Ex-CEO Shares Tech Bubble Experience
Published: Sunday, September 29, 2013
Updated: Sunday, September 29, 2013 19:09
“I chose to major in accounting only because I wanted to get a job when I graduated,” said Bill McKiernan, BC ’78, to a crowd of students, aspiring entrepreneurs, and faculty members at Thursday’s installation of the Lunch with a Leader series in the Fulton Honors Library. “Eventually, I decided accounting was not for me,” he said. “I felt like I was refereeing the game instead of being in the game."
McKiernan was invited to speak at the event by the Winston Center, an initiative housed within the Carroll School of Management that aims to help the entire Boston College student community examine the roles leadership and ethics play in business and society. Although the talk was structured around McKiernan’s defining entrepreneurial venture—CyberSource Inc.—he started by discussing the variety of positions he has held over the years.
After graduating from BC, McKiernan moved to New York City to work as an accountant for Price Waterhouse. He quickly moved on, citing a lack of value and excitement gained from the position. His first experience with a startup came in the summer between his first and second years at Harvard Business School, when he worked for a firm in California that was eventually acquired by IBM.
“I caught the bug there,” he said, alluding to the beginnings of the startup culture that would soon define the area now known as Silicon Valley. The summer McKiernan spent working in California was the beginning of a career in technology that is still at the core of his commitments. From 1990-92, he served as the vice president of a venture research firm before becoming president and CEO of McCaffee Associates, a computer security company that would go public under his guidance. McKiernan left this role in 1994 to build his own startup company, CyberSource Inc.
“The original concept of CyberSource in 1994 was to start this online store called software.net,” he said. “We would distribute software electronically instead of off shelves. At the time that was sort of a novel idea.” Emphasizing adaptability by subsequently discussing how this idea evolved into becoming an e-commerce and payments solutions company, McKiernan focused on the lessons he learned while running the company.
“Things are never as good as you think they are. And they are never as bad as you think they are,” he said, referencing wild changes in CyberSource’s stock price following successful fundraising efforts through public offerings. After raising a total of $300 million through two public stock offerings in 1999, shares were being traded at $70 during the height of the dot-com bubble in 2000. Following the market’s collapse the next year due to faulty valuations of tech stocks, CyberSource endured a two-year period of dismal stock prices.
“In hindsight, although the dot-com burst was painful, it was probably the best thing that could have happened to us,” McKiernan said. “Because what it did was eliminate all of our competitors.” Focusing on company values, long-term goals, and careful hiring decisions, CyberSource became profitable 10 years into its operations and hosted its billionth payment transaction in 2007. In 2010, with McKiernan still serving as president and CEO, CyberSource was acquired by Visa for approximately $2 billion.
After describing his journey with CyberSource, McKiernan shared a list of the 10 most important lessons he has learned through his experiences as an entrepreneur. Not surprisingly, one of his core pieces of advice was to start early. Although his own venture began after he earned an MBA, he echoed the sentiments of numerous industry colleagues that have invited undergraduate students to waste no time in creating businesses they are passionate about.
“Starting a company is about as hard a thing as anyone can do,” he said. “But it’s incredibly rewarding. And frankly, when you’re young, you have nothing to lose.” In a room full of students itching to make their ideas into reality, the encouragement of someone who had been in their seats showed them the potential of pairing their concepts with passion and perseverance.
“People don’t work for startups for the money,” McKiernan said. “They do it for the mission. They do it for the joy of building something. You’ve got to make the mission real.” McKiernan said, giving the audience his most sincere pitch for building something they believe in. “At CyberSource we talked about our mission as being changing the world, one transaction at a time. And we meant that.”