I had the opportunity to listen to Richard Baldridge, the President of ViaSat at a UCSD CONNECT event about a month ago.  Mr. Baldridge, with ViaSat CEO and founder Mark Dankberg, helped to guide the company from $80M in revenues to over $1B, and they recently launched a satellite, WildBlue Viasat 1that is touted to have twice the bandwidth of all other comparable commercial satellites currently in orbit, combined.  The company is clearly a success story, not just from a monetary standpoint, but also from a perspective of trying to change the world.  Anecdotally, their employees are recognized by other companies as intelligent, driven, professional and enthusiastic, characteristics any employer would like to have in their organization.  Mr. Baldridge is an interesting person and had a number of things to say about his organization that I felt were worth taking note of.

• He recommended reading Clayton Christsen’s “Innovator’s Dilemma”  – this book was influential on the way in which ViaSat built the company and culture.
• ViaSat measures the profit of the business as a whole rather than per business unit – this allows strategic investments that may lose money (up to a point).
• They never “bet the farm” – there are no investments or opportunities that if they fail will sink the business.
• • They use commercial and government work to balance each other out.
  • Very few companies do this well (GE and a few others). They are focused upon developing a portfolio of businesses to ensure a diverse customer base and revenue stream.
• They have very few rules (if a new rule comes up they make sure it is absolutely necessary before implementing).
• The management structure is decentralized with significant authority given to managers.
• To ensure the quality of the management team in this model they look for independent thinkers who are fearless about competition and have a high risk tolerance.
• Their acquisition strategy is based upon acquiring the components necessary to create a capability that did not exist before.
• CORRECTION – Unlike Apple, which doesn’t invent anything, ViaSat is are vertically integrated so they don’t have to rely on components from others and can improve many more elements in thesystem than they could just by integrating other components.
• They form partnerships with suppliers and integrate the final product.
• Most acquisitions were companies that approached ViaSat with hopes of being acquired.

• When Mr. Baldridge joined ViaSat, there were a number of VPs who “couldn’t be fired.” He followed these guidelines when deciding which to keep:
  • If they were star performers, good in their area and pulling in the direction of the team, they stayed.
  • If they were brilliant thinkers in their areas and pulling in the direction of the company but difficult to manage, he kept them.
  • If they were leaders who wanted to control growth, create fiefdoms, and made decisions that were in their own best interest vs those of the company, regardless of their performance, he fired them.
• They groom and promote leaders that embrace the corporate values.
  • They are very focused upon getting their new employees straight out of school.
  • He had an anecdote of how his father worked for Dupont.  The company moved from a strategy of hiring new blood to hiring only those with experience in the field.  The punch line was that when the flow of new blood stopped, the company almost tanked.
• ViaSat has a very thorough and rigorous interview and hiring process.
• Even after they went public the top leadership and founder maintained a significant amount of stock so they could follow a vision and ignore pushes from the market to change direction.
• For their consumer business they use very focused and targeted marketing strategies.
• Part of their vision is to focus on really hard problems and find technologies that when integrated could solve them.
• They have no org charts except when required for presentations
• Their corporate culture emphasizes pure meritocracy.
• They only offer salary incentives to sales people, all other employees would receive bonuses based upon the success of their group and the company.
  • No cost of living raises.
  • 60-70% of the company would qualify for bonuses.
• Most of their product development is funded by the customers.
  • Only 5% of their revenues are spent on product development.
  • This number is 20% if customer funds are included.
  • They split up growing areas into different divisions rather than allowing the growth of empires.

Although some of these concepts will not work for all companies, taken together they clearly appear to be a formula for success, for ViaSat at the very least.  I briefed my senior management team with my takeaways and notes on variations of these themes that I intend to implement in my own company.  None of these are earth shattering, never heard before management concepts, but they are common sense and clearly good business, with the key to success being in the execution.