I’m not sure when I first learned that Dave Newton had lung cancer. I suspect it was before I got back to the States. He was my great friend, business partner and mentor. It was very difficult to hear of his condition, particularly in terms of survival rates. The 5-year survival rate for Stage 1 lung cancer patients is only 45%. For those diagnosed as Stage 4, only 1% will still be drawing breath five years hence.
Soon after my return, I gathered my team leads. In a real Asperger moment, I announced that we needed to envision a future without Dave. This pronouncement struck my team as insensitive, reprehensible, and cruel. I admit their sentiment caught me by surprise.
But it didn’t stop me making my pronouncement to others. I took to saying that while Jim and I provided the brawn for client delivery, Dave and Amy were the brain and heart. I lumped them together because they were inseparable. They had lived, loved, worked and played together from the start. And now that Dave was sick and Amy was caring for him, neither one was very much around .
It wasn’t long until I told Dave and Amy how I felt. They both brushed my ‘lose our brain/heart’ metaphor aside, insisting they would always be around. But, as time wore on, that was less and less the case.
No one wanted to acknowledge that Dave was dying. So the company plodded on as if everything was fine. But in reality, we were stumbling. Meetings ended without decisions, often with the words, “We need to bring this one to Amy and Dave.”
I pushed the line that we needed to play the hand we were dealt and make decisions where we could. But I suffered from a hard-earned reputation for being a jerk. Few colleagues were inclined to follow my lead on ‘taking charge’, so the corporate lethargy ground on.
Then I took badgering Dave to a whole new level. “We’ve got three choices, as I see it,” I said repeatedly. “One: you can get better and the two of you can resume your Directors’ roles. Two: we can recruit some senior talent to replace your ‘hearts and heads’. Or three: we can sell the company. ‘One’ isn’t going to happen, so that leaves two or three.” Over a several month periods, I sensed I was wearing them down.
One day, after I’d been back about a year, Dave came in and said, “Amy and I have decided we should sell the company.” The pronouncement was particularly notable because Dave tended not to speak like this. He was too inclusive to use a phrase like “Amy and I have decided”. They both worked hard to ensure that our decisions were consensus-based. His blunt talk of selling took the air out of the room. Even I, who had been pushing for this, felt myself gasping for breath.
It was ok for me to say that Dave was dying, but for him to allude to it? That was simply not allowed. He was a fighter, I reminded him. He didn’t even know how to quit. But he told me this time I was wrong. He’d made peace with his limited future and wanted to ensure he used his remaining energy to do what was best for the company.
Once Dave made his mind made up, there was no changing it. He poured himself into finding us a buyer. He analyzed our competitive landscape and figured out who had the most to gain by acquiring us. Then he set about wooing the top three candidates. He didn’t tell them that we were selling. Rather he seeded them with reasons why buying a company like ours would be good for them. It didn’t take long for the seeds to sprout.
A rule of thumb is that professional services firms are worth half their full year’s revenue. So, with forty million in expected revenue in 2010, we pegged our worth at twenty million bucks.
One of our prospective buyers was SRA International. They were a 7,000 employee company with 1.5 billion dollars in revenue. We knew and liked them and had a shared history. When we formed the company, they had helped us out by lending us office space. They wouldn’t even take our offered rent payment two months later when we moved out. (In 2015, Computer Sciences Corporation (CSC) bought SRA. Combined, the newly named CSRA had revenues of 5.5 billion and 20,000 employees. Giving the plot away, this number included 400 professionals from our staff).
I had developed a ‘quick no/slow yes’ adage about business. It said that losses came as fast as a gut punch but wins trickle in. Winning was more like a ‘maybe’ moving to a ‘probably’. Wins came in so slowly that you were never sure when they actually arrived.
To my surprise, Dave got SRA to quickly bite. He landed the deal within a couple months. But then my adage kicked in. The deal was more like a string of caveats. ‘We’ll buy you for 10 million. But we’ll give you up to another 10 million if you reach this impossible level of new sales. And if you do it every year for the next three years. Without losing any key personnel. While transforming yourselves to look exactly like us. Without losing your identity because that’s your Brand.”
In the end, Dave delivered on every aspect of every stipulation and we walked out with twenty mil. When my first of several large checks came in – my first ever for over a million dollars – I felt like crying. The first check wasn’t quite TFI, but the ‘trickled yes’ had begun.
Over the course of the next 18 months the money slowly accumulated. It eventually got to the amount I arbitrarily pegged as TFI. Fifteen years after taking the gamble of starting the company, we had all won a major hand. We each walked out with a couple of million. Except for Dave. He was once again proven right in trusting his gambler’s instincts. His additional 75k investment netted him double our average take.