Tony DiBenedetto, Think Big For Kids
Thinking Big: Tony DiBenedetto talks founding Tribridge, pivots and evolutions, and life after
On this episode of SPx, Tony DiBenedetto joins our host Joe Hamilton in the studio. In this insightful episode, DiBenedetto walks listeners through the unlikely founding of Tribridge and the $300,000 check that brought it to fruition. He explains the tenets of Tribridge's culture, and the many acquisitions, pivots and evolutions before its eventual sale. DiBenedetto's talks coming "off the rocket ship" and into his new normal as a mentor and founder Think Big For Kids.
- On this episode: Tony DiBenedetto, co-founder of Tribridge and founder of Think Big For Kids.
- DiBenedetto shares the story of founding Tribridge, its arch and evolution through multiple pivots and its eventual sale.
- Tribridge started out of the minds of DiBenedetto and his co-founders Mike Herdegen and Brian Deming, all employees of Arthur Andersen.
- DiBenedetto shares the story of pitching Tom Wallace on a business plan that preceded Tribridge and how that led to a $300K check, Tribridges' founding and set it off running.
- On making sacrifices: "What you do in a start-up is you go home and you say what does it take to live on ramen noodles and whatever we have to, to get through the next six months or a year, and you figure that math out, and that's what we all did."
- The significance of Wallace's investment: "We knew we had the $300K in the bank and it just allowed us to be really comfortable because we had a client day one, we had revenue day one, we got employees. I mean, everything happened really quickly for us."
- Arthur Andersen: DiBenedetto left Arthur Andersen just after he made partner, a rare move. "Even though I got to partnership, you know, that was at the end of me wanting to leave for eight of the ten years I was there to start my own company."
- DiBenedetto had two other small entrepreneurial endeavors during his time at Arthur Andersen, including a truck leasing company and a pizza restaurant.
- Tribridge went through three major pivots and evolutions during DiBenedetto's time with the company, he describes them in detail and why those pivots helped position the company for its hike in revenue and eventual sale.
- DiBenedetto talks about the composition of Tribridge's board, careful listening and the board's relationship to the management of the company.
- DiBenedetto shares his theory of acquisitions and how it evolved based on the needs of Tribridge.
- The five culture points of Tribridge: "One was entrepreneurship, two was servant leadership, three was honesty and integrity, four was teamwork, and five was accountability."
- On culture: "We defined behaviors that were evidence and then we did evals based on it. When we interviewed to recruit, we evaluated them against it, and when we did partnerships, we talked about it. So, it became an operationalized part of Tribridge that culture was a way we were going to evaluate the success of the business."
- "My personality kind of figured out about 10 years ago that my purpose here on the Earth is to give. And part of that is telling my story, part of that is helping people, part of that is coaching."
- On branding Tampa Bay: "I do think it's bigger than any of the cities themselves, and I think it's bigger than any of the ideas on the table. Because what I've noticed is with the lack of identity, then we're nowhere."
"I kind of figured out about 10 years ago that my purpose here on the Earth is to give."
"Ultimately I knew for me to be successful as an entrepreneur I had to work in the business and that was the itch I really needed to scratch and once I did that there was no turning back."
Table of Contents
(00:00 to 01:55) Introduction
(1:55 to 10:01) Starting Tony’s Firm
(10:01 to 12:52) Pivots In The Company
(12:52 to 15:03) Tony’s Relationship With The Board
(15:03 to 18:19) Structure Of The Board
(18:19 to 22:54) Acquiring Companies
(22:54 to 23:40) The Five Culture Points Within The Company
(23:40 to 24:43) Acquisition And Leadership
(24:43 to 30:25) Selling The Company
(30:25 to 33:44) Plans For The Future
(33:44 to 36:45) Experiencing Name Dropping
(36:45 38:00) Contributing To Future Companies
(38:00 to 41:18) The Tampa Bay Brand
(41:18 to 42:59) Conclusion
Joe: Joining me on SPx is Tony DiBenedetto, welcome sir.
Tony: Hey Joe, glad to be here.
Joe: Excited to spend some time with you. You’re a storied entrepreneur in Tampa Bay and I’m going to jump right into that, how does it feel to be storied?
Tony: I’m not sure what I know what that word means, but this is a kind of community that likes to celebrate success, so I like that my colleagues and friends feel like they’re part of the Tribridge story. And so from my perspective that’s really cool. I know that’s not what storied means but I’m going to go with that definition for me. I love being part of everything we’re building here and my personality loves progress and I think the progress that the whole bay area is having around tech and the tech ecosystem and just to be a part of that I think is really cool.
Joe: Yeah. So, before we dig more into the story in this, let’s go back to where the story begins. I think I’m completely using the word story in two different ways. But let’s just run through a quick history of Tribridge major success, interesting beginning, great characters along the way, let’s start with the beginning.
