The Reeducation of an Internet CEO

After more than 10 years as a CEO, Michael Saylor thought he knew a lot about business. After all, he had cofounded Vienna, Virginia-based MicroStrategy Inc. as a 24-year-old MIT honors grad and had overseen its growth from a two-man partnership to a company with more than 2,000 employees around the world. He guided its development from a strategic consulting outfit to a multifaceted organization on the cutting edge of decision-support software. He was an increasingly high-profile player on the digital stage, trumpeting a grandiose vision that went beyond mining company databases for trends and inefficiencies. Saylor envisioned a "personal intelligence network" that would one day provide customized wireless alerts on traffic, crime -- you name it -- to consumers anytime, anywhere via tiny earpieces.

But the turmoil of the past year or so, which involved an SEC investigation, significant layoffs, and a plummeting stock price, has taught Saylor more about business -- and about his role at MicroStrategy -- than any other period in his career. It's been an unbelievably expensive education. In March 1999, his shares in the company were worth about $14 billion. Today, they are worth roughly $210 million. In an interview with Fast Company, Saylor shared some of those $13.8 billion lessons.

Don't let your stock price go to your head. When you have 5000% stock growth, you have everybody in the world -- presidents, senators -- thinking that you're the greatest thing, the symbol of the new economy. But when your stock goes in the other direction, you realize that you're like every other business person. Doing business -- especially if you're creating new technology -- is an inherently risky, painful, difficult proposition fraught with dozens of twists, turns, and challenges at every bend. Sometimes the path gives way.

I learned how powerfully various constituencies -- the media, Wall Street, customers, employees, the community -- can interact and amplify an idea. We hit that resonant frequency where every single thing just clicked. It's like an 80,000-ton flywheel that starts to roll and then accelerates, accelerates, and accelerates. But the most unexpected thing can reverse the flywheel, causing it to spin in the other direction just as powerfully. I understood that lesson at an intellectual level, but now I understand it at a visceral level. These catalyzing events have certainly made me much more careful, much more humble.

Hardship is relative. People ask me, "How do you deal with what's happened to MicroStrategy?" And I tell them about Saylor's Law: Things can always get worse. It's actually a very optimistic and motivational rule, because it means that you shouldn't sit around and feel sorry for yourself. MicroStrategy experienced a revenue restatement. A lot of people lost their jobs. Our stock crashed -- but that's not the worst that can happen. As we've seen with other companies, the worst is when the stock is delisted, the company goes bankrupt, and the court disallows bankruptcy. I don't mean to suggest that this whole experience has not been very, very painful, because it's been the most painful thing that's happened to me in my entire business career. That's for sure. But I do try to remind people that things could be much worse.

Trust the market -- even if you don't like the message. It's uncanny the way in which the invisible hand of the market has orchestrated the restructuring of MicroStrategy and has helped create a company that is a safer investment for investors, employees, and customers. I think the market wants us to be successful, and it wants Mike Saylor to be a good CEO, to invent cool stuff, to commercialize that stuff, and to create good jobs. It just wants him to do those things very, very responsibly.

What's frustrating is that investors can be like a parent who says, "Go for it, invest, take chances" -- which was the situation in 1999. And then the parent changes his mind and decides that you should get efficient really fast and not stretch too far. Investors can make that switch with blinding speed.

No leader is smart enough to do it alone. We've had to move from being an entrepreneurial, early-stage business to a mature, midstage business that has decentralized leadership and operations. That evolution means that I'm surrendering a bit of power and not gripping the company's reins too tightly -- which says to our shareholders that we're going to run an enterprise based upon a group of adults discussing and reaching consensus. I don't think anybody expects a CEO to be able to do everything. But you have to be able to recognize your blind spots and delegate someone else to manage those blind spots. I'm more willing to let the enterprise breathe now and be a corporation that is greater than any one person.