65. Colin Tenwick: Mastering the Art of Reinvention

0:00Welcome to The Difference Engine, the show for tech founders, investors and innovators.

0:11I've got to say I'm genuinely looking forward and excited about today's guest who happens to be somebody that you and I have both worked with we're talking about someone who's been right at the intersection of tech leadership and transformation for well pretty much as long as the grown-up tech industry has existed certainly as long as you have been in it Jono Yep, absolutely. Our guest today brought to you in association with BoardWave is Colin Tenick. Now, Colin has one of those careers that reads like a what's what of the modern tech era. Today, his LinkedIn page says non-executive chair investor.

0:49But he started out in the early days of enterprise software, working with the likes of relational database supplier Ingress, rising quickly to lead its competitor Sybase and open source OS pioneer Red Hat right across Europe. But Colin didn't stop there. He went on to lead StepStone, turning it into one of Europe's first digital recruitment platforms before going on to chair Control Circle, a hybrid cloud computing business, exited to alternative networks, and then a UK-listed business. Yeah, you'd have thought we'd have had enough by this point, wouldn't you? But he went on to be a non-exec director of private equity and venture-backed companies, such as the security specialist AVG.

1:28What I love about Colin's story is how he's navigated shifts from desktop software to SaaS, from web portals to communications businesses, from B2B to B2C, and kept finding new ways to make technology useful, not just flashy. So right now, we're going to dig into that and what it takes to stay adaptable in a world that reinvents itself every few years or these days, every few months, and how you build technology companies that last and those that others want to come in and buy.

2:01so colin i thought we'd start by sort of looking back and um you know we've both been in the it industry a long long time and and from your point of view what have been the biggest changes in the it industry in europe in the 40 plus years you've been in it uh well what what a question back back then in the day i remember people used to spend all their money on mainframes and uh in fact the the thing that everybody enjoyed doing was was showing you their mainframes because that's where all their money had gone so so being paraded around what was equivalent now of a freezer factory um clearly clearly everything's changed and uh we've been through massive massive changes in terms of where where people spend their it's gone from being essentially a a a niche part of a business to now core to the business and the cost of getting involved in that clearly has changed significantly as well i mean it is actually you know a core part of most companies now infrastructure a core part of their investment strategies and structures um most businesses today are technology-led.

3:13And we've seen every single wave from mainframe through to mini, through to cloud, through to et cetera, et cetera, over the last 40 years. So huge, huge change from being, I suppose, something that was an identifiable add-on to now its core and central to pretty much every business. Yeah, and it seems to have gone from, in that time, from being part of the economy to now being the economy. But hasn't there been some other change, I think, which was back in the 80s. It was very expensive and difficult to innovate in tech. The cost of entry was very high. But that's really not now the case. No, and I think the pace of change and the ability for people and businesses to be agile is extreme.

4:06um people used to work on multi multi multi-year paybacks uh investments programs we're now talking about people iterating in real time many many versions even in a single day uh in terms of maximizing so it's a it's a very different environment that we're now working in i actually did a little bit of uh research on on um the start of your career colin i believe the communards were in the charts back in 1986, if you remember those guys. I was too busy to focus on charts in those days. Fair enough. But I also looked into who were the largest firms in 1986, tech firms. You'll be surprised to know these are quite familiar names.

4:50So IBM, the biggest. Microsoft, and check out their market cap, 777 million. I mean, if they don't make that in a month now, they'd be very annoyed with themselves. HP and Compaq, which is obviously one company these days and not quite what it was. But there's been a lot of change. And you'll notice that they're American companies. And your career path, the early part of it, you were managing US companies as they rolled out across Europe. So it gives you a very unique sort of viewpoint as to those two parts of the world and what they've got to do with tech. So any lessons from the early parts, those very early parts of your career and that you went on to apply later in your career?

5:34Yeah, I was very fortunate to get involved in some of those. In fact, I started my career with IBM, actually, as a graduate. But if you actually look, the discipline that those American businesses brought, extreme focus on performance, which enabled them to continue to scale and take market share. So the US businesses that came to Europe in those days were challenges. They were hugely ambitious. I mean, there's an argument that actually says those American businesses became more international than any other international business. But that was purely because they actually had a model which they wanted to implement globally.

