I frequently hear people use the term “playbook” when discussing methodologies for building businesses in a rational, replicable, and scalable way. It’s hard to argue with the concept of establishing consistent best practices and optimizing critical success factors; and some investors have leveraged and honed this strategy to deliver absolutely phenomenal returns over many years. I certainly wouldn’t question these results or the benefits of such a scientific approach. Where I get leery is when people describe this kind of a sophisticated blueprint as “having a playbook” or intimating that business-building can somehow be distilled into a straight formula. And I’m definitely not a fan of the notion that a “playbook” alone is the key to assured business success. I acknowledge that the term “playbook” may just be loose shorthand, so perhaps I should chill-out and not take it so literally. But the metaphor of a standalone “playbook” carries a number of counterproductive implications that I consider are worth flagging. These include:

1. “Playbook” can imply an artifact that represents a fixed level of completeness or totality that is simply non-existent in the business world.
2. “Playbook” seems to elevate “the plays” as being of utmost criticality, while understating the importance of (metaphorically) reading the game, knowing which plays to call when, or having the confidence to change or modify plays mid-game, based on situational realities or market dynamics.
3. “Playbook” arguably ignores the hard truth that someone needs to execute those plays. The skills, mindset, and experience of that person(s) greatly impacts the outcome of any given “play.” And the X-factor of how a team functions as a unit may be the greatest success-determiner of all.
4. “Plays” themselves feel like correlates to “tactics.” And while tactics are critically important, they cannot stand on their own. Per Sun Tzu in The Art of War (with apologies for the mixed metaphor): “Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.” More to come in a later post on establishing a strategic platform, from which tactics can be leveraged with purpose.

Lew Moorman of Scaleworks said it better still with this 2018 quote: “There’s no playbook on how to build a business. But there is a set of disciplines that can be taught in terms of experimentation. Looking at the data, there are just some patterns.” I really respect what Scaleworks does; and I couldn’t agree more with this sentiment. These “disciplines” feel adaptable, applicable, actionable, and agile…bringing a critically valuable dynamism to the straight X’s and O’s of a static playbook.

In my mind, just a few of those teachable disciplines include:

• Translating a pressing business problem into a compelling solution vision
• Executing against that vision to produce a beautiful, problem-solving product
• Taking a purposeful, rigorous approach to what / how / to whom businesses sell & serve
• Seeing the world through clients’ eyes and orienting experiences around that vision
• Establishing fluid, effective communications among aligned and invested team members
• Orienting and executing around a set of performance goals that benefit a broad range of stakeholders
• Fostering a deep commitment and competency in constantly changing and improving

While it certainly has a major part to play, a playbook alone cannot be expected to instill these types of disciplines in an organization. Rather, a playbook is but one part of a larger ecosystem that fosters these kinds of disciplines. It goes hand in hand with with engagement models, values that shape organizational behavior and decision-making, strategies to align initiatives, and frameworks / artifacts / systems / processes to facilitate execution. I hope to further examine and unpack all of the above in many future posts.

I plan to use this blog to share my thoughts and perspective on growing SaaS businesses and on building successful organizations in general. With that in mind, I thought I’d use this inaugural post to offer a bit of background about me, beyond what can be gleaned from LinkedIn and other high-gloss media. I’ll start with just a bit of personal back-story and then fast-forward to some of what I’ve learned over the past 24 months.

Back-Story: I’ve always loved teams: playing on them, cheering them, coaching them, and always learning from them. And more recently: building, leading, and continuing to evolve through them. Over the years, I observed that the best teams consistently combine two seemingly opposing competencies: First, they clearly articulate their goals and relentlessly pursue them with unity and conviction. Great teams operate efficiently and effectively, and often simply “out-execute” their competition. They do so by leveraging shared principles, well-understood operating norms, and deep experiential understanding of the opportunities and challenges they face together. On the other hand, great teams also possess the humility, introspection, and courage to adapt and change however necessary within dynamic environments and in response to inevitable setbacks. These concepts were deeply ingrained in me by a few legendary coaches, by whom I was immensely fortunate to be mentored. These people had a profound impact on my world-view; and their ideas are foundational to Lock 8’s approach to thoughtfully and consistently building successful organizations.

Fast-Forward X Years: When BoardEffect was acquired at the end of 2016, I assumed I would take a few months to transition-out and rest-up, and then do another round somewhere as a “hired software executive.” I’d been a CEO twice and a President / Managing Director / EVP Operations twice; and I loved leading growth-stage SaaS businesses. Eighteen years had flown by, and these experiences had been transformative for me personally, professionally, and developmentally. It seemed to make complete sense just to “hit replay.”