Tony: Sure. You know, the beginning of Tribridge really started working at Arthur Andersen and that’s where I met my two partners, Mike Herdegen and Brian Deming. And we would meet on a regular basis to just come up with different entrepreneurial ideas and say man, we’re going to leave. And it was all the typical stuff, right? It was automating everything from gym memberships to CRM software and we tried all kinds of different software ideas, we were definitely on the software trail, including some non-technology ideas as well. And we finally came up with the idea that we were going to build a CRM solution that was going to be on the internet. And I’m doing internet with hand quotes because there was hardly any applications on the internet at that time. And Salesforce was not officially launched, or certainly I think it was launched around that year, but it was not visible to the public because it was a small, tiny company in Northern California. And so, we built a business plan and I have it still, it’s more impressive than the Tribridge business plan, but it never got funded because the first thing I did is setup a meeting with Tom Wallace who I would call him a strong mentor for me over the years. And Tom had tried on several occasions to get me to join Waldec which is a company he ran in the IT training space.
Anyway, so we meet at Malio’s and it’s the old Malio’s sitting on Dale Mabry and Malio’s for whatever reason for me always had this air about it of old Tampa. And I imagine people from the Tampa mafia meeting there to kind of plan world events and here’s Tom who I always call the godfather of technology sitting in Malio’s. I think you could smoke back then so smoke is kind of around him a little bit and he doesn’t smoke. And you just walk in and I’m like wow, this is a life changing moment, you know, we’re going to go pitch this guy. We’re going to ask him for three million dollars for this software company. And we sit down and we pitch him. And if you ever met Tom he’s a very, you know, he’s just watching and listening, he’s not asking any questions. We get to the end of the pitch and he goes, “Yeah, I hate the idea.” And I’m like oh, okay. He goes, “Yeah, I don’t know anything about CRM, I don’t know anything about the internet.” He goes, “I really believe in you and you guys.” And so he gets his checkbook out and he writes a check for three hundred thousand. And of course my first response is Tony DiBenedetto, $300,000, Bahamas, that’s kind of where my mind went. And then that quickly popped out.
Joe: Days later or hours?
Tony: No, seconds later, yeah, absolutely. Just didn’t have a lot of $300,000 checks laying around at that time. And I said to Tom, I said, “Tom, I’m not going to build a business when I don’t have a business plan, I gotta build the business plan.” And we had no equity agreement, nothing, I literally had a check. And I said, “Listen, let me build a business plan around what you’re saying.” Because what he was saying to us is why don’t you build what you know and then if customers want this CRM software we’ll build it inside of Tribridge, which ironically we wound up doing, not exactly, but pretty close. And so anyway, I went off and built a terrible business plan because we had the money around what are our services were, what markets we’re going to be in, and we identified twenty markets around the U.S. and services and then negotiated the equity. And even that was kind of funny because I wound up calling a friend that I had that ran a small fund and got his advice. And he said, “Well, Tom is going to probably want a third of the company.”
And I’m like a third of the company? I’m not going to give him a third of the company. He goes, “Tony, you have nothing, you have a business plan, you haven’t done anything, you have no customers, you have no IP, you have nothing.” And I’m like I don’t really like that idea, maybe Tom will negotiate, that’s what I’m going to assume. So, I’m like Tom, what do you think about 15%? And he goes, “Yeah, that sounds like a good idea.” He said, “Draw it up, call this attorney, and get it all done.” So the negotiation also fit the moment. So, here’s a guy investing $300K got 15% which was certainly a cool thing. And so, we had pre-money of I guess two million dollars and we were off and running. And first year we did two million in revenue and the rest is kind of history I guess.
Joe: So, at that point with 300K are all three of you quitting your jobs and going full time on it with that investment?
Tony: Yeah, it doesn’t sound like a lot of money now, but we did a couple things to start. One, you know, like I took a 67% pay cut and the guys took a pay cut. So, what you do in a start-up is you go home and you say what does it take to live on ramen noodles and whatever we have to, to get through the next six months or a year, and you figure that math out, and that’s what we all did.
Tony: Came back and we all had these very specific numbers down to pennies and said this is what we can all afford to do, and then that’s what we paid ourselves, that and the addition to the $300K. I would tell you, and I don’t think I ever said this before, we never tapped the $300K. So, the first year we were super profitable and did $2M in revenue. But what I would tell you the $2M did for us, it gave us a lot of confidence. We knew we had the $300K in the bank and it just allowed us to be really comfortable because we had a client day one, we had revenue day one, we got employees. I mean, everything happened really quickly for us. And in a service business it’s really easy to ramp revenue because your product is your experience and your people. We had a decade of experience at Arthur Andersen.
Joe: So, your day one revenue was consulting revenue?
Joe: And its clients that you obviously had a relationship with?
Tony: It’s clients we had a relationship with that didn’t violate our non-solicit or non-compete agreement with Arthur Andersen which we honored. I had an 18-month agreement, I was a new partner at Arthur Andersen, which is a funny story unto itself because I had just made partner and quit which apparently didn’t happen very often there. And so, I did have this non-solicit non-compete agreement. And so we just stayed away from things that violated it and after the 18 months we wound up partnering with our old firm.
Joe: And all three of you left at the same time?
Tony: We all did, we all left on September 14th, 1998. And you know, we tried not to do it in the coup fashion, we promised we wouldn’t take any other people, and we didn’t. And we all started together and took those big pay cuts which were painful frankly at a home level for all of us, but you know, in hindsight it’s what you do.
