Ten And Out

As some of you may know, Acuitive started operations on January 1^st, 1997.  Thus, at the end of this year, we will have completed ten full years in business.  And what a ten years it has been.  We’ve seen crazy times ranging from overly exuberant to reactively punishing to the more normal times of today.    We’ve persevered through it all and have done what we can to improve the odds of success for our start-up clients.  And we’ve been paid well for our efforts, both in terms of cash compensation as well as enjoying small slices of the liquidation fruits of our clients, which have totaled more than $30B over the years. 

As our tenth year closes out, we at Acuitive have a lot to celebrate.  That is why you may find it odd to hear the announcement I am about to make:

As of the end of the year, Acuitive will cease active operations as a consulting entity.  Acuitive will continue on only as a financial entity to manage our private company equity and venture fund assets.

You may wonder, if the formula has been successful, why are we doing this?  On one level, the answer is simple – it’s been ten years by God, it’s time to move on! 

But there are more logical reasons as well.  One of them stems from the fact that the Acuitive formula worked because we were (for the most part) subject matter experts as well as functionally adept. 

Most of us began our careers in the early days of the commercial application of packet networking and were involved in the development of LANs, WANs, SANs, and various and sundry xSPs.  That background was highly valuable when Acuitive started in 1997 as network infrastructure continued to rapidly evolve, driven by the confluence of new networked application deployment, world-wide-web usage, Y2K, expansion of networks geographically and to-the-home, and an insatiable appetite for speed and innovation by both enterprises and service providers.   The number of (potentially) cool companies launched far exceeded the availability of experienced and competent CEOs, VPs of Marketing, product managers, etc. and hence the Acuitive opportunity arose – to fill that gap. 

Nowadays, however, network infrastructure is not rapidly evolving.  The installed base acts as a giant counterweight against any innovation that might perturb it. This has raised the bar for new value propositions very high - perhaps impossibly high.  Instead of innovation, the world wants integration, low cost, and ease-of-use today. That is usually not the kind of agar that nourishes interesting and important start-ups. Thus, rightly so, fewer and fewer companies are getting launched that address opportunities in our historical sweet spot. The investment money has moved on to different emerging opportunities.  But the pool of available talent has not diminished.  Therefore the companies that have been created in our space have very strong teams.  Basically that means they don’t need us so much.  It becomes the old joke of not wanting to join a club that would have us as a member.  An observation we’ve made over the past couple of years with some of our client prospects is: if you need us, you’re probably in irreversibly big trouble and we should avoid you.  We’ve found some good teams to work with, but they are becoming scarcer. 

In a situation like this, personal career paths need to be re-evaluated.  Acuitive always operated on the principle that we should be adding value to our clients with-in the 1^st hour we were engaged.  That means we had to bring a lot to the table in terms of relevant experience, market and technical knowledge, competitive awareness, etc.   To achieve that meant that we were working on familiar things over and over again; getting deeper, but not broader.  Several of us are now at a point where if we want to have a career for another 10-20 years, we need to re-invent ourselves in some way.   You can’t do that as a high-priced consultant. Or at least you shouldn’t.

The personal situation for each Acuitive employee, in terms of financial, career, family, and other considerations is unique to each individual.  We couldn’t come up with a way of re-engineering Acuitive that suited each individual.  Instead, we are executing a friendly divorce, freeing up each member to shape their future in the best way for them.  Since there are no child custody or vacation home ownership issues in this divorce, it has been clean and easy. 

Let me tell you a little bit about where some of the principals of Acuitive seem to be headed.

Dave Danielson was a co-founder of Acuitive and bleeds Acuitive amber.  The dissolution of Acuitive is both very hard and very easy for him.  Hard in the sense that it is his baby.  But easy in the sense that Acuitive was never really able to create a sustainable footprint in the Northeast region.  Dave has been out there pretty much by himself for a number of years.  What we have determined is that the mindset in the Northeast is very different from Silicon Valley in terms of utilizing resources external to the company, at least for the kind of strategic things Acuitive does.  Dave has been highly engaged, but his jobs have been long term with a lot of operational duties as well as strategic challenges.  It always felt a little awkward to him, the client, and the rest of Acuitive to have a consultant working for two years full-time in a role such as CEO or VP of Marketing. So his mindset now is to take a “real job” doing essentially the same thing he has been doing for Acuitive clients.  He is talking to several companies about several positions. But his bar is pretty high.  He wants to make a good choice.  While he assesses the next step, he is continuing to do some short term consulting. 

