Updated: Sep 25, 2018
Get behind the curtains for the time preceding the sale of Skyscanner and the lessons we can take from it in our own law firm.
Let me introduce Ray
I was recently at the Start Summit, a full day event held in Dublin Castle helping entrepreneur's and business owners tackle the challenges they face on a day to day. Ray Nolan closed out the day with the final keynote talk.
For those who don’t know Ray, he is a tech entrepreneur who has built and sold a whole host of big-name companies including Hostelworld in 2009. He is a great character who holds no punches and had the crowd in stitches throughout.
There was one thing he said which stood out that I think solicitors can learn from as they try and improve their marketing and sales systems:
“Alignment beats culture and strategy”
He had a brilliant anecdote to explain it further. As he strolled around the stage nonchalantly, he took us behind the office doors in the time preceding the sale of Skyscanner.
Skyscanner is a metasearch engine website that aggregates travel fares all around the world. It was started by three guys in 2004 who wanted an easy way to find cheap flights. The company grew rapidly over the next decade and became one of the go-to travel sites in the world.
Ray recognized the genius and put in an offer to buy the company earlier this decade which was ultimately rejected. However, he had left an impression as he tends to and he was asked to be the chairman of the board. Ray was happy to oblige and as he said himself “I wasn’t doing anything else at the time”.
The company at this time was valued at around 30 million. But once behind doors, something became apparent to Ray.
All three founders had extremely different visions and goals for both themselves and the future of Skyscanner. So much so that it was beginning to cause the company to stagnate as the leadership was pulling in completely different directions.
Ray recognised things were bubbling under the surface and so he went to the pub with each of the founders separately. Sitting down with each of the founders separately over a few beers, he found out what each of them wanted out of Skyscanner.
- One founder wanted to sell, and quickly. If they sold now he would walk away with $7 million from the sale. That was more money than he knew what to do with, he had loved the journey up to this point and saw this as its conclusion.
- The next founder wanted to stay put for the time being. He was happy with the growth but knew his own stake would continue to grow in the next few years. He was proud of the company and wanted to stay put for another 3 or 5 years.
- The final founder again had something different in mind. He was having the time of his life, this was a job he wanted to keep long into the future. He was happy the valuation was so high but he wanted to retain control of the company he loved working for.
Ray could see this was a recipe for disaster. To continue to grow and build something great it is imperative everyone is pulling in the same direction. In fact, failure to do so can be a lot more harmful than any new competitor on the block.
After a bit of deliberation, he managed to get all of them aligned on a plan.
The first founder was able to sell some of his stake for close to €7 million while he also retained some other equity in case of a big sale down the line.
The other two founders stayed on with the company under this new common vision and bright things were on the horizon.
The Big Sale
A few years later, the big sale came. Skyscanner was bought by Chinese travel service provider Ctrip for €1.65bn.
That first founder who wanted to sell immediately ended up walking away with €70m on top of his initial cash while the other two founders walked away with a few multiples of that.
Where's the lesson for solicitors?
Having your team aligned and singing off the same hymn sheet is huge and the eventual sale is evidence of this.
Of course, Ray wasn't doing this completely out of the goodness of his own heart. He had a minority stake in Skyscanner and was also able to net €30m from the deal.
But law firms and business owners of all sorts can still recognize that the most important thing to do with new marketing and sales objectives is to ensure your team is all chasing the same goal.
The next time you are wondering why your new big strategic vision isn't planning out how you wanted, ask yourself:
Are the motivators of each team member aligned?
Does everyone have the same incentives to achieve this?
How can I ensure this will benefit everyone?