Tony: You know?
Joe: And I think it just occurred to me that I think AgileThought’s crew came out of Arthur Andersen, same kind of group of guys and ejected out and started their own thing.
Tony: Yeah, I know those guys well. They have some similar background and heritage; Arthur Andersen was a great training ground for really taking technology and business and melding it together and learning the business side. Like a lot of us like I started I was more technical and the business degree I got I would say that I got an MBA over my ten years at Arthur Andersen, and it was well worth it.
Joe: And I know Tribridge had a lot of internal entrepreneurial support and it just seems a shame that Andersen didn’t have that, or not enough of it, or was there no way to express this idea that you had internally? Or did it just make more sense to…?
Tony: Well, I mean, the one thing about Andersen when I got there in the late ’80’s or mid to late ’80’s is it was a pretty large international consulting partnership. So, it was organized as a partnership back then. And, you know, the way that money flowed through the organization is the partners made the majority of the money. So, a lot of people were not comfortable with that model even if you had a great just the comp structure of the firm was so top heavy, even though I got to partnership, you know, that was at the end of me wanting to leave for eight of the ten years I was there to start my own company. Because anybody that has that entrepreneurial bug you’re constantly annoyed by it, right? Everyday everything you see is an opportunity and you think you should leave and you can make it better and all that annoying feeling has to come out somehow. And so, I did start a couple of companies while I was at Andersen, I started a truck leasing company and I owned a little pizza restaurant. One was a success; one was a complete failure. So, that did scratch the itch a little bit, the firm knew about it, I didn’t keep it a secret. But ultimately I knew for me to be successful as an entrepreneur I had to work in the business and that was the itch I really needed to scratch and once I did that there was no turning back. And I think for me it was probably there the whole time but I also have a sense of loyalty, like I’ve only had two jobs in 35 years, one with Andersen and one at Tribridge, so I think it was hard to leave. You know, every year I really had a hard time leaving.
Joe: And I think this is natural for you and not a real stretch, but as a business case it’s interesting. You did a pretty large pivot a couple years in to Tribridge. So, you had this original funding, you came out basically riding the steam of the action you had with Arthur Andersen, and as you sort of got your feet under you, you decided to make a pretty large pivot which I think if I read correctly reduced your operating what you were doing by 90% and started almost completely over, can you talk about that moment?
Tony: We actually had three big pivots in the company. I think you may be talking about the first one where we pivoted from kind of a broad kind of simple consultancy to very focused on Microsoft technology. So, that was probably the first pivot we did and we did that about four and a half, five years in. And we lost a lot of people on our team that just didn’t want to do that. They wanted to stay in a kind of objective consultative kind of environment. And what we saw was that was a partner-oriented business that would be top heavy like Andersen. After four years we were like now we know why they did that to get the kind of experts we needed you had to pay them a lot. And if you’re paying them a lot it impacts the comp structure. And we thought that’s not really the business that we want to be in. So, we switched it to a much more technology firm about four and a half years in and we were starting to work in Microsoft dynamics and the Microsoft platform companies. Than we had two more pivots which you may ask me about later, but I’m going to throw them out and you can come back to it, one is we also do our own virtual private cloud and had spun out a company called Concerto Cloud Services and we also launched a number of software products that we were selling both through the Microsoft channel through other partners, as well as ourselves directly. So, we wound up at the end of the thing with about a $170M company, and we had a software company, we had a service company, and we had a cloud company all in one and it was fun. I loved the balance of the three things, a lot of our customers bought all three from us, some only bought one thing from us. And it turned out like those two other pivots really gave us some tremendous growth.
Joe: Right. And the second two pivots though were more additions than pivots, right? The first one was a complete change of structure from consulting to the Microsoft tech servicing, and then Concerto was an add-on, it didn’t really affect the core business at that point.
Tony: No, I think the reason Concerto – It almost had a cannibalistic impact because we had a consulting business, services business, around IT managed services. And we basically cannibalized that customer base and turned that into Concerto. So, it wasn’t that new, that team over time became the Concerto team, not completely, we brought in outsiders and it was a completely different infrastructure offering, but it was an evolution of the managed services business we had. The software business that we did was part of the Microsoft world, but to develop your own software, and sell your own software, and support your own software, was the biggest what I would call business process change because there were business processes that we didn’t have in the company. So, I thought that was the hardest one to do. I think the first one was only hard because it was philosophically against every person in the company’s thinking.
Tony: The second one was an evolution and the third one was a software company was just completely different.
Joe: So, let’s talk about your relationship with your board throughout these different changes. I’m assuming some of the board came in because of their investments, Tom and whatnot, talk about board life.
