Grown-Up Startup

After a stint on the sidelines as a consultant, Beverly Powell decided to get back in the startup game. Her specialty was strategic alliances, and she missed the exhilaration of helping young companies realize their potential. But not just any startup would do. Powell, now 45, had worked at or consulted for several startups, yet she had no interest in joining the business equivalent of MTV's Real World -- a cast of brilliant but clueless techies who make things up as they go along, who try to navigate the turbulent waters of the Internet economy with a business plan that is as sustainable as a raft made of Popsicle sticks. "So many startups have great technology but no plan and no vision," says Powell. "They think, 'We've got this cool product, so we can't fail.' But it takes a lot more than a cool product to build a company."

That's why, in 1998, Powell joined Calico Commerce Inc. The company, based in San Jose, California, provides e-commerce software and solutions that help giant organizations like Cisco Systems, Dell Computer, Gateway, and General Electric to conduct complex transactions on the Web. At one level, Calico is very hard to distinguish from the thousands of other startups that dot that dotcom landscape. It is the brainchild of an MIT-educated entrepreneur, and it's based in Silicon Valley. It's small, with sales that came to $21.4 million last year, but it's growing at lightning speed. It's public, of course, and its shares have soared from an IPO price of $14 last October to a high of $75, minting 100 millionaires out of a staff of 300.

But that wasn't what spurred Powell to come on board as vice president of business development. This was: Calico is a young company with grown-up ideas about how to do business. And, in large part, that's because grown-ups run the operation. Calico's senior team consists of Silicon Valley veterans who played key roles in building Cadence Design, Netscape, Oracle, Siebel Systems, and Sun Microsystems. "You see a lot more management experience here than you see in many companies at this stage," says Bill Unger, 50, a Calico board member and a partner of Mayfield Fund, which (along with Kleiner Perkins) is a longtime investor in Calico.

Calico is also a company whose leaders resolved early on to reckon with the growth-driven challenges that sink so many promising organizations. How do you get bigger without losing the speed, the focus, and the energy of a startup? How do you serve more and more customers and release more and more products -- without sacrificing quality? How do you act like an established company before you've become truly established -- or, indeed, before you've become much of a company? How do you integrate lots of new employees from lots of different backgrounds and still maintain a distinctive culture? How do you plan for the future when the present is constantly in flux?

At Calico, the answers to almost all of those questions hinge on a single word: "leadership." Not know-it-all leadership from the CEO but grassroots leadership, in which people from all ranks of the company make decisions fast and act on them even faster. "Out here," says Alan Naumann, 40, CEO and president, "there used to be a sign along Highway 101 that said, 'Speed Kills.' In this business, lack of speed kills."

That's why Calico spends so much time, energy, and money teaching members of its fast-growing staff how to become better leaders. Its three-day leadership-development course implores people to make their fair share of decisions -- and gives them a set of eight core values by which to do so. Those values include accountability, innovation, quality, and speed. A complete list is posted outside Naumann's office.

"We give people a way to interact with one another as leaders, not as participants," says Naumann (pronounced "newman"). "I have a really short fuse about people who point to a problem and say, 'I just wanted to let you know about that.' If you see a problem, either you should decide that it's not worth worrying about, or you should do something about it. Taking the initiative is the essence of leadership."

"Taking the initiative" is what Stanford intern Kelly Bayer did when she started what eventually became Calico's internal knowledge base. Seizing on an unfulfilled need, she helped create a site where engineers could share customized code, so that they could reuse it on similar projects. Bayer, now 23, went on to become the company's manager of corporate development. That take-the-initiative approach also explains how Matt DiMaria, 39, VP of marketing, managed to get Calico eSales.com, a new product suite, launched in just 30 days. In November 1999, DiMaria and a team of 10 coconspirators decided on their own to go after a new market: fellow Internet startups (as opposed to the giant companies that make up Calico's customer base). By the end of the year, Calico had added more than 10 new dotcom customers -- a time-to-market that Naumann calls "phenomenal."

Or consider the case of Lynn Corsiglia, 41, VP of human resources, whose proposal to donate pre-IPO shares to charity resulted in contributions both to Habitat for Humanity and to the Entrepreneurs' Foundation, a nonprofit organization based in Menlo Park. Those shares, initially worth $100,000, are now worth around $1 million. "If you have a great idea, you just get a few people behind you, and then you go off and get it done," Corsiglia says.