Reflections on moving through the expansion stage
Jason Judge, CEO of SpectorSoft since February 2010, has nearly two decades of executive leadership experience, with a strong track record of bringing world-class corporate solutions to market and delivering outstanding value to customers, partners, and shareholders.
Prior to joining SpectorSoft, Jason served as CEO of ScriptLogic, CEO of POPspace Corp., and vice president of business development at WesTower through its merger with SpectraSite in 1999. His executive leadership career began in 1993 when he founded and served as president of Omni Communications, a company that was acquired by USLD.
Jason was appointed CEO of ScriptLogic in 2001 by the company’s founder, who established the company in 1997. Under Jason’s leadership, the company grew 888-percent in terms of revenue growth over the five year period of 2001-2005, and in 2006 was identified by the Deloitte Technology Fast 500 as the fastest growing technology company in the Southeastern United States.
ScriptLogic was acquired by Quest Software as a wholly-owned subsidiary in 2007 in a cash transaction valued at approximately $90 million. Judge remained on-board for two more years.
We recently spoke with Jason about his experiences at ScriptLogic.
What was the atmosphere like when you joined ScriptLogic?
ScriptLogic was a small company with strong development talent. There were seven people wearing every hat imaginable. The founder and I set a goal to grow the company to a $5 million run rate and then agree to sell or get an outside investor. We reached our goal within one year, which was sooner than we had anticipated, and decided to seek an investor. During that year we added a lot of talent, probably around 30 people. Our biggest challenge was our size; we had a lot of great ideas, so we had to focus on what to execute versus going after the flavor of the day. We also were challenged in that as we grew, bigger prospects came our way. There were tempting propositions, but we had to stay focused on what we could realistically achieve.
Describe the company’s customers. What was your value proposition?
The company started with one product – an early version of a desktop configuration management tool; we sold it to IT administrators in small- to medium-sized businesses and that continued to be our market. We were always attempting to relate to the end user and build products for them. We never lost sight of who our customers were and we continued to find ways to cross-sell and up-sell to them – to keep giving them more of what they wanted and needed. When Quest acquired the company, we had even more products to sell.
We tracked everything we thought we possibly could to see if it would be relevant to our customers. Understanding and talking to our customers was at our foundation. We tested every theory we had about our customers. We were on the phone – a lot. It’s important to be in touch with your customers constantly or the information you have about them can become dated quickly.
What key actions made the company so successful?
First and foremost, people. When you develop and sell intellectual property, the initial hires are critical, as is the ability to recognize as quickly as possible those who are not working out. We had good team mates who understood their roles in the company. Our department heads were people who were able to scale their teams as we grew.
Second, we acquired companies that also sold products to IT administrators. Our goal was to bring even greater value to our existing customers on the desktop side. We did a lot of tire kicking to find the right companies, but we were lucky in that we were able to find the good ones and weed out the others. We were successful in that we were able to retain the key people from the companies we acquired due to our ability to explain our vision.
We also were very marketing and sales-focused. On the marketing side we were even a bit obsessive, and that was one of our strongest qualities. We generated a lot of interest in our products and had fun measuring the results. We had some very results-oriented people who did a great job of sharing those results company-wide. We also built a very good telesales group. The majority of our deals were small and we did so many of them that it wasn’t cost-effective to make sales in person, nor did we have multiple offices in different locations. So we attacked by selling to many small companies over the phone; we also had a partner program in some regions.
Were there any product development strategies that you found particularly useful?
Our philosophy was Point, Click, Done!™ It was pretty novel at the time. We applied it to everything from sales and marketing through development. When the product was easy and intuitive enough to use, we were ready to roll it out; if it was rough or clunky, we had to go back to the drawing board.
Describe the general approach you took with the financial strategy.
We focused on building a profitable company. We focused on the financial results as well as the operating metrics that led to those results; however, the tracking was designed so we could improve, not the reverse.
How did you keep everyone aligned?
Daily communication and ensuring that everyone understood the vision and their role in the company. Yes, we held our regular weekly, quarterly, and annual meetings, but those were more about scorekeeping. The exciting meetings were the ones that took place every day. We were always asking each other the open-ended questions – questions such as, ‘What can we do to make this better?’
Were there any key people you brought in who had a major impact?
Yes, having the right people in every department at every stage was key. As we grew, we were able to hire experienced people with solid track records, whereas earlier that was not possible. The people we brought in were very strong, typically coming from very specific backgrounds.
For many years, our board was comprised of four people – the founder, myself, and two partners from our investor Insight Venture Partners (Mike Triplett and Scott Maxwell, who is now senior managing director at OpenView Venture Partners). In the beginning we said we would bring on a fifth member as a tie breaker, but it never became necessary. Eventually, George Roberts joined us – he had been with Oracle and is now a venture partner at OpenView; he really added to the team and was a breath of fresh air. He brought an operations perspective to the board.
Describe your personal management style.
Build a strong team and then give them enough room to perform. There is an interesting balance here—you have to check on progress, but you don’t want anyone to feel like you are micro-managing. You need to trust your people. You have to have strong characters in specific roles who understand the vision of the company and their role in it; if they can’t, they are in the wrong place.
What mistakes did you make? What did you learn from them?
Keeping people in positions they were not suited for, for too long. When there are first-time performance issues, you want to give people the benefit of the doubt. You need to figure out what the problem is. It is internal or external? Are there leadership issues? Technical issues? Is the sales compensation plan adequate? Are they surrounded by the right people? Do they have the tools and budget to do the job? Maybe the person wasn’t ready for the responsibility. Or maybe it was someone you groomed for a position and it didn’t work out. In any case, you need to deal with the situation immediately; don’t let it drag out for months or quarters, and certainly do not ‘finish the year out’ with a bad idea.
Another thing I’ve learned is that you have to stay close to your team during any M&A process. Even though you have to hold many meetings behind closed doors, don’t distance yourself. In essence, you’re leading two lives and that’s difficult to do. I don’t have the magic answer, but it’s important to try to keep as normal of a schedule as possible and to maintain some sense of consistency during the process.
Any words of wisdom for senior managers of young technology companies?
Don’t hire to your strengths, hire to your weaknesses. Find the smartest talent possible. You don’t want to be looking in the mirror when you are interviewing someone. Bring in people who will round out and challenge the team – people who will surprise you.