Tony: The good news and the thing I’ve talked to a lot of folks from is I feel very comfortable learning. I feel very comfortable listening to people who have done it before, always have been, always will be. I feel like my next 30 years I’ll be learning a lot. And so, from day one we had a board and had a least one outside board member, but overtime we quickly started really getting excited about the value that brought, and we started bringing in other outsiders. So, early days the only one that had a significant investment was Tom and everybody else that we invited to the board was an outsider. We had no more insiders to the point where eventually there were no insiders but myself and the CFO and it was all outside board members. So, the first set of board was Tom and just the three founders, then we added guys like Bill Meurer and John West. Bill was the office managing partner of Arthur Andersen, so he was my old firm, he gets retired and he gets on our board. He was a phenomenal board member, he had grown multi-practice offices before, unbelievable. John West as you know, System One CEO, sold his company to Monster in 2000 and couldn’t have a more energetic more exciting guy who understood the whole tech world and just a great, great addition to the team.
Really he and Tom taught me a lot about how to be a CEO and I really appreciate that. And Bill taught us a lot about growing a services company. And then we had other folks that Bill Plamondon who worked in one of Huizinga’s companies either Dollar Rental or one of those. And we had other board members that joined us throughout the years. And then when we got money in 2011 the board changed again and reset with a capital partner called LLR Partners out of Philadelphia. And then we had one more reset five years later where we added Kathryn Hayley who was on the board at Deloitte and then we added Linda Rebrovick who was at KPMG and a number of other firms including a run for mayor of Nashville. And those two female executives were probably the two most impressive board members we had from a resume perspective, just really helped us in a big way.
Joe: You know when you were talking amongst your co-founders, what was the power structure you gave to the board? Obviously moving from insiders to outsiders and those folks wanting to have some say in things not just coming to give advice.
Tony: Yeah, you know it’s funny, we always treated the board with such respect that I don’t think they ever felt like they didn’t have power. Now they would say things, you know, at times, hey, do whatever you want, you’re the CEO. And I think Tom has told me this before, Tom Wallace, he was a big believer that you needed a strong management team, strong CEO, and that the board from his perspective, yeah they give you a little guidance, but it’s really about the management team. So, he always kind of put that in my head which was a nice trust thing, but I kind of always felt like man, I can’t just ignore what they’re saying. Over time as you’re with a board for a long time and you know their strengths and weaknesses and I think you listen to the things you want to listen to.
Tony: So, from a legal perspective there wasn’t a lot in governance until 2011 when LLR came on board. And even that, they owned about 60% of the firm, but the board structure was they had two board members out of five, it was all outsiders and they had veto rights on big things.
Tony: You know like stock issuance, debt, that kind of stuff, but it was only four points. And so, they also had a perspective— which I love about LLR— which is you’re the CEO and you represent the management team in the board, you guys want to move forward after you’ve heard what we have to say and you really listen then we’re going to back you. And the best example of that is, about a year in we had an opportunity to buy a company. And it was a company that I had been tracking for about ten years and made offers and never could land on it. And the company was in our space, a direct competitor, but they were losing market share. And so, but I liked some of the people there, and you know, to be honest with you I made much healthier offers when they were bigger and as they got smaller I made smaller offers. And I had told Dave Reuter is the partner at LLR, we’re going to buy this company someday. And this was in the quoting process with LLR and he probably didn’t even remember me saying that. So, about the third or fourth board meeting that they’re in, I present this company.
And we go around the room and each of them is kind of commenting on the acquisition, I present, they comment, I get to Dave Reuter the lead partner from LLR, they own 60% of the firm, and I look at him and he goes, “I hate it, it’s not strategic, it’s a bad idea.” Blah, blah, blah. So, he kind of looks at me and he goes, “So, what do you want to do?” And I’m like, “What do you mean what do I want to do? You just pooped all over my idea.” He goes, “No, I didn’t, I just gave you my opinion.” I’m like oh, okay let me reset it then. Here’s why we need to do it, I never said it was strategic, it’s a great financial buy, they’re in all our markets, here’s what we’re getting, here’s what the risk. I think we’ll get the money back on the acquisition in nine months. So, he goes, “Okay, let’s do it.” And then I went oh, this is the kind of relationship we’re going to have. And so, I loved it, I did listen to everything they said and he did structurally change the transaction and we did get our money back in nine months and it was a great transaction. And so, that point on I really got it. I was like hey, I’m going to listen, I’m going to sincerely listen, and if I don’t agree and if they can’t convince me that that’s a good idea then I’m going to go down the path we were going down. But in many, many occasions they convinced me of doing something else. And you have to be honest with yourself, are you the kind of person that is really going to listen?
Tony: If you’re not, than I would put a different structure in place. The structure at Tribridge where the power was in the management team really worked because I knew if the board had something smart to say I better pay attention to it.
Joe: So, you acquired that company and that was not the only company that you acquired; you acquired several companies. So, what was your mindset? You said that one wasn’t strategic, that was just straight financial even though it’s in the same space which was interesting. And so, what was sort of your philosophy on looking for acquisitions and we’ll dig into how you absorbed them and made them happy.
