NCA Ernst & Young Entrepreneur of the Year
president and CEO
As the president, CEO and chief visionary of Equinix, the world’s largest data storage infrastructure and co-hosting provider, Steve Smith is leading by example and guiding his company into a promising future.
A graduate of the U.S. Military Academy in West Point, N.Y., Smith was shaped by his eight years in structured and disciplined military service. Then, his years in management at Electronic Data Systems, Lucent Technologies and Hewlett-Packard helped refine his leadership style and prepared him to take the helm at Equinix in 2007 on the cusp of an imploding global economy.
Not only did Smith help Equinix withstand the economic crisis, it has posted 41 consecutive quarters of growth and positive earnings. The company has found success because the data storage services and co-hosting technology are literally “mission critical.”
Equinix differentiates itself with ever-expanding network infrastructure and Smith’s development and advancement of data business ecosystems. By developing facilities in the most expensive markets, clients can use an Equinix facility rather than making their own sizeable investment. The ecosystems allow similar businesses to consolidate and interconnect for previously unimaginable efficiencies and speeds.
The company also continues its expansion into new emerging markets, such as China, Indonesia, Brazil, India and Russia, managing the risk of varying regulatory environments and cultural philosophies.
By some estimates more than 50 percent of Internet traffic flows through Equinix data centers.
One of the things that originally impressed Smith about the company was the strength and character of the existing leadership team, so he has been careful to preserve that.
Smith quotes the behavioral scientist Jim Collins when describing his role in building the Equinix management team, “My job is to get the right people on the bus, get them seated in the right places, decide which direction the bus needs to go and then drive.”
How to reach: Equinix, www.equinix.com
NCA Ernst & Young Entrepreneur of the Year
president and CEO
As the president and CEO of one of the fastest growing and most dynamic staffing businesses, Fabio Rosati is showing what it truly means to work differently.
A native of Italy, Rosati emigrated to the U.S. to attend Georgetown University with the intent to return and eventually run his family-owned business. However, when the business failed, Rosati decided to stay in the U.S. and launched a successful career in management consulting.
He joined Elance in 2001 after being recruited to help stabilize, nurture and grow the struggling start-up enterprise software business.
As a result of his dedication and drive, Rosati revived the fledgling software business, sold it and in 2007 used the proceeds to launch a new and revolutionary Elance platform that propelled the traditional hiring and staffing process for contract talent into the digital realm.
Online staffing enables businesses to hire and connect with contingent staff just in time and fractionally. Rosati’s Elance pioneered the online staffing model and leads in its promotion.
More than 500,000 businesses, ranging from Fortune 500 companies to startups, use Elance to hire a single individual for a few hours or entire teams on an ongoing basis.
A tireless researcher of behavioral science, Rosati also seeks to understand what works for employees in a traditional work environment, and then translates/codes that into the Elance platform.
Every new user starts at Level 0 and is promoted to higher levels based upon points earned each week that come from 20 metrics specific to the work the employee performs. Employees at a higher level earn a higher wage and have more work made available to them.
Rosati also recently hired an independent consultant to analyze Elance’s global social impact. Notably, the report found the company is making its mark on individuals and communities worldwide by providing access to work that otherwise would be unavailable.
How to reach: Elance, www.elance.com
How Christian Friedland used a ‘never good enough’ attitude to generate millions in sales at Build.comWritten by SBN Staff
NCA Ernst & Young Entrepreneur of the Year
president and founder
In 2000, Christian Friedland had the idea of bringing the home improvement business into the 21st century with a specialty e-commerce website selling faucets and fixtures — faucetdirect.com.
With only $2,000 in start-up capital and the help of a partner, the website produced approximately $1 million in revenue in the first year of business. Friedland has continued to launch new specialty e-commerce sites, reinventing and improving with each.
Today, the company is an international network of more than 12 specialty home improvement websites under the umbrella of Build.com. Friedland, the company’s president and founder, has gone from being an upstart entrepreneur operating out of a garage to building a company with more than 350 employees and more than $324 million in sales.
