The offspring of MicroStrategy are coming of age.
Most of the McLean-based company's earliest hires were straight out of Ivy League colleges when they started at MicroStrategy. MicroStrategy eventually came to be lauded for clever software that sifts through huge amounts of computer data -- and reviled for an accounting scandal that showed the company was erroneously claiming profitability.
They made enough money at MicroStrategy to launch their own businesses and brought to those ventures lessons learned in the technology boom and bust.
Now they are starting to get some recognition on their own. Matt Calkins, chief executive of Appian, was named this year's winner of the local Ernst & Young Entrepreneur of the Year Award. Another former MicroStrategist, Sid Banerjee, chief executive of Claraview, was a runner-up. MicroStrategy's chief executive and chairman, Michael Saylor, won the award in 1997.
An outsider might assume an accounting problem such as MicroStrategy's could make alumni leave its name off their resumes, but these early employees are extremely loyal in defending their former employer. In fact, some acknowledge they have designed their new companies in MicroStrategy's image.
"We share DNA," says Calkins, 31, who spent five years at MicroStrategy, leaving in 1999 to start Appian. The Vienna firm builds internal computer "portals" for the likes of the U.S. Army, U.S. Navy, Home Depot and General Motors. Calkins, who named his company after the Appian Way in ancient Rome, agrees that he talks a bit like Saylor, known for his penchant for historical references and a sweeping vision.
"I like to think big, like Mike does," says Calkins. "I want to create a better solution than what the world has now."
Calkins recalls that when he left MicroStrategy he quoted Nietzsche to Saylor: "One repays his teacher poorly who stays a student always."
Appian hosts annual company cruises to locales such as the Caribbean, just as MicroStrategy did before its troubles. Calkins says his company's culture is tightknit but not nearly as much as was MicroStrategy's. MicroStrategy became involved in its employees' social life and even their dining, as the company brought catered lunch and dinner into its offices.
Banerjee, 38, one of the first 10 MicroStrategy employees, was an MIT fraternity brother of Saylor and of MicroStrategy co-founder and chief operating officer Sanju Bansal. He left MicroStrategy in 2001. Banerjee says he works hard now on building a social environment and a corporate culture at Claraview, based in Falls Church. Banerjee copied MicroStrategy's quarterly "company days," when workers from around the country gather for two days of feel-good meetings and family events; his most recent event was held in Miami. Claraview's work, known as data mining, is very close to what MicroStrategy does, although the companies say they do not compete directly.
MicroStrategy was like a family in the early days, says Shawn Dolley, 33, chief executive of Washington's Vision Chain, who left in 1999 after four years. His job was to close large deals and "move the cause forward," he says. MicroStrategy was "a dysfunctional family full of Doogie Howsers," says Dolley, referring to the fictional teen prodigy from a 1980s television series. Dolley, who was a psychology major just out of Dartmouth, felt at home. "I wanted to work with super-smart people on really hard problems," he says. "The model was you just throw people in." It was also a highly competitive environment, which Dolley says helps him in business today. Vision Chain creates management software for consumer packaged good companies, including Heinz and Newell Rubbermaid.
"It was in the blood that you were expected to win your deals," he says. There were rigorous "boot camps" to which new employees were sent, and a set of extremely tough challenges they were expected to meet. If they failed, Dolley says, they were sent to work in tech support.
It is difficult for these former MicroStrategists to talk about the accounting scandal that hit the company in 2000, causing it to restate earnings for previous years. The company settled Securities and Exchange Commission charges without paying a financial penalty. Saylor, Bansal and former chief financial officer Mark Lynch each agreed to pay a $350,000 fine. Neither the company nor its executives admitted wrongdoing.
Asked about MicroStrategy's past problems, Calkins sighs. "There are those who believe its fundamental flaws outweigh its merits," he says, but he is not one of them. He defends the company to detractors. He says he even feels he should have been there when the accounting troubles were happening, to help in whatever way possible.
"I don't want to talk about it," Dolley says. "I don't to this day know what happened. If I have lunch with Sanju I'm not going to ask him what really happened. He's not going to tell me anyway."
Banerjee, who was there during the restatement and restructuring, also did not want to talk much about those times, saying, "The last year or two [working there] I had to learn some painful things." However, he says, "we are proud of our past." A dozen former MicroStrategists now work at Claraview.
The leaders of this new generation of companies work hard to maintain relationships with MicroStrategy. Claraview and MicroStrategy are official "partners." Appian lists MicroStrategy on its customer roster.
Banerjee says he, Calkins and Dolley have grown their companies to a size at which they discuss taking on noncompeting chunks of their industry, and of forming alliances with each other. Dolley and Banerjee are part of MindShare, a networking group of chief executives that gathers once a month.
All three of their companies have been self-funded so far, a nod to MicroStrategy's practice of not taking any venture capital investment until it went public. All three focused first on consulting, then on making software.
. The course of their companies looks familiar to Bansal. "It's the logical trajectory," he says. Nor is he surprised that these firms show MicroStrategy-style intensity. MicroStrategy "was a part of their formative years," he says.
"Those of us who worked at MicroStrategy went through an accelerated maturing growth," says Banerjee. "This gives us a confidence in doing it ourselves."
Shannon Henry writes about Washington's technology culture every other Thursday. Her e-mail address is email@example.com.