I Want My Company Back
Early in 2001, Greg Matusky took his family out to dinner at a Japanese restaurant and told them that he might need to leave the company he'd spent the previous 10 years building. His children, then 9, 10, and 11, were incredulous. They'd been hanging out at the suburban Philadelphia public relations firm, headquartered in a converted bowling alley, since they'd been toddlers. With a wave of his hand, Matusky tried his best to minimize their fears -- but his words couldn't change the wrenching twist he felt in his gut. Thinking about resigning, he says, "was like jumping off the cliff and hoping there's a bungee cord around your foot that's going to pull you back."
The previous year Matusky had sold his 23-person firm to a high-tech Israeli incubator. But the incubator, called Yazam, was then purchased by a publicly traded company in Washington, D.C., that had shifted its focus from outsourced prison labor to the Internet -- and would soon become ensnared in a high-profile accounting scandal. "I felt like I had gone through the looking glass," recalls Matusky. His brief stint as an employee had been a disaster. Now he wanted his company back. Badly. But how would he get it? "You've got to be willing to walk away," a lawyer coached Matusky. "If you're willing to do that, then you've got them in a corner."
Throughout the ordeal, Matusky would lie awake at night wondering how he'd hang on to his 23 employees, 30 clients, and $3 million in annual revenue. All entrepreneurs walk through fire at some point, whether it involves the loss of a key customer, the dissolution of a partnership, or a financing deal gone bad. To survive his crisis, Matusky decided he'd need a specific set of guideposts that would help keep him centered, his clients well served, and his staff motivated while he plotted to reclaim his company: He told himself that he would keep his hands clean no matter how ugly the battle got. Inspired by Margot Morrell and Stephanie Capparell's Shackleton's Way: Leadership Lessons From the Great Antarctic Explorer, the story of Arctic explorer Sir Ernest Shackleton's extraordinary rescue of his crew, he promised himself he would lay off no employees. He vowed he would insulate both his family and his staff from his corporate struggles. And above all, he would do everything he could to make sure his new owners never realized just how much he wanted his company back.
If you're willing to walk away from your company, said the lawyer, you've got them in a corner.
The Ardmore, Pa., offices of Gregory FCA, as Matusky's firm is known officially, are a constant reminder of its past life with the Israeli incubator. Back when he envisioned Gregory FCA as part of a hip Internet company, Matusky, now 42, hired a designer to renovate the offices. The result: walls that are half exposed brick and half jaggedly broken plaster painted in bright strains of fuchsia, aqua, yellow, and blue. His desk is a 500-pound slab of granite supported by bright yellow steel sawhorses and a floor jack.
Matusky had started his career in 1984 as a speechwriter at Conoco in Wilmington, Del. -- a job he ended up hating. The company had been acquired by DuPont and many employees lived in fear that their jobs were going to be cut. Craving independence, he left and eventually launched his PR firm in 1991. He never considered naming it anything but Gregory Communications.
A year later, he hired his first employee, and the two moved into the former bowling alley. Their stable of clients was varied, but Matusky concentrated on establishing a reputation with technology firms. One triumph was PictureVision, the first online digital imaging company, which came onboard in 1997. Based in Herndon, Va., PictureVision had been co-founded by an entrepreneur named Phil Garfinkle. Certain that Kodak was about to launch a competitive photo service, Garfinkle sought PR counsel from Matusky, who strongly advised him to take the offensive. And so when Kodak announced its launch, Matusky immediately put out a cheeky response: "Been There, Done That." The Wall Street Journal, CNN-FN, and others jumped on the story, focusing on the angle that tiny PictureVision, not Kodak, was the established pioneer in the industry. It was "very effective PR," says Garfinkle, who rewarded Matusky with some $20,000 worth of stock options. Six months later, Kodak acquired PictureVision for well over $100 million.
Shortly thereafter, Garfinkle landed at Yazam, the Israeli incubator, and eventually made an offer to buy Matusky's company in the spring of 2000. The idea appealed to Matusky. Sure, he loved running his own company, but he was also thinking practically. "I had a friend who kept telling me that he felt things might get tough with the economy," he recalls. "I thought maybe it was a good time to see some equity from what I had built." His wife, Judy, had reservations. Their three kids were well past the toddler stage, their cabin in central Pennsylvania was paid off, and Greg was getting home between 5:30 and 6 every night. "I like our life the way it is," she told him. But she also understood how eager he was to take his company to the next level. And so, she supported his ultimate decision to accept $650,000 in cash and another $2.8 million in stock for his company.
DONNA FENN | Inc.com Contributing Editor
Donna Fenn is the author of Upstarts! How GenY Entrepreneurs Are Rocking the World of Business and 8 Ways You Can Profit From Their Success, an exploration of the ways Gen Y is changing the entrepreneurial landscape.