatever pain you have to go through. Although he [Stockdale] went through more torture than entrepreneurs, the metaphor is relevant. Entrepreneurs must sacrifice everything, commit completely, an keep believing that one day everything will be sorted out in their favor.

BF: But the big theme here [at the Innovate!Europe conference] is fail fast. So how do you know when to fail fast?

MM: That's tricky as well because things take time and at the same time you should not throw good money after bad money. You should fail fast and then scale fast. I don't have a generic piece of advice but sometimes I keep pushing and even pushing beyond rationale, and being rewarded. Then other times I stop and then I realize that I stopped too early so it's a tough judgment call. But you must be sensitive to timing. Either try something else or just keep going.

BF: What other pieces of advice can you share? Earlier we talked about focusing. Several entrepreneurs make that mistake of trying to go in different directions at the same time. How do you focus?

MM: You must be optimistic and believe in your own skills and ability so you think you should do a lot. But still you need to force yourself to just focus. People sometimes make a mistake of having multiple lines of products to grow faster but the truth is that you have to focus in order to grow faster.

BF:How do you determine which revenue line to focus on? Is it the one that brings you revenue today?

MM: You must have a vision for the company and know what it is ultimately about. For example, Michael Dell focused on a specific product for a certain audience and it grew like crazy.

BF: You were CEO of MySQL. When they brought you in, there were 12 people. When you sold it, there were 400. What was the biggest challenge growing it from 12 to 400?

MM: For any CEO, the biggest challenges are people challenges as well as yourself. You need to manage yourself and to do this, you must understand yourself. You need to have a very high level of self-awareness and accept yourself. I've seen CEOs blinded by their own characteristics, even myself. I would be in denial about myself, or would not be willing to change myself. But when I came to a level where I recognized my faults yet I knew I was doing the best I could, I then learned how to program myself and be efficient.

BF: Is there an underlying characteristic that a CEO must have to manage a company with 12 people to 400 people?

MM: You must be open to learn new things and you must be open to abandon old things. I intentionally told myself there are certain practices that I need to abandon by delegating them. I also asked people to tell me what I needed to learn now and what was the next level I needed to take in order to manage more people.

BF: But it was the desire in you to want to do that and you learned from other people about what you needed to do to manage that. What are tough decisions you had to make as a CEO?

MM: We had to make tough decisions on the business model because we were balancing between open source and making money. I've made tough decisions on hiring and firing people. When we were ready to go public or to decide that I would favor a sale to Sun Microsystems, which was a pretty big decision for me. I didn't decide on the sale but I decided that I would be in favor of it.

BF: That was a collective decision.

MM: It was a decision by the shareholders. They asked me for my recommendation.

BF: One last question. You managed your company in a very distributed fashion, with distributed operations and everyone working virtually. Would you operate that way again?

MM: I think that offices are so last century. We've had offices in mankind for 400 to 500 years. But the human being is good at working at where he enjoys his life.

BF: Why have offices when you can have the Roman theater?

MM: Exactly. People are more motivated at home. It doesn't work for everyone but people who enjoy it and when it works, it is the best model in my mind.

BF: Well we like that model since we are all virtual at Vator. Thank you Marten.

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Bambi Francisco Roizen

Founder and CEO of Vator, a media and research firm for entrepreneurs and investors; Managing Director of Vator Health Fund; Co-Founder of Invent Health; Author and award-winning journalist.

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