6:21And that was a single model. And so what you found was that the US businesses were extremely focused on sales performance, extremely focused on fast growth and extraordinarily, I think, performance orientated, which really was the sort of epitome of the 1980s. If you think about the way the 80s sort of evolved, they were formative times and things really which I think still stick with me, but I think the whole generation of people that evolved at that time. There was a sort of downside to this though. There was an awful lot of people who were going around with the title MD or CEO, Europe or UK, Europe, France, Germany.

7:10And of course, the lie in all of that was that they weren't really CEOs as we would understand it. They were sales directors, essentially, under a lot of pressure to deliver some pretty big and rising numbers. Yeah. And I think whatever your title, you were a glorified sales and marketing director. Nothing wrong with that. And in fact, a lot of people, that was the way their careers developed and evolved. and they've been extraordinarily successful doing that with a number of different US-led businesses. But you're right, the broader spectrum of what I suppose being a CEO involves, you didn't get that experience unless you moved back to the US and became part of the mothership and experienced that.

8:03But that is one of the secrets of your journey was that there was a time when you had done that essentially sales leadership program right across Europe. And there was a sort of realization that maybe that's not enough. I want to be more interested in the job. There are many more functions in the job of a real CEO than there are in a sales director. Yeah. And that really sort of was a realization. I think, you know, I was flying to San Francisco once a month for management meetings. And I was feeling, well, you know, have you reached the peak? Have you reached the top of that mountain? And something in me said, well, actually, you know, you looked across.

8:47It was like sort of looking across and looking across and saying, yes, you've reached the peak, but you're on the wrong mountain. And there's another mountain over here. And so I did feel that it was an opportunity to sort of broaden those skills. And as a CEO, you know, the whole breadth of what you're looking at as a CEO changes. You know, you have responsibility for the entirety, you know, finance, personnel, people, product, tech, marketing, etc., etc. And so that was something that I really wanted to explore in more depth, having observed some great people doing those roles. And so, you know, role models are very important in anybody's career.

9:31But I felt it was the right time to see whether I could find that opportunity. I mean, that was, I think, after essentially you'd done your third pan-European sales leadership role, I think, with Red Hat at that time. and I think from memory, the moment you stepped out of that sales leadership role into the CEO role was strangely with a company called Stepstone. It sort of was your stepping stone into the world of CEO leadership. Yes, and an interesting one to say the least because that then led to sort of another part of my career. I mean, Stepstone, when I got involved, was, in most people's views, a bit of a dead dog.

10:23It had launched and been part of the dot-com boom. It had floated on the London market right at the top of the boom, had raised over£200 million of cash and then spent it in about 18 months. and um i i initially went in there uh as a consultant uh to see you know whether i would be interested and within three hours it became clear that the company had probably less than a month's worth of cash left uh on its current burn rate and no plan actually to to change you know it's like it was like a ferrari going full pace into a brick wall and um uh i took that on i mean me and a couple of colleagues actually we took that on crazily yeah crazy it's sort of fascinating because because you'd grown up with IBM Ingress Sybase Red Hat you know these were essentially software companies and mostly enterprise software companies and and and here you were convincing yourself that you could fix a recruitment platform well I mean you've got to remember Red Hat was another massive challenge because that was the first open source free software so think about going from an enterprise software environment to suddenly you've got free software that that raised all sorts of other interesting intellectual challenges isn't there also a rumor that when you arrived at red hat they actually weren't getting any revenue for from software that you you were selling sort of merch scooters and other things alike in the first year whilst we were trying to figure out how we could turn this into something that was going to be commercially more scalable, it is absolutely true that in our catalogs, we had t-shirts, cups, and mini scooters, and they were very good sellers.

