Position: Chief executive of Message Systems, a provider of digital messaging software, headquartered in Columbia.
Phillip Merrick was born and raised in Melbourne, Australia. Attracted to the growing tech scene in the United States, he decided to pack up and move here with plans to get experience and then start a software company in Australia. But he met his wife, who was the first manager at Aol.com, and soon the two decided to start a company in their basement at the height of the dot-com boom. The company, WebMethods, went public in 2000, and was eventually sold to Software AG. Merrick became chairman of a few growing tech companies before coming to lead Message Systems.
What are some lessons learned from starting your own software company?
Being a technologist by background, I was originally always focused on the technology. I thought that if you have strong technology, that’s how you win in the marketplace. I still believe that is a fundamental prerequisite. The lesson I learned relative to that is, just as important is the people factor. Nothing happens without someone making it happen — a salesperson, an engineer. First and foremost, the quality and commitment of your people is the biggest factor in what gets you success as a company.
What’s the secret sauce to ensure you get the right people?
You’ve got to really recruit carefully and selectively. I’ve always had three things that I look for in individuals when looking to bring them into the company. One is raw smarts, pure unadulterated intelligence. Smart people like to work with other smart people. Number two is passion. I look for people who are literally, like me, excited to get out of bed every morning and do something significant. Passion for what you do, what the company does and the industry. Thirdly, integrity. That’s not just not telling lies and being open and transparent but it’s also having integrity in terms of living up to your commitments and treating people the way you want to be treated. Those things I found wind up being more important than whether or not someone has a perfect match on the skills you’re looking for.
Any other lessons from the start-up?
Right up there is focus. Companies, particularly entrepreneurial growth companies, have limited resources. You have to really work hard at focusing those resources and resist the temptation of getting pulled in different directions. Say you want to focus on just selling to financial services companies and a health-care opportunity comes in. Some companies might say, “Well, we kind of like the revenue and maybe it would be interesting to focus on health care. Let’s look into it.” A focused company would say, “Right now, we’re 100 percent focused on financial services companies. Maybe that might be an interesting future direction, but right now, we’re all about financial services.” Having the discipline to say no to things is a key focus. With WebMethods, it was when we didn’t stay true to our culture values that we lost focus and got tempted by that deal that was out of our power zone.
Any lessons learned in building a business with your spouse?
Don’t try this at home. Just kidding. We’ve been extraordinarily fortunate in many ways. We started the company together, the company was successful and we stayed married. We really beat the odds on that front. There are some great advantages. One is when you’re working hard, if your spouse is doing it with you, you don’t have that problem of one spouse being absent. You’re both doing the same thing, so that takes away that time pressure and separation anxiety. But it did get pretty tough getting the conversation off of the business. Many days at the end of a long day, one of us would just have to say: “Enough. Can we please talk about something else?”
You’ve mentioned that it can be difficult as a chief executive to talk to people about your business. How do you navigate through that?
Yes, sometimes it can be slightly isolating in that realm. When I first started out, I didn’t know what to do. But now I reach out to peers. There are quite a lot of organizations now that really help connect chief executives for peer support groups. Young Presidents’ Organization is one. MindShare is now a huge network of almost all of the growth tech company CEOs and founders over the last 15 years. I was in the inaugural class. That was a great support. There’s a lot of industry roundtables, too.
What books are you reading?
“The Hard Thing about Hard Things,” by Ben Horowitz. I’m not a big business book reader because they tend to make things sound way too easy. This book is the best book I’ve read on entrepreneurship and leadership of tech companies.
— Interview with Vanessa Small