Why I Gave Up My Life of Leisure To Jump Back Into The CEO Hot Seat
By Rick Rudman
I’ve been working since I was fourteen years old, part-time and then full-time, through summers and college, and every year since. So, after co-founding Vocus (now Cision) in 1992, raising venture capital, taking the company public, becoming the leader in the PR space and ultimately selling the company for close to half a billion dollars, I finally got to take my gap year. I have to say the timing was perfect and fourteen months went by much quicker than expected. I will always look back with satisfaction at what we accomplished at Vocus. Going from two co-founders to over fifteen hundred employees around the world was a thrill, and I still enjoy staying in touch with the people that contributed so much to our special culture and our success. Vocus, as they say, was the ride of a lifetime.
At the end of May 2014, with the acquisition of Vocus complete, I handed over the keys to the kingdom and rode away, literally, on my Victory motorcycle into the sunset, with “Best day of my life” playing in my helmet.
I knew when I left Vocus that I was not done working. I had no idea what I wanted to do, but with three kids still at home (and one in college) the timing was not right for traveling around the world. Contrary to the advice I received from others who had gone before me on this journey, I did not set aside a specific timeframe to “stay on the beach”. I decided to keep an open mind and look at a wide variety of opportunities. The only promise I made, to myself and to Vocus employees on the day I left, was that whatever I did next would be something I was truly excited about and something that would make me happy to come to work every day.
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I looked at everything. I thought about doing a not-for-profit in the social services space. I looked at and quickly eliminated the idea of being a professional board member or venture capitalist. Not that there’s anything wrong with that. I just knew that I was still an operating executive. I love growth businesses, and cloud software, and large markets that are still new and underserved. I looked at app companies, startups, turn arounds, public and venture backed companies. Yet nothing really clicked into place.
I discovered that a lot of the private equity and venture firms that had bought companies and were looking for new management had a very specific game plan they were running. It felt like a lot of those investors were really looking for more of a COO that would just run their playbook. Strategy to me is job one for a CEO and I wanted the freedom to create value from both strategy and execution. Plus, the market opportunity for many of these companies felt constrained to me. I was looking for a large untapped market, a great technology platform, and the freedom to develop a winning strategy and management team.
While the searching continued, I waited for the day which everyone I knew assured me was coming, when I would get out of bed and be bored out of my mind, aching to return to work. Or the other scenario, which was the day my wife would get out of bed, and sick of having me around the house, push me out the door to go back to work. I am happy to report that neither of those days came. In fact, we both had a great fourteen months. We traveled for the summer and I got to spend a lot more time with my kids. My wife added me to the driving schedule, which anyone with multiple kids knows is like becoming a personal Uber driver. But I also learned one of the secrets that moms know: Car time is the best time to talk to your kids and get to know their friends. Also, I lived more in the moment and talked to my kids without my mind drifting off to product roadmaps, or sales number,s or other problems du jour. My wife was constantly surprised at how my new reaction to most things had gone from near instant annoyance to a mellow “no problem”.
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I was able to spend more time doing some things I always wanted to do. I took more sailboat certification courses, and sailed my own forty-two foot sailboat in the Bahamas and the British Virgin Islands. I gutted and renovated a guest room at our place in the country. After years spent in meetings, on earnings calls and in front of investors, it felt great to tear down walls, haul bags of garbage, and hang drywall. I also continued to meet with many business people, with entrepreneurs, and venture capitalists, and other people that wanted to talk about new ventures and different opportunities. It was a great deal of fun. I knew that when the right opportunity came along, I would know it.
Sometimes, life is like a quote from the Wizard of Oz and to find your hearts desire, you don’t have to look any farther than your own backyard. I met the folks at Edison Venture Fund in 1999, and became lifelong business partners when they invested $2M in Vocus at a pre-money valuation of $6M. There is something special about a business partnership forged across the years, through the trials and tribulations of growing a SaaS company and coming out clean on the other side with a 12x return. Yes, Vocus was a great ride for them as well.
When Edison contacted me about Tracx, I have to admit I was a little skeptical. “What do they do?” I asked, queuing up my now routine grilling I used to vet new opportunities. Market opportunity, technology platform, scale, growth rate, people, go to market execution, ACV (annual contract value), renewal rates, cash burn, office locations, competitive landscape, vision, strategy, roadmap. I had pretty much learned through the years the SaaS short hand for indicators of opportunity.
Then I drifted back to the most important questions. Kevin Burns, one of my mentors and an early investor in Vocus once told me, “Rick, fundamentally, all investors really care about is making money. Along the way they look for a large and underserved market, a unique technology platform with sustainable competitive advantages, and a smart and passionate executive team that’s able to articulate a strategy for success and then make it happen.”