Tony: Yeah, you know, my theory around acquisitions and our philosophy changed based on need. So, in the beginning we made this big pivot that we talked about earlier in 2003 to a Microsoft-centric tech firm and we didn’t have a lot of Microsoft skills. So, early 2004 we made two really small acquisitions because we needed to build out the skillset. So, those were strategic in we needed technical people that knew the Microsoft dynamics products because that was going to be an offering. And we also geographically wanted to expand outside of both Tampa and Orlando because that’s where we were at that time. And so, we bought a company in Dallas, eTerrace which was only eight people, so a very small acquisition. And then we bought Leading Edge in Miami which was also around eight people. And so, they were very small acquisitions but it gave us a little credibility in the space, it gave us a little geographical expansion to build into, which Dallas turned out to be our second biggest office. They turned out to be a great office and our leader there was also a guy who was a great leader and wound up managing about 60 million dollars worth of revenue at one point. So here he is in 2004 managing six or eight people, $800,000, and by the time 2015/16 rolls along he’s managing $60 million business. So, that was a great acquisition for us. So, our philosophy really was on expansion of skillset. We did an acquisition in 2013 that came from a strategic deal that we had with our partner in LLR who said we kind of presented our strategic plan and he’s like man, I don’t think you’re stretching the envelope enough, which was funny because years prior, they were saying Tony you’re doing too many things.
So, now they were saying you’re not doing enough, which was the nature of the beast. And I took it as a challenge, we spent a bunch of time with Gardner and came back and said we’d like to do something in the HCM space, the human capital management space. And just by chance I was on the board of an HCM company that I thought would be an acquisition which was Mark Blumenthal, he’s a local entrepreneur. So, he had a small company called Intelladon, I thought we could get it for the right price at the right time, so that was an acquisition to getting a completely new space. And so, that was very strategic. And so again, depending on where we were at in the history of Tribridge, you would do acquisitions for different reasons. The acquisition I mentioned earlier was ePartners, and the reason for that acquisition is they literally had people and we competed with them every day. And I knew that financially we could turn the thing into more customers, more quality people, and get the money back from the acquisition immediately. I just knew the math was right because they were not doing well and we saved a lot of people’s jobs. We wound up getting about 80 people in that acquisition and they would have bankrupt that company eventually. And so, it was just an easier way to do it.
Joe: So, 80 people is a big ingestion of people, and any acquisition imposes culture risk, how did you go about ensuring the culture stayed?
Tony: Yeah, so, you know, when you asked earlier about what’s my theory in acquisitions, there’s the business need, but one assessment we always made for every acquisition is, is this a culture fit? So, we have a really strong understanding of what our culture was, we had five guiding principles and behaviors defined. So, we could go into an acquisition and at least evaluate whether the people there from a behavioral perspective were doing some of the things that our people were doing. So, in some of the cases we would assess that on the front end and we walked on a bunch of acquisitions that we didn’t think were a culture fit on the ePartners one specifically we had so many people that were working side by side competing and we had some of the old team members from their company working at our company that we had a good sense that the culture was pretty similar. So, in that one in particular that I was talking about we knew there was less risk. It’s funny because we would track our turnover as a way to measure culture and we tracked the acquisition one separately. We actually had lower turnover from our acquisitions over a 20-year period that we did- Now just slightly, but it’s not like people that got acquired-
Tony: -left in a hurry, they actual left at a slower rate. I think part of that they were at another company sometimes in a different leadership style and so when they came over they really appreciated the way we managed the company and I think they just liked it better. So, we had maybe two or three basis points better turnover when people came through an acquisition which is kind of funny.
Joe: Would you share the five culture points that you mentioned?
Tony: Yeah, the five things we defined as our guiding principles which is the definition of our culture. One was entrepreneurship, two was servant leadership, three was honesty and integrity, four was teamwork, and five was accountability. And as I mentioned a couple of minutes ago we also— and I just said those words— we defined behaviors that were evidence and then we did evals based on those. When we interviewed to recruit, we evaluated them against it, and when we did partnerships we talked about it. So, it became an operationalized part of Tribridge that culture was a way we were going to evaluate the success of the business. And those many, many statistics were communicated to the organization, very open book format the whole time that we were in the company.
Joe: And did you find it challenging to absorb- It sounds at least some of the time you absorbed and kept the leadership of the companies that you acquired. How challenging was it to be able to keep them?
Tony: Most of the acquisitions we did were small. We did an acquisition of a pretty large company that was about $30 million in 2009. And that was probably the hardest one because they culturally weren’t the same, we thought there were, but when we got them in they weren’t. And we had some leadership challenges with some of the leaders that didn’t want to, openly, didn’t want to do the things we wanted to do. And so instead of fighting them we basically sold a small part of the business back to those leaders and just got them out of the company in less than a year. So, one of the smartest things we did was getting them out of the company, those guys have been very successful without us doing things their way. I still, you know, am friendly with them and happy for them, but they had zero interest in the way we ran the business, so we didn’t let it linger, you know? And we got lots of feedback from both the Tribridge people and the folks we acquired that it wasn’t a good fit and we fixed it quickly.
Joe: Let’s talk about the time leading up to the sale. How long were you open to being sold and sort of how did that over what was a little the first few steps of going down the road of selling?
