Reed Alum With a Perfectionist Streak? Don't Call Him Steve Jobs

  • Luke Kanies’s Puppet Labs spurns a ‘workaholic standard’
  • Software startup targeting 2017 for initial public offering

Luke Kanies is trying to figure out how to mimic Steve Jobs’s success without being a jerk.

The chief executive officer of IPO-bound software startup Puppet Labs has a lot in common with the Apple Inc. co-founder and has read just about every book about him. They both spent time in communes. They both went to independent-minded Reed College. And like Jobs, Kanies is a stickler for detail, obsessing with minutiae down to the color of his shoes.

Luke Kanies

Source: Puppet Labs

That combination of subversiveness and perfectionism proved successful for Jobs, and it’s helped Kanies make Puppet Labs a rising star in the technology industry. An initial public offering slated for this year, in which he targeted a $1 billion valuation, has been scrapped until 2017, thanks to turmoil in the stock market. But analysts still consider Puppet Labs a top contender in the market to help corporations automate their giant data centers -- a market poised to explode to $7.53 billion by 2019, up from $3.16 billion in 2014, according to researcher MarketsandMarkets.

The opportunity for Puppet Labs’ software “has never been bigger,” said Matt Murphy, who led two rounds of funding while at Kleiner Perkins Caufield & Byers. The company raised a total $86 million from investors including Kleiner, Cisco Systems Inc. and Google Ventures.

With Wall Street watching, Kanies’s challenge is to keep pushing Puppet Labs ahead of a crowd of rivals, catering to a growing roster of corporate clients from Starbucks Corp. to Bank of America Corp. and the New York Stock Exchange -- all while reining in the excesses of corporate behavior he believes are unproductive. Kanies says you won’t see him keeping employees working late into the night and skipping weekends to get a key product feature just right -- instead, he encourages employees to work no more than 45 hours a week.

“You’ve got to be better at compromise than I think Steve was,” Kanies said. “At some point you have to say enough is enough; you got to get this thing out the door. You’ll never find me caring deeply about the individual shade of blue.”

‘Firing on all Cylinders’

Puppet Labs “looks at market conditions for the right timing” for an IPO, Chief Financial Officer Bill Koefoed said in an interview. The company is close to cash-flow positive, and bookings grew 72 percent in the year ended Jan. 31, he said.

Puppet is probably the largest and most mature company in this market, ahead of competitors such as Chef and Red Hat Inc., said Mary Johnson Turner, an analyst at researcher IDC. The software maker seems to be “firing on all cylinders,” she said.

Last month, Puppet Labs secured a $22 million credit facility to expand its 75,000-square-foot Portland, Oregon, headquarters by 50 percent in 2018. The company’s office has three beers on tap and a ping-pong table.

Formidable challenges await, such as selling to larger clients. The company must also provide more tools to manage security, mobility and the millions of objects being connected to networks, Turner said.

Yet No ‘Workaholics’

Despite that long list of tasks ahead, Puppet Labs’ employee handbook cautions against the “workaholic standard,” stressing instead how rejuvenation is the key to creative problem-solving, innovation, sustaining engagement in one’s work, and maintaining positive work relationships, said Justin Dorff, a spokesman for the software maker.

The company takes a similar approach with vacation time. Every Puppet Labs employee gets about four weeks off. Some years workers might go over that amount; other years they might go under. “And that’s OK,” said Dorff. “We trust our employees to do the right things for themselves when it comes to rejuvenation.”

In the early days of Puppet Labs, Kanies had logged tens of thousands of air miles promoting his software, and was on a plane returning home when his wife gave birth to their twin girls.

“I burned out, and I burned out badly,” Kaines said. “It made me a lot more willing to forgive myself. I now don’t feel guilty for not working.”

Only ‘Personal Mastery’

As a student at Reed, Kanies “basically read the manuals and read up on the techniques and figured out how to do it all himself,” rather than inundate professors with questions, said David Dalton, his thesis adviser. “I am not surprised he’s been successful. He is very hard-driven,” he said.

During this time Kanies took out a loan to buy his first computer, which he said he learned to master by “breaking” and then learning to “fix quickly.” He took a series of corporate IT jobs before he got the idea for Puppet and began coding, subsisting on frozen pizza and his wife’s $23,000 student stipend.

Kanies attributes his quest for self-improvement to “The Book of Five Rings,” a 371-year-old text by a Japanese swordsman named Miyamoto Musashi, whose lessons on defeating adversaries have become popular as a management text.

“When I ask myself when is enough enough, a big part of what I am trying to accomplish is really the pursuit of personal mastery,” he said.