Ken Levine | Crain's Boston

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Ken Levine

Background:  

Waltham, Mass.-based Digital Guardian makes software to defend against data loss, serving industries from finance to manufacturing.

The Mistake

I think the mistake was overvaluing the Rolodex.

Way back when, I was doing a VP of sales role at Cabletron Systems. I was young and when I was hiring people I would tend to get very excited about who people knew, what their network was like—back then, in the '80s, we called it the Rolodex that somebody would bring to the table. The mistake was falling for more of an external package thinking that it's just automatically transferable.

I remember a guy who was a minor league baseball player. He said that because he played in the city where he lived that he knew everybody, they all liked him and he'd be able to sell to everyone. So I hired him—and found out that's not the case. Even if he knew a few of those people, they also had to be legitimate prospects.

It was all about his overall personality—you know, somebody that you probably want to go out and have a beer with but who really didn't have the depth of the relationships where he could come in and bring those relationships back to the company. When you're young it's easy to be impressed by the allure of, “Wow, this guy can get me into General Motors and the Ford Motor Company and all of this,” but then you find out he doesn't know them like he says.

Contact doesn't equal sales.

The Lesson:

You've got to go beyond the fluff or the promise of somebody that may in fact know people, because it's not always transferable. When we were starting out at Cabletron, I was overly impressed with the contacts and overvalued the person's ability to make connections with those contacts. But just because they know somebody doesn't mean it's going to help at all—that, I think, was the lesson learned: contact doesn't equal sales.

Now I'm 53, I'm not the young guy anymore, but I still interview people and the first thing they often say is, “Well I can tell you this buddy of mine, we coded together at Microsoft and this guy, I know him from Dell,” and everything. But in all likelihood that's probably not going to do me any good.

I think at the end of the day it's looking at the [right] person for your organization. Experience certainly counts, but contacts are not nearly as relevant as how that person can fit in your company, in your industry, because the likelihood is they're never going to sell to the same accounts they knew before. In my experience, who you know sounds great, but it doesn't get you deals. It's finding the right potential customers, presenting the product in the best way possible, and tenaciously following up. It's not the Rolodex.

Photo courtesy of Digital Guardian

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