A few months after Bob Massey stepped down as president and CEO of CompuServe Inc. in 1997, he was thinking about the future of his career.
He’d led 3,600 employees at a nearly $800 million public company where he, himself, had served 20 years.
What interest, then, could this heavy hitter possibly have in joining a start-up company that, founded just two years earlier, was making less than 1 percent of CompuServe’s revenues?
The key: Equity.
When C.J. Petitti, then-president of CallTech Communications Inc., offered him a sizable share in the fledgling calling center company, Massey jumped. Massey was familiar with the start-up because he’d used it for outsourcing part of CompuServe’s $100 million annual investment in customer service, and he was a friend of Petitti. He saw the opportunity to leverage relationships he’d built in the Internet business for CallTech.
“I learned a long time ago the best way to make money is to get equity in a company that you’re building rather than focusing on a big salary,” Massey says, noting he wouldn’t have joined CallTech without an ownership stake. “I wanted a significant piece of the business.”
Petitti was all too happy to accommodate him since “I knew Bob wouldn’t stay for a long period of time unless he had a part of the company,” Petitti says. “I did not want it to be a stepping stone. I wanted him to stay as long as I could keep him.”
Massey says the prospect of growing his own successful company, especially one in his interest area of the Internet, also attracted him to CallTech.
Sure, he admits, there was an amount of uncertainty to joining the start-up. However, the gamble has paid off.
When he first signed on with CallTech, there were about 125 employees — and that included three owners besides Petitti: Todd Price and Kent Bowen, who shared in the management of the company, and Petitti’s brother, Phil, a silent partner. “Today there are close to 1,300 employees. There’s always risk, but I have a lot of self confidence, and I had confidence in C.J., Todd and Kent.”
Now chairman of CallTech, Massey won’t disclose his salary or the proportions of shares of the owners — five as of late October — but he does wish he’d made the decision to have ownership in a company 20 years ago.
“My personal wealth has increased dramatically,” he says. Revenues for CallTech in 1998 were approximately $13.5 million.
He’s also more comfortable with the decision-making process at the smaller company.
“Certainly as president and CEO of a publicly traded company, you make a lot of important decisions,” Massey says.
After all, CompuServe was having troubles of its own near the end of Massey’s term. “The main difference, however, is in the CallTech environment, the owners, the managers, are also the board of directors, and so we don’t have to turn to a third party to make things happen.”
For CallTech’s part, Petitti, who now carries the title of CEO, lauds the payoff in investing in Massey. In his first year with CallTech, Massey recruited major clients BellSouth and Priceline through relationships he had developed while he was at CompuServe.
Having top talent like Massey, as well as former Ohio Division of Travel and Tourism Director George Zimmermann, on staff hasn’t caused any major head-butting among the company management, Petitti adds.
“Quite frankly, we have the personalities to get into a room and disagree, and at the end of both of us talking about it, either one of us works it out or sees the light at the end of the tunnel,” Petitti says.
Still, he’s not naïve; he knows he didn’t get Massey without some sacrifice on his part, too.
“I think that one of the biggest challenges is that you’ve got to let go from doing everything,” Petitti says. “When you get powerful people like Bob, you’ve got to trust in what you’re getting.”
“I think the biggest key is you can’t be blindsided thinking that you can’t give up a lot. You’ve got to give up some equity to get people of this power,” he says.
“But in return, you’re going to get some additional business.”
Joan Slattery Wall ([email protected]) is associate editor of SBN Columbus.
