San Diego Business Journal It's Often the Challenge, Not Money That Is Appealing

It happens more often than you think , a CEO of a much larger corporation gives up his inflated salary, bonuses, and all the perks to take over the top job at a startup. This month it happened in San Diego when graviton, a high-tech firm formed last year, named Sol Trujillo as its chairman and CEO. Trujillo is the former chairman and CEO for US West Inc., a Denver-based telecommunications provider with some 58,000 employees and more than $3 billion in annual revenues before its merger earlier this year with Quest Communications Inc.

The prospect of growing a new enterprise and helping it become a success was a prime reason Trujillo decided to make the change, said Pete Thompson, graviton's director of marketing. "He told us he's done the big company thing, and he wanted to take over at a small company that has good technology, a good business plan, good management, and grow it," Thompson said. In addition to having a significant impact on a startup, Trujillo also was looking for a desirable place to live, and San Diego certainly fit the bill, said Sue Major, managing director for A.T. Kearney Executive Search, the placement firm that completed the hire. Major said San Diego is seeing an increase in local startups attracting top executive talent from other areas of the nation as these companies attract higher amounts of venture capital. The startups may have been founded by scientists and research people, but at some stage they need experienced managers if they expect the companies to grow successfully, Major said. Dean Cuplin can relate to Trujillo. In 1991, he left his equipment leasing job at GE Capital where he had spent most of his career to help found and launch a local biotech company called MitaKor. "I was enjoying what I was doing, the people I was working with, and the companies I was working with, but after you do something for a very long time, and you know it so well, the challenge isn't the same," he said. Cuplin gave up his CEO title at MitaKor about four years ago and now is a partner in an executive coaching firm called Navica Partners. Building a new business to the point where it is doing deals with more established companies is a feeling that isn't easily matched, Cuplin said.

Before Dan Ferranti was named the new CEO for SkyDesk Inc., a San Diego-based managed services provider in October, he ran a much larger high-tech firm. SkyDesk has about 100 employees. Majesco Software, based in Santa Clara, was doing about $165 million in sales and had some 900 employees, Ferranti said.

In making the move, Ferranti was motivated by the chance of achieving greater rewards for his efforts should the company become successful. The downside is there's a greater risk when leaving a job at a more established and larger firm, he said. But the overriding reason for making the change was the opportunity to be involved in a new venture in a more hands-on way, "and enjoying the ride of taking something small and making it into something big," Ferranti said. Fred Cutler, the executive director for UCSD Connect, agreed financial gain is not the biggest factor for most executives leaving a larger firm for a smaller one. In 1991, Cutler left his job running a division of Oracle Inc., then about 15,000 employees. Later, he helped launch DigitalStyle Corp., a local Internet company. In 1998, the company was sold to Netscape Communications in a deal ultimately valued at about $110 million. "A lot of successful businessmen get their enjoyment by building and growing things, and that's what you do when you're in a startup," Cutler said.