Scaling a Hypergrowth Enterprise – Part 3 (Scalable Customers)

This is the third in a series of Posts on scaling a hypergrowth enterprise.  I was the co-founder and CEO of CyberRep, a CRM and call center company which grew revenues nearly 160x (16,000%) to over $80 million over a 9 year period.  In Part 1 of this series, I talked about People as the first of 5 key elements for scaling a hypergrowth company, the other four being Culture, Scalable Customers, Process, and Capital.  I examined Culture in Part 2 of this series, and today we will discuss the 3rd element, Scalable Customers.


All customers are NOT equal.  Some are much better fits for your company than others, in terms of how they treat you, their level of dependency on your services, and the degree of difficulty in servicing them. You want to serve customers who are growing fast and who will have more and more needs as they themselves grow.  A “scalable customer” is one which grows and takes you along for the ride.

Partner Mentality – The best kinds of customers take a partnership approach to your relationship (as opposed to a vendor-vendee mentality).  They rely on you for true “value add” solutions that go beyond just providing the bare minimum of what they need.  They rely on you and have a high degree of dependency.  These kinds of customers will continue expanding their scope of business with you, as they grow.  Note:  An added benefit of a customer with a partner mentality is that when things get rocky (and they inevitably will from time to time), they will be more apt to work through the issues with you, since you are a valued “partner” and not just another vendor.

Customers who grow fast – Try and find customers who are in hypergrowth mode themselves.  Whether they are in hot market segments or expanding via acquisition, these customers need you the most because they have challenges supporting their growth.  For example, my company supported Nextel and Microsoft (MSN) in the early 2000s when both companies’ user bases were exploding.  The more customers they added, the more customer service they needed, and the better we performed, the more business they gave us. They expanded astronomically with us.

Know when to say “No” to revenue – It hurts to turn away revenue, BUT it’s required if you want to build a hypergrowth company.  Saying “no” is really tough.  It is tempting to want to do any kind of work and take on more than you can handle, or to take on a client that is not “scalable,” but you have to stay disciplined in your business acceptance.  By pursuing the revenue YOU want, and focusing only on clients who will grow with your company, you can marshal your scarce delivery and other resources on becoming an expert at your craft and improving your service offerings with these scalable customers.

Thanks very much for reading.  I’d love your feedback and thoughts, so please Comment below…and please sign up for my Blog too!  (See the Signup box on the sidebar of my Home Page)


Scaling a Hypergrowth Enterprise – Part 2 (Culture)

This Post is the second of a series of posts on the topic of scaling a hypergrowth enterprise. My former company, CyberRep, grew from $550,000 to over $80 million in annual revenue over a 9 year span.  In Part 1 of this series, I talked about People as the first of 5 key elements for scaling a hypergrowth company, the other four being Culture, Scalable Customers, Process, and Capital.  Today, let’s examine Culture.


Culture is the company’s DNA.  It’s the genetic code which governs how the business is built, how customers are acquired and services, how employees are managed and developed, what core values matter, etc.  We sought to build a culture of hypergrowth, opportunism, speed, and flexibility. This was integrated into our “Top Ten” corporate core value set and our “Four Pillars of Success” which I will discuss in future posts.

When should a Culture be established? – Whether you’re starting a new business, a division, group, or team, it’s critical that Culture be established at the very beginning. Why? Because, it’s always easier for new hires to fit into an existing culture, than to change a group’s culture once they are operating.  People hate or fear change.  It’s for this reason that so many M&A deals fail.  Buyers are unable to impose their new culture on the legacy team, so integration is never fully realized and dysfunction sets in, but that’s a topic for another day.

Hypergrowth – It may seem tautological that scaling a hypergrowth enterprise requires a culture of hypergrowth.  Well, that’s right.  Our culture was focused on our “Four Pillars of Success”:  Client Satisfaction, Profitability, Revenue Growth, and Associate Satisfaction. These pillars were interdependent, and our leadership team evangelized the focus on these objectives, including REVENUE GROWTH, on a 24/7 basis.  Our objective was to grow via new customer acquisition, but more importantly, via  our existing client base by expanding current offerings, cross-selling new services, and thrilling the heck out of our them.  Our sales team, client service team, and operations teams formally reported in on their progress on a weekly basis.  We held everyone accountable. By sending a clear, consistent and constant message of hypergrowth, the focus on revenue became a daily responsibility of EVERY associate, and it was was incorporated into our company’s DNA.

