Running Through Walls: From Genentech to Facebook to Startup: Part Two
The best way to learn how to grow a new company is to watch how other leaders manage the job, in good times and in bad. David Ebersman, who’s now CEO of Lyra Health, spent 15 years at Genentech, eventually becoming CFO. As he tells Venrock partner Bryan Roberts, Ebersman’s time at Genentech taught him valuable lessons about meeting goals no matter what obstacles he encountered. (For more of Ebersman’s view on entrepreneurship, read about part one of their interview here.)
In Ebersman’s early days at Genentech, former CEO and chairman Art Levinson offered guidance on efficient decision-making. As Genentech grew, Ebersman recalled, access to people and resources served the company well, but the bigger the company got, the tougher it was for people to make fast decisions.
“Size can really slow you down — and in particular, it slows you down when you feel that you need to wait for everyone to agree before you can make a decision,” Ebersman says. Levinson insisted that for every project, there could only one person who was accountable for decisions. “If you said, ‘Well, the team’s going to do that, that was a completely unacceptable answer to Art,” Ebersman recalls. Requiring one-stop decisions “made a very big impact on not only how fast we moved from a decision-making standpoint,” he says. “It was symbolic of the company he wanted us to be, in terms of getting bigger but not getting slower and more bureaucratic.”
In 2009, when Roche launched a takeover bid for Genentech, Ebersman had to manage the needs of shareholders and employees during a 1-month negotiating period — right in the middle of the financial crisis. “There was tremendous volatility all around us that would impact Roche’s ability to borrow the tens of billions of dollars they needed to make the deal happen,” Ebersman recalls. “And because you have a diverse set of shareholders, there’s no one person whose opinion you have to seek out — you have multiple opinions.”
The lesson learned from shepherding the company through that deal, Ebersman says, was gaining and then keeping support of shareholders. “We spent a lot of time trying to make sure we told our story to the shareholders as clearly and effectively as we could,” he says. “And in doing so, we encouraged most of our shareholders to stand with us for a long period of time, until Roche decided to significantly increase the offer that they’d made.”
