What does it take to start a $50 million business?

How do you go from being an underachiever to the CEO of a company with $50 million in revenue? Mark Fackler, the founder, and CEO of Stellcom, started out as an underachiever yet managed to build a company with 500 employees.

In this interview, Mark Fackler shares the story of taking his business of one to hundreds of employees with a Fortune 500 client list.

start a business

 

 

Listen and learn what it takes to build a $50 million business:

 

Here is a list of topics we cover in this interview:

  • Not trying your hardest = Waste of time.
  • What did it take to stop being an underachiever?
  • The pressures of people counting on you to succeed.
  • Dealing with fear regarding making decisions.
  • The importance of being ready to lose everything.
  • Be ready to fail over and over again.
  • How to pick up after a failure?
  • The importance of hiring people smarter than you.
  • Determining whom to hire next.
  • How to keep your ego in check?
  • The responsibility of employing people and keeping them employed.

 

 

Read Raw Transcript Now:

start businessSuccess Harbor: Hi everyone, this is George Meszaros with success Harbor and I have Mark Fackler with me. Welcome!

Mark Fackler: Thank you, George.

Success Harbor: Thanks for being here Mark! I wanna talk about wrestling with you.

Mark Fackler: Oo!

Success Harbor: Ha, ha. Senior year in high school you have lost in the last 5 seconds, if you could go back in time what would you say to yourself before that match, just before starting that match?

Mark Fackler: O, it’s a complex question, because when I was senior in high school and actually for many years afterwards, I was in a sense a quitter and, so, what I would say of course is don’t quit, but that’s just a little too simple of an answer, because part of who I am is a person who used to quit and doesn’t anymore. So, of course, the message to everyone out there is quitting or trying your hardest, is waste of time and that match because I did not try my hardest and I did loose taught me it’s better to try really hard and failed and not try hard, but that lesson took some 12 or 13 more years for me to understand.

Success Harbor: Yeah, I read about you, that you, this is according to you, that you were underachiever until you graduated from college, so, what changed, that turned that around for you?

Mark Fackler: I had started my company when I was 25 or so, a Consulting Company. And I still would consider myself at that point, underachiever, a slacker, a quitter and it was a good time to have an engineering consulting company, and I have hired a couple of good people, so we were having some success, and, the very first time client called and said that they were very very disappointed, and, what our engineer had done for them and it hit me really hard and when I received the news from vice president of mine, I remember walking out of his office, and I leaned against the wall and I taught are you, I was talking to myself: Are you gonna be a loser, a slacker and underachiever your entire life, I think I was 30 at that time. And something clicked in me. I went back to that feeling of my final. I lost because I did not try. I don’t know what changed, maybe I’m just tired of hiding and not trying. There were people who counted on me too, maybe that was a little bit, I had 20 or 30 people working for me at that point, and families who counted on the income from the engineers that worked for us, so it’s time for me to become an adult and work hard.

Success Harbor: Ok. In early 1980 you were a working for a defense contractor in Tucson, Arizona if I am correct, and then you went on to General Dynamics in `82. What did you see and learn that made you want your own business at that point? What opportunities did you see back then?

Mark Fackler: I have the privilege working on a large projects in General Dynamics, we are actually building a cruise missile, and there were hundreds of engineers of all disciplines worked on that project and one of the engineers that worked in my group owned his own consulting company and I got to know him and we talked a lot and I was fascinated at the, at what he was doing. He had hired engineers and he would let General Dynamics buy those engineers from him. And he would make some money on it, and I got to know the engineers who worked for him, I got to know the manager that have hired this owner, his company and his engineers and I actually taught I could just, I could do that. It seemed possible, so, about 9 months into that contract I actually quit General Dynamics and went to work for another, not the same man, but another very small consulting company, so I could learn the business and about 9 months after that, I started my own company.