Opportunism – In order for a company to get into hypergrowth mode, it MUST be able to identify or create new opportunities. Opportunism is a highly entrepreneurial trait.  A company needs to nurture and support creativity and risk taking in order to establish an opportunistic culture.  While it is very important to focus on key objectives, you have to also keep your eyes open for those windows of opportunity that may open.  This could be something a client needs which you do not currently offer, or perhaps a great acquisition, or even a new line of business.  Keeping a pulse on client requirements, and the market as a whole is crucial.  But the key thing here for hypergrowth enterprises is to keep fostering that culture of opportunism, creativity and risk taking, and letting your smart people come up with great ideas on which you can then capitalize.

Speed and Flexibility – Speed kills.  And so does flexibility.  The big advantage of small organizations is that they are more nimble and responsive that the big guys, and therefore they can grab more market share by doing things that larger and more inflexible competitors can’t do.  And, believe me, customers do appreciate this!  It can be tempting to fall into the trap of wanting to “cookie cut” a product or service offering, and then resist customizing it to a particular client’s specifications.  If you want to create a hypergrowth business, don’t fall into this trap.  For service companies, especially, not being flexible is risky for a bunch of reasons:  client dissatisfaction, revenue loss, lost opportunities, etc.  In our experience, by jumping through hoops for clients and delivering faster and better than our larger competitors, we grew astronomically, not just with these clients, but with others who had similar needs.  Again, it’s up to leadership to create and evangelize this culture of speed and flexibility through any means possible.  So many successful and FLEXIBLE hypergrowth companies have pivoted and morphed their business models into hypergrowth mode successfully, Facebook, Apple, and even Groupon and Living Social, being examples.

Business is Darwinian, and Charles Darwin himself said that it is the “adaptable,” not the strongest or smartest, who will survive:

It is not the strongest of the species that survies, nor the most intelligent that survives.  It is the one that is most adaptable to change.” – Charles Darwin

Part 3 of this series will address “Scalable Customers” as the thrid essential ingredient in scaling a hypergrowth enterprise.

Thank you for reading.  I’d love your thoughts, so please Comment below…and please sign up for my Blog too!  (See the Signup box on the sidebar of my Home Page)

Scaling a Hypergrowth Enterprise – Part 1 (People)

Each January for the past 5 years, I have had the privilege of presenting on “Scaling a Fast Growth Enterprise” to a group of MBA students who attend a 3-day “Start Up Bootcamp” run by John May of New Vantage Group and Tim Meyers of Capital Trust Ventures.  Students come from all over the country including UVA Darden, UMD Smith, U Michigan, Duke Fuqua, and others.

This Post is the first of a series of posts on the topic of scaling a hypergrowth company.  At CyberRep, we were able to grow our top line revenue from $550,000 to $22.5 million in 5 years. We then grew from $22.5 million to over $80 million in the subsequent 4 years. In retrospect, there were FIVE KEY ELEMENTS that contributed to our ability to grow so rapidly while maintaining high degrees of both client satisfaction and retention, as well as employee morale and retention.

These 5 elements are:  PeopleCultureScalable CustomersProcess, and Capital.  In these next few posts, I will explain in more detail my thoughts on each of these key elements to scaling a hypergrowth enterprise.


Everything starts with people, no matter what kind of business you are in. Success begins and ends with getting the right people on Jim Collins’ proverbial bus.

Hiring – We look for 4 key characteristics in our people:  Integrity, Passion, Energy, and Execution capability.  In short, we want players who have high integrity, love their work (because passion is authentic and infectious), have huge reserves of energy (because all hypergrowth organizations require personal and group energy), and folks who can get the job done (critical for thrilling clients).

2 more important traits – flexibilty and resourcefulness.  We need staff who are flexible because plans change in a highly dynamic environment.  Further, since capital and human resources tend to be scarce in organizations which are stretched thin to support rapid growth, we need people who are resourceful and can do more with less.