12:15I think that's fine. They say that I was with a Salesforce exec this week, and the joke that we've always been saying is that Salesforce is an events company with a software company tagged on the end. And yeah, sell what you can. I think it's fine. so there you were with stepstone and i presume that it was in such bad shape that sort of what followed was yeah delisting refinancing laying loads of people off you know not the um not the stuff you get out of bed for normally no it it was a it was a one-on-one on corporate recovery in sort of turbocharged. And fortunately, we were able to persuade some of the larger investors to back us and put emergency finance in.

13:04We threw the UK into receivership. Unfortunately, you know, that's never a nice thing to do. We ended up with a very small European business left and then we started to rebuild that. And that took us a few years. Then the market came back after the dot-com crash. It became clear that we needed to have a more repeatable revenue stream rather than a pure transactional one. So we started investing in this crazy idea of actually where people pay monthly for some software, which is one of the first sort of software as a service type offerings in applicant tracking systems. and the company then grew and scaled successfully and we were so successful that Axel Springer wanted to acquire us.

13:57In terms of the total transition from time we went through to the final sale was about eight years. The first two or three years of that were very much stabilizing then we had two or three years of good growth and then maturity. I guess at that point, you'd sort of proven to the world of investment and private equity that you could get a business successfully back on the rails. And somebody must have approached you with another business, which possibly wasn't in terribly good shape. And yet again, was a long way away from those early days in enterprise software. I think that business was book a table.

14:39It was interesting because I had a couple of options I was looking at. And this was VC backed. One of the things it did teach me actually in the end is don't confuse things you like doing as a hobby with business. It doesn't always work out. Restaurants, fantastic. The margins in the restaurant industries are incredibly small. But here was a business which which had raised a lot of money. I'd probably not use that to its best use in some of the earlier rounds. hadn't got the scaling that it needed and so um i got involved in that to to try and and get some momentum and growth in that business which we were able to do it it needed to be part of a bigger group um and we were very fortunate that uh we were able to do a partnership deal with michelin which then ultimately led to to the sale to michelin and michelin had it as their as their core online booking platform um and then subsequently it was sold to trip advisor but yeah it was during that process that i i said i'd give it a couple of years i i was starting to reach the point where um being ceo i've been a ceo then for uh 13 years or so and uh um i'm starting to see that actually there are some other things that i i i thought i could lend my hand to and be more interesting.

16:03And that jump was what, to Control Circle? That was to my first sort of NED roles. So I became non-exec chair of Control Circle. Again, great company, UK company, needed to be part of a bigger group and alternative networks was looking to consolidate the space and was able to acquire the business. So that was just over a year and a bit in that. You also joined AVG, which was a pretty sexy security company at the time. I think they listed on NYSE about a year after you joined and eventually sold to Avast for well over a billion in 2016. And Avast are actually PE owned. AVG was interesting. The company was in a great space.

17:00It brought together a lot of the things that I'd done in the past, if you think about it. It was a freemium model, so that played to the Red Hat side. It was also in the enterprise. It was very much B2B2C type model in many respects. Very international. And so we were able to scale that business. the board had some very strong players on it. We had the chairman of Rabo Bank on there. We had the CEO of O2, some very big PE players as well. And so it was a really interesting board in terms of talking about strategy development and then really sort of focused on execution. So I used to thoroughly enjoy that company.

17:51But it's also where I found that I was enjoying more working with the CEO and the management team rather than being the lead up front. It's taking that step back and working with the team and through the team. And that's where I found that very enjoyable, but also fulfilling. It looked by that time that it sort of cracked the code. And what followed, listeners, if you're not familiar with Colin's career, was a whole series of European non-exec chairman roles at Pixel, Addison Lee, Woucher, Intelligent Reach. So this is about working with private equity owners and navigating the companies through a series of acquisition sales, IPOs, And of course, this massively changing landscape over 15 years.

18:45And Colin, can you just finish this section by telling us a little bit about the two companies that you're involved in currently? So I'm involved in two businesses, which again, technology is core to what they do. They are technology enabled businesses. One is Oxford International Education Group. and that was a really interesting like all these things like you know what why are you attracted to a particular business to me it's it fits really three things one is the CEO and leadership are they people that you really would value working with and you think you can add value second is the sector and third one is the backer typically they're the three things I look at Oxford International Education has the most amazing CEO.

