In our recent conversation with Salil Pajwani and Sophie Surowiak-Long, the dynamic duo behind 2nd Stage, they shed light on their journey from the development and sale of their last company, ?What If!, and the thinking behind their current venture. Their story offers valuable advice for entrepreneurs preparing for sale, overcoming setbacks, and strategically enhancing company value.
?What If! and Its Evolution
The journey began in the early 1990s with the launch of ?What If!, a consulting firm designed to help clients innovate and evolve their businesses. “Latching onto the concept of ‘innovation’ was very helpful, because people were not talking about innovation in those days,” Salil explained. He described how their business aspirations evolved: “Initially, all we thought about was doing great work and hiring great people. We never gave ourselves the space to think about what we wanted for ourselves. About 6-7 years in, we realized we had built a valuable asset.”
Transitioning from Operation to Sale
As ?What If! grew, the possibility of selling the company became more concrete. Despite numerous challenges, including the 2008 financial crisis, Salil maintained his core focus on developing top innovation talent, which caught Salesforce’s attention in 2016. Off the back of that, Salesforce subsequently put in an unexpected offer to buy the business, and the acquisition process started rolling.
Salil shared that he felt more gratified and “affirmed” that the business he had built over 25 years is now something that “someone’s prepared to pay a lot of money for it,” which meant more to him than just money.
However, a pivotal moment arose when Salesforce suddenly retracted their offer four weeks prior to finalising the deal due to a change in management. “We were really gutted. But after we dusted ourselves down, we decided to go back to Salesforce with one question. “If your offer for our company was X, what would we have needed to look like for you to offer 2X?”.
Salesforce’ answer to Salil and Sophie was simple – they loved ?What If!’s offerings and their unique “Talent Engine”, but they “don’t operate (their) own business well enough”, they needed to be “faster and leaner”.
Strategic Changes and the Road to Sale
Armed with these insights, Salil and Sophie set to work by implementing significant leadership and operational improvements, greatly increasing their company’s value. These changes not only paved the way for a successful sale to Accenture but also laid the groundwork for their advisory firm, 2nd Stage.
Advice to other Entrepreneurs Looking to Sell
The essence of Salil’s and Sophie’s advisory approach centres on understanding leadership dynamics and the balance between maintaining cultural identity and implementing change. “Strong cultural companies often resist change,” Salil noted, necessitating a delicate approach during leadership transitions in exits.
Sophie also stressed her belief that “the people who are the best at doing the work are typically not the best people to run the business.” This draws attention to a widespread tendency to elevate top performers into managerial positions without considering the fundamentally different skills required for effective leadership.
Home Grown as Entrepreneurial Support
Reflecting on their journey, Salil and Sophie also underscore the value of community and networking, particularly through their involvement with Home Grown.
“We’ve met some really great people,” Salil recounts, where simple conversations at Home Grown led to introductions with potential clients and partners. Sophie adds, “It’s not just a couple of kids with a startup and a computer. It’s actually people running proper businesses,” highlighting how Home Grown is the business club to-be for serious business professionals.
Meet Salil and Sophie at Food for Thought – 2nd May 2024
Salil and Sophie will share detailed insights into their strategic planning, adaptability, and community engagement at Home Grown on 2nd May 2024. Join them for a detailed discussion over dinner on exit strategies, negotiation tactics, and key learning points from their sale process.
Limited slots available, RSVP on the members’ portal now.
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