Staff for the present but keep the future in mind – Every small and growing organization wants to hire the big guns, the heavy hitters whom you may not need right now, but whom you will surely need down the road.  However, you need to focus on the present tasks at hand, so it’s more important to get the best people for the job NOW, than it is to hire for that “future” position prematurely.  Predicting growth is very difficult, so staffing plans are seldom at an “optimal” level.  You will always be overstaffed or understaffed, depending on where your company is in its growth curve.  The key is to make sure you take care of today’s business while keeping in mind the future potential for personal growth of your new hires.  Not everyone will keep growing as the company grows, but that does not mean these folks can’t make important contributions.

Can your people adapt as the company grows?  Every team consists of diverse groups of generalists as well as specialists.  In early stage companies, there is a greater need for utility players, a.k.a. Generalists.  As companies grow, they start to need Specialists to fill specific roles.  The faster they grow, the greater the need for specialty positions.  Can your generalists make the transition?  Do they have the personality, ego sublimation, people skills, and technical expertise to transition, if necessary?  These are key questions which leaders face when hiring and developing their talent in hypergrowth companies.  In my experience, most generalists can’t make this difficult transition and are often left behind as a company grows.  I think it’s important for top leaders of hypergrowth companies to be cognizant of this transition risk and try to mitigate it by providing training and development opportunities to their A Players.

In the coming days, I will talk about the other 4 elements in scaling a hypergrowth enterprise:  Culture, Scalable Customers, Process and Capital.

Crankathons: Achieve More Sales and Better Service Delivery

We all know about Telethons.  And most of us have heard of Facebook’s famous Hackathons, where an army of engineers get together and pull all-nighters to work on special projects, problem solving, and other creative ideas they may have.

At Lore Systems, we have found an effective way to get more productivity out of our managers and sales execs, in terms of outreach and folllow-ups to clients and prospects. We hold “Crankathons,” where a group of us get into a conference room and bang out dozens of emails at a time, and attack small and large, but important, business problems and issues.  (Note:  Our team’s average age is a few more years than FB’s so we don’t stay up all night!)

This is especially effective when done consistently.  Why?  Every week, lots of action items and follow-up tasks accumulate.  Most of these involve communications with prospects and clients, and Crankathons provide a venue and vehicle where we can get out of our offices and away from all the noise and distractions.  There’s no substitute for concentrated effort, and we each have a common objective:  get most our accumulated “to dos” done in one sitting.  We compare notes, discuss specific approaches and solutions to certain clients, and BOND with each other.

Maybe I’m “Old School,” but I believe the best form of communication is face to face, and when our team convenes together, lots of key information is shared and this allows us to provide a better and more complete service to the outside, as we get to know each other and build trust through our various interactions.  Because of this, I think this also accelerates the creation of high performing teams.

The results have been amazing, in terms of staying focused on each of our highest prioirties and getting real work done.

What do you think?  I am always looking for great new ideas to improve performance, so please share any cool and interesting ways in which you are getting your teams to accomplish more.

Ernst & Young Entrepreneur of the Year – A Winning Tradition

Congratulations to Ernst & Young on their 25th Annual Entrepreneur of the Year awards gala, which was held Thursday night, June 16, at the Tysons Corner Ritz Carlton.  Great work by E&Y’s Debbie Kissire, Rene Salas, Herb Engert, and Erika Chambers.  You guys really know how to put on a show!

This awards program is the de facto “Academy Awards” of Entrepreneurship in our region, and brings together some of DC’s finest business leaders.  The impact of this pioneering program in celebrating entrepreneurship and fostering confidence, inspiration, and pride in our community is immeasurable, and we all owe a debt of gratitude to the great work of the E&Y Team for these past 25 years.

Ten years ago, Doug Palley and I won this award.  At that time, the company we had co-founded and built, CyberRep, was a leading call center/CRM provider with over 1000 employees and around $45 million in revenue in 2001.  While winning the award didn’t change our company, per se, the recognition from our peers was a real confidence booster for us, and a morale booster for all of our associates.  The best part, however, was becoming a member of the E&Y “family” and being invited to their Palm Springs national event every year, as well as participating in EOY alumni receptions, and just staying involved, etc.

