Twelve Months in the Garage

Thinking back on my corporate entrepreneurial experience inside HP, each start-up had its share of peaks and valleys -- personally, professionally, and emotionally. In every case, the most exhilarating period was spent 'in the garage', learning, experimenting, creating. During this insane period there are few real pressures, when a small team bonds in marvelous ways to build lasting friendships, and when each new discovery creates such excitement that it generates both a physical and emotional response -- what I call a 'goose bump moment'.

Every leader of a new business venture needs to understand the critical nature of the 'garage period'. The 'garage period' is defined as the initial project phase when a dedicated and highly-motivated team focuses on a loosely-defined opportunity, officially sanctioned or not. In the garage period, three critical roles emerge:
1) Technologists and marketers assess company assets and technology against the target opportunity, and invent solutions.
2) Marketers study end-to-end business requirements and engage potential customers to perfect the company's portfolio.
3) Business leaders assess employee 'fit' and investor expectations.

A couple of important company dynamics take place in the garage. The first dynamic that forms in the garage is the foundation of the company culture. Successful executives actively manage company culture for rewarding risk-taking, failures and successes; for defining attitudes about diversity of people and ideas; and for defining lasting core values. The second dynamic that forms is management practices; however, management practices can change significantly once the company emerges from the garage door. While still in the garage, each member chooses to join the team, enjoying the intensity, excitement and camaraderie. It is one of the best development opportunities an employee experiences in any company, large or small. No team member wants to waste such a once-in-a-lifetime opportunity. However, as the company grows, the need for more traditional and formal management policies is required as new members join the team.

I often get questions during my lectures at Berkeley’s Haas School of Business about the concept of ‘leaving the garage’. Why leave the garage if it’s so rewarding and successful? When companies leave the garage, isn’t that when they lose their way? For most successful companies, there is a small team that never leaves the garage, continuing to innovate great things for the company. However, garage metaphor captures the focus of the senior leadership team which changes from creating the business ‘inside the garage’ to operationalizing the strategy and scaling the business ‘outside the garage’ to deliver the financial results expected from investors. Google represents a great example of leadership transition from inside to outside the garage. Google spent its first years inside the garage developing its brilliant search algorithms. However, as it neared the point of exiting the garage (defined as its IPO), Sergey Brin and Larry Page, Google’s co-founders hired Eric Schmidt, an experienced technology executive, to provide critical leadership outside the garage. For every successful start-up, the garage door always stays open to help the leadership team innovate to adapt quickly to its dynamic business environment.

When I decided to leave HP twelve months ago to start up Borei Corporation, an entertainment technology firm, one question I had was, how would this cycle play out without the support network provided by friends, technologists, mentors, and support staff from HP? In other words, would our time in the garage be as rewarding?

My new venture is indeed generating the thrilling peak-and-valley cycle -- just as within HP. We spent the past twelve months in the garage, building technology for the entertainment industry, inventing technology for toys and games that will change toys forever. Along the way, we had were numerous 'goose bump' moments that turned into brilliant solutions that toy makers are snatching up as quickly as we can invent them.

After twelve months, the Borei team is about to emerge from the garage without knowing exactly what lies ahead. Even without knowing, each team member has a sense of accomplishment that will last a lifetime.