[quote style=”boxed”]Manage downward, never upward. Of course, the success of a company is dependent upon the performance of the entire team, but people by nature still want to be praised and recognized for individual achievements.[/quote]
Ajay Patel is the co-founder and CEO of HighQ, an enterprise cloud collaboration company that has been recognized in the Deloitte Technology Fast 50 and Sunday Times Hiscox Tech Track 100 as one of the fastest-growing technology companies in the U.K..
Ajay and his co-founder, Veenay Shah, started HighQ in 2001 and bootstrapped the business with £20,000 in seed capital. Today, the company generates eight-figure recurring revenues and is highly profitable.
Ajay graduated with a first-class bachelor’s degree in computer science and mathematics and later completed a post-graduate degree in management of information systems from the London School of Economics and Political Science. He started his career as a chartered accountant at PwC in London and later occupied roles in leading investment banks, including Merrill Lynch and Morgan Stanley.
After spending several years in the city, he realized the corporate environment didn’t fulfill his creative, professional, or personal ambitions and subsequently started HighQ. The vision was simple: to create a dynamic, fun, and successful company that puts its employees and clients at the center of everything it does.
Where did the idea for HighQ come from?
Back in 2000, I was working in a transactional role at Morgan Stanley, and my co-founder (also my best friend from university), Veenay, was at Allen & Overy, a Magic Circle law firm.
We saw how some of the larger law firms were developing in-house file-sharing and collaboration tools to share information with clients. While the software fulfilled their requirements, it was expensive to develop, difficult to maintain, and almost impossible to enhance as a result of competing internal IT projects.
We also realized early on that not all law firms would have the resources to develop in-house systems and decided to start HighQ. The plan was to build the best file-sharing software and license it as a hosted solution to the legal industry. The idea was further reinforced by the fact that it was important for lawyers and their clients to have an industry standard to minimize any learning curve. After all, law firms share the same clients.
What does your typical day look like, and how do you make it productive?
I typically wake up between 6:30 and 7 a.m. and spend the first couple of hours working from home, responding to overnight emails, or catching up on any outstanding communications from the previous day. This is my time and allows me to get shit done.
I arrive at the office at 10 a.m., and then my time belongs to everyone else. The majority of my day is either spent in client meetings or in internal meetings with the sales, marketing, development, support, and infrastructure teams. I make a real effort to leave the office at 6 p.m. so I can be home in time to see the kids. One of my few household chores is the bedtime story. (I’ve got a good deal!) Work doesn’t stop when I am at home, though I restrict it to urgent or time-sensitive issues.
How do you bring ideas to life?
There are two important stages to bringing an idea to life: validation and execution. At HighQ, ideas originate from various team members. Depending on the idea — whether it’s an improvement to existing processes, a marketing idea, or something more strategic — the relevant team members discuss and perform further due diligence or even create a business plan to see if the idea has any merit.
When we see a positive outcome, we create an execution plan that typically manifests itself as a project with assignees and deadlines. These are tracked and monitored during the regular weekly departmental meetings.
At HighQ, we strive for continuous improvement across all divisions, and change is part of the culture. It’s vital to have processes in place to ensure that these ideas are implemented (and not ignored) and even more important to create a culture where everyone is encouraged to make recommendations. This is particularly important for high-growth companies.
What’s one trend that really excites you?
One exciting trend I’m seeing is the increased investment activity in the U.K. and European tech startup scene. Until recently, investment in new companies had been concentrated in the U.S. —Silicon Valley in particular.
Most of the investment still originates from U.S. venture capital and private equity firms, but in recent years, these firms have established European offices and increased their investment activity in the region. Countries like the U.K., Germany, and Israel have seeded many successful tech companies, and I think this is only going to increase as more capital is invested.
What is one habit of yours that makes you more productive as an entrepreneur?
Reading about and learning from the experiences of other founders. There are no courses that will teach you to be an entrepreneur. You can’t predict your next challenge, and it’s unlikely that your educational background or your previous employment at a large corporation will help you. There’s a wealth of information (most of it free) available on the Internet, written by people who have either gone through or are currently going through the same challenges as you.
As HighQ has scaled, this information has been an invaluable source of ideas and inspiration for me. I’ve looked to founder insights for ideas with my business at times when I’ve needed some help. It has also allowed me to predict and prepare for the challenges I will have in six months or a year as the business grows.