19:34And she is an absolute natural force in terms of force of nature in terms of what she's doing with this business. Education sector is one which is core. It's clearly very relevant. I think it's actually one where Britain has an enormous high value. It's a global brand which we can extend and further. and it's about making people's lives better education is their starting point and so bringing technology to this is critical and and i looked at the space and i felt there was a lot of players in there which were not as fast moving adopting technology at the pace in which it needs to and so there's an opportunity there and oxford international um is demonstrating that uh big leader in this space.

20:26It's the fastest growing international education provider, broadens its skills. So to the point now we're actually also running our own universities or running universities on behalf of universities in India and Canada and Australia. So a really interesting business, but one where a lot of the techniques that we've used in tech, we can now apply. A lot of the ways we look at scaling a business can apply. And then there are certain ones that just don't apply to that sector and that's that's the that's the alchemy that we try to bring together the second one is comify which is a telecoms platform messaging platform uh international again and one where um essentially you know communication messaging whether it's via sms text whatsapp anything that enables businesses to be able to communicate with their customers effectively or have a dialogue improving the productivity, but actually managing that through all these complex networks with the major network operators.

21:30That's what Comify does. And so, again, very different, but it's a big scale-up opportunity.

21:42You were a serial executive and now a non-executive chair. so what is it that any aspiring technology chair should know about the role and what do you think is the most important function that the chair performs in ensuring that a company delivers for its shareholders um it's a it's a great question and the way you get there will will change depending on the circumstances but but fundamentally your job is to deliver or ensure that the company can deliver on the strategic plan and the expectations of the shareholders and the owners. But by doing that, by essentially encouraging management to fulfill their ambition and fulfill their best alternatives and make sure that the resources are in place, whether they're financial, technical or whatever, to actually deliver that.

22:43So you're very much ensuring that both sides the operational side and if you like the strategic side the financial side are aligned but also making sure that as much as possible that you're able to also steer through some of the issues perhaps a bit further out than than some of the operational management may be looking at and so you've got to be able to you've got to be able to dip into the strategic view and direction and then also be able to tether that back to operational side and that's where the where the magic really happens. I was very, very fortunate that Jan Stenberg, who's sadly no longer with us, but Jan, he was my chairman for, you know, over eight years.

23:25And I still wonder, you know, I still question sometimes, well, what would Jan think in this sort of thing? He was an incredibly challenging individual in terms of, he put his finger on the key issue, was able to identified the key issue in a debate and discussion was was incredibly supportive of me and my management team at the same time and was also well respected by shareholders and so he he knew when to when to support he knew when to encourage but he also knew when to criticize somebody who who really was an extraordinary exceptional man but also a fantastic chairman And I think somebody else, which in this case we've both had experience of, was somebody that you cannot have had a conversation with him and not remembered it.

24:20And that was Mitch Kurtzman, who's now a VC with Hummer Windblatt Venture Partners. I mean, Mitch was one of those guys where when you had a discussion with him or met him, you couldn't help but be incredibly enthusiastic about the topic and the way in which he presented it and the way he sort of articulated it. I always thought the thing that was reminding me is a bit like he would he would he would encourage you such that, you know, you could be a couple of lemmings leaping over a cliff and you could look at your colleague next to you and you say, I don't know where we're going, but I feel great.

25:03And the great thing I found about Mitch was, A, he was fantastic in front of customers and clients, but also observing him. What's important is you observe people for, and I certainly always do, I look and say, well, they've done that really, really well, or they've got that particular skill. Then it's about internalizing that and figuring out, are they things that you could use or not? and you've got to be authentic. And there are certain things that you just look at and say, well, I could never get away with that or I could never do that, whatever. And there are other things or techniques you look at people and you think, actually, that may work for me.

25:38So that's also part of how do you continue to evolve and learn? You've got to be able to be observant, but also I think authentic. The companies you've chaired in recent years, such as Addison Lee and the Oxford Education Group, seem to be proof that all companies are technology companies now given that to what extent has your experience of the culture in the tech industry and the tech industry does have a particular culture influenced how you've performed as a chair and and on the flip side what is it that you've learned that those more traditional industries if anything have got to teach those of us who have grown up in tech i i think it's a it's a great question and And it is an interesting one because with experience, I think you learn, you know, you can't go full Tonto tech in some of these businesses because it just doesn't resonate.