Success Harbor: So in`84. you started State of the art computing that later became Stellcom. According to an article I read, you said, back then that the worst thing that could have happened was to get fired and lose your house, no big deal, or at least, you know, you didn’t think it was a big deal. Was it really not a big deal? Were you really not afraid or did you had fears back then, too?

Mark Fackler: I was afraid and I, I will say that when that fear got to great and it was getting in the way of my ability to make decisions or to move forward, I would ask my wife, is it ok if we lose everything? We lose our house, we lose all our savings. Is it ok if we have to live in the garage of one of our parents? And she will always say: “Yes!” and it gave me the courage to continue on, and I, it’s interesting, as the company got larger and larger, the situations got more intense, and the fear at times would become overwhelming and the same question would be asked, even, you know, when we had kids, even. Is it ok if I lose it all? And she always said: “Yes, we will rebuild!” Incredible valuable for me.

Success Harbor: Do you think its necessary for an entrepreneur to be ready to lose everything?

Mark Fackler: Yes! I have no question about it. An entrepreneur needs to be prepared to fail, over and over and over again and though my company didn’t go bankrupt ever, my company failed multiple times over the years and it’s devastating and if you can wake up the next morning and brush yourself off and go back. The chance of succeeding is minimal, because there is a failure at every turn and that’s just life, and entrepreneurs need to get past that.

Success Harbor: You said that one of the reasons of your success was the ability to hire people that are smarter than you and, you know, I hear that all the time, we hear that all time, I’m a little bit struggling with that because – how do you know what smart people you need at whatever stage you are in your business?

Mark Fackler: In hiring side I think it’s an easy answer. I was not the greatest sales person, so, therefore, I should hire a good salesperson. In the moment it’s not as easy because you, you are wrapped up in everything, but when I interviewed people and they took, a control of the interview, a, and they dominated me, and they dominated the situation, I have assumed that they will gonna fill some hole for me and they almost always did. If you, if you spend enough time paying attention to what you do on a daily basis, you’ll find that you ignore, I should say: I ignored the thing that I wasn’t so good at that and so those are the types of the talents that I look for and hired and then, of course, the gold ring in that wrest ring is when you find someone smarter than you and I did hire a countless people who were far more talented than me. I just had to figure out the way how to lead them.

Success Harbor: You mentioned you were not a great sales person. What do you think in terms of developing skills for entrepreneurs? How do you know what a skill set do you need to develop as oppose to hiring someone to that skill set?

Mark Fackler: In the beginning of entrepreneur let me a phrase that: When I started I was a one man company and therefore I did every single job from answering the phones, to opening the mail, to selling, to engineering, to doing the finances. And if you look at how much time you have at the day, I was always able to determine what was the easiest task that was the most time consuming for me to offload and that would be the next hired. So, my very first hired besides engineers actually, you know, the first 7 or 8 people I hired were engineers and I was doing everything was a sales person, because it was clear I could not do it, and if I did it I was unofficial at it, so, it was just so obvious to me that I hire a salesperson and then a bookkeeper, then receptionist, then an admin, then HR and operations and office managers and every time you just too busy you have to look at what can you shade, a, and where that talented people out there who can do it and you can shade.

Success Harbor: What were some of the early challenges grow in the Stellcom?

Mark Fackler: I think the greatest early challenge was when I hired vice president who I used to work for, he was my boss and he was smarter, more talented, more aggressive, than I was. And that the greatest challenge was for me to get out of his way and let him do this, do the operations, do the sales and nobody would do it slightly different but with the same set of core values and that was my ego was bruised many many times. Friends of mine would come and tell me, well you know this Peter, I owe him everything, cause he helped build this company for me. People would tell me that Peter is out there in the market saying that he owns the company, and a, at that point I owned the entire company, I gave stock eventually to Peter and to all the employs, but, and I was insulted by that. And then I, I was complaining about that, to a, mentor of mine. Mentor looked at me and he said Mark, you have someone who doesn’t own any other company acting like an owner, and you are upset with that and when I heard it phrase on that way that challenge went away. I shouldn’t say went away, that challenge became so much easier and then I was proud that I have someone who cared so much for company that he called it his own and, so, you know, your question what was the most challenging thing: Well, to keep my ego in check and to get out of the way of very very talented people to do staff, cause they do it different than you.

