Zayo’s entrepreneurial success story has attracted plenty of interest and questions from today’s startup founders. What were the early days like? What are the challenges that come with scale? How has your culture evolved as the workforce grown to nearly 4,000 employees? What advice do you have for today’s startups?
Participants in Boulder Startup Week had the opportunity to ask their questions at last week’s kickoff session, “Perspectives from 10 Years in Business.” Panelists included Zayo employees who joined at different points in the company’s history.
“In the early days, we were in true start-up mode,” said Hannah Wanderer, vice president of Tranzact and Customer Care, who has been with Zayo since the beginning. “Everyone was moving and shaking, trying to make things happen. Working 80 hours a week or more was not uncommon. Building trust with our customers was the priority. So was getting the bills out the door!”
Patton Lochridge, senior director of Federal Services, joined the company in 2014. “Dan (Caruso) teaching at the University of Colorado Business School and I was inspired by him. When I got here, we had 1,500 employees and were operating only in the United States. It was an incredibly exciting place to work – and it still is. Zayo attracts people who are flexible, embrace change and take risks.”
Unlike companies that struggled to survive, Zayo acquired key growth assets during the recession. “We were able to raise capital in ‘08, ‘09 and ’10, years that were really tough for many companies,” said Rachel Stack, who joined Zayo as a vice president of Corporate Development after 10 years in investment banking. “Our leadership understood the industry, had extensive contacts and a strategic view of what they could put together with ‘fiber orphans,’ companies with fiber in isolated markets.”
By the beginning of 2012, Zayo had made 18 acquisitions. The acquisition of AboveNet later that year was the tipping point in terms of scale, with Zayo amassing more than 60,000 route miles of fiber across the U.S. and Europe.
“One of hardest things to do is to scale, especially when it involves integrating other teams,” noted Hannah. “We established a culture of ownership and growth incentives by managing to internal rate of return (IRR) metrics.” Zayo also runs its business, including quote-to-cash, over Salesforce.com, a highly efficient approach to CRM and an operating platform.
Sustaining startup values and the early entrepreneurial spirit continues to be a priority. “We’re organized into independent segments, with our own P&Ls,” explained Grant Burchfield, who joined Zayo in 2015 and is currently senior director of Global Reach. “We’re effectively a mid-cap company comprised of entrepreneurial businesses. Culturally, Zayo employees embrace change – we thrive on it.”
What advice did the panel have for leaders of today’s startups? “Be decisive and accountable,” offered Rachel. “Own your decisions, and spend a lot of time communicating to your employees, customers and potential investors. It’s critical to standing up a business.”
“Understand the concept of sunk costs,” said Patton. “Past investments or decisions that haven’t panned out should have no bearing on future decisions.”
“Embrace the chaos,” Grant said simply. “Never become complacent. Always be thinking about how can you do things differently and better.”