Founding A Company: A Tale of Three Recipes.
Author: Colin Cooper – Colin founded Fairsail in 2007.
Ten years ago, I founded a new company called Fairsail. The mission was to create the best HR/HCM system for midsize multinational companies. The company is now one of the fastest growing tech companies in the UK and is used by 200,000 users in over 130 countries. Yesterday the company was purchased by Sage to become one of their four key cloud product offerings; renamed as Sage People.
So what led to this amazing result? Just what is the secret to founding an internet-based company? Undoubtedly there are many different secret sauce recipes but I thought it a good time to share mine. This is what worked for Fairsail. Actually there are three recipes I would like to share. Fairsail went through three distinct phases of development almost exactly 3 years 4 months each. The first phase was Creation, the second was Bootstrapping and the last was Growth.
The primary two ingredients here were a great product idea and a vision of how to turn that idea into a business. The great idea was that mid-size companies needed very similar systems to manage their people as big companies do. The big boys can afford to buy or create big enterprise systems from the likes of SAP and Workday etc. They can afford to have multiyear implementation projects. But mid-size companies need simplicity, flexibility and agility far more than complexity, customisability and control.
To turn that idea into a business took a little bit of money from an amazing business angel called John Tilney, who sadly died last year. It took visionary advice from the tech industry guru Steve Garnett to select Salesforce to provide the best software platform and sales partnership to reach international medium size businesses. It took two or three early customers who were willing to take the risk of new software in exchange for a low-cost turnkey custom system. Software that was also built to be a generic product.
It also took many days, nights, weekends and no holidays over 4 years to lay down those crucial foundations. So that is the third essential ingredient in this phase (or indeed all three phases); hard sweat. And a very supportive and understanding family.
I must admit that this first phase was truly the hardest. The seed money dried up and for over a year I was on my own coding the product with no salary. My wife was super supportive enabling me to do this. However I remember a very dark flight back from San Francisco to London when I felt I was just a fraud and that I should get a proper job. Only the thought of having to tell my investors I had lost their money kept me going. I also met one or two people that tried to “help” but only had their own agendas. Be very cautious of advice when it benefits the giver.
So we had a great product. We needed to start selling. That took some more money from investors willing to make a very risky investment. Two choices here, private investors or VCs. Fairsail was lucky in that those same two people from the creation phase (John Tilney and Steve Garnett) were willing to put up that money. There was one condition, I had to stand aside as CEO and become the CTO. Steve thought he had a difficult task to tell me that. Actually I had already recognised I was a much better designer and coder than a salesman and manager – and I felt more relief than injured pride. So that is the first crucial ingredient: recognise your weaknesses as well as your strengths.
To provide the skills we needed brought in the superb Nic Scott as the new CEO. At this stage you need to be able to sell where you do not have any reference customers. That takes steely determination. It may also involve using as much spin as one can whilst still maintaining business integrity.
The second key ingredient is exceptional people. So we also brought in: Paul Dowthwaite for sales, Kate Fletcher for marketing, James Hoyles for support, Pete Stocks and Matt Deren for implementations, Chris Rauch to ensure the customers remained happy, and Nick Harber as CFO to keep us legal and accountable. Many of these people came from the amazing black book of Steve Garnett – who seems to know all the best people in the tech industry.
During this phase we grew to about 25 happy customers from the UK, USA and parts of Europe. Fairsail was fortunate to start selling internationally far sooner than many similar software companies because we had designed the software to be multinational from day one, and we were on the Salesforce platform which drew US customers. But none of those first sales was easy. In particular, one customer had a unit in Germany and a German lawyer who seemed determined to stop a non-local company to win the business. Nic Scott took nine months to work around all the legal obstacles thrown at us.
Two main ingredients were now important: expanding individual people into teams and expanding initial sales into key markets and sectors.
We desperately needed teams to scale up the business. At the start of this phase I would have two feelings when we made a new sale: joy that we had made another crucial win and fear that we did not have the resources to implement and make it work for that new customer. We also decided to change the CEO to the amazing communicator and legendary networker: Adam Hale. That change was not an easy one to make but this new phase work needed different leadership skills. We also brought in Paul Burrin as CMO to start creating amazing marketing messaging.
We got more money into the business both from the original investors (nice when people are willing to follow their money) and others drawn from Adam’s black book. This funding brought in many more great people (too many to list here) and the marketing needed to move from prospects finding us to us finding them. We got our messages right. We focused on markets that we had proven success. We built a fantastic product and development team (I could finally stop coding). We brought in sales people, implementers, support, recruiters etc, etc.
The growth we achieved was phenomenal. Over four straight years we doubled in size each year; in revenues a little more than employees. We joined the FAST 50 and was recognized as the fastest growing B2B tech company in the UK. Not that growing at that pace is easy: we had to reorganise frequently and introduce new processes to deal with the ever growing scale of business. I think crucial to success at that stage was embracing diversity in all its forms. We have a gender-balanced teams,from development to marketing and implementation – we employed people from many countries and backgrounds, and crucially we listened to their ideas and suggestions. Creating a team is far more than cloning people; it is about building richness in multiple skills and talents.
This high growth combined with reaching the magic $10M annual revenue started attracting the attention of some bigger companies seeking to buy Fairsail. We deliberately did not seek them, but they found us. We had many secret meetings at country hotels with many code words and whispered conversations. Of the companies that approached us fortunately the best of them got serious. Sage first made a small investment in the business, and then decided to acquire Fairsail in order to meet increasing customer demand for a leading cloud HR product more quickly, while accelerating growth.
The journey has not finished as we have new visions and new opportunities. However the start up and scale up part of the journey is now complete. It has been an amazing ride. I have the honour of being the Founder; but in reality it is the team of amazing people in Fairsail that made it possible. With a few tears in my eyes this part of the story ends and a new chapter begins. Now we can fully realize Fairsail’s mission and bring a modern HR and people system specifically designed for smaller enterprises to companies all around the world.