February 23, 2019

Akamai CEO Swings His Elbows - page 2

Leading-Edge Firm Uses Linux to Distribute Data Around the World

  • January 11, 2000
  • By Gavin McCormick
Conrades is a partner in Polaris Venture Partners, one of the venture capital firms that funded Akamai when it formed last January. By April, he'd taken over as its chairman and CEO. And, beyond the company's technological edge, it was his conviction of its eventual market dominance that helped convince investors to go on a wild spree when Akamai had its initial public offering in October.

"Look, you've got to believe in your company and what you're doing," said Conrades, who did 71 pitches to investors in the nine days leading up to the IPO. "These investors are smart, and if you're unsure, they'll smoke you out. The only way to beat it is to believe. Half the time during those nine days, I didn't even know where I was. But I knew what I was saying because I believe it."

From a starting price of $26 a share, Akamai zoomed over $200 on its first day. On Monday it closed at $285.50, putting the firm's value around $26 billion.

"Of course our revenues don't justify a $30 billion market cap, so everyone howls," Conrades said. "But it's not about revenues. It's about the potential to be a market leader. Can you be a gorilla in your market space, and can you give a hint that you can sustain it? We can."

Conrades defined Akamai's IPO as a success, but not strictly in financial terms: "You measure success today not by 'time to market' buy by 'time to market cap'," he said. "IPOs are not for money but for marketing traction. And we got it, huge."

Since going public, Akamai has used that traction to help it line up customers--and it has succeeded impressively. Within a month the company had 100 customers. Last week it announced that that figure had doubled, including seven of the Web's 10 most popular search engines, 75 e-commerce sites, 10 financial service sites and 20 sites devoted to software downloads.

Conrades said the firm focused first on convincing players "at the top of the pyramid" in each marketplace--Yahoo, for instance, in the search engine world. Now, he said, Akamai is moving steadily down each pyramid. When he talks about "sucking oxygen from competitors" like Adero and Digital Island, this is what he means.

"But I'm not sanguine," he said. "Once you get a huge market cap, everyone sees how valuable your space is and competitors come out of the woodwork. And everyone knows how fast things change these days."

The CEO sees one of his jobs as not letting employees get sanguine, either. He told a story about one of Akamai's 350 employees, all of whom are paper millionaires.

On the Sunday after the IPO, Conrades bumped into a 21-year-old MIT graduate who'd just started full-time work at Akamai. When Conrades asked him how much he was worth, the young man turned flame red before stammering a figure in the double-digit millions.

"And how does that make you feel?" Conrades asked.

The kid responded, "Why do you think I'm working on a Sunday?"

That's the attitude an ultra-competitive boss likes to see. "We've got a lot of people working their buns off to make sure that our stock's under-valued," Conrades said.

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