Tony: So, zero days we were open to being sold and I’m laughing because I don’t want to say we sold by accident because I almost said we got funded by accident, it’s a weird circle of life thing. But you know it’s funny, I had this feeling and vision that the company was going to do a billion dollars in revenue. And it sounds like a big deal when you’re at a 170 million it sounds like a big jump, but I could see it. I could see that all of our service lines had lots of growth globally. We had grown in some global offices so that wasn’t even a stretch. And I pitched our private equity firm, LLR on a $100 million dollars’ worth of growth capital and they didn’t put a $100 million dollars in the first round. So, it was a really difficult conversation for them to think about, wrap their head around, give us a good value. So, they came back with an offer of $20 million dollars’ worth of growth capital and it just wasn’t enough to do what I wanted to do. So, I suggested to them that I go on a roadshow and try to raise the capital through other PEs. And they were 100% comfortable. They wanted to make sure they made good money on the return.
Tony: And we have a very open relationship, I wanted to know what that number was, and I found out. So, I felt very comfortable we could get that number, which we got more than that number in that final exit. And I started shopping it, we hired a banker and we shopped it and got, you know, about nine offers and we were going down the path and we picked the firm and we were going to close and the deal blew up, you never know why, but the firm we were going to do the deal with had never done a technology investment like this. And ultimately I felt like they were asking the wrong questions and I really liked the lead guy at this firm, I still would call him a friend, I still stay in touch with him. And I had to call him up and I call it the break-up. Now they initially put the deal on hold and they were kind of waiting us out and seeing how we did. And I was like no, we’re going to have to go back to the other eight companies and see if they’re interested.
So, I call it my break-up call to him, it was very hurtful because I really thought we could have done great things. But that repositioned the company for sale with the other private equity firms that we had talked to. And we got, you know, five more offers and going down that path. And I think because of the herky-jerky nature of how that played out, the banker came back and said look, we know you don’t want to really sell to a strategic, we have this one strategic, the guy says he knows you and competes with you, and I said zero. Zero chance I want to show him the playbook, zero chance I want to talk to him, and then he mentioned the guy’s name and I’m like ah man, I like that guy. He was in Australia so I’m like yeah, I’ll talk to him. And he mentions this company DXC which at that time wasn’t even really formed, and I didn’t even know what DXC was. So, his company had gotten purchased by DXC when it was CSC prior and I had not followed that.
So, they’re telling me they’re about to launch this public company April 1st and they’re really looking for leadership on the Microsoft space, this is super strategic. It’s a $27 billion dollar company and I’m like we can’t beat the super strategic, but he’s like no, it’s super strategic. I’ll tell you they did a great job, a great job of convincing me and the board that this was a better path for us. And so, it shocked me and I’m still a little surprised we sold, but it was a better deal for our shareholders, it was a better move at the time. Strategically we’re going to be part of a global company with, you know, over a hundred thousand resource and a bigger balance sheet. And so, we sold under that guise, so I can honestly tell you it wasn’t the plan, thought we were going down this billion-dollar idea, went a different direction.
Joe: So, how do you feel about that?
Tony: You know, like anything you always have mixed feelings. As an entrepreneur, you know, I miss it, I miss being part of something special and the culture we had there, and the people, and all of that. I thought, you know, the billion dollars was just like a milestone along the way, you know? So, not getting to that, that part I don’t love, but I really miss the people. I just miss that working together for a common goal and I just really miss that. But in terms of like doing your job and feeling good about an outcome, and you know, did you provide for lots of families, and I feel great about. You know, one thing we don’t advertise is the number of people that did really well in our transaction. You know, I think there was upward of about 18 or 20 millionaires that came out of our deal and recently Connectwise did a great job of advertising the number of millionaires that came out of it. And that was just something that we never advertised; we didn’t even think about that. But the idea that we helped a lot of people, you know, kind of further their life and their careers is a great feeling. So, I feel great about that part of the outcome and I love my life now and what I’m doing, but certainly in the moment and looking at what we were building and how special it was, it’s hard not to miss that, so.
Joe: And what about the potential? I mean, do you feel like had you not done that, you know, you were on the road to a billion dollars in revenue, obviously it’s a bigger company and it’s just a matter of how soon I think you would have gotten there and how hard it would have been and-?
Tony: Yeah, I think absolutely 100% was confident that taking the company from a 170 to a billion was in the plan. I knew what the playbook was, knew what the acquisitions looked like, we had it drawn up. It wasn’t a wishful thought, we had the partners, you know, all of the offers we had that was part of the plan and we knew where we were going to expand to and all of that. So, I felt very confident in the management team and our ability to execute on that.
Joe: Yeah, so, with that though I mean do you have a fire for that, right? The way it was just there for you and it was coming down the pipe, right? And you felt confident you were going to get there. And so it’s sort of like executionally now that falls off a cliff, right? Where you’re- You know, do you do that now you’re hanging out with the family? And it’s a totally different speed, right?
Tony: Oh gosh, yeah.
Joe: So, that’s what I mean as far as how do you feel about that because I won’t say it’s an impossible to repeat opportunity, many people do it, but it’s a rare, you know-
Joe: -you had the rocket ship sort of there, is there any sort of along those lines where worrying about getting back there or are you at peace with if you just work on Think Big and things like that for a while you’re good?
