Surviving Exponential Growth: Lessons from Network Solutions

Opinion

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they make their way to your front door. This requires designing and implementing a highly flexible and responsive company structure that is quickly scalable to accommodate rapid growth. Technological change is extremely rapid and hard to predict, and markets today are global, and moving quickly. The key to responding to this change is to be agile—to be able to direct people and resources at problems and opportunities quickly and in sufficient quantities, as they arise. The winners in the future will be those companies that are able to respond quickly and completely to the challenges in their path.

Second, building a solid financial base is a critical element in any company’s long-term success. It’s better to generate the cash you need for growth by becoming a profitable enterprise than it is to rely on intensive ongoing cash investment from venture capitalists or via initial public offerings. Keep your company in good financial health, and minimize your debt load. In that way, when a favorable opportunity comes your way, you’ll either be able to draw from your own reserve of cash to execute the deal, or easily obtain the financing you need to complete the transaction.

Michael Daniels

Michael Daniels

Third, making money out of nothing takes a unique combination of creativity, smarts, guts, and luck. This means hiring the very best people you can find—entrepreneurial “A” players who have a natural penchant for making things happen, instead of waiting for things to happen to them. The more opportunities your people pursue, the higher your chances of hitting a home run.

J. Robert Beyster

J. Robert Beyster

Fourth, if you end up on the bad side of certain politicians, they can make your life a living hell, and jeopardize all the good work you have done. The best way to deal with this reality is to constantly assess the political environment, to work hard to anticipate potential political problems and to be proactive with solutions that work for government and the public interest. You need to know how to work with government. You can’t predict every potential political problem you might run into, but if you have build strong relationships with your government representatives, agency executives, and key employees, you’ll be in a much better position to weather the storms.

Fifth, the most-effective executives and owners recognize when it’s time to sell out and move on to the next opportunity. When we acquired NSI in 1995, we paid $4.7 million. In 2000 we sold the company for $19.3 billion.

We then used our portion of the proceeds in part to fund the pursuit of new acquisitions and other business opportunities. You’ve got to keep a constant eye on the horizon and know when to stick with an opportunity, and when to sell out. While luck may sometimes pay a role, good data, observations, and persistence can take you far.

Names, Numbers, and Network Solutions We share more stories on how this evolved during the commercialization period of the Internet in our book: Names, Numbers, and Network Solutions: the Monetization of the Internet (www.nsibook.com).

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J. Robert Beyster (a San Diego Xconomist) founded Science Applications International Corporation (SAIC) in 1969, and served as the company's chairman and CEO for 35 years. Mike Daniels was the senior executive who led SAIC's acquisition of Network Solutions in 1995, and oversaw its phenomenal growth, IPO, and follow-on public offerings.Follow @

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