Friedland has also worked to develop a culture of empowerment for his employees, which enables his people to provide the best support to the company’s customers.
Build.com’s new facility is outfitted with adjustable stand-up desks to improve posture, workout facilities including daily yoga classes, table tennis tables and even an industrial grade kitchen. The goal is to continue to cultivate long-term relationships with employees who can grow with the business.
Most of the management has been promoted from within, often starting in the call center and working up.
The company has developed strong infrastructure by keeping virtually all functions in-house. Friedland is a firm believer in not giving verbal rewards for achieving goals, but rather monetarily rewarding employees.
He also embraces what the company calls the “Darkside,” which is an obsession with not being good enough. That attitude pushes Friedland to take risks like leveraging Build.com in Europe — a move that was met with some skepticism — but now expansion plans are in the works.
The company is planning to hit $800 million in revenues in the next five years, although Friedland has set a personal growth goal of $1 billion.
How to reach: Build.com, www.build.com
NCA Ernst & Young Entrepreneur of the Year
CEO and founder
As one of the early leaders within an up-and-coming industry, BrightRoll CEO Tod Sacerdoti has transformed his company into one of the most profitable and successful online video advertising firms that reaches audiences across Web, mobile and connected TV.
Within the last decade, customers have increasingly engaged with digital devices for everyday activities and shifted away from traditional TV. In 2006, Sacerdoti noticed this and realized there wasn’t a viable and scalable way to monetize digital video content. Thus, the idea for BrightRoll was born.
Sacerdoti believes in putting his employees first, and promoting an extremely flat and transparent work environment. He empowers his employees and gives them the autonomy they need without micromanaging. This translates to an efficient and well-run organization without overlap in responsibilities or oversight.
That employee empowerment also comes into play with BrightRoll’s quarterly “HAX Day.” Here, staff team up with others outside their department to work on a project of their own choosing to benefit the industry, company or fellow employees. Projects have included mini websites, community volunteer groups and some BrightRollers have even redesigned the office lunch space.
The online video industry is extremely competitive and dominated by a number of players that have raised enormous amounts of capital. Despite this, BrightRoll has grown faster than its peer group of companies and has done so with the least amount of capital raised, which is a testament to Sacerdoti’s leadership.
The company works with 90 percent of the top 50 U.S. advertisers and the world’s largest ad agencies.
Sacerdoti’s forward-thinking has ensured BrightRoll is ahead of the constantly shifting digital landscape to offer the most advanced solutions for advertisers, while giving publishers access to the industry’s largest video marketplace.
As an industry leader, he not only speaks at conferences and through media channels, but also has made a $1 million pledge from BrightRoll toward industry innovation and research around online video and advertising.
How to reach: BrightRoll, www.brightroll.com
NCA Ernst & Young Entrepreneur of the Year
founder and CEO
Aaron Bell’s background and path leading up to establishing advertising firm AdRoll is quite remarkable. Before becoming CEO of his own company, Bell was programming and creating video game software that was sold and distributed nationally when he was 12. Three years later he became the youngest software engineer ever to be hired by Microsoft.
While at Stanford University, Bell studied artificial intelligence, started a Facebook-type website that was unfortunately shut down by the university, and worked with NASA to lead and design schedulers for manned space flight missions.
It was during difficult economic times that Bell founded AdRoll in 2007, but he stuck with it through the years of slow growth while he struggled to generate profit. By taking time to understand customer needs and creating a transparent product with a high ROI, customers simply could not say no.
Online display advertising is usually purchased by cost per ad impression served. In an effort to make sure the company could report the websites on which clients’ ads are placed and the cost of each placement, AdRoll charges a 30 percent margin on top of the cost of each impression. This increased reporting is unlike many of his competitors who place ads on spam or low-quality websites with high chances of accidental clicks but little chance of reaching a client’s customers.
With Bell’s technical background, the AdRoll team was able to develop proprietary technology in-house, rather than integrating with third-party software, and these technologies are more robust with advanced retargeting tools.
