Lessons From Dave Hitz

Dave Hitz, a co-founder of NetApp Inc. (Nasdaq: NTAP), has written a book that is partly an autobiography, partly a corporate history, partly a guidebook for entrepreneurs, and partly a business management manual. It doesn't have a lot on storage technology, which is probably why it is such an entertaining read.

The title, How to Castrate a Bull, is taken from Hitz's time working on a ranch and is an example of his quirky approach to putting together the book, which was written with author Pat Walsh. The storyline jumps around, includes jokes and digressions, and refuses to follow a standard formula for a business book or a personal history. "It contains the lessons I learned through experience," Hitz said in an interview. "I also was trying to capture the unusual journey of starting off as three guys writing out a business plan on a napkin and growing a startup into a multibillion-dollar company."

The personal story includes learning programming from a family friend and building a mail-order computer in 1977 at the age of 14, starting college while still a sophomore in high school, learning how to castrate bulls while attending Deep Spring College, which was located on a cattle ranch, selling his blood when he was short on cash, and typing names and diseases on index cards for an insurance company, one of his first jobs.

Not a promising beginning. But he got into Princeton, where Jeff Bezos, the founder of Amazon.com Inc. (Nasdaq: AMZN), was his roommate for a year. After college he moved to Silicon Valley and began a career in the tech industry, working for MIPS Computer Systems and then Auspex Systems, which in 1988 was trying to build a networked storage system that would compete with products from Sun Microsystem. Auspex was where he met James Lau and Mike Malcolm, and the three of them quit to launch a company that would create a network-attached storage appliance. They called their company Network Appliance, later shortened to NetApp.

It was a risky move, and it could be said that the main topic of Hitz's book is risk and change -- personal, professional, and business. Among the more interesting sections are when he recounts the challenges and risks NetApp confronted when it tried to evolve and grow. The big challenges came when the company moved to direct sales from indirect sales, added support for Windows to a product line based on Unix, and embraced SANs when the company was totally focused on NAS. "Change is a natural part of life and business. You should embrace it and in some cases demand it. Too many people think that if they have to change they must have been doing something wrong. If the management team can provide the perspective that the world has changed and we also need to change, that can make it easier for people to go along on the change journey," he says.NetApp had no shortage of ambition. It intended to create a new product category, dominate a new market, and double revenue every year for five years to hit $1 billion in sales. And, for the most part, it accomplished those things. Then the stock market crash of 2000 hit and NetApp's stock fell from $150 to less than $6. "We had designed NetApp for growth, and when the growth stopped, everything broke, but this time in a bad way," he writes. He says the company survived the crash because it had diversified its customer base, adding banks, telcos, other enterprises and the federal government to the dotcom and tech companies that had provided the bulk of the company's revenues.

Hitz also writes a lot about company values and how to motivate employees (the company's official travel policy is "Use your common sense"), how to manage engineers, and what customers really want from a technology company. Management lessons form the bulk of the slim book, which has fewer than 200 pages, and you can find some nuggets of hard-won lessons among the bad jokes, anecdotes, personal observations, interludes, and other short bits. While building the company, Hitz and the other members of the leadership team often had to do things they had no experience in and, as a result, often did them in an unusual fashion (see the official travel policy). He says he got a "street MBA" just from surviving at the top of a fast-growing tech company.

Readers will gain insight into management styles, different ways to make decisions, alternative approaches to managing people, and the value of dissent within a company. They also will learn why it is better to castrate a bull with a dull knife than a sharp knife. And they may get a few chuckles along the way. You can get a taste of the book here, a Website Hitz created to promote the book and solicit speaking engagement.