How Carly Fiorina' s Mistake Put Me on a Path to Entrepreneurship

The aftermath of the 2002 acquisition of Compaq by HP was hard for many of us.

Carly Fiorina's "adopt and go" policy and general economic malaise had resulted in layoffs of entire departments; few groups were left unaffected. My group, the Richardson, VLSI Lab, based in Richardson, TX was no exception.

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I remember a "coffeetalk" group meeting where managers lined up at the exit to grab subordinates who were slated for the “workforce reduction” program.

I'll never forget the knot in my stomach while "walking the gauntlet" and the feeling of relief when I passed my manager without incident. In 2002, I had 2 year old twins and had very little appetite for risk.

By the way, did anyone at HP really think re-branding layoffs as “workforce reductions” would soften the blow of being fired?

Kiran Vemuri, the engineer directly in front of me and my office mate was not so lucky. Or maybe he was – after being laid off, he eventually found his way to the Bay area and later spent 8 years with Apple. Not bad... (He works at a startup now, I think.)

A year later, I received an unexpected opportunity in the form of an email.

As part of Carly’s “adopt and go” policy, she had eliminated the bulk of the pre-merger HP enterprise sales organization and sales of HP-UX based (UNIX) systems sales were in free fall.  Why did this mistake happen? As a veteran of the telecom sector (Alcatel), Carly had extensive experience with what was essentially a transactional technology sale. In other words, it was a relatively short sales cycle where price competition dominated and supply chain was the primary buyer. This approach fit well with a Compaq sales organization that was primarily focused on x86 “volume” server sales. It didn’t’ work well with sales of HP-UX systems, an $8 Billion HP business at the time, however. The sales cycle was often more than 6 months and sales reps had a much more complex sale on their hands. They needed to be able to understand and communicate the value proposition for servers running massive enterprise applications like Oracle and SAP. Buyers were often the technologists themselves, not supply chain. In other words, she thought the HP legacy sales force was "lazy".

Because most of the folks who could sell HP-UX servers were gone, Dan Brennan, the VP of HP-UX sales, put together a retraining program to train engineers to become sales people.

I’ll never forget the email – it came from our lab manager on a Sunday night and we had until only Wednesday to respond. It was like she didn’t want to send it but had to, probably because non of the volunteers would be back-filled and she had deadlines to meet. Volunteers would go through 6 weeks of sales training for this pilot and would then enter the sales force for a 6 month pilot.

I was about to enter the SMU Cox MBA program and this was a great opportunity to pivot my career. It was risky though. Layoffs ware probably not over and if the pilot program wasn’t accepted, we were pretty much at the front of the line for layoffs (despite assurances to the contrary).

Out of over 150 engineers in the HP Superdome chipset and microprocessor labs, Scot Heath, Jody Zarrell and I were the only ones to volunteer. (Since then, at least a dozen others have told me they wish they had signed up.)  Scot, Jody and I weren’t the only folks in the program however, there were about 25 of us. Most were from the True64 Unix and Alpha engineering teams from the Compaq side. I guess they saw the writing on the wall as those programs were all gutted in short order.

It was a wonderful summer:  We went through six weeks of training and soon found ourselves back in our respective homes across the US on various sales teams.

About 3 months later, Carly was on a worldwide tour of HP offices to communicate with employees about the new “end to end portfolio” strategy for the combined HP-Compaq. What a load of garbage, but she made it sound really, really good. If you’ve never seen her speak in person, her charisma and presence are simply stunning. I’m not at all surprised to see her in politics.

I decided that this was a great time to flex my new sales muscles in front of the more than 700 HP employees packed into the Richardson hotel conference center. My heart felt like it was pounding out of my chest as I stepped up to the microphone to ask my question.

Carly: Hi, what’s your name?

Me: Hi, I'm Tyler Johnson.

Carly: Oh, great name, my first boyfriend’s name was Tyler.

(Silence – you could have heard a pin drop while her statement put me off script and I paused.)

Me: I’m sorry but I’m taken.

(All 700+ employees, including Carly, explode with laughter for several seconds until it quiets down enough for me to ask my question)

I can’t for the life of me remember my question…

A few months later, the pilot program changed hands again with a management reorganization and the sales program was in danger of being cut. I remember holding my new twin daughter in a common area of the Scottish Rite hospital in Dallas after her hip exam waiting for a call from a new manager I barely knew to notify me if I had a job or not.

(Yes, I have 2 sets of twins! And I’m now an Entrepreneur?)

Good news, I still had a job.

I remember being really afraid of losing my income during such a critical time but it all worked out. The next 10 years saw great success: I graduated with high distinction from SMU with my MBA and I’ve had a distinguished career with HP, then NetApp and most recently with Rackspace. (all great companies)

None of this would have happened if Carly hadn’t made a mistake in firing all those HP salespeople and I hadn’t taken a risk.

Although successful with these large companies, something was always missing. I yearned to be able to create something on my own, and I’ve just taken an even bigger risk. After 12 years of planning, I left Rackspace in January to join the ranks of the entrepreneurs (or unemployed as some like to call us).

I’ve already made mistakes: I’ve been through 2 iterations already and am in the process of starting a third.

Success consists of going from failure to failure without loss of enthusiasm. – Winston Churchill

My experience has taught me that a combination of taking calculated risks and tenacity will take me to a better place. And that place is probably nowhere near what I imagined it to be. Putting myself out there and being willing to work harder and longer than others is what has and will continue to make all the difference. Even if I’d been laid off along the way, it wouldn’t have mattered. Many or even most of the folks laid off at HP and other places I’ve been ended up in much better situations. I’ve learned that if you focus on improving and working hard, the risk of losing your job is perceived, not real.

Two roads diverged in a wood and I - I took the one less traveled by, and that has made all the difference. – Robert Frost


David Litman, co-founder of taught me the difference between real and perceived risk in a conservative entrepreneurship course I took that he taught at SMU back in 2004. Most people over estimate the risk of being an entrepreneur and underestimate the risk of having a “steady” paycheck. Why? One word – fear. And not just fear, but irrational fear.

Are you willing to work harder and longer than your colleagues, engage in careful planning for years only to fail multiple times before you succeed, give up on materialist expectations for a particular standard of living in the near term (and possibly long term), and trust yourself to do something remarkable?

If so, it’s a race worth running and it’ll take you to a better place.

Thank you to all the people who've helped me on this amazingjourney so far.


I’m currently in pre-launch startup mode in the cloud computing space – I’m open to collaboration and/or I’d love to hear your thoughts, ideas and feedback.

For more insights, read my blog at or follow me on Twitter at @Tyler_J_J