Many Constraints But Few Limits
Here is something that caught our eye this week:
Reflections on Tape Sucks
We recently read Frank Slootman’s Tape Sucks: Inside Data Domain, A Silicon Valley Growth Story, a short narrative of his experience leading Data Domain from a fledgling start-up in 2001 to a $2.4 billion acquisition in 2009. Slootman then went on to serve as CEO of ServiceNow, taking the company from $100 million in revenue in 2011 to $1.4 billion of revenue in 2017. He is currently the Chairman and CEO of Snowflake, a publicly traded cloud-based data platform. Over the years, Slootman has been in the news for his sometimes controversial perspectives, but there is no denying the guy knows how to grow a business. Furthermore, his candor comes through in a direct writing style that appeals to our small business sensibilities – long on tangible tactics, short on strategery.
Among the many gems in the book, Slootman’s commentary surrounding focus resonated with us:
“..focus is hard to maintain: a startup is like a combat zone, a very confusing, unstable, fledgling enterprise where you are “pushing a rope” half the time. Big companies are stable by their own inertia: it is hard to get them to change. A startup is the polar opposite, which is both a strength and a weakness – it wants to change all the time and there is little to keep it in the groove.”
While Chenmark purchases established companies – one of our recent acquisitions was founded in 1936 – Chenmark itself is a start-up based on the idea of building a team of small businesses. This means we encounter the mix of “start-up” and “established” mentality on a daily basis. We will admit that at first, focus around our strategy could be murky. Did we do distressed special situations? Did we do venture investing? Did we want to co-invest with external parties? Do we provide growth capital to existing management teams? In reality, there was nothing preventing us from adjusting our strategy, and we will admit to exploring certain opportunities for longer than we should have.
Slootman notes that in moments of confusion at Data Domain, they “always reverted back to our True North, the customer, which helped us focus, quiet the noise, and strengthen our resolve.”
In recent years, we have articulated our goal to be the acquirer of choice for North American small business owners. This is our guiding principle and allows us to avoid spending time on opportunities outside of our mission. Beyond that, our values – Chase Better, Play the Long Game, Put the Team First, and Keep Score – help us make decisions when no long-established playbook is available. We still have plenty of work to do, but Slootman’s commentary was a good reminder to stay focused on our goals and not get (too) distracted.
On a separate note, Slootmans’ thoughts on being a leader were highly relevant for the Chenmark Team:
“Coming from bigger companies, I found the startup experience exhilarating and liberating. Like sailing a dinghy: direct feedback all the time, close to the metal. It’s heady, like breathing pure oxygen. Many constraints but few limits.”
We would argue that the same dynamic is true in the realm of small business. Those in leadership positions have a direct, tangible impact on the business realities on a daily basis – the company is a reflection of its leadership group. That, in and of itself, is incredibly rewarding, even if from time to time, we feel like we’re pushing a rope.
Have a great week,
Your Chenmark Team