3Pillar Global (http://www.3pillarglobal.com) based in Fairfax, VA is the 436th Fastest Growing Company in the Inc. 5000. 3Pillar Global (@3PillarGlobal) is a trusted partner in software product development. Founder and CEO David DeWolf chatted with Ascent Advisor (@AscentAdvisor.)
Juan Riboldi- Ascent Advisor: What was your original vision that led you to found 3Pillar Global?
David DeWolf: The phrase “original vision” is, quite frankly, a bit misleading because there was originally no vision. I’d worked for multiple consulting companies and after going through different acquisitions and IPOs, I was done trying to find the next consulting firm. So when I started 3Pillar it was about being an independent consultant, where I could focus on two things: the types of software products I wanted to develop and the types of people I wanted to work with. I was passionate about having the freedom to maintain a strong focus on building great products and working with very high-performing teams.
Over the first 6 months as an independent consultant I ended up finding too much work to handle, and I responded by introducing these companies to colleagues who could take on the work. One of those times the company came back to me and said, “We’d love to use them. How much do we have to pay you?” I’d never even thought of that, I was just making a friendly introduction. So that was my first subcontractor and how I started the company. I used the subcontractor model for a while then I realized I might want to hire some of them. I’ll never forget, 18 months into starting the company I was on my way to visit a client, and it hit me like a ton of bricks- I had 8 people working for me. That meant I had 8 families depending on me to provide for them so I’d better decide how to run the business. It was at that point, I stepped back and analyzed what we had been doing and created the “original” vision.
I wanted to create a different type of company. At the time I saw two different business models in the market – one model was the offshore product development company that grew up out of the IT services industry where everything was about cost arbitrage, or there was our model, a boutique firm that really got time-to-market, and knew how to apply technology and innovation to real business problems. These boutique firms are very expensive. It was hard for a company to sustain a product development effort by leveraging them, so companies would use them to spur innovation and then they’d bring development back in-house. I wanted to bring those two worlds together and create a middle solution where you had the time-to-market, high innovation, and the ability to drive real business value by getting product to market faster with more engaging technology that users would love. My goal was to create a true product development partner, with the best practices expertise in full life cycle agile-based product development. At the same time I was figuring out how to do that with global talent base.
Ascent Advisor: So you are employing offshore talent?
David DeWolf: Yes, we have about 600 employees across the US and world. 3Pillar has offices in Fairfax, VA, an office in D.C., two offices in Romania, one in India and one in Argentina. Romania was our first offshore office.
Ascent Advisor: How did you choose Romania?
David DeWolf: The engineering skills in Eastern Europe as a whole are phenomenal and the people tend to be very scientifically minded. When you are doing high-end innovation, software product development, it is naturally a good fit. 3Pillar has had a lot of success in Romania. We acquired a Romania shop of about 25 people which has grown to 135 people today.
Ascent Advisor: What other interesting insights do you find about dealing with the cultures of these other countries?
David DeWolf: One of the secrets of having a global business is understanding these cultures and people. First, you have to realize every person is an individual and focus on the dignity of each individual person. Second, you need to realize there are cultural aspects creating different advantages and disadvantages in different areas. Romanians are very strong engineering minded people and can be inflexible. So when we leverage Romania for high-performing scalable product development, we often mix in a little bit of creativity by doing user experience and design here in the States.
Ascent Advisor: How does that meld together?
David DeWolf: It’s all about creating a team dynamic that absorbs cultural and work-style approaches, but keeps the team focused on the Product Mindset. The difficult part is that the sum has to be greater than the parts: you can have creativity here in the States; you can have engineering in Romania, so you need your people to see the value from the collective effort.
India has a long legacy in the IT business; you can find talented people in India who have been doing software and product development for decades. They are strong at quality assurance; they follow directions very well. This creates a weakness; they rarely challenge assumptions or push back because they are following directions. We find Argentina has a much more relaxed culture without this rigidity. They follow directions and engage in a dialog, yet they challenge the status quo as well. They also tend to identify with the American culture a little bit more, so if we are building products for consumer good or sporting industries that are “American” they tend to naturally understand them more and there is less ramp-up. It’s all about understanding people. 3Pillar is lucky – we have talented people in all of our delivery centers, and despite the unique approaches, the team is collectively focused on delivering products that enable our customer’s success.
Ascent Advisor: The growth at 3Pillar Global has been phenomenal and part of that growth has been through acquisition, some of which has been off-shore. How do you integrate these people from different cultures (company and backgrounds) to the 3Pillar Global way of thinking?
David DeWolf: There are two parts of that answer. One is the typical answer about integration and how to do it. The other part- what happens before and after the integration- is even more important. Before acquiring a company it is absolutely essential you understand the value of what you are acquiring. In a service business like ours, the value is in the people. Over time, as the firm matures, the value expands with the introduction of intellectual property (IP) that helps the company scale.
We’ve had three acquisitions to date of any reasonable size; two of those have been where we knew the company for years before acquisition. We partnered with them and worked with them; we saw what happened when things went awry. We knew how they operated so we were able to shape their culture prior to the acquisition.
