You Did WHAT?!?!?!?

AUG 22, 2014

You did WHAT?!?!?!?

This was the response from many when I announced I was stepping down as the CEO of Trace3.  We founded the company back in June of 2002 and in August of 2014 I stepped down.  My run had ups and downs and was unbelievably trying and stressful at some point in every year.  It was also one of the most rewarding periods of my entire life.  I could talk about the growth in revenue and profits (one good, one a roller-coaster) but the growth I really am thankful for is the growth as a person.  If you are open to it, the amount of learning that occurs when you grow the way Trace3 has is truly almost too much to bear.  No matter how much you think you know, each stage of the business demands more and more of you.  You must not only be open to learning, you have to have a thirst for it.  But it is not just the personal growth that matters.  The colleagues that become teammates and then become great friends are also a huge part of it all.  There are no two ways to look at it.  I love Trace3.  Period.

I was talking to someone two days ago about Microsoft.  We were debating why they didn’t do something in the vein of Bell Labs and put their innovative thinkers into a sub and have them turn their brilliant ideas into Microsoft Labs spin outs.  The debate really centered around value creation and whether a truly great idea that needed 100% focus and attention could really thrive and reach its potential in such a huge organization.  I have always respected the way some companies innovate and spin out.  There are also many companies that purchase other innovative companies and let them run completely separately so they can continue that R&D and sales focus to really hold momentum.  I know that sometimes this goes against some of the traditional M&A strategy of combining companies to combine overlapping departments and drive out cost for greater profits.   I like having my head in the clouds and believing that innovation wins over lowering cost or that sales momentum wins over super efficient departments.  I know both sides of the equation can work; I just think one is way more fun to be involved with.

About three years ago I realized that my young child (Trace3) was growing up and getting ready for High School.  I had a terrific leadership team and by leveraging Organizational Health god Patrick Lenicioni’s company “The Table Group” the team was really starting to become cohesive and hold each other accountable in a way that gave me capacity.  It was around that time that I began examining the Trace3 asset (of clients) and thinking if there were different more innovative things we could do to provide value to the asset.  Great things happened.  Leaders arose.  As we entered High School the management team started writing the playbooks instead of just me.  The why and the how started to materialize and with a cohesive team the messaging cascaded through the organization with much more clarity of purpose.

It was at this time that I knew my child, which had been born with 5x$20 bills was now well on its way to being a 300 person organization generating tremendous value and over $400,000,000 in sales.  About 24 months ago, I began talks with Josh Berezin about coming over.  I knew what I had in him.  He had the potential to be a great leader.  He had great experience and really understood the business but he still felt he had a tremendous amount to learn.  He was great at something I was weak at.  He helped me set clear goals for the org and he was terrific at holding people accountable.  He was organized, thorough, and constantly learning.  After he joined he gave a speech at a company event and it was nothing short of disaster.  I coached the best I could and he got a little better.  Then he went out on his own and got a speaking coach.  He got better.  He got up in front up people as often as he could.  He reworked the company pitch and gave it everywhere.  He is now one of the best speakers in the company.  Anytime he struggles with something he does not turn away; he dives in and fights to conquer it.  It is hard to not find Josh inspiring.  In watching him I knew I had a key piece of the puzzle for Trace3.

With Josh on board I worked with Rajiv Gupta who is an amazing entrepreneur in Silcon Valley on a new crowdsourcing concept that we called POP.  Rajiv is currently the CEO of Skyhigh which is possibly one of the fastest moving cloud security companies in the nation.  He also sold his last two companies to Oracle and Cisco respectively.  What we realized is that just by getting management cohesive at Trace3 (via the Table Group offsites) we had grown by over 33% with no additional headcount.  Yes T3 went from $300M to over $400M with less people than it had the year before just by getting management on the same page.  What if we could create a mobile app that could get ALL employees aligned to the strategy and vision.  What if we could create a tool that allowed ALL employees to be a major part of creating and implementing the vision and strategy.  So we did it.

I formed a company, separate from Trace3, called POP, Inc.  We made an app called POPin that allows you to have a conversation with 1,000’s of people as if it were a 1:1 conversation where at the end of the meeting you can stand up, shake hands, and take action.  The key for me was the TAKING ACTION part.  I did not want a tool created that was for chatting.  I wanted to contain, control, and curate a conversation with a scoreboard of ideas/answers that I could then take action on.  I knew if management could actually have conversations like this with the entire employee base then implement the best ideas – it would drive engagement.  An engaged management team (8 people) gave me 30%+ growth.  What would an engaged company (300+) people give me?

While we were building POP I was also CEO of Trace3.  Josh came to me and told me he wanted to contact Tyler Beecher about joining.  Josh told me he thought Tyler was the one that could run sales and take it to the next level.  He then paused a bit and told me that Tyler was such a dynamic leader and had so much experience that once he got a chance to win over the teams and understand the intricacies of our business…that he would make an amazing CEO.

2 things here: Wouldn’t you think Josh would want that job?  And wouldn’t you think Josh should not say that to the current CEO????  All I can say is if you work on a truly cohesive team that trusts each other, is okay with conflict, and at their core just wants what is best for the company, then this is a normal conversation.  What Josh did not know is I had wanted Tyler at Trace3 for over 5 years.  He had been anointed at his previous company as someone to watch and I had failed to really impress him.  Josh began the chase and Tyler joined almost a year ago as VP of Sales to learn the business.  In our executive meetings I started giving Josh the reins in the Tactical meetings and would discuss all my thoughts with Tyler about the Strategic meetings.  They both had skill at both, but it gave me a chance to really see their thought process and even more importantly see how they communicated with others.

During this time, with only 25-30% of my focus on POP, POP started to take off.  Clients heard how Trace3 was using POPin and the engagement that was occurring and they started buying the product.  One of POP’s first clients, Red Robin was interviewed by the Wall Street Journal (link below).  I met with Patrick Lencioni and then the Table Group started using the product and introducing me into their client base to drive further engagement.  Trace3 had a real innovation on its hands.  80% of POPs clients are Fortune 500 clients.  This is not a small play.  This is a simple tool that if used correctly drives incredible engagement.  The analyst started asking about the product.  They liked how we coined “Making Social Actionable.”

To most outside of Trace3, I had what looked like a big decision to make.  Little did they know, I had begun solving the problem the day Josh joined Trace3.  And when Tyler joined, I just knew it was a matter of time.

I have a child (Trace3) that I had helped grow from a newborn all the way through high school.  It has a foundation of culture and leaders that I know will help it move forward now.  I trust the leaders.  I am here everyday in the Trace3 offices to mentor those leaders when they need it.  It is like sending your child to college.  Am I nervous, as any parent would be in letting go?  Sure I am.  But I trust in that foundation and after a tough day, my phone still works and I will talk for as long as they need me to.  I named Tyler CEO and Josh is the President of Trace3.  I know they will execute on the Org Health, Innovation, and Datacenter plays and take Trace3 to $1 Billion and beyond.

I decided that as we create innovation we should evaluate how it fits with Trace3. I decided early on that POP could be a distraction to Trace; but as it matured, it fit perfectly into our Org Health offering with the Table Group.  POPin and Table Group conquer engagement for the whole company.  Trace3 now has a complete play there.  But in order for POP to truly reach its potential, it needs to be on its own with a dedicated leader.  I am that leader and I am more excited than ever.

So now you know the whole story.



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