While it can be challenging for Bell to retain the company’s unique, entrepreneurial culture as it grows, he’s managed to maintain the same approach to people, culture and management as he did when the company was in its infancy.
In fact, the company has an almost perfect retention rate — only four of the current 130 employees have left of their own accord in the past three years.
How to reach: AdRoll, www.adroll.com
Business today is more competitive than ever. With a few clicks of the keyboard, every customer can research, price check and read reviews of your product or service. Many times, with one more click, they can have that same product delivered to their door from anywhere in the world. Want it tomorrow? No problem.
So how does a business succeed in this era of the empowered consumer? How can it differentiate itself? I’ve given this question a lot of thought, and the answer may lie in a practice called Customer Experience Management.
Failing on the promise
Let’s talk about customer experience. How many times has a customer service representative ended a conversation by reciting something along the lines of, “I hope you received excellent customer service today,” when the service was less than gratifying? How satisfied did you feel after hearing their script?
Most businesses pay lip service to the idea of superior customer service, but when it’s time to execute, they fail. Their departments are structured to run their own processes smoothly, not to ensure their customers think, or better yet, say, “Wow.”
CEM asserts that if we put our customer’s experience at the core of our business and subsequently construct functional departments around it, we will gain that competitive edge. Yet, truly understanding the customer’s experience while interacting with your business is easier said than done. So, how does one reinvent a company with the customer at the center?
Start at the touch points
Begin by becoming aware of your company’s touch points — all the places a customer comes into contact with your business. Keep in mind that these touch points vary widely. They include obvious departments such as telesales and customer support, but these touch points also include the clarity of the invoice/statement, your website, your ad in the newspaper, a partner or retailer and many more.
We did a quick count at my company and discovered 26 touch points! Too many for sure, since more touch points mean more opportunities for mistakes.
After you’ve identified the touch points, do some investigating. Be the mystery shopper, in person and on the phone. Listen to the language a salesperson uses to describe your product or service. Do it again. Notice the differences between what you hear depending on who is serving you. How did their actions differ from what you wish they had done?
Once you experience every touch point first hand, you might begin to feel your customers’ frustration, pain and sometimes, surprise. Then you can begin rebuilding toward a satisfying customer experience.
Use CEM as a tool
Right now at EVault, we’re working hard to reduce and improve each touch point using a CEM lens. For us, that means creating simple, valuable, authentic and pleasantly surprising exchanges.
We want each customer to feel that every interaction with EVault was worth their time, was clear that we genuinely wanted to help, and that we did something pleasingly unexpected.
How do you want your customers to feel when they interact with your business? You need to find out and then rebuild.
Terry Cunningham is president and general manager of EVault Inc., a Seagate company. He founded Crystal Services, which was purchased by Seagate in 1994 and integrated into the company’s software division, which then became Seagate Software. He has also served as president and COO of Veritas Software, and founded, built and led two other successful software companies.
“A ship in port is safe, but that’s not what ships were built for,” is a quote that hangs in Brig Sorber’s office at Two Men and a Truck in Lansing, Mich. Sorber uses that quote to define the new direction in which his company has been moving.
“I love that quote because this ship, Two Men and a Truck, has been in port for too long,” says Sorber, CEO. “We’ve got to get this into deep blue water. There are a lot of challenges out there and a lot more risk, but that’s where business is done. We need to start moving forward and accept the challenges.”
Sorber and his brother, Jon, started Two Men and a Truck International Inc., a moving company, in the early ’80s as a way to earn money using their ’67 Ford pickup. Today, the business has x4,500 employees, more than x1,400 trucks, more than x200 franchises in x34 states, Canada, the U.K. and Ireland, and 2012 revenue of x$361 million.
“We did it to make beer and book money for college,” Sorber says. “We really never thought that it would get to this point.”
However, in getting to this point, the company had neglected to make necessary changes in order to keep the operation aligned and running well.
“One of the challenges we have had is going from a mom-and-pop-type business to having to grow up and become more corporate,” Sorber says. “We needed to bring in newer and stronger skill sets.”
Here’s how Sorber has helped Two Men and a Truck grow up.
