Built a strong culture by hiring the right people, maintaining cultural fit, and balancing internal promotions with external hires as VMware scaled rapidly.
Drove communication and transparency through weekly all-hands meetings, Sunday leadership updates, and including founders as individual contributors.
Developed the product strategy by starting with a desktop product to mature the virtualization technology before launching the server product.
Committed to treating hardware partners equally and fairly, which built trust and allowed VMware to run on a wide range of platforms.
Launched VMworld as an industry event to grow the overall virtualization ecosystem, not just promote VMware.
Meeting Notes:
Building a Strong Culture
Diane Greene emphasized hiring the right people and maintaining the culture as VMware scaled rapidly
They had an "autoimmune system" where the company self-selected employees who didn't fit the culture
For example, a performance engineer left after 2 weeks, realizing it wasn't the right place for him
Diane Greene hired a VP of Engineering who left after 3 weeks, lacking confidence to keep up with VMware's pace
When scaling, Diane Greene balanced internal promotions vs external hires
For new roles like VPs of Professional Services and SEs, she hired talented individual contributors who grew into leadership roles as VMware expanded
Example: Hiring a Stanford grad who ran the track team to lead Professional Services. He scaled it to 1,200 people and ran it profitably.
Communication and Transparency
VMware had weekly all-hands meetings to share company updates
Diane Greene required her leadership team to send written updates every Sunday night by 9pm
She compiled them, highlighted key points, and distributed to the full team
This was an efficient way to ensure transparency and get everyone on the same page
The culture of openness was reinforced by including the founders (Ed Burian and Scott) in staff meetings as individual contributors
Product Development and Strategy
VMware started with a desktop product to get the core virtualization technology working first
Their original goal was to build a server/bare-metal hypervisor product, but realized it would be too disruptive initially
The desktop allowed them to test and mature the virtualization capabilities before launching for servers
When the desktop product gained market traction, they transitioned to focus on the server virtualization market opportunity
Relaunched ESX Server after working with hardware partners through the "Preferred Hardware Vendor Program"
Partnerships and Channels
Diane Greene committed to treating all hardware partners (IBM, HP, Dell, etc.) equally and fairly
Created explicit "rules of engagement" that the sales team had to follow
Promised not to disclose sales engagement with one partner to other partners
Shared intellectual property across partners, keeping proprietary work exclusive
This neutral approach built trust with partners and allowed VMware to run on all hardware platforms
When Microsoft wouldn't support Windows on VMware, the hardware partners provided frontline support contracts
Marketing and Events
VMware launched VMworld as an industry event, not just about promoting VMware
The goal was to grow the overall virtualization market and ecosystem, not just VMware's business
Enabled an open ecosystem of startups and large companies around the VMware platform
Diane Greene believed virtualization should run on every hardware platform to maximize customer value
Mergers and Acquisitions
VMware avoided major acquisitions early on due to lack of M&A experience
Diane Greene recognized the challenges of successfully integrating acquired companies
They prioritized organic growth over growth through acquisitions initially
Diane Greene advises startups with no M&A experience to avoid acquisitions, which are very distracting and commonly fail (even for large companies)
Scaling People, Culture, and Organization
New leadership roles were created as VMware's headcount grew rapidly
Diane Greene would "upgrade" roles like VP of Sales when she recognized a incoming leader couldn't scale
An open culture without blaming individuals for mistakes helped maintain VMware's entrepreneurial environment
Adapted hiring and real estate strategies for distributed workforce as team expanded
Lessons for Entrepreneurs
One doesn't necessarily need to start a new company from scratch to be an "entrepreneur"
Diane Greene encourages considering how to have an entrepreneurial impact within an existing company
Focus on building something you're passionate about in the right environment, whether a startup or established company
What matters is the people you work with and what you're building, not just starting a new venture