On Selling Crowd Favorite

On Friday Karim and I signed the final papers to bring my Crowd Favorite team together with his VeloMedia team. Whew!

I’ve told the story of how I came to build Crowd Favorite countless times. I tell it on podcasts and in on-stage interviews, to candidates during the recruitment and interview process, to folks who are just starting out creating their businesses – it’s a leading plot line in the story of the last decade of my life.

I spent 5 years working at startups in the Bay Area during the first boom and bust. One startup succeeded, the other fizzled. During that time I saw many companies rise and fall, I saw acquisitions and exits, mergers and failures. I grew weary of the attitude that was so pervasive in the Bay Area; one that focused so much on raising capital and building towards an exit. I wanted to actually build stuff; not create perceived value to capitalize on.

At the end of 2003 my wife and I decided to leave the Bay Area. We chose Denver, sold our townhouse, and moved.

Instead of looking for a new job in the Denver area, I decided to go independent and start building software of my own. This also afforded me the opportunity to be active in the fledgling WordPress community.

By 2007, WordPress had matured to the point that a demand for professional services was growing. I did a few WordPress gigs and started to see demand for more than I could provide as an individual. I didn’t want to miss out on some of the cool projects I was seeing, so I decided to try bringing on another developer to help. By the end of the year we had expanded to a team of 4. Over the next 6 years we grew, slowly and intentionally, to a team of 15.

While working with my team, we figured stuff out and expanded our capabilities. I had no formal training in business or management, and we did a lot of experimenting and learning on the fly. Often things worked out well, sometimes we learned lessons the hard way. But we were careful to take away something of value from each experience.

I had been active within the WordPress community and various other “birds of a feather” developer-centric communities and events for years, but I had rarely1 engaged with other digital agency owners in the same capacity.

I believe Crowd Favorite was the first WordPress-focused agency. This has had many benefits, but also a few drawbacks. Having been established a couple of years ahead of most shops in the WordPress community, we were trailblazing on our own. When sharing stories with other shops in the WordPress community, the topics would frequently be things my team and I had already solved or moved past. As it turns out, this was extremely limiting.

Last summer I had the opportunity to go to OwnerCamp and it was a revelation.

OwnerCamp opened my eyes to the greater digital agency landscape. 6+ years may have been old within the WordPress community, but here I was meeting folks who had been running shops for 10-15 years. In the course of a few days, my understanding of what Crowd Favorite could become exploded.

I saw how much I still had to learn, and I had a few key takeaways from that experience and the few weeks of thinking that followed.

  1. With my previously limited vision, I felt that we were close to being established and complete. We had chosen to settle into a comfortable space and were refining things rather than taking next steps. I could now see a map for the future of Crowd Favorite that showed us not even at the halfway point.
  2. I recognized that taking these next steps would require moving the company beyond my own limitations. We were good at taking on a new challenge, figuring it out as we went, then learning from the experience and refining the process but I wasn’t sure that was the right way to move ahead at this point. I’ll come back to this below.
  3. Most of the other agencies I met operated as a partnership. It can be lonely at the top regardless of the size of the hill. It also showed me that there other shops doing interesting work and being just as thoughtful about how they went about it as we were.

Armed with a new perspective, I had some choices to make.

Like most shops in the WordPress community (and many of the shops I met at OwnerCamp), Crowd Favorite evolved into a business based on individual reputation and subsequent team execution. We were designers and developers solving problems, and we were very good at that part of the job.

But it turns out there are other parts of the job. Larger clients and organizations have certain expectations about how your team will interact with them. Account and client management, training and on-going support, documentation and final delivery packaging; all of these things require expertise and attention if you want to do them well. And then there are the internal challenges. Making sure employees are happy, challenged and can see a future for themselves within your organization. And of course, watching the bottom line.

When Karim and I started talking in earnest last fall it was quickly apparent that we were building towards the same goal, but from opposite and complimentary perspectives. We shared the same values and ideals of building something sustainable and focusing on employee and team health and success, and we were creating teams that championed our own strengths. Crowd Favorite was mature on the technical side, while VeloMedia could deliver to top tier clients on the business side. The opportunity to bring the teams together was easy and obvious.

I could see where I wanted Crowd Favorite to go, and the things we needed to learn and improve were the same things VeloMedia was already doing well. Sure, we could take a few years to learn these lessons on our own. I knew we could do it, but we’d certainly have hiccups along the way (and occasionally a client would suffer because of them). Also, I knew this area was not my strength. Would I be able to effectively lead the team through this process?

The alternative was much more appealing. Come together with an established and successful business-side team and jump ahead of that process by a few years. This is what we chose to do. It also has a pleasant side-effect of allowing me to focus on the stuff that I’m most excited about; I’m stepping into the CTO role.

I ask each person on my team think critically, bring new ideas to the table, and always strive to improve our approach, process and execution. As we bring the companies together, we are doing exactly that. Things are changing and evolving. Some things that have been easy will be harder for a while as we work through them. Some things that were a struggle are suddenly easier. We’re on a great path, and I can’t wait to see where we are in a few months.

I created Crowd Favorite out of a desire to build something of lasting value. That hasn’t changed. My decision to sell the business to VeloMedia is not about an :scare: exit :/scare: , it’s about taking the next step.

  1. I did organize a weekend retreat with a few good friends to talk shop over the summer of 2011. 

This post is part of the following threads: Career, Crowd Favorite – ongoing stories on this site. View the thread timelines for more context on this post.