PeopleSupport's new CEO looks for growth
Company that has raised $75 million in funding expects to increase work force to 600 by end of year.

April 12, 2001
By Michael Fisher

WESTWOOD VILLAGE, Calif., April 12 ( -- PeopleSupport Inc. has hired Charles Callahan as the company's new CEO. He replaces Founder Lance Rosenzweig, who will continue as chairman of the board.

Westwood Village, Calif.-based PeopleSupport provides customer support services, such as voice, live chat, e-mail and Web collaboration, to about 100 clients, including Time-Warner, GE Capital, Fleet Bank, Network Solutions and World Book.

Callahan was most recently general partner with Tiberon, Calif.-based Triangle Ventures, a private equity and turnaround firm specializing in the high technology industry and the business-to-business arena.

Although he has never held a CEO position, Callahan said he would be able to draw on his 20 years of experience in management consulting. He ran Baan Co.'s $300 million professional services business. And as a partner with with Booz, Allen and Hamilton, a management consulting and technology firm, he spent most of his time working with CEOs.

"In management consulting you see the top and bottom, the best and the worst companies," he said. "You get a set of experiences that qualify you for being a CEO."

Why PeopleSupport? "I was looking for something that had a value-added service," said Callahan. He said was also seeking the opportunity to build a company that had barriers to entry that would keep others from easily invading the space.

PeopleSupport is a company that Callahan saw as having a number of important assets. "They have class A investors and class A clients," said Callahan. "This is really what I was looking for."

He was also impressed that the management team and Rosenzweig supported the change to an outside CEO. "I think that most young companies inevitably do a transition from founder to outside CEO," he said.

Getting to know youPeopleSupport wasn't Callahan's only option, either. "I probably looked, in the past couple of years, at 15 opportunities," he said. In making his decision, he wanted to be sure that the board and management team were committed to a transition and that the founder would be a partner.

The process of getting to know PeopleSupport, and vice versa, took from November of 2000 to February. Callahan took over the CEO position on March 19. "The first thing I set out to do was to make sure the financial situation was as it was portrayed," said Callahan. "Looking at the (cash) burn rate, we can live for probably a year at the current burn rate." The company has raised $75 million in venture funding since its founding.

Callahan said that PeopleSupport will continue to build its call centers in St. Louis and Manila, but that Los Angeles would continue to be the company's headquarters. "We want to be in L.A.," he said. "Some of our key investors are here. The management team is here, and it's a gateway to Manila. We are looking for other facilities in L.A."

PeopleSupport now has more than 500 employees. Of those, about 250 are in St. Louis and 200 in Manila. Callahan said he expects the company's total to reach 600 by year's end.

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