Value Added: Wayne Jackson's climb to success

By Thomas Heath
Washington Post Staff Writer
Sunday, February 20, 2011; 5:53 PM

Wayne Jackson's secrets to business success are to work hard and be lucky.

It seems to have worked for him.

Jackson, 49, has done pretty well for himself. He sold one startup, Riverbed Technologies, for $1 billion and took another, Sourcefire, public for $450 million. He now runs a third startup, Silver Spring-based software maker Sonatype, which is funded by Accel, one of the most successful venture capital firms in Silicon Valley.

That's not all.

Jackson has scaled Mount Kilimanjaro and 21 of Colorado's 54 mountains that reach over 14,000 feet. He even climbed the highest peak in Antarctica.

There's more.

He drove racecars with the late actor Paul Newman, and he runs a profitable side business refurbishing and reselling Porsches.

It hasn't always been a smooth ride. It never is. The thing I like best about writing Value Added is hearing the stories of people like Jackson: successful businesspeople who struggled, failed, failed again and risked everything before the hard work paid off.

Careers, like stocks, fluctuate. Mine started with a sputter when I was fired from my first job out of college. Broke and sleeping a floor in the Bronx, I went home to Syracuse, buckled down and found a $145-a-week job at the local newspaper, for which I was thankful. Never again, I said to myself.

Jackson hit bottom around 1991, when the James Madison University finance graduate lost his job as assistant comptroller at a Virginia resort company.

His wife left him and took their child with her. He was unemployed and living in Florida.

"For me, it was eviscerating," Jackson said. "I was in a pretty bad place and said, 'I have to get . . . out of here and get serious about building a career and get in a place where this can never happen again.' "

So he did.

He moved in with his father in Gloucester, Va., on the Chesapeake Bay and got a $40,000 software consulting job through connections from his ski instructing days (he learned to write code in college). He eventually moved into a $300-a-month basement apartment in Arlington, sharing space with a furnace. His kitchen was a microwave oven.

Jackson was good at what he did, and soon he was providing consulting services to General Electric, the World Bank and the Federal Reserve.

He landed a job two years later at a Northern Virginia firm called Noblestar. His career started to blossom, as he worked up to 80 hours a week and began to manage his own division.

His salary swelled to six figures.

Jackson persuaded his bosses at Noblestar to allow him and a colleague to start a new company called Riverbed Technologies, which created software for the nascent handheld device industry.

To illustrate how luck played a role in his success with Riverbed, Jackson said he was sitting in his office on a Friday night at 8 p.m., partly obsessing about work and partly trying to avoid rush-hour traffic.

The phone rang and a manager from Symbol, the company that owned bar code patents, called to say that Symbol was canceling its letter of intent with Riverbed. After pleading from Jackson, the manager said that the company's top guy would give him a hearing if Jackson could be at a Denny's restaurant at John Wayne Airport in Orange County, Calif. - the next morning.

Jackson drove to Baltimore-Washington International Marshall Airport, caught the first available flight and talked the Symbol executive into doing the deal with Riverbed. That led to other deals with Oracle, IBM and Palm.

"The morale of the story is if I hadn't been at work, sitting at my desk at 8 p.m. on a Friday waiting for traffic to clear, I wouldn't have gotten the phone call. Which means I wouldn't have gotten the deal. Which means you and I wouldn't be talking today."

Riverbed received venture capital funding from Columbia Capital and Friedman, Billings, Ramsey, the Arlington-based investment bank that made millions in the go-go dot-com era. Riverbed was sold to Aether Systems in 2000 for $1 billion in stock, turning Jackson and a bunch of others into millionaires.

Jackson resigned as chief strategist from Aether a year later. He gave his relatively small fortune - estimated from public records at between $5 million and $10 million - to Goldman Sachs to manage, and pursued his racecar interest. Aether would later crash into bankruptcy, scarring many investors.

Jackson was recruited by Sourcefire and served as chief executive from 2002 to 2008, earning a salary in the mid-six figures and receiving a chunk of equity. He expanded the network security startup from almost nothing to a profitable business grossing $70 million a year. He retired in 2008 and took up mountain-climbing with the goal of knocking some weight off his 250-pound frame.

Jackson is respected enough among techies - he worked with Palm, IBM, Symbol and Microsoft at Riverbed - that Sonatype founder and chief technology officer Jason van Zyl recruited him to run the company last year. He agreed, under one condition. The company must be headquartered near his home in Columbia.

Silver Spring-based Sonatype's revenue approaches $1 million a quarter; it has 30 employees, no debt and is projected to reach profitability next year.

Even with a great venture capital firm and seasoned executives such as Jackson and van Zyl, startups such as Sonatype face long odds.

How long? Jackson said he got these numbers from the venture capital industry:

Odds of getting a business plan venture funded: 1 in 500.

Odds of getting a business plan to any liquidity event: 1 in 1,000.

Odds of getting a business plan to a positive liquidity event for founders: 1 in 2,500.

Odds of getting a business plan to an initial public offering: 1 in 50,000.

Odds of hitting the Powerball lottery: 1 in 80,089,125.

So how do you increase your odds? Here are a few nuggets from Jackson.

"Build a phenomenal team with experience relevant to your specific business. Mediocre people can crush the culture of a company.

"Find investors who are closely aligned both with themselves and the founders.

"Play to win. Finishing fourth often equals zero and second isn't always so great either (Facebook vs. MySpace, Google vs. Yahoo, Oracle vs. Sybase, etc.).

"If building strategic value [a.k.a. a big exit multiple] is your goal, avoid the pressure to achieve profitability too early. The biggest outcomes in tech have had much more to do with market potential than short-term financial results."

Follow me on Twitter at addedvalueth.

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