Success Harbor: So, so far it sounds pretty, pretty smooth to turn, you know, Stellcom in the years but what were some of the earlier challenges that you faced, what kept you up at night?

Mark Fackler: Hiring friends and having the client, having the contract with, and it was, we didn’t guarantee employment to our people, but I cared about my engineers, they were my friends and to have them become unemployed was brutal. And to have the fate in sales staff that they could find new work for them was hard. And we did fail on our sales people, of all the positions that we hired for. My success rate in sales people was the worst, maybe because it was a difficult position to fill, maybe because I didn’t have a sense back then as to what it took to be a great salesman person, but keeping the pipeline full with a jobs, in the early days was the hardest thing for us to do. Finding engineers, good engineers with easier at that point we developed a reputation and people wanted to work for us, but finding those jobs for them, hiring the right sales people. That was the constant challenge for me.

Success Harbor: It’s a, I wanna jump forward a little bit. In 2000 Stellcom had 500 employees and 50 million in revenues. What were some of the challenges at that point? What kept you awake? I mean this is a major development, I mean it’s an incredible success, most businesses never even get close to that kind of size and revenue. How would you compare what kept you up at night to the early days of Stellcom?

Mark Fackler: Ha, ha, ha. The number of 0 at the end of the problem. When we were doing 20 million, I had a hundred thousand dollars issue facing me or I could just, hundred thousand dollars could just have operated and it was paralyzing me. And one of my advisors who ran a billion dollar company came over and just sort of patted me on the back and he says Mark you could only hope that in the years to come this hundred thousand dollars problem is the 10 million dollar problem. And that you have the resources and the capability and the cash flow in the balance sheet to deal with this. So, the size of the problems got bigger, they just got bigger and bigger, but as you work from a small company to a larger company, you get used to that. The most, I, the most disappointing part of growing the company larger and larger was my inability to communicate with the company like I could when they were 50 or a 100 people. There are some studies that say when a company crosses a hundred, that the ability to communicate or the technics used to communicate to a company have to change, and a, that’s very very frustrating. You do an employ survey and a, what would come back is: we don’t know what’s happened in the Internet division or the hardware division. You know, we don’t know what’s happening in that corporate and in occasional Dilbert cartoons been penned up at people cubicles. It’s embarrassing, and in the early days that wouldn’t happen because we were all family, and family with 500 people it’s a really hard thing to do.

Success Harbor: In `99, that was really 15 years you’ve been in business at that point and you had a, about 30 million in revenue and you were seeking venture money, but, there was a challenge because there was no traditional management in place. What was missing from your team, I mean obviously it takes a lot to grow a business to 30 million in revenue. What was missing and how did that professional management team that you put in place change Stellcom?

Mark Fackler: Well, I think you, your question answered it in a sense, a, we were good managers and we could continue to grow the company. Venture capital and the public market in my naive tale expected professional managers, managers from larger companies have come to work for me, and we didn’t have that, we were a, we were the company that grew, and my employees had been with me for years and years and years, and what we knew was behind us, and we had no idea how to take the company from say 50 million to a 100 million. And, when I finally convinced venture capital to give us some money, it was in a condition that we hire people who have been where we going and that was a, it was a cultural change for the organization. An incredible learning experience for me, and sadly, it didn’t necessarily work out, but unnecessarily because of the managers, the new professional management that we hired. Just the world continues to change and company sometimes handle those challenges, sometimes the company doesn’t handle those challenges.

Success Harbor: How did it not work out, you said sadly did not work out?

