Musings of a Tech CEO:
What We Learned Building and Scaling a Billion-Dollar Business
By Marcos Lopez
My professional journey started in the late 1990s after earning my degree in computer science from the University of Calgary. Although more than two decades ago, I vividly recall how eager and ambitious my business partner and I were at the time, not to mention naive. We didn’t have a master plan or even an end goal in mind. We just knew that we wanted to do something on our own and build great software.
We founded Bitonic Solutions in 1999 with nothing more than a logo and the desire for an adventure. The internet was still coming of age, and it was a great time for a couple of young software developers who loved coding and wanted to help clients with this exciting new medium. One of those clients was a new startup called Solium (now Shareworks), whose idea we liked so much that we invested in their initial seed round.
After a wild three years growing Bitonic and working closely with Solium, we merged in 2002, becoming their in-house engineering team focused on building the company’s Shareworks product. 2002 was a reset year for Solium after barely surviving the dot-com crash. Over time, the business steadily grew into an incredible 900-member team across 14 offices in 7 countries, increasing its revenue each year.
I had the privilege to play several positions on that team over the years, starting as our CTO, then in various leadership roles across the business before becoming CEO In 2015. Four years later, Morgan Stanley acquired Solium for $1.1 billion. It was an incredible experience that grew the company’s reach, created exciting new career opportunities for the team, and significantly accelerated the growth of the business.
From Tech CEO to Inovia Executive in Residence
After ensuring the business and the team were set up for success, it was time to explore my next chapter. Solium Board member and Inovia partner, Shawn Abbott, thought a rewarding option could be sharing my experiences and supporting Inovia portfolio companies as an Executive in Residence (EiR). I look forward to using the experience and network we gained from building a global business to help other founders and teams on their own journey to creating enduring businesses.
My time at Solium was an amazing ride. We enjoyed more than our fair share of luck and got to work with incredible teammates along the way. But, we also made many mistakes and learned a lot of important lessons. Here are a few of the lessons that a younger me would have found helpful.
Developing a world-class work culture defined by what you show you value
We created a powerful culture at Solium that fostered a highly unified team with a shared purpose and passion for what we did and how we did it. It featured everything from annual year books celebrating stories and accomplishments to a unique recognition program where team members could use badges to recognize each other for exhibiting our company values or to celebrate projects they felt were important.
We also invested in a meaningful corporate awards celebration every year that we live streamed to all of our offices. And because storytelling is a deeply ingrained human trait, we tried to create lots of opportunities to use it to make everyone feel more connected and aligned.
Your company is going to have a culture whether you explicitly define it or not. And, to paraphrase Netflix CEO Reed Hastings, one of the strongest signals you’ll send your team about the culture you want to build comes down to who you hire, fire, and promote. Think about what you want to reward and how you show your team and customers what’s important to you. Your team will emulate the person you promoted or the actions you took (or didn’t take).
Another underestimated piece of building a culture is how important the words you use to communicate are. Your specific choice of words plays an important role in creating your team’s reality. Try to phrase things in a positive way and thank people often, out loud, and in front of others. Never underestimate the power of a simple compliment or of telling someone they’ve done a good job. This doesn’t mean you can’t have hard conversations. It just means that you should be thoughtful about how you have them and the outcome you desire. We all achieve better results when we feel our team believes in us.
Acquisitions are powerful but challenging
Over the years, we completed 11 different acquisitions. As you might imagine, we also looked at and chose not to complete, or were simply unsuccessful in completing, several more. Some acquisitions helped us expand into new markets, while others augmented product lines and allowed us to gain domain expertise faster.
Acquisitions can be exciting and transformative, but they’re also a lot of work and risky — both from a capital and focus perspective. What’s more, the real work doesn’t begin until the deal closes. Successful acquisitions don’t happen in the boardroom. They’re generally the result of thoughtful, meticulous execution well after the ink dries. That includes creating frameworks and report cards to ensure you’re tracking to your objectives and successfully executing and integrating the acquisition.
I also firmly believe that in almost all acquisitions, someone from the acquiring company should relocate and work directly out of the acquired company’s offices. It’s almost impossible to fully come together unless senior team members integrate into each other’s organizations and make this commitment. Without that kind of commitment and discipline, you won’t know how the integration is really going and be able to learn which of your assumptions were right and wrong.
Understanding why you’re making an acquisition and spelling out your plan before signing a definitive agreement is critical. Know who is responsible for key outcomes, who is relocating, and how existing job functions will change. It’s worth pointing out that some of the best deals we made were the ones we never completed. We learned just as much, if not more, from the ones we didn’t do as the ones we did.
Building an enduring business is never an overnight success
Over 20 years, we experienced bull and bear markets several times over. As part of that experience, we gained the emotional fortitude to know that the health of the business was our leading indicator and the thing we needed to keep focused on.
While it’s incredibly important to know the economic cycle you’re in, more important is understanding what’s generating revenue, growth, churn, and margin for your business. Know what drives your company’s enterprise value, both near term and over the long term. Being intimately familiar with these business drivers, both in good times and bad is critical for knowing when to lean in and when to pull back based on prevailing market dynamics. Don’t let the noise distract you, be mindful but ensure you have conviction. Annual budgets and three- or five-year plans can be powerful lighthouses for you and the team to know where you’re pointed.
The more you can instrument the business and understand your most important metrics and drivers, the quicker you can react. Don’t make the mistake of confining these numbers to the C-Suite; drive transparency into your team at all levels so that they know both the good and the bad. That way, everyone can row together, and you benefit from having a team that has greater context on the why.
Ultimately, if you want to build an enduring business, you have to play the long game. While you can’t afford to ignore what’s happening around you, don’t overreact either. I love the Bill Gates quote, “Most people overestimate what they can do in one year, and underestimate what they can do in ten.” We often missed many parts of our yearly targets, but we were almost always further along five or ten years down the road than I would have expected. Conviction and stamina are powerful enterprise-building traits to instill in your team.
From Lessons to Action
I hope sharing my experiences can help accelerate more successful outcomes than a pure first principles approach. It’s an honour to be able to share my learnings and gain valuable insights from other entrepreneurs.
-marcos