Two Men and a Truck incorporated its first business in Lansing, Mich., in 1985 and began franchising in 1989. The company at this time was run by Sorber’s mom since he and his brother were in college.
Upon graduation, Sorber worked as an insurance agent and also operated his own Two Men and a Truck franchise. He returned to the company in the mid-’90s, became its president in 2007 and CEO, the title he carries today, in 2009. In that time the company had grown significantly, but it wasn’t running as well as it could be. Starting in 2007, Sorber’s job was to help restructure the business.
“We had to take a look at ourselves internally,” Sorber says. “There came a time that I just knew things were broken here.”
Because the company was growing so fast there was no organization chart. It was very loose on who reported to whom. It wasn’t that people weren’t working hard, but things were not getting measured.
“I had an epiphany that something had to change big time,” he says. “I made up something that resembled an org chart on a big piece of paper in my office. I brought in five people that I greatly trusted and had confidence in and gave them three markers — green, which meant that person or that job was important; yellow, which meant I didn’t have an opinion either way about this person or about this job; and red, which meant that this job makes no sense.”
Sorber used that as a starting point to help him identify where the company could restructure and cut costs.
“I wanted to give big bonuses to everyone at the end of the year and share the winnings, but we had to prime the pump first,” he says. “We went from 78 employees down to 51 employees after I went through that chart.
“That wasn’t because we were losing money. It was because by the time we realigned everything, there were some people here who weren’t doing anything.”
To avoid issues such as this, you have to have metrics that you measure to make sure whether you’re doing well or not.
“My metrics are No. 1, customer satisfaction,” Sorber says. “Find out how every one of your customers feels about their service. No. 2 is trucks and driveways. We want to put more trucks in more driveways every year.
“No. 3 is franchisees. Make sure your franchisees are profitable and have the tools to grow. No. 4 is giving back to the community.”
Metrics are a crucial aspect of success, but so is a mission statement that helps employees and customers know what the business is about. It also makes your decisions as a CEO simple.
“If your mission statement is strong, it should be limitless,” he says. “For us, we had our mission statement when we had 25 franchises, and now we’re well over 200 and it still applies. You also need core values that comprise what’s important to your company. Once you have those, you have to stay within the confines of your core values.
“When I was a younger executive I thought that was stuff you say to be nice. It’s something that’s serious. You can’t go into work and keep turning the wheel and expect better things to happen. You’ve got to maintain your mission statement, core values, measure what you’re doing, and then you have to look for ways to make things better.”
Bring in key people
As Two Men and a Truck went through these necessary changes, new employees and executives had to be brought in to give the company the right skill sets to continue growing.
“Sometimes we hold onto our executives too long, and we get comfortable with them,” Sorber says. “They may not question what you’re doing. Not all of them, but many of them can be fine with the status quo and as the world is changing they’re not forcing you as a CEO to question what you’re doing.”
You can’t settle for the people who are in your key positions. You need to find people with the right skill sets and make sure they stay within your mission statement and core values.
“Bringing in new individuals is kind of like working on an old house,” he says. “You think if you put new windows on the house it’s good, but then the siding looks really bad. The same thing happens in business when you get somebody that’s great in a department. You start to think, ‘What if I had someone like that in marketing?’”
Sorber brought in executives to fill his company’s voids, and they began offering all kinds of new ideas for the business.
“When I started bringing in these key executives, they wore my carpet out because they have fresh eyes for the business,” he says. “They asked why we did this or that. Many of the things we were doing were the right things, but it’s good for you to make your point about why you do it.
“The new executives will say, ‘That makes sense’ or ‘That’s different.’ Other times they’ll say, ‘OK, but did you ever think about doing this?’”
That is how your business goes through an evolution, and it starts bringing in more modern thinking and different approaches. A business will have a life cycle of only so long, and you need to continually reinvent it because your customer is changing. If you bring in new people they may bring the great ideas you need.
“It’s really important as a president or CEO to hire people who are smarter than you in their specific fields,” Sorber says. “Our job as president or CEO is to look more strategically at where we want the business, make sure the executives play nice together, ensure there’s harmony in the business and keep an eye on those important metrics.”
