Attack Where They're Strongest

Akamai CEO George Conrades doesn't believe in giving competitors a chance to catch their breath. "Go as fast as you can and suck up their oxygen," he advises.

by Gavin McCormick boston.internet.com [January 11, 2000]

It's not that you wouldn't want to meet George Conrades, the chairman and CEO of Akamai Technologies Inc., in a dark alley. It's more that you'd want to avoid him in an open playing field.

Conrades, a trim, sharp-featured man who since joining Akamai (Nasdaq: AKAM) last April has guided the Cambridge Internet infrastructure firm to stunning market success, came off as both affable and plain-speaking during an address Monday night to a packed dinner crowd of about 100 at the Harvard Faculty Club, an event sponsored by the Massachusetts Interactive Media Council.

His directness stood out in an Internet culture filled with techno-jargon and business cliches. His energy and focus seemed remarkable even in a world filled with monomaniacs who survive on four hours of sleep a night. And, underneath his geniality, his competitiveness seemed almost fearsome.

"The big business challenge today is that everything happens in turbo time," said Conrades. "If you're not exhausted, you're not in the game. This is hockey, not golf. If you don't feel like you're getting slammed into the boards, you're not on the ice."

Clearly Conrades is a man exhilarated by a solid body check.

Give no quarter
Among his words of advice: attack your competitors where they're strongest, as Microsoft did with Netscape or as Dell did with Compaq Computers. When a questioner who said he was taking his company public in a year asked for counsel, Conrades didn't let him finish the question: "Cut it in half. Work your ass off and go out in six months. Go as fast as you can and suck the oxygen from your competitors."

Akamai (AH-kuh-my; the name is Hawaiian for "clever" or "cool") has been taking in oxygen at a furious rate since it burst onto the Internet scene a year ago. The company's game is simple: delivering the content of Net companies, everything from text to streaming video, more quickly and reliably.

To do the job, the company has over 2,000 servers set up across more than 100 telecommunications networks in 50 countries across the globe. Akamai can map the status of the Net within seconds at any given time, almost instantly determining the quickest route to deliver data from content provider to user.

Selling speed
For companies that pride themselves on Internet speed, like Yahoo, it cuts delivery time in half; for many customers, especially those with "rich" content that takes time to download, it can slash delivery time by a factor of 10 or more.

Despite the technological and economic transformations the Net has engendered, Conrades said some fundamental truths haven't altered since he started working for IBM in the 1960s, working to build the first transistorized computer.

"Cheaper, better, faster," he said. "Underneath it all, the same rules apply. We were trying to replace mechanical accounting machines with something cheaper, better and faster back then, and that's what Akamai's doing with Internet content delivery today. Those rules apply whether it's the agricultural, industrial or information revolution."

Venture funding plus
Conrades is a partner in Polaris Venture Partners, one of the venture capital firms that funded Akamai when it formed last January. By April, he'd taken over as its chairman and CEO. And, beyond the company's technological edge, it was his conviction of its eventual market dominance that helped convince investors to go on a wild spree when Akamai had its initial public offering in October.

"Look, you've got to believe in your company and what you're doing," said Conrades, who did 71 pitches to investors in the nine days leading up to the IPO. "These investors are smart, and if you're unsure, they'll smoke you out. The only way to beat it is to believe. Half the time during those nine days, I didn't even know where I was. But I knew what I was saying because I believe it."

From a starting price of $26 a share, Akamai zoomed over $200 on its first day. On Monday it closed at $285.50, putting the firm's value around $26 billion.

Revenue isn't everything
"Of course our revenues don't justify a $30 billion market cap, so everyone howls," Conrades said. "But it's not about revenues. It's about the potential to be a market leader. Can you be a gorilla in your market space, and can you give a hint that you can sustain it? We can."

Conrades defined Akamai's IPO as a success, but not strictly in financial terms: "You measure success today not by 'time to market' but by 'time to market cap'," he said. "IPOs are not for money but for marketing traction. And we got it, huge."

Since going public, Akamai has used that traction to help it line up customers—and it has succeeded impressively. Within a month the company had 100 customers. Last week it announced that that figure had doubled, including seven of the Web's 10 most popular search engines, 75 e-commerce sites, 10 financial service sites and 20 sites devoted to software downloads.

Pyramid strategy
Conrades said the firm focused first on convincing players "at the top of the pyramid" in each marketplace—Yahoo, for instance, in the search engine world. Now, he said, Akamai is moving steadily down each pyramid. When he talks about "sucking oxygen from competitors" like Adero and Digital Island, this is what he means.

"But I'm not sanguine," he said. "Once you get a huge market cap, everyone sees how valuable your space is and competitors come out of the woodwork. And everyone knows how fast things change these days."

The CEO sees one of his jobs as not letting employees get sanguine, either. He told a story about one of Akamai's 350 employees, all of whom are paper millionaires.

Easy come?
On the Sunday after the IPO, Conrades bumped into a 21-year-old MIT graduate who'd just started full-time work at Akamai. When Conrades asked him how much he was worth, the young man turned flame red before stammering a figure in the double-digit millions.

"And how does that make you feel?" Conrades asked.

The kid responded, "Why do you think I'm working on a Sunday?"

That's the attitude an ultra-competitive boss likes to see. "We've got a lot of people working their buns off to make sure that our stock's under-valued," Conrades said.

—End