How to become a ceo of a billion dollar company

Great companies are led by great CEOs, right? Of course they are. Elon Musk, Mark Zuckerberg, Jeff Bezos, Steve Jobs… all visionary CEOs capable of boldly predicting the future and propelling their companies toward it through ruthless efficiency, precise execution, and inspiring leadership. At least, that’s what the popular press and media around entrepreneurship wants us to believe. It’s also what every venture capitalist will tell you they’re looking for when evaluating investments — an incredible CEO. But is it true? Is it even necessary?

According to an entrepreneur named John Danner, it’s not. John is the former CEO of a tech company called NetGravity, a company he led to a billion dollar exit. And yet, when I spoke with him about building NetGravity, he described himself as a “horrible” CEO.

So how did he do it? How does a horrible CEO build a wildly successful company? Just as importantly, is John’s story proof that CEOs don’t really have to be “the next Elon Musk” in order to make a company a good investment? If not, is there a better predictor of a company’s potential for success?

* John’s story is based on a podcast and interview I conducted with him on April 8, 2021. Quotes have been edited for clarity.

Unless you’re an Internet history buff, you’ve probably never heard of NetGravity. However, NetGravity is, in some ways, one of the most important startups in Internet history. It was the first Internet advertising company. Considering much of the Internet these days relies on advertising, being the company that started the online advertising industry is… well… kind of a big deal.

In order to come up with the idea for the company that would ultimately become NetGravity, John hosted months of intense brainstorming sessions in the small living room of his Silicon Valley apartment. According to John, he and his friends went through hundreds of concepts, but none seemed perfect. John was looking for an idea that was “inevitable.” He wanted something the market was clearly moving toward on its own, and, by launching a company, he would simply be putting himself in front of the impending wave of innovation.

Finally, in 1995, John thought he might have found what he was looking for. As he examined the rapidly growing Internet, John believed the popularity of the World Wide Web was going to create huge demand for free content. Of course, people would still need to get paid for creating all that “free” content, and, since advertising already supported things like radio and television, John figured the same thing would happen on the Internet.

John took that thesis into a breakfast meeting with a man named Randy Haykin. Randy was the VP of Marketing for Yahoo! — a small but fast-growing Internet startup you’ve surely heard of. At the time, Yahoo! was still less than 10 people, but it was already clearly on trajectory toward becoming the Google of its day. The site was getting enormous amounts of traffic (at least by 1995 standards), and the company needed a way of monetizing. According to John:

“It was one of those meetings that you kind of dream of as a founder where I walked in, and I said, ‘I think I think the internet is going to be based on advertising. And so I built this ad server that puts ads on pages.’ And [they] said, ‘Well, we had a board meeting last night, and we decided that Yahoo is going to be advertising based. We’re going to go public in three months. Can we put your ad server in today?’ And I said, ‘Well, you can’t do it today. But let me go talk to my co founders, and we’ll shoot for tomorrow.’”

The truth was, at the time, John didn’t even have a product. However, Yahoo!’s excitement proved he had a huge opportunity. Not wanting to let that opportunity pass him by, John’s team pulled an all-nighter and, in about 24 hours, literally developed the first Internet ad servers. Their software went live on Yahoo! within a few days, and suddenly NetGravity was powering the entire advertising system behind one of the world’s fastest growing startups.

According to John, once NetGravity became the advertising infrastructure provider for Yahoo!, convincing other companies to become customers wasn’t hard. In fact, their second customer was Netscape, and their third customer was Time Warner. By any standard, that’s an impressive set of initial customers for a just-launched startup.

John was able to use this early success to raise an initial round of venture capital. At that point, he found himself leading a rapidly growing company with significant investment, and yet, he admits he had no idea what he was doing. When I asked him about how he approached being a CEO, here’s what John told me:

“I certainly was horrible. I’d never managed before — maybe like five people — and we were at 25 people in three or four months. I was completely out of my depth almost immediately. I had no idea what leadership was. I thought maybe my job was just to tell people what to do.”

In other words, according to his own admission, John was nothing like any successful CEO you’ve ever heard about. He didn’t have some big vision for the company he was steering it toward. He didn’t know how to manage people. And he certainly didn’t know how to lead them. If anything, he thought his job, as CEO, was to basically tell everyone else how to do their jobs, which, of course, is one of the worst approaches to being a CEO.

Despite this, NetGravity grew rapidly. Within three years it was doing $40 million in revenue, had a few hundred employees, and its customer base included the majority of the most popular websites on the Internet.

So what happened? How could a company with such poor leadership at the top still become so successful?

Curious to understand how a poorly run company could produce a billion dollar exit, I wanted John to share his secret to success. “Why did NetGravity accomplish what so many other, better-run companies fail to do?” I asked him.

According to John, the answer is simple, though not necessarily simple to achieve. John explained to me that:

“When you get extraordinary product market fit like [NetGravity did], you can almost do everything wrong, and it doesn’t matter. The market forgives you. And that’s certainly what happened with us.”

In his answer, John is revealing a fundamental truth about startups that not enough people talk about. When trying to pinpoint the success of companies like Apple and Amazon and Google and Facebook and Uber, we often focus on things like quality of leaders, the business strategy, the amount of capital raised, the team, the location, and even some ethereal sense about the general brilliance of the “idea” behind the company itself.

But John and the story of NetGravity is a great reminder that one thing has more impact on the eventual success or failure of companies than just about anything else. That thing is timing. As John told me:

“Looking back on neck Gravity in that era, I don’t think the timing could have been more perfect.”

Ultimately, the story of NetGravity confirms that exceptional timing when entering a market trumps just about everything else.

NetGravity’s software wasn’t revolutionary. Heck, it was developed in a single night, so the success of NetGravity can’t be attributed to great technology. Nor can NetGravity’s success be attributed to the quality of the founding team. After all, by their own admission, NetGravity’s leadership was “horrible.” Instead, NetGravity introduced a product into the market at the exact perfect moment. It was the moment content creators on the Internet were struggling with huge bills as their popularity increased, and they needed some way — any way — to turn their traffic into revenue.

In that moment, online content creators needed a product like what NetGravity was offering. And, since NetGravity was the only company offering it, that’s the company people chose.

There was nothing incredible about what the company built, and there was nothing about the founding team that made them somehow exceptionally well-qualified to deliver their product in ways nobody else could have. Instead, John and the NetGravity team identified the right market need at the right moment, which resulted in near-perfect product-market fit. And, as John already told us, “When you get extraordinary product-market fit… you can almost do everything wrong, and it doesn’t matter.”

As you build your startup, don’t forget this lesson. Yes, you can try to build a revolutionary technology that’s going to reshape an industry. And, yes, by strength of will, strong leadership, precise execution, and inspiring vision, you can attempt to force a market to adopt your product. But that’s going to take an immense amount of work and flawless execution.

The better approach is to do what John did. Spend as much time as you need finding the right opportunity. It could take months. It could take years. That’s OK. Spend the necessary time. It’ll be worth it in the long run because, when you do find a business that’s going to be inevitable — like advertising was going to be inevitable on the Internet — and you put yourself in front of it, you’ll achieve the same type of perfect product-market fit as NetGravity. With that kind of product-market fit, you won’t need to be the kind of mythical CEO who wills your company to success. Instead, your company will be pushed toward success by market demand, and you, as the CEO, will get carried along for the ride and the rewards.