Tony: I think two things, one everybody is wired a little bit differently. And not good or bad but I know myself and I know I’ve talked to you about this before in another context, but I’m really motivated by giving. My personality kind of figured out about 10 years ago that my purpose here on the Earth is to give. And part of that is telling my story, part of that is helping people, part of that is coaching. And so, I have felt that for a long time. And so, I think if my personality was different I couldn’t have let go of that ego feeling that you have to accomplish that billion-dollar mark and do all of that. Do I think from time to time man, I really wish I was doing that? Sure, I mean, there’s no question. I’m still a very ambitious person and feel like I can do big things, and so I still have that feeling, but I don’t regret it. I have zero regret and I don’t wish for it to be. And so, I think because of that I’m very comfortable where I am. I feel good that I’m going to use the story like I am on this podcast to do big things.
And it might be Think Big For Kids where we’re raising awareness for kids in poverty to change their life. And if I can put the kind of energy and resources to that and change people’s courses from being in poverty to not – across the United States, it will be a bigger legacy for me and a bigger accomplishment for me than Tribridge. And so, to me the billion dollar was just the number to jump over because like any good entrepreneur I just got to jump. I like impossible goals. You know, I’ll give Mark Blumenthal a lot of credit he early on in my Tribridge days said “Tony, one thing you’re missing is you don’t have a BHAG. You know, you really don’t have this big thing to go after.” And at that time we were like $15 million in revenue and I go oh okay, so our next management or next- We used to have these full company meetings and really the whole 20 years and at the meeting without clearing it with my partners I looked at the team and I said, “Yeah, our plan for next year is $24 million and for five years we’re going to hit $100 million.” And that was the first time I threw even a number out. And we had no reason to say it, I didn’t have a plan for the $100M. But we got to the $100M in the five years and it did change the way I made decisions.
So, the billion was that way of when you’re at close to $200M what are you going to say? $500M? That seemed too small and the billion, like I could see it, right? You could see it in front of you. So, it’s not the number, it’s not any of that, it’s the ability to give back because one of the things I loved about Tribridge was people were becoming successful in their own way whether they were launching a business inside of Tribridge, which gave me joy, whether they were getting married, or having kids, or whether they were building a career, or whether they left. We had a guy that left twice and came back and he was one of my favorite people. They were like why do you like that guy so much? I go every time he tries to leave he figures out we’re a better place, this is the best story in the whole company.
Joe: And that’s more what I meant, the number is arbitrary, but it’s just the action, right? It’s being on the rocket ship and whatnot is more what I meant.
Tony: You know, I don’t think so far building a charity doesn’t feel like a rocket ship, so I don’t have that feeling, I do think I’ll get back on a rocket ship whether it’s through the charity or one of the companies I’m associated with, but you know, I’m only 54 so I feel like in the big scheme of things like doing another rocket ship and whatever that goal is, is in my future for sure.
Joe: One of the running starts that you can give Think Big For Kids is your name and I find that interesting. We have a growing tech community and start-up community and Florida Funders has been successful, SeedFunders is doing well etc., etc. And all of that has created, you know, it’s an overused word, but ecosystem, or environment, or whatever. And within those it’s natural to have sort of aspirational people in them, right? There’s the Michael Jordan in the NBA and so on and so forth. And you know I know that when people mention your name and it makes news if you join a board and all of that good stuff. So, as this tech scene has grown and you’ve sort of because of your success, come in as a – celebrity is a weird word but at the name drop end of that sort of thing, do you feel that? Or how have you experienced that?
Tony: It’s a weird thing for sure. I don’t see myself that way, I see myself, you know, as another guy trying to help. And I feel like my peer group and people I hang out with, we’re all kind of in the same boat together trying to raise the tide for all the boats together. I think of so many people here that do a lot of stuff. So, when I hear stuff like that the context is usually somebody says my name and often somebody will say, hey do you know this person? I’m like no and they’re like oh, they said they knew you or they name dropped you as an investor, or something crazy like that. You know, I know I should feel good about it, it feels more weird than anything. But because I know it exist, I know there’s power in bringing people together then I tend to think how do I use this to better other people’s situations. So, Think Big is a good example of that, like I am using my name to raise funds, and I am using my name to get companies to showcase there. So, man, if that’s the good that comes out of this kind of weird thing that people attach themselves to, hey that’s a great positive thing in my mind.
So, if that’s what it turns out to be and I can help the whole bay area kind of succeed in tech and be one small part of that, man, I’m all over using my name. I’m not that proud and I just love being part of this. I’ve said this— and I think you were at this event— you know, we don’t live in a market that has been fully defined. You know, if you go to New York or L.A., or Chicago, or Boston, or one of these places, being an individual trying to make change happen is pretty hard because there’s hundreds of years for some of those cities, developed politics, developed industries, even though those industries are changing and the power brokers I know change from time to time. You know, Tampa outside of Ag and maybe tourism, there really isn’t another dominant industry. And I do think entrepreneurial companies, specifically tech, and tech in general, is becoming a vast part of that kind of story about the whole bay area. And so, I feel like for all of us that are in it, you included, this is a chance for all of us to build something and it makes us all feel different. I’m on one rocket ship, I shouldn’t have said I’m not on a rocket ship, I’m the Tampa Bay rocket ship. And so, there’s something pretty rewarding about that, that I feel from other people.
