We’ve all worked on a group initiative with someone who struggled to release the reigns, holding tightly to their own vision. (Maybe it was you!)
Entrepreneurs arguably have the best excuse for being that person in the group. Shay Houser, however, is an exception. Through founding and growing four companies, has learned when to loosen his grip and create a culture of ownership, from the Board of Directors down to the newest hire.
Houser, co-founder and CEO of Greenville-based Green Cloud Technologies, is a serial entrepreneur and, in spite of his relatively young age, a seasoned executive. Green Cloud has received recent recognition as the 73rd fastest growing company in America (Inc. 5000 list). More important, the growth is sustainable, as evidenced by just a few 2016 highlights: the receipt of 7.5 million in financing from Spring Capital Partners, Millry Corp, and Bridge Bank and acquisition of Cirrity, a cloud-based solution provider that will add two top of the line data centers to Green Cloud’s portfolio.
Back to His Roots
Shay’s family moved to Greenville from Chicago in 1981. His father, an executive with a telecommunications company, Tel /Man, taught Shay principles of business and finance.
“It got me interested in business at an early age. I bought my first stock — Warner Communications and Apple — when I was in seventh grade.”
Despite a keen business intuition, young Shay did not expect to follow in his father’s footsteps. Focusing on schoolwork was a constant struggle. After “barely” graduating from Eastside High School, Shay set his sights on the Citadel for college.
“Back then, if you applied, you got accepted. I knew I needed the structure.”
Shay agreed to give the first week at the Citadel a try. While the initial intensity of freshman week one at the Citadel scares off nearly 8% of entrants today, Shay knew he had found his new home. Even so, staying focused on schoolwork presented enough of a challenge that Shay opted for the “easiest” major, Political Science, and worked hard to beat his own struggle to sit down long enough to read and test.
When he wasn’t doing schoolwork, however, Shay was far from idle.
“I started a company with a friend in college. It was a T-shirt company. It did really well and even grew into providing fraternity and sorority T-shirts to colleges across the state. We learned a lot—like you have to pay sales tax, for example.”
The Foundation for Everything
While Shay says academics still weren’t his forte during his college years, his drive and talent for making things happen were shaken to the surface through his fledgling business endeavor. Upon graduating, he and his good friend were hired by a manager at his father’s company, Corporate Telecommunications Group (CTG).
Shay credits his first employer for providing the business intelligence and talent nurturing that allowed him to consider starting his own company.
“My talents were allowed to flourish. Instead of forcing us to go in a certain direction, Leighton Cubbage and my father, Charlie Houser, were believers in allowing employees to go in the direction that was best suited for their God-given talents. I went from sales support to product management to business development to corporate development, which involved mergers and acquisitions and financing.”
While Shay is quick to credit his experience at CTG as foundational, he played an integral role in growing the company.
“I brought a naivety and a willingness to do anything. I was willing to take direction and just go and do it, regardless of the fears I had.”
Shay models Green Cloud Technologies after a number of CTG systems, one of which is employee ownership.
“If I wouldn’t have had a stake in the company, I wouldn’t have been able to start my first company after CTG sold. It positioned us to go take a risk, financially and personally.”
In 1997, Shay left CTG to co-found Seruus Ventures, a venture capital group.
“At the last few years at CTG, I’d moved into corporate development. I’d started to learn how critical mergers, acquisitions, and financing were to business.”
Back then, a young venture capitalist was rare, but there were many positives to bringing that same willingness to do anything.
“I was 26 years old, so who cares? Risk was irrelevant.”
Seruus invested in 10 companies across the nation. The positive experience investing into telecommunications companies inspired Shay to begin his own. After a little under two years with Seruus, Shay turned to scraping together a company that served a niche market that had become apparent to Shay while at Seruus.
“I saw a hole in the marketplace for a combined local and long distance phone service for residences. We bundled the two services and focused on consumers.”
Trivergent was founded in 1997; the company grew quickly through mergers and acquisitions and merged with Gabriel Communications to form Nuvox. Eventually, the company merged with NewSouth Communications to form the Nuvox that was acquired by Windstream in 2010 for $625 million.
From Zero to 250
The local and long distance bundling model of NuVox took off. The growth happened in every direction, from customers acquired to network coverage to new hires.
“I was wholly unprepared for the growth we had at Trivergent / NuVox,” Houser reflects. “I didn’t have the experience to fall back on to grow a company that big. We went from startup to 250 employees in two years. We raised over 125 million dollars and filed for an IPO in two years.”
29-year-old Houser, an entrepreneur at heart, was quickly immersed in responsibilities and decisions he had little experience navigating.
“Few people grow a company that fast, but for someone my age, the challenges were too many to list.”
The Value of the Honest Tribe
Not all real-life stories have a particular moment where the action takes a sharp turn; the story of NuVox is an exception.
“I’ll never forget. A guy named Watts Hamrick, my largest investor, invited me to Charlotte to talk. I show up at the First Union tower and rode the elevator to the top. I walked through the massive lobby, complete with columns, soaring ceilings and all. It was Watts and couple of partners. I sat down and he hit me with a two-by-four — in a professional way.”
Hamrick challenged Houser to find a solution — and to do it immediately.
“I was 29 years old, and I’d taken 5 million dollars from these guys. I mean, the company was exploding, but the growth was causing us to unravel in various directions. Looking back on that moment is great. It sucked at the time.”