The first thing we do is get to know the people and the fit and we begin integration before there is a deal in mind. We have a specific corporate development strategy leveraging that approach. My VP of Corporate Development is not looking for acquisition targets; he is looking for strategic partners. Of those we build a relationship with, how many will work out and become an acquisition? Who knows? But it’s the best way to make it successful.
We also believe a company cannot grow purely off inorganic growth. You can’t just do M&A and be a roll-up, per se. People rally around seeing the natural growth of a business. What excites these companies about joining 3Pillar is that we are on a trajectory we can’t reach on our own, and they become an accelerator for us. In fact, our global talent base has begun to produce IP that will position 3Pillar for faster growth, and higher valuation. One plus one can never equal two; it needs to equal five or seven.
Ascent Advisor: How do you get your clients to think strategically about their technology?
David DeWolf: We first align ourselves with our customer’s business. Our goal is to produce software products that help our customer’s drive revenue. Technology is important in that discussion, but it comes second.
But, what does that say about helping your client think strategically about technology? First, you need to learn when to say “no.” It’s never about technology for its own sake. You have to be very astute from a business perspective on how to leverage technology. Focus is all about what you say “no” to, not what you agree to. Second, have the technical expertise to actually discern what the technology can actually be used for and how it should be deployed. Third, when you see it, you dive in first. You find those progressive clients leading the charge and then the masses will follow because you’ve done it. For example, we took the first bet in mobile with PBS and we won one of the most recognized awards for any digital work, called a Webby award, for our production of the PBS iPad application. It was at the top in the App Store for about 5 weeks running when it first launched. We gained momentum because we waited for the first one to do it right and we found a partner with multi-year experience who wanted to invest in doing it right.
Ascent Advisor: As you explained your role in growing the company and your employees appear to be consultants to their clients, how do you balance that consulting role?
David DeWolf: It’s hard, especially when you are in our space because our competitors tend to be engineering firms and we’re innovators. Finding the balance between the two is really important. We invest in people and help them learn key skills. Though it’s not an engineering mindset, it needs to be grounded in technology at the same time. You’ve got to get the right people on the bus and more importantly, make sure the right people are in the right seats on the bus. You’ve got to be able to identify visionary talent that understands where things can go but are also grounded by what can happen now. One of the biggest skill sets I look for is the ability to connect the dots. They need to be able to pick up pieces of information here and there, and be able to pull all those together. That is such an important skill.
Ascent Advisor: You mentioned you are getting the right people on the bus and growing very quickly. What processes do you have for maintaining that level of quality in your scaling organization?
David DeWolf: I think processes are interesting, though I am not sure they are the answer. I think it’s more of a question of the DNA of the organization. The further down you go in any organization the more the vision becomes diluted. You have to focus on making sure you communicate and articulate the vision. We try to make sure the team hears it seven times and in seven different ways. From the top all the way to the bottom you have to articulate what are you trying to accomplish. You have to repeat it over and over and over again. Part of that vision is the DNA of the organization. Our three core values are:
I walk around and I look for examples of people displaying integrity, people being innovative, people showing agility, and I compliment them and reward them for it. You have to set the example yourself. If I’m not in the market myself and if I don’t know what the latest technologies are, we cannot succeed in being an innovative company. If I’m not willing to turn down business and make tough decisions because it’s not the right thing for the organization, then I can’t expect everyone else to live to the same standard of integrity. You have to live it and be the example and talk about it and take it to the people and engage with your people.
Ascent Advisor: Do you have an example of one of those tough decisions?
David DeWolf: We have turned down very profitable revenue before because it didn’t fit with the culture of our organization or our personal beliefs. I have a great example of the integrity of one of our employees: A number of years ago, we had an employee in charge of all of our IT and systems servers. One of his responsibilities was to do all the patches and make sure all the security was up to date. One day he walked into my office and said, “I have to tell you: we were hacked last night and a bunch of client information was compromised.” He had failed to apply a patch he had known about for months and was too lazy to do. He told me it was 100% his fault. He had a mitigation strategy and told me his plan. We went to our clients and made them aware. I am convinced to this day that not only would our clients have never known, but nobody in the organization would have ever known if he hadn’t brought it to light. But it was the right thing to do.
He understood we have a responsibility to keep confidential information confidential and he stepped up to the plate. It was one of those situations where if you do the right thing, even when it seems like it’s not going to work out well, it ends up working out better for everyone. Our clients were appreciative and there were no ramifications because we did the right thing.
Ascent Advisor: What do you see as challenges or exciting opportunities for 3Pillar Global going forward?
David DeWolf: The biggest challenge in any services organization is scale. You’ve got to continue to attract, retain and invest in the right people. When you are doing that in a global environment, it is even more difficult, so that is our biggest challenge, no doubt about it. We have a lot of creative and interesting ideas we are excited about, but we have to execute them. The best strategies in the world don’t mean anything if you can’t execute. I’d rather a mediocre strategy executed phenomenally well than a phenomenal strategy executed poorly. I think it’s all about execution in scaling a business.
Opportunity wise, innovation is happening so quickly and companies are depending on software more and more. We are primed and right in the sweet spot- building innovative products to drive revenue for other companies. There is no shortage of opportunities out there and we just need to continue to navigate the space and make sure we get our name out there and capitalize on it. The sky is the limit.