When Euan Rellie left Schroders in 1996 to start his own M&A firm, Business Development Asia, he invested his life savings of $75,000--and took an 80% pay cut. Today, BDA has offices in New York, London, Bahrain, and 7 locations in Asia with a run rate approaching $30 million.
Rellie knew by 27, he didn't want to work for a big organization. What he didn't know was how long it would take. BDA closed two deals in the first three-four year period. "It took 10 years for us to get anywhere," says Rellie, adding, "Just about enough people hired us that we could imagine a successful future."
Across industries, when you're paid for your advice, a track record and some grey hair go a long way toward credibility. From five employees in the first three years to staff of 90 today, he's picked up a few pointers.
1. It takes a team. "My business partners have qualities I lack, and we're not afraid to challenge each other on strategy, nor on tactics and budgets, nor on expenses. Actually, I'd rather be the boss myself. Still, without them, I doubt the business would have survived let alone thrived."
2. Be decisive. "We've been undercapitalized throughout, but I've never been scared. I have pushed my colleagues to take risks they were reluctant to take, in hiring, in the way we present ourselves, and on investing in growth. I've been resolute in fighting to keep some of our smaller offices open even through local downturns and dry patches. This year, eleven of our twelve offices will be significantly profitable, and the twelfth will break even."
3. Be patient, and tenacious. "In 1996, I thought I'd be rich or broke within three years. The truth has been more prosaic: steady growth, and not in a straight line. Sometimes along the way, I have pushed too hard, and over-extended myself financially. Again, my partners have helped out when I needed them. But I have never come close to giving up. It took us twelve years to build a US$10m revenue company, and then six more to triple that."
4. Be fully committed. "I invested $75,000, my life savings, for my initial 50% stake in the start-up, eighteen years ago. I took an 80% pay cut to start the company. Today I own less than 25% of the company, and all our senior team own stakes in the business. I still get that deal heat, the excitement from winning a mandate, or from securing a high-paying buyer for a business. The numbers are just bigger these days."
5. Don't be afraid to promote yourself and your company. "We faked it until we made it. We wrote a lot of press releases. We sponsored a few conferences. Three years ago, we identified a fantastic alliance partner, the Chicago investment bank William Blair, and we sold them a 10% stake in our company. We bought lunch for a few journalists. And we cold-called a lot of clients. As an entrepreneur, you must write your own press, and believe it too. Be the ball."
6. Be mildly provocative. "I tend towards irreverence. I tell our clients that we offer best-in-class, blue chip investment banking advice, but in a down-to-earth, practical way. Of course, they often ignore us, but our clients--be they Fortune 500 companies or private equity firms--always like us to give them candid advice, and to push them to act decisively. I use humor liberally to try to diffuse tense situations. It usually works, but every now and then, it backfires."
7. Empower junior staff. "We try to hire smart, sophisticated junior staff. Gradually they're becoming more polished, and less rough-around-the-edges. But I have always been transparent with them. We share the company's financial performance with them. We bring them to meetings with clients even before they're ready to contribute much. We let them learn by osmosis, and we spend money to train them. We treat them like adults. We give them regular detailed feedback about their performance. We focus on their strengths, not their weaknesses. We make them feel like they own their careers. We drive them to be excellent, but we support them even when they make mistakes."
8. Get out a lot. "I travel extensively. I take a meeting with more or less anyone who wants to see me--except for IT and telecom vendors. I'm a compulsive networker. I tell anyone who'll listen about BDA. I try to look at our business from the outside, and I ask our clients to tell me how we could be better. I love to hear criticism from clients; that spurs me to improve."
9. Don't take yourself too seriously. "There are lots of different styles of manager. I'm focused and driven about building a bigger, more valuable company. I want us to be winners; I'm not just worried about my own compensation. I assume that, if we keep growing, we'll all get rich eventually. But I laugh at myself. I have self-knowledge, and I let people see my flaws- or rather, I let people see that I recognize my own flaws. Most investment bankers are pompous, and I really hope I'll never become that."
10. Be proud and share it. "I say it every day, to my partners, my colleagues, to my family, and to my clients. We eat, drink, and celebrate together. People like to be associated with success, and people like to be reminded--within reason--that we're in a good place. Then we can plan future adventures together."