How the Company-Startup Thing Worked Out For Me, Year 5

Every year, I stop to look back at what happened a couple of years ago. This post covers April 2015-April 2016.

My cofounders and I were all ready to try something new.

Jeremiah, Kendra, and I had the same vision for where the business was going next (on-premises software), what the next steps were, and the speed at which we’d make the journey. We didn’t want to kill consulting and training, mind you, just wanted to build up a third profitable leg for the business.

But in year five, both Jeremiah and I had the same thought individually: “The company should continue on as it is, but just without me.”

For me, it was the software work that was just over the horizon. I’ve worked for small and big software companies before, and I know the infrastructure is way, way bigger than it looks from the outside. I didn’t want anything to do with building a support team, managing groups of developers, QA processes, etc. I didn’t have any skills to bring to those tasks. I knew it’d be a Herculean amount of work over the next few years, just as the first 4 years were huge to get the consulting and training off the ground. I knew the company would succeed with Jeremiah and Kendra at the helm, and that I wouldn’t add anything to that success. (I wouldn’t hold it back, I just wouldn’t be able to contribute to those tasks.)

I took some time off by myself to think – I’m a big fan of doing structured solo retreats every year – and I sketched out a few ideas. I figured I’d walk away, then start a remote DBA services company or an e-discovery consulting company, because neither of those would compete with Brent Ozar Unlimited. (Neither of options had a particularly easy route forward, but I didn’t want to do anything competitive – I wanted Jeremiah and Kendra to succeed, period.) I talked it over with Erika, and we agreed that it was the right time.

I told them, “I’m walking away, but I fully believe in where you guys (Jeremiah & Kendra) are going to go with the company, and I’m totally okay with you using my name.” I was even willing to change my name to something else entirely just to make it easier to keep the existing company going. (I’d be Brent Valencia, if you’re wondering – I’d take my wife’s last name.)

But that company name made things awkward.

Jeremiah and Kendra didn’t want to keep the company without me involved because they would want to rebrand the company as something else. I don’t blame them – all throughout the company’s history, tons of readers/customers kept saying stuff like, “Great post, Brent” even when the blog post was written by somebody else. We had clients refer to our consultants as “Brent” no matter who was on the call. Jeremiah, Kendra, and I were always equal partners, and I know the constant “Brent” references had to be frustrating. If I was gone, they wanted the name to be gone too.

Rebranding – changing a company’s name – sounds easy, but it’s HORRIBLE work. We went through the rebranding process when Tim left – the change from Brent Ozar PLF, LLC to Brent Ozar Unlimited was a pain in the ass. I totally understand why they didn’t want the company if it came with that kind of baggage.

This is probably my biggest regret in founding the company – I wish when we started it, we’d have added another domain and started migrating our company stuff over to it. Something independent, like Data Bass Hatchery or whatever. It would have given us more flexibility around ownership. (When you start a blog, I still believe it should be under your own name, though.)

So in fall 2015, the company bought out Jeremiah and Kendra.

We brainstormed a bunch of options and came up with this:

• Jeremiah and Kendra would each get a cash payout, plus money over the next several years
• They would leave their intellectual property for training inside the company (which meant we could sell their classes, thereby helping pay them out)
• They could do anything they wanted, even take clients with ’em, but not hire the company’s employees for several months (because if the company lost J&K and all the employees, it’d be too hard to bring in revenue and pay down the loan)
• If the company defaulted on payments, Jeremiah and Kendra would get their ownership back

We came up with numbers that worked for everybody, worked through a bunch of legal paperwork, and then told the team.

I always say “the company bought out Jeremiah and Kendra” because I wanna make it really clear that I didn’t whip out my wallet and start slappin’ down hundos. I wouldn’t have been able to finance that big of a move. Instead, the company bought back their shares, which indirectly makes my shares worth more, but the company was the one taking on the debt and the risk. This move wouldn’t have been possible if it wasn’t for the incredible work that Jeremiah and Kendra put into the company, building up its earning potential over the years.

Since then, it’s been really cool to see Jeremiah go back to college and watch Kendra build up SQLworkbooks.com. I think the biggest lesson we learned over the years of working together was that each of us – and each of you, dear reader – can define what personal success looks like, and build a path to get there. I love watching them do their thing.

When the company ownership shifted, I had to pause to think about what success would look like to me, too. We were just hitting the $2mm/year revenue mark with a successful consulting and training business. I decided that over the next 2-3 years, if I owned the company, success meant growing the company to 10-15 consultants. (I didn’t choose to hire trainers.)

The first six months were really hard on me.

