 |
 |
 |
 |
 |
 |
 |
 |
 |
|
|
Daring To Make Big Changes Can Result in Big Rewards by Michael J. McDermott Author Eric Hoffer, the "longshoreman philosopher," claimed discontent was at the root of all creativity. That's a feeling with which many people can identify, especially in the business world. In the midst of a successful career with a top Fortune 500 company in the mid 1990s, Kevin Allodi might not have 'described himself as discontent, exactly. It was more like he was looking for a new opportunity, even if that meant leaving behind the comfort and safety of life at the top of corporate America. Through a former colleague and a venture capitalist, Allodi made the acquaintance of John Little and Dave Labuda, founders of a company today known as Portal Software, Inc. At the time, he recalls, "There were no software revenues or customers to speak of, but there were about 15 tremendously talented employees, mostly software engineers, who were truly committed to making Portal a success." Allodi was prospering as a vice president at Computer Sciences Corp. (CSC), charged with building the company's telecom billing software business. He had started a billing services practice at a smaller company that was eventually acquired by CSC. "I was fortunate to have great support from CSC's executives in expanding that business," he says. "We made a few acquisitions, and ultimately it became the largest part of that division's operations." With 15 years in the telecom software industry and a string of successes behind him, Allodi was in an enviable position. But he was restless, and he saw the first indications of something big beginning to stir around him. "It was the dawn of the Internet age Netscape had just gone public and it had become clear to me that the need for business management systems in the Internet space held huge potential," he says.
After some serious soul searching and many discussions with his wife, Nancy, Allodi decided to take the leap into the unknown world of software startups. Anyone who has ever taken such a leap by starting their own business, for example can understand the emotions he felt. When Allodi took over as president in 1996, Portal had been doing business as an Internet services provider, but it was essentially a startup as a software developer. Allodi knew he was taking on all the challenges that go along with launching a new business.
OPENING DOORS On the business side, the initial challenge was gaining visibility and credibility in the market and landing "face time" with decision makers at large companies to give Portal a shot at getting their business.The company's business model was to develop, market and support customer management and billing software solutions for communications and content service providers. Its software programs would be used by customer service reps at Internet, voice, data, cable and cellular telephone service providers to enroll subscribers and manage their accounts. It would also be used behind the scenes when subscribers accessed their account information via the Internet. "Fortunately, no major players in the telecom software space were doing anything about servicing the Internet market," Allodi recounts. "Although we were an unknown quantity, once we got our foot in the door we were ultimately viewed as a welcome option to the usual suspects," he says. Allodi's own credentials in the industry played a key role in opening doors, and the company lined up several large accounts early on. As quickly as Portal met its first big challenge, a new one arose that was virtually the polar opposite. With the Internet and cell phone sectors taking off, the market exploded so quickly that the company faced a problem getting adequate coverage. "There were simply more opportunities to pursue than we had people to pursue them," Allodi remembers. "We had to be judicious in determining where we would expend our sales and engineering resources to maximize our return." He made the decision to focus on the larger telecom and Internet players initially and describes as "fortunate" his success in landing a couple of big accounts right away: CompuServe, which at the time was one of the largest Internet services provider (ISP) in the industry, and Sprint, which was a leader in the booming cellular market.
In effect, Portal would be protected to some extent from the bursting of the tech bubble that would come at the start of the current decade. Its success also allowed Portal to keep its equity in the hands of its employees. "That worked out well when we went public," Allodi says. The former Fortune 500 executive also faced challenges on softer issues, such as corporate culture, but here his inherently creative nature helped him meet them easily. "I've always been more of a creative person than an analytical one. I was an art major in college, and I get much more enjoyment out of the creative side of things particularly in business than the technological or analytical side," says Allodi. Allodi had also performed in rock and roll bands with his twin brother, Brian, through college. "It's why I tended to stay in sales related positions throughout my career there's much more people contact and opportunity to be creative in a business sense," he observes. There's no doubt that Allodi was a "suit" trying to gain entry into the militantly casual world of Internet culture, but he made the transition seamlessly. "I never felt any resistance or bias for being an outsider," he says. "I think that was in part because I jumped right in and got my hands dirty, shoulder to shoulder with everyone else who had been there awhile."
