The Lighthouse Series features a weekly Q&A where we ask one of our CEOs five questions that are matters of the heart, mind, and business.
This week, we interviewed Budderfly CEO Al Subbloie - a true navigator of markets, models and moments with a highly competitive, humble approach.
THIS WEEK'S CEO: AL SUBBLOIE
Al Subbloie has been a successful software technology serial entrepreneur and CEO for the past several decades. Al has been versatile throughout the entire business development cycle: starting with the creation of the business concepts as founder, then leading the ideas through the early growth stage as CEO, and scaling through the successful completion of two IPO’s. His previous venture, Tangoe (Telecom Expense Management TEM), grew to over $200M in recurring revenue, becoming the global industry leader over a period of 16 years. Al led the growth of this unique model from invention and start-up phases, through 16 successful acquisitions, a successful IPO, and growth to over 2,500 employees globally. Al’s most recent venture, Budderfly, is yet another disruptive business model in the Energy Management Space. In only three years, Budderfly has become one of the fastest-growing companies in the industry as well as the region.
Al has served actively on various Boards. Most recently, he helped lead another Edison portfolio Company, Operative, through a successful exit to a major US-based private equity firm. Al resides in Connecticut with his family, and enjoys various hobbies, including boating, snowmobiling, skiing, motorcycling, and golfing when time allows.
1. You have led previous companies from start-up to IPO. You have lived the dream of many CEOs. What is the key to your personal stamina?
It is easy to keep doing something you truly love doing, so the notion of digging deep to find stamina is somewhat foreign to me. Stamina is one of the many qualities in a successful leader, but I categorize that quality as the least intelligent one when compared to wisdom, experience, foresight, instincts, poise, and humility. Sometimes being naive at the right time plays a key role in supporting perseverance! A good example of this is my desire to change industries when I build new companies. I prefer not to be jaded with how things “are” in the creation of a disruptive business model. Entering a new space keeps things vibrant, fosters learning, and attracts many of the team members around me, as it is all new, exciting, and refreshing.
In my earlier CEO days, I would often lean on stamina when in doubt to overcome adversity through sheer effort. I have learned that stamina has probably been the easiest quality to endure through the years of ups and downs. This comment is anchored on the fact that I really love building companies, highly effective solutions, and great teams to execute the vision.
For me, capitalism is simply the playing field for this entrepreneurial sport.
2. Looking back, how many pivots were there and what were the keys to success to get to the NYSE?
The thought of a pivot is essential and probably one of the most critical success factors in building highly successful businesses. Great CEOs are often defined by their decisive pivots. They also come at unexpected times, and in many cases, in the face of adversity. It is incredibly rewarding to face adversity and overcome it. It is not as rewarding to simply have everything fall into place easily all the time. We are defined by how we act and relate during times of adversity and challenge. While that ugly feeling of failure can often push us into exhaustion, you learn that those moments become the crux of your success, as many of your greatest outcomes get created during those moments. Great leaders learn to embrace those challenges with eyes and ears open, waiting to pounce on the creative outcomes that can shape the future. The challenge is to think through the noise and use the noise as your guide. We are in one of those moments now...
Pivots will either make the business successful or cause failure. The qualities that lead to good judgment in defining these pivots are not obvious. I am intensely aware of major pivots, along with the risks and rewards. Here is a list of the key pivots from my last Company:
Tangoe was founded on an early unsuccessful model; we quickly created and pivoted to what transformed into the long-term disruptive model, which became the ultimate success story. This was a risk, but the risk of not doing it was greater. Budderfly had the same type of pivot, a reinvention of the early business model using a “fail fast” approach. This is now the key to our current success.-
Another key pivot moment was the turn from one-time revenue to recurring revenue five years into the growth story at Tangoe. This can be the kiss of death for many companies, but we pulled off a sharp turn to majority recurring revenue in less than 18 months.-
My last market was too fragmented and it needed to be consolidated. We quickly pivoted the company to become an acquisition machine and subsequently completed 16 in about five years. We became the industry leader that consolidated the marketplace.-
Going public became a key pivot in many ways. The recognition that your unique business value is an attractive acquired asset or not is important to understand. In that market, an IPO seemed to be the appropriate exit strategy for our shareholders and for our long-term access to capital. Alternatively, Budderfly, is going to be a ripe acquisition someday and should stay private given the market dynamics.
In summary, while we work tirelessly each day, those few key pivots in our business lives will define our success.
3. How is a public company different than private in terms of recruiting for talent and how you allocate your time?
Running a public company for five years was not as fun for me as the earlier stages of growth. When asked why I am doing this for the third time, it’s because I love doing it, especially at this stage of growth. That said, the stakes of running a public company are high, which can be exciting as well. Unfortunately, a high percent of your time running a public company is spent on managing many layers of required overhead – not the business itself.
Talent recruitment in a public company in some ways is easier because the public awareness of the business is widespread and its valuation is always available for the candidate. This is positive when things are going well, and not so positive when they don’t go as well, making this a dual-edged sword for recruiting and retention. Great talent is always attracted to great companies.
Sometimes the skill sets are different for public companies, so talent acquisition can be like applying a specific skill for the specific need and size of the entity. Selecting talent in a public market venue often requires picking from a different pool of candidates. In either case, it is the vision of the CEO to paint the future and the growth opportunity, whether you are public or private, for good talent acquisition.
4. You are now building a company that needs billions of dollars of capital and is playing in a $100B market. Why are you doing this to yourself?
I feel fortunate to be a CEO. I first became a CEO when I was 24. The only way for me get that role was to start a company, as no one would hire me at that stage of my life! I have been a CEO for my entire career. It is like playing football and baseball, which I did through college, mainly because I just loved to play the game. When you graduate, no one lets you play anymore.
In business, it is like a sport you get to play for a long time, like the game of golf! I am having more fun on the latest venture than ever before. It is because my experience gives great confidence to make the right pivots and the right funding choices, attract the right talent, and build a multi-billion dollar business in five or six years. This will clearly be the biggest outcome of all my ventures. What is better than that? In summary, I just want to keep playing, because I love the sport.
5. You are also an active Board member and serve on various boards. What should a CEO ask a Board member to do for the rest of 2020 during these incredibly volatile times?
Board member roles are crucial to CEOs. Board members serve as advisors, coaches, counselors, and experience managers for sanity checks. In tough times Board members can get more active for each of these roles, especially when there is no playbook to rely on. Common sense, experience, and judgment become our compass, and having a safe, fluid discussion is critical for a CEO. More specifically, during these challenging times, a Board needs to meet more often, assist in making critical decisions regarding headcount, customer management philosophies, employee communications, and funding strategies. We instituted a Board update every 2-3 weeks, which was very effective. Overcommunication is a basic leadership trait I find quite effective in general.
A NOTE FROM AL TO HIS FELLOW CEOs:
I hope all of you are doing well through these times. I firmly believe we are defined by how we act when we face the “unexpected event.” It has been cathartic for me to read how each of you has responded and kept your composure through this recent trying period. I have been impressed and motivated by all of your comments and wanted to thank each of you for the time you put into sharing your perspectives.