Nathan Day, chief scientist of SoftLayer delivers a presentation Tuesday at cPanel Automation Bootcamp
(WEB HOST INDUSTRY REVIEW) — The first session at the cPanel Automation Bootcamp on Tuesday was delivered by Nathan Day, chief scientist at SoftLayer.
While the session’s title is obviously an amusing reference to the pretty incredible growth of SoftLayer (into a billion dollar company in just a few years, with a small team), Day’s session focused more generally on growing a business, and delivered a pretty great overview of that process.
The Beginning
To start with, he says to begin with a business or idea you are passionate about. If you don’t love your business, your chances of success are greatly diminished right out of the gate.
He also includes a quote from Box.net CEO Aaron Levie, “make sure you’re constantly doing something that wasn’t possible three years ago,” as a way of illustrating the point that innovating is key to rapid growth.
In the SoftLayer example, he says, they were passionate about using automation to solve problems, and some of the innovation was around the network architecture.
In assembling a team, he says it’s key to have skilled people who have a lot of trust for each other, as well as a good leader. In the case of SoftLayer, the team had a long history together and a great mix of expertise, as well as a great leader in Lance Crosby, says Day.
When getting financing for the company’s early stages, he says to get as much as you can without giving up equity in the company (through leases and loans as well as the money of the founders). Equity is the most expensive money you can get, especially if you plan to grow. SoftLayer, he says, managed to hang on to all of its equity until its buyout.
There’s a lot of time and effort required in the early days, he says, so make sure you’ve got the support system around you that makes that possible. Your family, for instance, is going to have to be willing to deal with you working long hours, answering texts and calls, etc.
Going Live
He says to get live as fast as possible. Take as much time as you need to get the product ready, but no more. It’s key that you have something out there as fast as you can so that you can find out what people like, and start earning revenue.
It feels great to go live, he says. Enjoy it for five seconds, and then get back to work.
Now that you have customers, treat them well. Your future depends on it. They are the reason you do what you do, so think like a customer, and design your products and your policies around their needs.
Day says to use every marketing tool out there, but use the cheap ones first – social media, forums and word of mouth.
It’s important to know that people are going to criticize your product and company, once it’s live, says Day. Listen to it, if it’s valid, and then move on. Don’t take it personally, especially if it is intended for you to take personally.
He shares some quotes from WebHostingTalk following SoftLayer’s launch, and he says they’re not even close to the worst ones.
Growing
As your company grows, he says it’s key to adjust to what your customers do and want. Listen to your customers, watch how they spend, and how they navigate your website. Then adapt to that. Put metrics everywhere you can.
Check if your early customers are staying, and if they’re buying more from you. Examine why, or why not.
SoftLayer launched before Facebook, so it built up a forum for communicating with customers.
Set up Google (and other) alerts to track where people are talking about your company, and respond to them in the medium they like to use.
Money is a great measure of success, of course. Early on, you’re going to be underwater, but keep going. It feels great to become cash flow positive.
For SoftLayer, automation helped the company to stay lean as far as staff was concerned.
When it comes to employees, he says, hire slow and fire fast. Share equity with good contributors. It makes people feel like they have a stake in the performance of what they do.
Maturing
Keep innovating with new products, says Day, and keep getting better at what you do and how you do it – that stretches to things like accounts receivable, etc.
End Game
What ultimate target are you moving toward? Private Sale? IPO? Merger? Continuing to run your business?
He says there’s nothing wrong with wanting to run your business forever, just like there’s nothing wrong with building a company with the intention of being bought out.
In the case of SoftLayer, a majority of the company was acquired by GI partners in August 2010, and it was merged with The Planet, also owned by GI.
Ultimately, he says, your chance of success depends on preparation, looking for opportunities and working hard. You can greatly influence your own luck, he says, by being aware of the opportunities around you.
About Liam Eagle
Liam Eagle has worked as a contributor to the Web Host Industry Review since its inception in 2000, and as editor since 2003. He has been editor of the WHIR's print magazine since its launch. His daily involvement in the gathering and reporting of Web hosting news and his regular interaction with Web hosting leaders gives him an uncommonly broad appreciation of the issues and tends facing the business. Through his WHIR blog, Liam spots Web hosting trends and offers opinions on the industry-wide impacts of major developments and the motivation behind big announcements. Follow him on Twitter @liameagle
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