PAST PAYS OFF He adds that his previous experience and his ability to bring business to the company was viewed as a big positive, particularly as Portal started to see some success in the form of revenue generating business deals.Allodi embraced the corporate culture differences between his old Fortune 500 world and his new Internet milieu, describing them as the easiest adjustments he had to make. He happily gave up his suit and tie and learned to appreciate the advantages of his new environment, but he never took his eye off the ball. "Conducting business was just as serious, but the whole culture of the Internet was much more relaxed and, I think, more personal," he comments. "People were very open to new ideas, and in a sense I really felt liberated once I got into the swing of things. It was how I thought business should be conducted." With Allodi at the helm, Portal grew at a phenomenal rate. It went from zero revenue in the software space in the fiscal year ending January 31, 1996 to $5 million in revenues the next year, $9.5 million in 1998 and $26 million in 1999. "Then we literally exploded," Allodi says. The company did more than $100 million in sales in fiscal year 2000 and peaked at $268 million in 2001, before the economic slump hit the technology sector.
Nonetheless, Portal has fared remarkably well, given conditions in its industry. While it has had to endure major cutbacks to pare expenses to levels commensurate with the revenues being generated, it still rang up more than $121 million in sales for fiscal year 2003. "With the business running at roughly break even levels, it appears Portal has adequate cash reserves on hand to weather the storm," says Allodi, who retired from Portal at the end of 2001. "Even at that, the company is miles ahead of where it was when I came on board. It has hundreds of customers worldwide, including most of the top players in the global communications industry, and tremendous market presence for what is arguably the best product in its class." The challenges related to his migration from the corporate world to the frenetic Internet economy that Allodi remembers most were those of a personal nature. His family had to sacrifice and endure a lot, especially in the early years, he says, when he was commuting from Chicago to the West Coast nearly every week.
"I considered a move to the West Coast but decided against it for family reasons," he explains. "Portal was growing by leaps and bounds, and having a 'commuting president' was not in the best interests of the company." Rather than having Allodi leave the company, he and John Little brain stormed on what he could do to contribute without the burden of a cross country move. "We got creative and came up with the idea of a corporate vice president role focused on revenue generation and large account management support. It was a position that had not existed before we just made it up," he says. "Since I am essentially a gales guy, I became the de facto executive staff representative the person who would be brought in to help the field sales teams close business. I also became something of a mouthpiece for the company and spoke at many conferences and forums," he says. Allodi's association with Portal proved to be beneficial to both parties. As Allodi puts it, "We were fortunate to have the right product at the right time, and we enjoyed what was clearly the most fascinating and explosive growth market in the history of American, if not global, business. To put it in Gold Rush terms, we sold virtual pitchforks and pans to Internet miners rather than mine for gold ourselves, and we were very successful at it."
FAMILY MATTERS Today Allodi, 46, serves on the boards of several companies, but his success at Portal has made it possible for him devote himself more to his family.He travels with Nancy on antiquing and buying trips for her retail business and coaches his three younger sons ages 9, 11 and 16 in basketball and football, much as he did with his oldest son, now in college. "Mainly," he says, "I'm just trying to enjoy life, smell the roses a little." His creative approach to meeting life's various challenges to this point has made that possible. For Kevin Allodi, daring to make a big change has unquestionably resulted in big rewards. Along the way, he also learned many valuable lessons that are relevant to anyone starting a new business or making other major changes in their professional life. First, as Allodi's story demonstrates, good instincts and good timing are valuable tools for those with an entrepreneurial bent. That is especially true in the case of an opportunity that offers you a chance to leverage your existing skills and experience. It can pay to seize those opportunities when they arise. Second, the most valuable thing any business can offer its target customers is the promise of filling an unmet need. Demand for what Portal had to offer was just emerging at the time Allodi made his leap, and he made sure the company did what it had to in order to meet that demand.
Finally, it is true that problems related to conflicts between business and personal goals can be among the most troublesome most people will face in their lives. However, even in those thorny situations solutions can be attained especially if you reach down deep inside and tap the most creative aspects of your nature. The prospect of change is often scary, but embracing change can be its own reward.
|