My initial reaction to Tracx was similar to the reaction I get from people when I tell them about my new job. The reaction usually falls into one of two buckets. Bucket one is: “Hasn’t social been done?” And bucket two is: “What do you mean by social?” Having spent some time in the social media world at Vocus, before I took the job, I dusted off the cobwebs and took a fresh look at the state of social. This is what I learned:
The term “social media” describes what is today a vast landscape. Peoples’ views of social media remind me of the old fable of the six blind men and the elephant.
Once upon a time, there lived six blind men in a village. One day the villagers told them, “Hey, there is an elephant in the village today.” The blind men had no idea what an elephant was, so they decided that even though they wouldn’t be able to see it, they could go and feel it. All of them went to the elephant and took turns touching the elephant.
“Ah, the elephant is a pillar,” said the first man who touched his leg.
“Oh, no! It is like a rope,” said the second man who touched the tail.
“Oh, no! It is like a thick branch of a tree,” said the third man who touched the trunk of the elephant.
On it went until a wise man passing by heard the arguing and explained that they were all correct.
Social media is like that elephant: What it is really depends on what aspect of social media you’re touching. Today there is technology that monitors, or listens to, every post and every conversation across many social networks. Some companies may just want to find customers who are unhappy or need service. Other companies look at social networks as a rich source of consumer information. They use social analytics to find out what topics are being discussed at the product, company, brand or general topic level.
Some social technology platforms can also pull meaningful insights out of these conversations to help companies make better business decisions. There are social platforms that focus on marketing objectives, like attracting customers, lowering customer acquisition costs, building brands, and measuring the effectiveness of marketing programs. Other social platforms focus on the goals of customer care, such as making it easier for customers to get problems solved using their favorite social network instead of the telephone. There are social solutions that also focus on sales, human resources, governance and other business areas.
But regardless if you have touched the leg or the trunk or the tail of social media, this is the most important thing to understand: We are in the midst of a social business revolution. Of the seven billion people living on our planet, over two billion are currently active on social networks and that number is growing daily. In the United States, 70% of all online adults engage in some form of social networking. While social is having an impact on almost every aspect of business today, nowhere is this more evident than in marketing, where social networks, along with easily searchable online content have fundamentally changed the way consumers research, buy and share information on products and services.
For marketing, this represents the biggest paradigm shift to come along in the last fifty years. Companies no longer define their brands and value proposition. Consumers now define those things through millions of online conversations taking place between friends and socially connected consumers, out in the open for the entire world to see. While social media continues to grow, other forms of traditional communication are declining. Eighty-six percent (86%) of people now skip TV commercials. Forty-four percent (44%) of direct mail is never opened. Ninety-one percent (91%) of consumers have unsubscribed to company email they previously opted into.
Consumers now want to be in control of the content they receive. Marketers of course are always adapting and are spending increasing amounts of money to reach consumers through social networks, engaging one-on-one, sharing content, reaching out to key influencers, and building relationships with consumers on their terms. According to Forrester Research, digital marketing is expected to reach $100B by 2020 and social is the fastest growing part of the digital marketing mix, expected to grow from 8% of the overall marketing budget today to 23% by 2020.
Yet, how marketers make the best use of social networks is still in the early stages of trial and error. Eighty-five percent (85%) of B2B buyers believe companies should present information via social networks, yet only 20% of CMOs leverage social networks to engage with customers. Sixty-six percent (66%) of marketers claim that social indirectly impacts their business performance but only 9% claim that it can be directly linked to revenue. The art and science of social marketing is still being developed and companies are still looking for the best ways to use social networks and technology to accomplish business goals, build their brand, drive website traffic, increase share of voice and generate leads, revenue and customer loyalty. There are still many innovations on the way to help companies achieve these goals, which is why now is also such an exciting time for social software companies.
This is the main reason I hung up my flip-flops and put away my beach chair to sit at my new desk at Tracx, in the heart of New York City. The other reason was the impressive and innovative enterprise social platform developed by the talented team of co-founders based in Tel Aviv. I see a special opportunity in Tracx, to participate in some pretty big macro changes happening in the world today, while along the way getting a rare shot to double dip on another exciting ride.
In the mean time, I can tell you that I have kept my promise to myself and my former Vocus colleagues to do something I love. So if you see a guy whistling out loud while walking down Fifth Avenue in New York, please be sure to stop me and say hello.
Rick Rudman is the former co-founder and CEO of Vocus (now Cision). He is now the CEO of Tracx.