Joe: So, if we just take the rocket ship analogy just a little bit further, you know, the non-profit stuff aside, what do you feel like your role is? Or what would you like to contribute to that rocket ship specifically? What vacuum do you want to fill, or?
Tony: Yeah, the role I’m playing now with a number of companies is, you know, with the Wave, I’m a coach and mentor for fast growth companies and there’s 20 or so of those that will ask me questions and I will try to make sure I understand the question and then give them the best advice I can by saying don’t listen to anything I’m saying, but at least if the story helps you make a decision, great. So, I feel good about that. I have investments in about 14 or 15 companies in the bay area that are tech-oriented or mostly tech-oriented and not all of them, but 99% of them are. So, I feel like I can make some small financial contribution. And like I said, some of them I’m on the board. I’m on the board of seven companies also where you really have a direct impact on direction of those companies and coaching of the executives. So, I feel like I’m spending my time making the impact on those companies that I can and leveraging the network, and the experience, and the relationships with vendors that I have whether that’s Microsoft or Oracle or whatever. Because Tribridge was a global company, although mostly U.S., I have lots of relationships outside of the bay area that can be customers for people or employees, whatever.
Joe: What about the overall brand of Tampa Bay though?
Tony: You know, the brand is something man, I feel like I’ve been on a million committees on and I feel like we continue to kind of struggle with agreeing collectively across all of these interested parties or stakeholders to say can we just put- I don’t want to say a stake in the ground but put something down and agree to it. And I’ve always thought that the two things that stick out for me that could define the brand, one is the collaboration of the cities and the way we all work together, I think that has changed a lot in 25 years from the politicians to the tech community, etc. And then the second thing is that this is a place for tech entrepreneurs. And I think there’s, again, smart marketing people that can come up with a couple of slogans around those two concepts, and then get everybody to back it, right? Like get all of us to tell that story and train us all. I was hoping—and it still might be the case— that synapse could be that kind of central area where Mark and his team could run kind of a contest or something around that, galvanize that concept which I’m going to continue to push him on. But I think he’s trying to do some of the things I’m saying, but the real branding, the hardcore coming out with the messaging, and the tactics, and the PR around it. I’d love to see the EDCs and the mayors agree that we’ve got to do something there and put some money behind it, and I think that’s where it will take off.
Joe: A lot of that is their power dynamics in there as well. And so, it’s not so much that there’s not the right thing it’s, you know, where do you go to express that right thing? The big thing is a lot of times when you have that one overarching anything is that it’s at the expense of the something else because I need your traffic, I need your attention, I need your eyeballs, I need the power, the glory, all of that kind of stuff. You know, that’s where the best brands have come organically, not all good things come organically and authentically, but sometimes they come organically simply because it bypasses, you can’t help it, the power structures can’t get in there to mess with it, right? It just bubbles up.
Tony: I 100% agree with you, but I guess I feel like we’re there. Like I would say right now if the mayors and the EDCs can’t look at this tech community and this concept of collaboration and not agree on, again, forgot the tactics of it, that we have something to market to the rest of the world, then I’m just missing the boat because I think we actually are there. I do think it’s bigger than any of the cities themselves, and I think it’s bigger than any of the ideas on the table. Because what I’ve noticed is with the lack of identity, then we’re nowhere. You know, healthcare would be the other place I think you can place a bet, but without of interest to me I think it has its own dynamics as you’re talking about. But I just feel like it wouldn’t take much effort, and I do think that the reason it hasn’t happened is that people in those positions— and I’m not going to name names I don’t get into any of that— are afraid to take the risk, and so we’re going to bet on that. But I think they’d be surprised if they just started something and rallied behind those two concepts— and they don’t have to be exactly the two I’ve mentioned— they’d get a lot of people and a lot of executives, and a lot of companies to back it because we’d all benefit from it. And so, the problem is there’s not lots of giant tech companies here driving that so, what comes first the chicken or the egg? I’m suggesting we’re now ready, we’re big enough to make the statements that I’m talking about if a few people in a few power positions would take a risk. So, that’s what I would say.
Joe: I hear you, wonderful. I’ve enjoyed the conversation. I feel like we need to find a smoky restaurant for you to get in and we can bring in entrepreneurs into, what was it, the Godfather of tech? [Chuckle]
Tony: Tom Wallace.
Joe: Take the rollover in the back booth. But I do appreciate everything you do for the community, your energy that you bring, the positivity that you’re putting in your time into Think Big. I think Think Big For Kids is going to be, and already is, a very impactful program. And you do, like you mentioned, give a lot of support both in time and in treasure to companies and you are a key ingredient to success that Tampa Bay is seeing right now, so thank you for that.
Tony: Ah man, loved being here and anytime you need me I’m there for you.
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About the host
Joe Hamilton is publisher of the St. Pete Catalyst, co-founder of The St. Petersburg Group, a partner at SeedFunders, fund director at the Catalyst Fund and host of St. Pete X.