Tech Workers Shouldn’t Dismiss Old-School Businesses, Says Onyx Co-Founder Brent Frei

Last week, Xconomy published a story about the large number (13 and counting) of former Onyx Software managers who have gone on to become CEOs of other companies. We were put on the trail by Brent Frei, the co-founder of Onyx who’s now executive chairman of Bellevue, WA-based Smartsheet. In talking further with Frei, some interesting lessons emerged that should be of great interest to the tech-business community, especially in tough economic times.

Among the ex-Onyx crop of CEOs are Patrick Angelel, chief executive of Everett, WA-based Creo Industrial Arts, and Andrew Bennett, chief executive of Deneki Outdoors, based in Anchorage, AK. What’s interesting about these businesses is that they are more traditional, not high-tech. Creo designs environmental graphics and makes custom architectural signs. Deneki is a chain of high-end fishing expedition lodges. Yet there is a connection here.

Frei points out that lessons from the software world transfer well to other sectors—to some extent, business is business. “In both companies, the ex-Onyx folks bought out existing businesses that were performing well in their own right,” Frei explains in an e-mail. “But, by applying advanced sales, marketing and customer service best practices that are do or die in high tech (not to mention treating the employees like insiders rather than hourly workers), they created growth beyond their best case business plans. Turns out that the sophistication of the competitors in those industries largely lags that of the high tech industry by a wide margin.”

So tech workers, take heed. “It is a very interesting thing for freshly out of work high tech folks to consider when thinking about what next to do,” Frei says. “Don’t dismiss the old-school businesses, many of them can be extremely lucrative with a fresh dose of high tech ops.”

Bennett, of Deneki fly-fishing fame, weighed in with his own insights. “In terms of overall sophistication, the fly-fishing business couldn’t be more different from the enterprise software world,” he says. “When I made the leap and started Deneki Outdoors, I felt that although I needed to get myself up to speed on a new industry, my experience at Onyx would be beneficial. Looking back on the past five years, it’s an understatement to say that my Onyx experience gave me a foundation—it’s really where I learned almost everything I know about running a business.”

He points to three key factors from his time at Onyx, which sound like valuable lessons every business leader should strive to impart:

Motivation. “We pushed each other hard,” Bennett says. “It was an extremely motivating environment and we all just worked hard to get better.”

Rewards and responsibility. “Strong team members got opportunities in multiple parts of the business. There were a bunch of us in our 20s and 30s who were managing teams in multiple geographies, owning P&Ls, hiring and firing, managing indirect distribution channels, advising large customers on strategy, driving product decisions, all while making some fairly involved technology-meets-business objectives.”

Customer experience. “Our customers included software companies, HMOs, mutual fund companies, pro sports teams, home builders, large coffee companies, insurance companies, hardware manufacturers, telecoms, you name it,” Bennett says. “It was incredibly valuable to get meaningful exposure to the ‘core issues’ at such a wide range of businesses, and I think that’s one of the reasons that you see ex-Onyx folks doing a lot of things today that don’t obviously follow from working at an enterprise software company.”

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