John Jaeger is a very smart guy.  When he and I started to discuss the possibility of shutting Acuitive down last spring, his reaction was to take time off as he rolled off from his last active assignment.  Since last April or so, he’s been 100% focused on family, home projects, beer making, travel, etc.  And you know what he found out (much to my surprise)?  He likes it.  So much so that towards the end of the summer, when his wife was starting to make noises about him going back to work, he accidently cut his hand with a table saw to buy himself a few more weeks of idleness, this time supplemented by pain relief drugs.  However, he realizes that some time in the near-to-intermediate future, he will be driven by some force – maybe internal, maybe external - to get back to work.  So he is presently thinking about his criteria and is just about ready to pop his head out of the hole to listen to and assess options that come his way.  John is an extremely hard worker.  I’m very glad for John that he has had a chance to do a deep battery re-charge over the past six months, and it gives me a warm and fuzzy that his efforts at Acuitive gave him the opportunity to do so. 

Tom Garland is different from the rest of the Acuitive principals in that he actually knows what he is going to be doing come next January.  That is to say, the same thing he is doing now.  Tom is the Interim CEO of Evernote.  Being Interim CEO is a full-time (and a half) job and Evernote isn’t going away any time soon.  However, one characteristic of interim roles is that they are, well, interim.  Sooner or later, driven by either success or failure, Tom will move on to something else.  Tom’s thinking is that what that something else will be is going to be very similar to Acuitive because it suits him very well.  Tom is also a little different from the rest of the Acuitive principals in that he is more sales, BD, and operations oriented than the rest of us and less bound to a particular market segment or another.  One thing he really excels at is validating products and associated messages with potential customers.  He created and led the very successful Customer/Market Validation service at Acuitive.  Post Acuitive, his plan is to continue to consult to start-ups (and perhaps more established companies), with that service as a central part of his offering.  His availability to do so may be limited until post-Evernote, although possibly he can create more bandwidth sooner if he can find others suitable for delivering such services. 

Steve Farnworth is a seething cauldron of product and company ideas.  I think that sometimes it has been frustrating for him to have to mold and shape other team’s ideas rather than develop his own.  But I think he also knows that the experience he has gained doing so at Acuitive has been invaluable.  Going forward, I expect that he is going to leverage that experience to convert one of his many product ideas into a new company.  And, if he builds the right team around him, I think that whoever finances that company may do quite well.  But Steve knows that finding the right idea, validating it, building the team, and getting the financing can take a long time and involves a lot of backing up from dead alleys discovered.  So he’s not going to rush it or try to push the wrong idea up a rope.  In the meantime he has mouths to feed and bills to pay, which he will achieve by continuing to take on consulting assignments with interesting clients as an individual contractor.  

That summarizes the direction that some of the Acuitive principals are taking.  It’s been exciting to be at the center of the start-up universe during a time that will probably be looked at as very unique.  I think we are all very happy to have had the Acuitive experience and view it as a spring board for whatever may come our way next.  You’ll be able to stay abreast of what we’re doing individually and access up-to-date contact information on the Acuitive web site (www.acutiive.com) for another couple of years as we’ll keep the site active for those purposes. 

If you’ve been a regular reader of Hoov’s Musings, you’ve been subjected to 167,000 words spread across 96 Musings over the past ten years.  You might be saying, “Enough is enough!”   In spite of that, I’ll follow up with one last Hoov Musing as an Acuitive employee in a week or so to update you on what my plan is for the intermediate future.  One of the things you’ll learn from that is that you haven’t heard the last from me yet.   Sorry about that.