There’s probably never a great time to do stuff like this, but my first ~6 months of ownership (winter 2015-spring 2016) were rough. I knew it would all be fine if I could just get to May 2016, but until then, I was a little unhealthily stressed out because:

I had to do all partner duties. Jeremiah and Kendra hadn’t exactly been sitting idle playing Solitaire – they were managing the staff, building tools, and designing the new software. I found myself working seven days a week trying to tread water. Thank God we had really smart, self-starter people who could manage themselves, because I didn’t do jack for management.

I had to rehearse and teach week-long classes by myself. We’d already signed hotel contracts for our 2016 training classes, and we’d just announced our week-long class lineups. However, I didn’t have co-presenters anymore, and I was up by myself starting January. While Jeremiah & Kendra left their training material in the company in order to increase its value, I wasn’t necessarily familiar with all of their modules. Teaching a week-long class solo is exhausting, let alone two of them, as I wrote last week.

I was on the road most of the time. I’d already booked my own 2016 travel calendar, and between taking over classes, plus my existing training/client commitments, and new clients that would only take in-person work, I was on the road for 14 out of 16 weeks. That sucked. I wish I could have canceled some of that, but the company needed the cash flow early on because…

We had to backfill consulting capacity, fast. We’d just hired Angie, but that wouldn’t be enough to replace both Jeremiah and Kendra. I hired Tara before the company changes were even done because I had to get consultants up to speed really quickly. Doug & Erik had to do double duty – consulting, plus getting their new coworkers trained.

We were temporarily unprofitable. While Angie & Tara got trained on how we do the SQL Critical Care® process, we were way heavy on payroll – but way light on revenue. The first quarter of 2016 scared me more than any quarter we’d had – the consulting side of the business lost over $100k in those 3 months alone. We were never in a position where we wouldn’t make employee payroll, but I did a lot of training & consulting that I never got paid for, even to this day.

There were also some big expenses I couldn’t avoid:

• We needed a company retreat to get the new team together to build camaraderie
• My first solo class, a January 2016 class in Newark, bombed with only 5 tickets sold (losing a bunch of money, but we don’t cancel classes – lesson learned, nobody wants to go to Newark in January)
• Doug wasn’t billable because he started recording Jeremiah & Kendra’s advanced querying & indexing training material, because we needed to start bringing in more passive income
• I had the opportunity to hire Richie – but as a developer, he wasn’t directly bringing in revenue

“Wait – why hire Richie if you didn’t want to build software?”

If Jeremiah, Kendra, and I were all building Brent Ozar Unlimited, the right way to go forward was to add software to the company’s offerings.

If I left, and Jeremiah and Kendra ran the company, I thought software still made sense for them. I am absolutely positive that they would have succeeded wildly.

But if Jeremiah and Kendra left, and I was the only remaining partner, then I would have failed. It’s not that I don’t have the experience or the drive – it’s just that being a solo founder, running a consulting and training company, and trying to build an app – that’s stretching one person too thin. In the first year, there just simply wouldn’t be enough time for me to devote to designing a new app and building the staff infrastructure necessary to bring it to life.

However, I did see an opportunity to build something different than the SQL Server industry had seen before: free online services. (The first result which has since gone live: PasteThePlan.com.) I wasn’t really in a rush to build them, but when Richie became available, I wanted to snap him up fast because the personality fit would be so good for the team, plus he had the right architecture and project management skills that could hit the ground running with minimal oversight from me. (I really do suck as a manager – I just point at a dot on the horizon and yell, “Run that way! Let me know what you find.”)

Plus, I could have Richie build a tool to rapidly improve the SQL Critical Care® process, making it easier for us to onboard new staff that could produce a better product faster, and for less money. I gave him a general spec and two months to build it, and he totally delivered. His CriticalCareCollector app dramatically changed the way we do consulting.

By the end of year five, I thought could breathe again.

I remember laughing in April when a commenter called me arrogant – at that point, I was about the farthest thing from arrogant. I had spent months really stressed out, paranoid that I would have to ask my team to make compromises, work more hours, take less time off, work crappy engagements, cut bonuses, or stop investing in our future. I was willing to do whatever it took to make sure that didn’t happen, including making a lot of personal financial compromises.

Thankfully, by the end of April 2016, it looked like we were firing on all cylinders. The consulting business was kicking ass: we had a trained, profitable team, using new consulting and sales tools do to their jobs better/faster/cheaper. The training business was on track as well: my 2016 classes were all written and working fine, we had a successful (profitable!) class in Newark, we had new video classes coming into the sales pipeline, and the rest of the year’s classes were in a profitable state.

Sadly, I was wrong about of half of that, but that’ll have to wait until next year’s retrospective.

If you wanna read the past updates:

• Year 1 recap – April 2011-2012
• Year 2 recap – April 2012-2013
• Year 3 recap – April 2013-2014
• Year 4 recap – April 2014-2015