That talk led to some strategic business decisions — centered around the art of recruiting help — that ultimately kept NuVox from unraveling into failure.
“Ultimately we brought my father in as CEO; we hired a COO,” says Houser. “We needed experienced leadership.”
Houser credits that conversation with his investor as foundational to who he became as a leader in a few ways: he learned the value of having investors who are bought in enough to care, and who are able to tell him the truth — nothing more, nothing less.
It was also a hard lesson on the value of pure experience.
“Until you go through it, you don’t have the experience to fall back on.”
Company founders and company executives often utilize completely different skill sets; experience lends the entrepreneur the maturity and patience needed to lead intentionally.
The Entrepreneur’s Achilles’ Heel — and How to Overcome It
Houser credits entrepreneurs like himself with an overdeveloped “blind optimism” center in the brain. While this optimism is what leads otherwise sane men and women to risk everything, there’s also a downside.
“You tend to believe your own hype,” says Houser, “But I would say that 90% of startups fail for one of two reasons: failure to raise enough capital and being blind to the fact that people aren’t nearly as willing to shell out cash for your product as you think.”
Tunnel vision can account for pushing one agenda without seeking or listening to the council that could shift a company’s direction away from a dead end. The solution, according to Houser, is simple: reach out.
“You have to have a strong board of directors and surround yourself with great people. Having a management team around you that are empowered is critical. Exceptional employees, a lot of capital — and the faster you grow, the more capital you require.”
And then there’s always that one piece of advice that’s hard to follow until you’ve learned the hard way:
“Be honest with yourself and don’t believe your own BS.”
Today, Shay keeps his entrepreneurial spirit grounded through sharing the leadership of Green Cloud Technologies with four partners that each have different strengths: Charles Houser, Shay’s younger brother (and former NuVox executive) as Executive Vice President, Eric Hester as CTO, and Keith Coker as COO. Shay credits Green Cloud’s growth to his partnership with Charles, Keith, and Eric.
“Not one of us could have built this company individually,” says Houser.
Another important practice is Houser’s early morning routine, which allows him to get focused so that he does not simply “react” to all that comes his way over the course of the day.
“First thing in the morning, I need time alone to prepare and think for what’s coming. 5:30 to 7:30 AM is my time. It allows me to get up, read industry news, hit the gym, and set goals. Having that time and the dedication to doing that is the most important piece of my day.”
Why Green Cloud Technologies Isn’t Just Any Cloud Company
After his Houser successfully built and sold a third telecom company, UCI Communications, he spent a few years leading the company under its new banner, Black Box Network Solutions, after an acquisition in 2008. He took advantage of that time to develop further due diligence and “M & A” experience before beginning a fourth telecomm company with a commercial focus: Green Cloud Technologies.
“When we started, cloud was just a small part of what we offered,” tells Shay. “There came a point when it was obvious which part of our company was growing. We just had to decide how we were going to pivot while keeping our identity as a company.”
Houser didn’t want to lose Green Cloud’s channel-only structure, a model Houser has valued and implemented since his CTG years.
“We never compete with our customers. Plus, our channel partners are our best product development resource. They are continually coming to us with insightful suggestions based on the needs of their customers.”
Thankfully, pivoting away from phone and toward cloud not only allowed Green Cloud to retain its channel-only structure, it allowed them to add an energy-saving value proposition to its identity. Through a comparably energy-efficient computing solution for businesses as well as company service initiatives such as the Plant-a-Tree Initiative, Green Cloud Technologies holds true to the values Houser held when he started the company—and then some—while also offering incredible value through over $10mmm worth of server infrastructure.
Computers Don’t Drive the Company; People Do
Even with Green Cloud’s sustainable growth, Houser faces daily challenges, the forefront of which, in his mind, is finding and retaining top talent.
“People do business with people. Without quality employees, our product, as cost-effective and efficient as it is right now, won’t stay as competitive.”
This common challenge is keenly felt at Green Cloud, where, once hired, an employee shares ownership of the company. While the revolving door is increasingly “the way Americans work”, the exit of a coworker and co-owner brings unique challenges.
In spite of the disruptive nature, however, employee ownership also has benefits that Shay attributes to Green Cloud’s growth, ability to pivot, and overall success.
“No one’s just punching the clock. Everyone has enough stake in the company to be driven to solve the problem and grow the company.”
With the typical protective perfectionism of an entrepreneur, House has been tempted to only give employees fiscal ownership over his startup companies. But ownership means more than that, a conclusion he’s drawn through his years of experience. Employees must be hired for talent and given the coaching and opportunities to put their full weight on the line.
“It’s important for me to get out of everyone’s way here. If you have a great team, that’s what you do.”
Space-Sharing Gives Freedom
Green Cloud occupies a space on the main floor of NEXT’s first co-working space, located on University Ridge. The year they moved in, 2014, Shay Houser was considering a few options for Green Cloud’s next HQ, some of which — gasp — weren’t downtown.
“But we met with Jon Moore and caught his vision for the added value of co-located startup companies. We’ve been here three years and love the environment,” concludes Houser.
Sharing a space also gives Green Cloud executives the freedom to hold true to the entrepreneurial principle of pivoting. This is particularly important for a company in the tech sector, which is constantly changing, and for Shay, who aims to continue to grow Green Cloud Technologies “as fast and as big as is practical, creating as much value as we can.”