But I didn’t end-up following that familiar path into my next operating role. Instead, I’ve been on a journey since then, exploring new ways to leverage my love of operations and organizations. This exploration has ultimately led to the founding of Lock 8 Partners, a platform for investing in and optimizing the performance of small-scale SaaS businesses. I am completely energized by this next leg of my journey; and this is a brief synopsis of how I arrived at this point.

After ninety days of amicable transition, I left employment with BoardEffect’s acquirer and promptly became immersed in a number of long-deferred pet projects. As expected, I soon missed my true passion of building teams and businesses; and by July 2017, I was itching to get back into the swing of growing companies. Without a full-time role and company for which I had the requisite level of excitement, I took on a number of part-time projects with a few private equity firms. These included strategic consulting engagements, executive coaching stints, board roles, and operating assessments in connection to prospective new investments. Although these projects were stimulating and challenging, I realized by year’s end that I wanted something with more continuity. So, I committed to spending four days a week in an Executive Chair role at one of the companies with which I had been consulting; and it was fun to be fully-engaged again. I loved helping the team think through how best to unlock the significant potential of that business; and I was completely engrossed in that effort throughout the first half of 2018 (full disclosure, I remain on a more limited basis).

It was during this time and through these collective experiences that I was struck by a number of observations; and these eventually evolved into the foundational ideas behind Lock 8 Partners. To dig into those ideas, please check out Part 2 of this post here.

As I shared in my initial post for this blog, my decision to start Lock 8 Partners was driven by some long-held views, along with a number of more recent experiences and observations. This post picks up on the latter, and attempts to lay out some of the thinking behind founding this business. Specifically, the following observations and takeaways have been central to Lock 8’s strategy and approach.

1. More Capital than Investment Candidates: Since early 2017, I helped evaluate a half dozen or so prospective investments and initially reviewed scores of others. And yet nothing I worked on resulted in an eventual investment. Deals were halted for many good reasons, but the majority came back to one central dynamic: there were many investors and vast capital pursuing a relatively small number of companies that were judged to be the most attractive investment targets. The end result was — and remains — that it is objectively very difficult to find and invest in great companies.
2. Search as Competitive Necessity: To mitigate this challenge, rational and intelligent investors have spent years and significant resources developing highly sophisticated sourcing operations. They employ accomplished people, world class systems, and finely tuned strategies, all in a concerted effort to be the first to find the very best companies as destinations for their investment capital. Being very good at finding businesses for investment is no longer a competitive advantage for exceptional investors, it is inarguably a competitive necessity.
3. The Other 9X%: With such tight filters in place, it is inevitable that investors elect to pass over the overwhelming majority of companies they see. But I found that a company failing to meet investors’ stringent search criteria didn’t necessarily mean that business was unattractive. Quite the contrary. In my consulting capacity, I looked at dozens of interesting companies that were simply early in their life-cycle, or hadn’t experienced stratospheric growth, or had some other characteristic that limited their appeal to a broad swath of more traditional investors. These are good businesses; they simply are in need of something that helps brings out their full potential. And there are many of them.
4. The Missing Operating Piece: Over the past year+, I have thoroughly enjoyed serving in an active Exec Chair role — facilitating strategic discussions / decisions and advising on operating matters, but ultimately leaving the critical execution to those with far more domain expertise and intimacy in that particular business. What was especially gratifying in this role was the sense that the specific challenges and opportunities companies were experiencing were often new versions of old themes that I had seen in past lives. I found that I possessed mental models for understanding these issues, language for explaining them, and tools to address and capitalize on them. I was struck by the thought that twenty years of operating experience could be broadly applied to many SaaS businesses. And, it occurred to me that operating expertise might just be the critical component to navigating some of the above-mentioned investing challenges that I had witnessed.
5. Over time, these thoughts took root and led to a series of questions, including:

• What if the emphasis of investing became as much about building out world-class operations in good companies as it was about focusing resources on finding and transacting with seemingly flawless ones?
• What would it look like to inject deep operating DNA into a small-scale company investment strategy and how could that expertise be injected into businesses in a seamless, additive way?
• How would expertise in addressing operating challenges increase the population of prospective companies an investor could confidently target?
• How might such a system scale over multiple businesses and how best to prove this approach?

The more I investigated these and other questions, the more urgency and energy I felt around answering them. As I have sought to do so over recent months, I have gained ever-increasing conviction about this as an investment model; and I believe a unique value-generating opportunity exists at this moment and juncture.

I plan to dedicate many future posts to further outlining these ideas, describing my efforts to understand them, relating their practical application, documenting my experiences in this pursuit, and sharing lessons learned along the way. I hope these will be helpful to all readers, but most specifically for operators who are working tirelessly to build successful SaaS businesses.

Thanks for reading and please come back for future posts.