Mark Fackler: We, in 2000, you know, the tech bubble, was getting bigger and bigger and bigger and our industry was becoming a darling of Wall Street. When we finally closed the second very large round of a capital into the company in October of 2000, the world significantly changed in November of 2000. We had a ton of money, millions and millions of dollars in our bank account from the capital infusion. We had incredible talented professional managers and we were gonna go on a path to take this company public. Well, that pass, stopped, the World changed. And when there was that much momentum and that much of talent, all lined up to take the company public, it’s very difficult to change the directions and we didn’t. And we lost a lot of money in those next 18 months, and it was hard on the company, the employees, it was brutal at the market, and a, we were, we got hurt. We survived, but we were hurt.

Success Harbor: Would you, would you change, if you could go back, would you change anything? It sounds like it’s difficult for you to talk about this. How do you think of those times?

Mark Fackler: Yes, ha, ha. In the beginning in 2001 and 2002 I was angry. I had sold a portion of my stock, the significant amount of my stock was still with the company, significant a part of I gonna call my net, was still in the company and in the stock. And as I saw the World changing and I didn’t see the company changing as quickly, I was angry and I was embarrassed. However, with time comes better understanding and maybe a little bit of wisdom. And what that management did was survive and I would never change it. At 42 years old I got a chunk of money that allowed me the freedom not to worry about finances and providing for my family and the second tranche of money never came and over time the anger over that second tranche went away because I’m one of the most blessed individuals in the World and I’ve had some good times and I’ve had some bad times and I wouldn’t change anything. Did I make mistakes? Dozens of them, but would I change any of it? No!

Success Harbor: Even, even after you hired a new CEO, this is 2000 I believe, you still manage to put in 60 hours of work. I think a lot of people that think of hiring and replacement for yourself for another CEO to run the company, they don’t think of working 60 hours, what draw you at that point?

Mark Fackler: I didn’t know anything else. Call it an addiction. It was my life, was working a hard. I knew nothing else, except spending time, spending time, doing things, filling up my day trying to feel needed and important and valuable and it took quite a, it took years. It took about 18 months actually for me to understand that there was another part of life, and it was a, not necessary from me to be, I was real even if I didn’t work 60 hours a week. That was a very difficult transition, is to understand that I was still somebody without the title of CEO and without saying or doing 60 hours a week of work.

Success Harbor: And in 2000 when you hired a new CEO, you sold some of your stock and retired. Why?

Mark Fackler: I, years before… when I was an engineer, I was a self-taught engineer and I’m a self-taught CEO, I think maybe everybody is a self-taught CEO, I don’t know. After a while of engineering I hadn’t solved, you know, all the engineering problems in the World, but I had learned how to solve engineering problems. When I became a CEO, and then I quit engineering to become a CEO, or a professional manager or A manager of the company. And I didn’t know anything at the beginning and I was a self-taught CEO. And after a while I haven’t solved any problem, but I solved lots of problems and I learned how to solve problems being a CEO and in a sense it wasn’t that exciting for me anymore, that’s way I started looking around for some venture capital, I taught that would be an interesting path to take. And that was. But, after, you know, 16 years of running the company, there was something else for me in the World.

Success Harbor: It’s been, it’s been, you know, you’ve been out of the business since the 2000 and it’s 2014 now, so it’s been quite a few years. Do you ever feel like doing it all over again or do you ever feel like wanted to be plug back into that, that whole life?

Mark Fackler: Doing it, it was a wonderful life and for the first few months it was near impossible to me not to start another business, cause I saw business opportunities everywhere, and then over the years as I got involved in non-profits, and a mentoring, that desire slipped away. Interestingly enough I’ve started a new business, a manufacturing business. However, it’s a, it’s more of a hobby, now, as oppose to a passion that takes all of my time and energy. It’s something I’m going to do, but it, it’s not, I don’t have to succeed in it for financial reasons. And, that makes it different and possibly less likely to succeed, because there isn’t as much pressure on me. I’m glad I took 14 years off, I’m glad that I’ve started this new company and in the last 2 years I taught a lot about it, I’ve done a little bit of the work, but it’s no or nearest far along as Stellcom was in its first 2 years because back then I was working 80 to 100 hours a week. Now, this company gets 10 to 20 hours a week. And there is a consequence for that.