Thursday night, I had the honor and privilege of returning as an alumnus to co-present the award for the 2011 Technology Entrepreneur of the Year to Kevin Mandia of Mandiant. The finalists in that category were Sid Bannerjee of Clarabridge, Tony Jiminez of MicroTech, and Craig Abod of Carahsoft Technology, all awesome entrepreneurs.

Winners in the other categories were:

Richard Fairbank of Capital One Financial (Master Entrepreneur), who thrilled the crowd with his story and a great acceptance speech which focused on the gratitude and appreciation of his family.

Tim O’Shaughnessey of LivingSocial (Business & Consumer Services)

Daniel Yates of OPower (Emerging)

Willy Walker of Walker & Dunlop (Financial Services)

Thomas Watkins of Human Genome Sciences (Health Services)

Warren Thompson of Thompson Hospitality (Hospitality Services), my former Virginia Baseball Club Partner, and owner of one of the largest African American-owned businesses in the USA.

Matt Desch of Iridium Communications (Telecommunications)

The best part of the night was the honoring, for the very first time in 25 years, of 2 Youth Entrepreneurs, including Liam McGhee, a NFTE student.  By celebrating entrepreneurship education, E&Y has taken the program to another level!

Power Networking – Put a group of Winners in one room and let them have at it!

Tonight the good folks at WalkerInformation of Indianapolis ( and Lore Systems ( co-sponsored an “Execs Night Out” at Zola Wine and Kitchen in DC.

It was Power Networking at its finest.  We put a couple of dozen regional business leaders together and it was magic.  The group included Luis Fiallo, Managing Director of China Telecom Americas;  Steve Graubart, Managing Director of University of the District of Columbia; Frank Walker, Managing Director of Baker Tilley;  Matt Curry of Curry’s Auto Service;  serial CFO David Samuels;  Rob Klingensmith, SVP of The Washington Group; Paul Innella, CEO of TDI;  Colin Eagen, CEO of EGroup;  angel investor and mentor Glen Hellman of Driven Forward; Co-Hosts Steve Walker and Jackie Ross of WalkerInformation; and Patrick Binsol, Dwight Fischer and Laurie Freeman of Lore Systems.  New connections were made, old ones nurtured, and it was great to see deals being done!

The focus of the event was “Customer Challenges” and each attendee shared what they felt was their top customer challenges.  Terrific insights, and the interesting thing was that, despite the disparate industries and businesses represented, we all were saying the same thing:  The consensus theme was that we absolutely MUST bring real value for our customers today.  They are more demanding than ever, and have more choices than ever. It’s no longer enough to do our jobs well.  We need to go above and beyond merely delivering our actual solution sets.  What’s this mean?  In order to win and retain business, we need to help our clients achieve their goals, whatever they may be: strategic, financial, political, efficiency, operational, governance-related, etc.

This is the correct approach to business today in the new reality of the hyper-competitive marketplace, so the Winners will be those companies who keep practicing this habit well into the future, long after we recover from this recession.

The food and wine were great also, so yes, this is an endorsement for Zola Wine and Kitchen.

Success Formula: S = BD+GM+F+C+P

Success is Winning, and everyone loves Winning.

Having been a student and analyst of the subject of Success for over 40 years, I think I have boiled down the formula of what creates Success:


Each of the great thinkers and each successful person has their own personal take on what it takes to achieve success, but these are the 5 essential elements.

Of course, I left out a couple of other important elements like Serendipity, Luck, Sacrifice, Hard Work, and others, but I believe that these “sub elements” are a part of one of these 5 essential ingredients.  For example, if you have a Burning Desire (passion), then you will make the sacrifices and work hard.  Goal Setting includes goal review, and is the roadmap to the destination.  Courage is an interesting one and we don’t hear it mentioned often, but to me, Courage is all about taking action, and stepping up and going outside your comfort zone to make things happen.  Without Courage, thought cannot easily be transformed into Action. And what about luck?  Well, the more persistent you are, the luckier you get.  By never giving up and hanging in there, opportunities will inevitably come your way.

Persistence is my favorite, and I conclude this, my first ever Blog Post with my favorite quote:

“Never give in. Never give in. Never, never, never, never–in nothing, great or small, large or petty–never give in, except to convictions of honor and good sense. Never yield to force. Never yield to the apparently overwhelming might of the enemy.”   – Winston Churchill