What was the worst job you ever had, and what did you learn from it?
The worst job I had was at a large corporation. (I’m not giving any names in case this company becomes a client one day.) Ultimately, I felt like a pawn with very little ability to make any difference. The company was rife with politics, and the weak and insecure management meant that the flow of information was nonexistent and the culture was broken.
I was working for a paycheck — nothing more. This experience had quite a profound influence on the way I wanted HighQ to work. In the software business, people are everything, and it’s vital that employees get the opportunity to make a difference, continually learn, and ultimately enjoy their work and the teams they work with. I truly believe that the culture comes from the top, and we’ve been very selective when it comes to hiring or promoting people into management positions.
If you were to start again, what would you do differently?
I think I would take more risks sooner. HighQ is a bootstrapped company, and in the early days, we had very limited access to capital, which restricted our ability to grow at the desired rate. The old saying that “cash is king” still resonates with me, but I think we may have played it a little too safe in the early years.
In hindsight, it may have been a good idea to leverage the business (most likely a debt instrument) and expedite growth. That said, our lack of capital had some benefits: We were forced to become capital efficient from the beginning, and that has now been engrained into the DNA of the business. I believe that this is one of the reasons why we are among the rare breed of profitable SaaS companies in the market today.
As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?
Manage downward, never upward. Of course, the success of a company is dependent upon the performance of the entire team, but people by nature still want to be praised and recognized for individual achievements. (After all, most businesses are meritocracies.)
I think the natural instinct is to think that keeping your superiors happy is the solution, but in fact, this happens naturally if you look after the people who report to you. A team that respects you will work hard for you, and this will enhance your reputation within the firm, allow you to deliver on your objectives, and ultimately enhance company performance.
What is one strategy that has helped you grow your business?
One of the biggest contributing factors to our growth has been our ability to retain and grow existing clients. We put a very high value on client service from day one, and this is something that has stayed with us. Client service is more than just the day-to-day after sales support; it should be engrained in every part of your business.
In our case, it’s about the type of sales/pre-sales people we hire, the proactive account management we deliver, our commitment to continually improving our products, and ultimately, always having an open and honest relationship with clients. Since we started the company, we’ve had one of the lowest churn rates in our industry (less than 0.2 percent), and on average, our existing clients spend 25 percent more with us each year.
What is one failure you had as an entrepreneur, and how did you overcome it?
I think one thing I could have done better is delegating earlier. Like most founders, I was involved in almost every detail of the business in the early days, including product development, sales, support, and marketing. As the business grew, I hired specialists for these roles but found it quite difficult to let go. As the business scaled, delegation happened out of necessity, but I always feel like I should have done it sooner. As CEO of a startup, you’re a generalist, and your job is to hire people better than you. My advice would be to start delegating responsibilities to your staff as soon as possible, giving them more of a sense of ownership and allowing you to focus on more strategic aspects of the business.
What is one business idea that you’re willing to give away to our readers?
A mobile app specifically designed for schools (children 4 to 16), geared toward creating a community of parents and teachers within each school. Having two children in this age group, the benefits of being able to communicate with other school parents would be huge (arranging carpooling, social events, requesting homework, etc.). The app could also be extended to include communication between parents and their child’s teacher.
Tell us something about you that very few people know?
Although I have been a CEO for 13 years and oversee a team of 130 people, I’m actually quite an introvert. I don’t think I’ll ever be the “showman” that you associate with many of the software companies today. Besides, HighQ has its fair share of extroverts, so I guess I restore a certain balance.
What software and web services do you use? What do you love about them?
I use many software services, but I guess the one that stands out for me is Flipboard . I love to consume information, and no one does it quite like Flipboard. It has a stunning visual design, awesome typography, and simple navigation that delivers a superior user experience on mobile, tablet, or desktop. I love it!
What is the one book that you recommend our community should read and why?
This is an easy one. Rework by Jason Fried and David Heinemeier. It’s a must-read for anyone thinking of starting a company or people in the early stages of their company. This book dispenses with typical corporate “best practices” and basically shows you how to get shit done! You may not agree with everything the authors say, but I guarantee you’ll implement some of their suggestions in your business. We certainly did.
Mario Schulzke is the Founder of ideamensch, which he started a decade ago to learn from entrepreneurs and give them a platform for their ideas.