By Larry Peña | Video by Matt Yoon
Mike Abbott is one of those restless souls whose winding career path reflects a constant search for a new challenge. “I’m not that interested in doing the same thing over and over,” he says. “At each move, I tend to gravitate to a higher degree of discomfort with each new adventure.”
After graduating from Cal Poly with a degree in biochemistry in 1994, Abbott went to work researching enzymes in the human liver at SRI International and then began a Ph.D. in molecular biology at the University of Washington. That would be his last formal interaction with the field he studied at Cal Poly — but what he took from his college experience was perhaps more valuable than the nuts and bolts of his curriculum. “At Cal Poly I learned how to learn, and hence how to move between different domains in short periods of time and be successful,” he said. “It’s all about doing, not talking, and you have to be curious.”
He switched to the pursuit of a childhood passion for programming and tried his hand as an entrepreneur. His first software startup endeavor, launched in 1999 at the start of the dot-com bubble, was an utter failure. Despite raising $80 million to fund a software platform for businesses, Abbott was forced to lay off 180 of the company’s 220 employees when the market suddenly shifted the next year. He sold the company in 2001, delivering investors a percentage of what they invested — a better return than most companies swept up in the bubble’s burst.
In 2002, taking the lessons he learned from that first entrepreneurial experience, Abbott launched Composite Software. The product was enterprise software platform designed to process the massive amount of data generated by the operations of companies in the Fortune 1000, such as financial institutions and retail companies. The company caught the attention of Cisco Systems a decade later, who acquired Composite for approximately $200 million. While that result, in and of itself, would be a dream for most entrepreneurs, the experience of launching a successful startup would eventually yield its own rewards for Abbott.
One investor in Composite, a computer science professor at Stanford, gave Abbott an invaluable lesson. “He taught me that there was a role for investors to actually be helpful to an entrepreneur as a partner, beyond just contributing money, but actual company-building advice,” he said.
Moving on to a new challenge, Abbott was recruited to be a partner architect at Microsoft to work on early cloud service effort as an engineer. His rapid success there as an engineer earned him a leadership role managing global engineering teams that created and eventually shipped Azure, the company’s first cloud computing platform. Azure is recognized as one of the two leading cloud platforms on the market today.
Next Palm recruited him to lead the team developing weBos, a groundbreaking mobile operating system that was the first to support wireless updates and many novel user interactions that would later be adopted in iOS and Android. In that role, his challenge was turning around a lagging development team that hadn’t created and shipped a new product in more than a year.
“Honestly something like that can be almost more work than starting a whole new company,” he said. “When you’re turning something around, there are deep cultural shifts you have to deal with. A person used to working 40 hours a week is not emotionally committed enough to work 80 hours a week to ship a great product.”
But his success at that challenge earned him a shot at his next role — and the accomplishment that would become one of his bigger claims to fame. In 2010, Abbott joined Twitter as the company’s first vice president of engineering. His main task was to stop the popular and fast-growing company’s biggest problem: the ubiquitous “Fail Whale” that users would encounter when the service received more traffic than it could handle.
“It was this huge opportunity — the site was down all the time, but the user count kept growing,” he said. “We couldn’t just say, ‘Hey folks, Twitter’s gonna be down for a few months while we’re fixing things.’ So the challenge was how do we perform that open-heart surgery on a marathon runner while he or she is still running that race?”
His approach to that challenge began by setting goals in an incremental manner over the next several quarters and the next year. Then he moved quickly, hiring an army of new engineers and spearheading a long-overdue campaign of investment in the company’s infrastructure. Abbott and his team turned Twitter around, building a service that was more reliable and profitable for the first time ever.
“Getting rid of the Fail Whale was the impact of stabilizing the service and developing the infrastructure, and it was done by the people we hired, not by me,” he says. “One thing you realize when you’re building a company is that your most critical activity is recruiting and the team.”
After his success at Twitter, his next career move took him further outside his long-discarded comfort zone — across the divide between tech innovator and investor. In 2011, after being an entrepreneur in residence at Benchmark Capital, he became a general partner at Kleiner Perkins Caufield & Byers (KPCB), the storied Silicon Valley venture capital firm that helped launch Amazon, Google and AOL.
At KPCB, Abbott is part of a major generational shift, both for the firm and across the venture capital industry. Until recently, he was the only partner under the age of 50.
More critical than his age, though, is a new approach to venture capital that Abbott represents. His work with entrepreneurs, he says, is a direct result of his experience as one himself. “Candidly, my biggest motivation to move into venture capital was the bad behavior that I saw from either board members at companies that I was involved with and how entrepreneurs were sometimes treated,” he says. “I have a number of different scars and experiences, and I thought that if I could share them, that would be awesome.”
Firms like KPCB are no longer in the business of just cutting checks, taking control of a fledgling enterprise, and waiting to reap whatever profits may come in. Venture capitalists of Abbott’s generation see their role as mentors as much as investors. They don’t just make decisions about which projects to back — they provide a service focused on the entrepreneur.
At KCBP, those services include giving entrepreneurs access to design experts like John Maeda, the former president of Rhode Island School of Design, whom Abbott recruited. It includes the Fellows Program, which connects fledgling companies without their own connections to pools of student interns from top schools. And it includes the mentorship of industry experts from some of the tech world’s biggest companies — companies that got their start because of KPCB, like Google and Amazon.
Those services must increasingly be competitive in the venture capital industry, because the balance of power has shifted from investors to entrepreneurs. “You have web platforms and new distribution services that make building companies a lot less capital-intensive than 10 or 20 years ago — things going on in the technology world that are pretty groundbreaking,” he says. “It’s democratizing the market, and from my perspective that’s a good thing because now there are more entrepreneurs out there with innovations that have the potential to become great companies.”
That democratization is requiring investment firms to change the way they view their role. “It’s not just about seeing the right companies and making the right decisions — now you have to be able to win, by having the entrepreneur want to work with your firm and that partner,” Abbott says. “That puts the onus on us to have people around the table that can really help entrepreneurs. Because five million from Kleiner Perkins is the same as five million from Firm X down Sand Hill Road.”
For Abbott, getting the right people around the table is the crux of most challenges. It certainly was a big part of his solutions at Twitter, Palm, Microsoft and Composite Software. That background in building dynamic teams is an important part of his work as a venture capitalist, because choosing an investment opportunity is much more than just finding someone with a great idea.
“You look at the attributes of the entrepreneurs, some of the traditional things like intelligence and ambition,” he says. “But a high degree of curiosity is also particularly important. Regardless of the product that you’re building, you have to test your assumptions and they sometimes turn out to be wrong. So how you filter that feedback and reiterate a product is important.”
But another factor he says is critical is one that, at face value, might seem odd. “I am looking for people who have some type of chip on their shoulder, something to prove at a deep individual level,” he says. “There are a lot of easier ways to make money than by starting a company. Companies have up days and down days, so having an internal motivator is important.”
For Abbott, who began his career as an entrepreneur himself, that internal motivator goes hand-in-hand with the force that has led him through a career marked by dramatic changes. “Look, my training was not in computer science, so my chip was wondering whether I could create a company and a product that would go compete with the IBMs of the world,” he says. “That’s why I try to apply as much intensity as I can to succeed.”
But as that career has shifted, so has his definition of what success means. “I think over a career, your definition of success starts with self, and that grows to maybe a small team, then to a larger team, then to a company,” he says. “For me now, success means the opportunities to mentor and coach others, and helping make those people successful. Today, that’s my metric.”