During the course of the past six years, Sorber has been able to successfully do all those things within Two Men and a Truck. Randy Shacka became the company’s first non-family member to serve as president in 2012. Now, Sorber and Shacka are looking at the future outlook of the business.
“We think we will be a $1 billion company by the year 2020,” he says. “In the last few years we’ve been doing a lot of internal work on fixing where we are broken and getting the right people in here. Now we want to be more than just a moving company. We want to be a company for change.”
How to reach: Two Men and a Truck, (800) 345-1070 or www.twomenandatruck.com
Many executives do not view the content they distribute as intertwined with their organization’s unique product or service. However, the two are interchangeable. Your product or service has differentiators that cause your clients to select you instead of the competition. Those same factors apply in content marketing.
If your goal is to engage prospects and ultimately lead them to conversion, you must create content that keeps them engaged. Success comes from creating consumable pieces of content that together form a singular thought leadership message and distributing those pieces across multiple channels. You never know through what channel someone will engage with your brand (or branded content), so the message needs to be consistent.
There are a few simple rules to doing this. Your content and what you’re selling should meet four criteria. It must be:
Useful means the content, as well as your product or service, has a defined use for a target audience. It addresses:
- How do I use this?
- How does this help me?
- What problem does this solve for me?
Here’s an example: According to a recent IDC Research report, 49 percent of the entire U.S. population currently uses a smartphone. By 2017, that number is expected to reach 68 percent. That means that within four years, more than two out of every three Americans — regardless of age — will be connected via smartphone. Therefore, a useful product a company might offer could be a solar-operated phone charger. And useful content to distribute to a target audience may include “How to make your daily life easier with these top five iPhone apps.”
To be Relevant, the product, service or content must be new and interesting, and mean something to the market or industry. Your audience will ask:
- What does this mean to me?
- Do I need this?
Let’s say your organization provides a website portal that connects insurance companies. New and interesting content that means something might be, “How your health care plan will be affected by reform . . . and what you can do to prepare for it.”
In a world filled with noise, you must demonstrate how what you do is Differentiated from competitors and explain:
- How does your content, product and service compare to the competition?
- Is it unique?
Let’s go back to the smartphone example. If you sell or service iPhones and Android-platform models, think about creating engaging content that examines the needs of today’s smartphone user, and then go beyond the basic functionality.
It’s also imperative to understand your target audience and the target audience for each product. Android-based smartphones are primarily aimed at businesspeople. iPhones, for all their bells and whistles, are not. This differentiation has led to a lot of confusion in the marketplace when consumers compare one against the other. Understanding this allows smart marketers to create engaging content such as “The top 10 needs of businesspeople: A comparison of Android phones vs. iPhones.”
Finally, your product, service and content must be Available and easily obtained in any channel.
If you run a benefits company that works with employers, for example, health care reform provides a timely opportunity to help clients make sense of the landscape. This might entail delivering a variety of consumable content that’s available to them 24 hours a day, seven days a week, through any channel.
This could include a video that explains the difference in options available to employers. It could be a social media campaign that outlines the top five differences between the health care insurance exchanges and employer-sponsored health care. Or, it may be a series of print mailers or webinars, or even a dedicated microsite that’s filled with content that details what employers need to know.
When your goal is creating engaging content, your ability to consider — and address — each of these factors may be what’s required to transform engagement into measurable conversion.
This is no fish story. Instead, this column is about one of the most important roles an owner or CEO must fulfill on an ongoing basis.
Leaders spend an inordinate amount of time dealing with the issues du jour. These range from managing people, wooing and cajoling customers, creating strategies, searching for elusive answers and just about everything in between. These are all good and necessary tasks and undertakings. Too frequently, however, these same leaders delegate this effort to others or ignore it altogether. To be “in the game,” you have to know when to fish or cut bait.
