business was increasing rapidly, especially with small and mid-sized businesses, which was our target at that time. If we had started five years earlier or five years later, I don’t know if we would have been successful. Timing is essential. Part of it depends on you, and part of it depends on things you have no control over.
T
om McLeod founded McLeod Software in 1985. Rusty Watkins joined the company in 1986 and continues to serve as Executive Vice President and Chief Information Officer.
What do you remember about the early days of McLeod Software?
Tom: When the company first started, it was just me. At one point I had a programming contract that would require all of my attention for four months. I knew that I could sit down and do it, but after that was done, I would essentially be out of business, because I wouldn’t have any time to go out and generate business. The other option was to hire someone to help with the programming, which would allow me to go out and try to sell the next deal. That’s what I did, and the rest is history. I focused on bringing in people and looking ahead to the next month.
Rusty: At the start there were only a few of us and everybody did everything. Each of us needed to know how to support the product, how to train on the product, how to sell the product, and how to develop and design the product. It was definitely not a boring time.
So many new businesses fail in the first few years. What allowed McLeod Software to survive?
Tom: We had the good fortune of starting the company at the right time. The use of computers in
16 THE ABILITY TO DO MORE
Do you have a business philosophy that has guided you over the years?
Tom: I came up with three basic rules for business success. The first is “Spend less than you take in.” You must be fiscally responsible. As long as you make more money than you spend, you get to keep playing the game. The second is “Do what you say you’ll do.” Your customer has an expectation, and if you can deliver on that better than your competitor, then you will win in the marketplace. The third is “Know what you’re doing.” You’ve got to be good at what you’re doing. There were 50 or 60 regional players developing software for the trucking industry in the late 80s and early 90s, and many of these didn’t succeed because they failed to follow one or more of these rules.
I later added a fourth rule, which is “Treat everyone—customers,
employees, and vendors—with
respect and dignity.” Following this rule alone won’t guarantee business success, but it does help. Your people stay longer, you keep your customers longer, and your vendors work with you better, if you treat them right.
Rusty: Tom’s rules may seem overly simplistic, but they proved to be essential to our success. I think there’s one more rule that has helped us succeed, and that is, “Don’t be afraid of innovation.” Tom has always encouraged people to try out new things. He wants people not to be afraid of taking reasonable risks.
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