Success Harbor: Do you think it’s necessary to have your back against the wall to succeed?

Mark Fackler: No, it’s up on an added motivation, though. A fear, ha, ha, ha. Fear! And when you are financially strapped, that’s motivating. Paranoia, that’s motivating, they are not most positive factors, but they are motivating factors, and when you take away the financial need, for me, it’s part of it. But, that’s ok. 10 to 20 hours of work in this company right now works for me.

Success Harbor: Now, what, what opportunities do you see today? If, let say, for some crazy reason, you would say, to wake up tomorrow and say, you know, I wanna see if I can do it again or if I want to do it again. Where would you start? Where do you see the opportunity in business, today?

Mark Fackler: Well, those are two separate questions, because where I would start is with something I love, and I love the engineering, and I wanted to create a great engineering company. There is an opportunity in my opinion everywhere. No more, no less than before. Circumstances have changed, the environment changed, the economy is changed, all that is changed, but the number of opportunities out there is infinite and so, for me, manufacturing sounds fun. And you ask me where I’m gonna go? So, there is an opportunity everywhere, what you should be doing? Something that provides you a great deal of satisfaction and passion, something that when it’s a bed day or it’s a 2 bad days in a row or 3 bad days in a row, there is enough love of what you’re doing or love of the industry or love of the mission of the company that you can go back a day after day after day, even when things go wrong and you get knocked on the ground.

Success Harbor: Is there anything that you think is still crucial that wish to maybe bring up for somebody either wants to take their business to the next level or start a business or start another business. Some, some word of wisdom that you think would be important for them to know?

Mark Fackler: Well, its interesting cautions, we talked for quite a while now, and, I have any, I have not mentioned the most important educational tool, that I had in business and that was a joining an organization club vestige it’s called Tech back then and conceptually that’s a, it’s a PR group learning organization. And, you know, I mentioned a couple of times I’m a self-taught CEO, well, that’s little too egoistical of the statement, and I listened to a dozen CEOs for 12 years, once a month, I listen to their problems, I told them my problems, and to constantly learn. While you’re doing the job I think it was critical for me and I know it’s critical for a lot of other CEOs out there. So, sharpening the sword, sharpening the sword before you go cut the tree, that’s really important to do. Cutting the tree all day long, you know, you might knock it down, but going back and educating yourself or sharpening that sword is well worth the time and the money you invest in it.

Success Harbor: You mentioned some non-profit that you’re involved with it. Can you talk about it a little bit?

Mark Fackler: Conceptually, social venture partners is one like I said specifically social venture partners is one, for an entrepreneur is a great organization to align with because it’s a bunch of executives who wanna help other non-profits. I’ve found that the similarities between nonprofits and for-profits are tremendous. The differences are subtle but important and just as I learned every day at Stellcom, running my business, every day that I was aligned with the social venture partners and other non-profits, it was a learning opportunity again to better understand human dynamics, to better understand sales and marketing and operations, and it’s a, it’s a great World out there. Again, in a sense to sharpen your sword to keep a wrest of your business community and I think that non-profit community offers a tremendous amount of an opportunity for all, for all entrepreneurs. A great learning, and it’s a great way to get back. San Diego was very good to me, and a, I will for the rest of my life support San Diego non-profits, cause I, I feel that’s my obligation, now.

Success Harbor: Mark, I really appreciate you taking the time today and share the story behind Stellcom and how you got there. Thanks for, thanks for sharing your wisdom and I wish you might success with your new ventures and in life in general.

Mark Fackler: George, the same to you, thank you for taking the time to talk with me and I wish you great success also in this.

Success Harbor: Thank you.

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George Meszaros is the editor and co-founder of Success Harbor where entrepreneurs learn about building successful companies. Success Harbor is dedicated to document the entrepreneurial journey through interviews, original research, and unique content. George Meszaros is also co-founder of Webene, a web design and digital marketing agency.