Successful fishermen know that to catch a fish they have to sometimes cast their lines dozens of times just to get a nibble or bite. The first bite might not result in reeling in that big fish. Frequently, a nibble is just a tipoff as to where the fish are swimming.
The same applies to reaching out — casting a line, if you will, to explore new, many times unorthodox, opportunities for your organization. These opportunities can be finding a competitor to buy, discovering an unlikely yet complementary business to partner with or snagging a new customer from an industry that had heretofore gone undiscovered.
All of this takes setting a portion of your time to investigate unique situations, as well as a healthy dose of creativity and the ability to think well beyond the most obvious.
Too many times even the most accomplished executives lack the motivation to look for ideas in unlikely places. Some would believe that it’s unproductive to spend a significant amount of time on untested “what ifs.” Just like sage fishermen, executives can also cultivate their own places to troll.
Of course, networking is a good starting point, particularly with people unrelated to your business, where sometimes one may fortuitously stumble onto a new idea that leads to a payoff.
Other times, a hot lead might come from simply reading trade papers, general media reports and just surfing the Internet. The creative twist is reading material that doesn’t necessarily apply to your own industry or to anything even close to what you do. New ideas come disguised in many forms and are frequently hidden in a variety of nooks and crannies. This means training yourself to read between the lines.
Once something piques your imagination, the next step is to follow through and call the other company or send an inquiry by email to state that it might be worth a short conversation to explore potential mutually beneficial arrangements. This can at times be a bit frustrating and futile. That's when you cut bait and start anew.
However, reaching out to someone today could materialize into something of substance tomorrow. The often skipped but critical next step, even after hitting a seemingly dead end, is to always close the loop with whomever you made contact. Even if there is no apparent fit or interest at the moment, it’s easy and polite to send a short note of thanks and attach your one-paragraph “elevator” pitch.
That same person just might be casting him or herself, be it in a month or even a year later, and make contact with a different organization that’s not a fit for him or her, but recall you because you followed through and created awareness about your story.
This just might lead the person with whom you first spoke to call you because you had had the courtesy to send that note. Bingo — you just got a bite all because of continuing to cast your line.
Good CEOs and honest fishermen also have one other important characteristic in common: humility. They know that when a line is cast it won’t result in a catch every time. But if nothing is ventured, it’s guaranteed there will be nothing gained. Don’t let that big one get away. Just keep casting.
As an organization grows, changes are inevitable.
New employees are added, promotions are made and job responsibilities shift.
But any time you have change, you have the potential for conflict. Few people are comfortable with change, and each person will react differently in making the adjustments necessary to move forward with the company.
The most important thing a CEO can do is to be active in confronting potential conflict. Conflict goes hand-in-hand with change. Employees begin to question management, co-workers and even themselves as they are forced outside of their comfort zones. Those questions can lead to misunderstandings that can lead to conflict, and that will ultimately slow your growth.
Don’t passively avoid potential conflict. Instead, actively engage members of your organization by providing the necessary forums both for you to communicate your strategy and vision and for them to communicate their concerns back to you. An active conversation will help drive your vision for the company through the organization and will also help foster your next generation of leaders as they take a more active role.
Only when employees are challenged to think — and to challenge you — will you maximize your organization’s potential. Do you want employees who don’t speak up when they recognize what may be a fatal flaw in your grand strategy? Or would you rather have employees who are actively thinking about the big-picture goals of the company and doing their part to contribute?
Regardless of what size company you run, it comes down to a simple choice.
It’s a choice between having employees acting like robots or acting like people. If you choose robots, you will have to have all the answers. If you choose people, you only have to have some of the answers because the employees will help you find the rest.
Engaging employees in conversations, meetings and decision-making helps them take ownership and helps you create a happier work force. If they are not allowed to speak, gossip and rumors will drag down your productivity.
Actively provide two-way communication. Let employees do the talking and hear what they have to say. The results may surprise you. Those closest to the customer often know best what needs to be done to improve sales, service or efficiency.
Too many CEOs lament the lack of good people to help take them to the next level. Maybe the problem is more CEOs need to create good people rather than driving them off with a work environment that’s better suited to a good robot.