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Leading through Adversity

Paul Sagan: February 18, 2010; Running Time: 0:51:00

About the Lecture

About the Lecture

Few companies have endured such hardship, or risen to such heights in a brief span of time as Akamai Technologies. Paul Sagan tells how he became the CEO of this young firm, and helped it survive and then flourish despite “unimaginable adversity.”

Brought up in a Chicago newspaper family, Sagan trained for a life in journalism. He cut his teeth as a broadcast news producer and executive in the 1980s, and in the 1990s. He helped launch New York 1, a cable news network pioneering digital video technology, and later, an interactive TV project in Orlando that featured video on demand and customized newscasts. Over the years, says Sagan, he picked up critical lessons on running a business: Don’t count on the permanence of any customer, job, or venture. He also “glimpsed the digital future,” realizing that if “you married the interactivity and openness of the web with the bandwidth available from cable…you could change the way the internet worked.”

In 1997, Sagan met a group of MIT computer scientists, including Tom Leighton and Danny Lewin, who had the “crazy, big idea” of applying mathematics to improve internet performance. Businesses frustrated with breakdowns of fragile central servers could rely instead on a network of servers coordinated by sophisticated software. It was “air traffic control” for internet packets and routing. Venture capital money poured in, and Akamai Technologies was born in 1998, with Sagan as chief operating officer. But all was not well: While “everyone wanted a piece” of Akamai, the company was hemorrhaging funds. Then in early 2001, the internet economy burst, and Akamai’s customers vanished.

“We were feeling sorry for ourselves,” says Sagan, who recalls laying off 2/3rds of the employees. “Then the unthinkable happened:” Danny Lewin died in the crash of Flight 11 on September 11th. “Few believed a business, especially ours, could survive a blow like that.” Sagan was determined to shepherd the company through the twin disasters of economic collapse, and the loss of Danny Lewin, the “driving force” of Akamai’s culture.

He slowly rebuilt the customer base, focusing on selling services to larger corporations that promised greater stability. Some clients “turned out to be real businesses,” such as Yahoo and Amazon. The year 2003 saw Akamai’s first positive cash flow, and the first profits came a year later. As he closes the books on 2009, Sagan proudly cites revenues approaching $900 million. He’s unshaken in his conviction that the “internet is the biggest business idea of our generation.” Akamai, says Sagan, “will hopefully face a little bit less adversity” in its second decade.

NB: From 45:43 to 46:40, there is a loss of audio.

Lecture Details

Location: Wong Auditorium

“I learned that no business is permanent, and no set of managers or employees get a guarantee that things won’t change, that customers won’t defect, and that businesses may not wither or die. ”

Paul Sagan

About the Speaker

Paul Sagan

President and CEO, Akamai Technologies, Inc.

Paul Sagan joined Akamai in October 1998. He was elected to the Akamai Board of Directors in January 2005, and became CEO in April 2005. Previously Sagan served as a senior advisor to the World Economics Forum, consulting on information technology in the corporate world.

In 1995, Sagan was named President and Editor of New Media at Time Inc. He was a managing editor of Time Warner's News on Demand project, and a founder of Road Runner, the first broadband cable modem service. In 1991, Sagan developed NY 1 News, a cable network known for its use of digital video technology.

Sagan is a graduate of Northwestern's Medill School of Journalism, and he began his career in broadcast news at WCBS-TV in 1981. He is a three-time Emmy Award winner, a fellow of the American Academy of Arts and Sciences, and a Global Leader for Tomorrow with the World Economic Forum. He is also a director of Massachusetts-based EMC Corporation.

Paul Sagan

Sagan's profile at Akamai

About the Host

About the Host

MIT Sloan School of Management

The MIT Sloan School of Management, based in Cambridge, Massachusetts, is one of the world’s leading business schools — conducting cutting-edge research and providing management education to top students from more than 60 countries. The School is part of MIT’s rich intellectual tradition of education and research.

MIT Sloan began in 1914 as engineering administration curriculum in the MIT Department of Economics and Statistics. The scope and depth of this educational focus have grown steadily in response to advances in the theory and practice of management to today’s broad-based management school.

A program offering a master’s degree in management was established in 1925. The world’s first university-based executive education program — the MIT Sloan Fellows — was created in 1931 under the sponsorship of Alfred P. Sloan, Jr., an 1895 MIT graduate who was then chairman of General Motors. A MIT Sloan Foundation grant established the MIT School of Industrial Management in 1952 with a charge of educating the “ideal manager.”