26:35And so what you've got to do is you've got to pick the bits that we would use, you know, let's say simple things like, you know, cost of acquisition, lifetime values, churn data, all these sorts of budgeting, you know, all these things that which are the things that we assess and manage tech businesses today. Some of those are applicable and some of those are just an anathema for a language. Beyond understanding the technology, what lessons has all of this experience, do you think, brought you that you could maybe share with startup founders and scale-up CEOs who need to learn the most? They've got the most to learn.

27:14The more senior people get in their organizations, actually, the lonelier it is. And we're in this perverse situation at the moment where socially we are more connected than ever before with our past. you know, where they're schoolmates or whatever, people having fleeting touch points. But as you move up your career or your scale of the responsibility gets larger, that peer group actually gets smaller. And so tapping into where you can discuss your issues, your challenges in a safe environment is increasingly important. And, you know, I bring that when I chair a board, I bring that to the CEOs because one of the loneliest jobs in the world is actually as a CEO.

28:05It is you are facing all those challenges across all those areas. And where do you get your mentorship from? Where do you get your peer group responses from? And so what we're seeing, I think, you know, with BoardWave as an example, it's tapping into this demand, this requirement that people want to be able to learn from others. They want to stay relevant, but they also want to challenge their own thinking in a safe environment. and so I think that it is a wonderful way of bringing together all these things we've been talking about experience people that are coming at it from either a financial perspective or an operating perspective or an industrial perspective and this melting pot and bringing it together and I do think the alchemy of that coming together is is part of what could be you know the success of what we're trying to do here.

29:01Because as the world becomes increasingly tech-focused, those divisions of, well, I'm in retail or I'm in production, I'm in food, whatever, actually start to break down because we have more consistent problems and issues, challenges, but also solutions than probably we ever have done.

29:25so this is the part i've been looking forward to because i think um probably one of the great values that you can bring a 40 years in the tech industry colin to our listeners is that you've recruited a hell of a lot of people could you please share with us what it is in your opinion that make future leaders stand out and what can you do or what can one do to encourage their development? I think one of the most important things that I'd learned is a successful team and team being the operative word there brings by its very nature a whole range of different skill sets and different personalities and actually some of the highest performing teams I've been involved with on the face of it you look at it say this shouldn't work because these people are bringing different things but it's actually it's how you bring that team together and how you have a common purpose and common focus and then recognize that those different people bring totally different skill sets to the table which makes the actual solution that you're trying to get to better better informed um uh better debated but ultimately better implemented so the first thing is i would i I would say be cautious and careful about recruiting in your own image.

30:44We all love talking to people that feed back to us what we're thinking. And if you're not careful, that actually leads itself to mistakes on that side. The other thing is, is I've used psychometric testing in a number of businesses. In fact, a number of businesses I'm involved in now do. but I've only ever used it as a means of confirming some of the thoughts and views that intuitively you may have when you've interviewed people and tested people. I've not used it as the main source and so I think we have to be careful that we don't lose that ability to recognize that you know not everybody's going to do the job in the same way and you've got to try and find out you know does a uniqueness bring a particular skill that that you can bring to bear so that's another key factor could you tell us a little bit more about that so where your gut feel told you something and then the psychometrics came in and confirmed or denied it yeah it could be something as similar as like how good is this person at communicating and what support are they going to require in order to inform the rest of the team of what they're doing.

32:00So they may be somebody who's actually incredibly competent, but not very good at communicating what they're looking for or where they're doing or how they're doing. Now, that might be a situation where you say, well, actually, I think this person is going to do absolutely the job and bring that team along, but we're going to have to really support and help them to develop some of those skills. That would be one example. Another example may be that, you know this person doesn't form relationships which are meaningful and and and don't have the the desired requirement typically they may be you know called a hired gun somebody that comes in does a job and then is going to go on to the next would that be an individual would that be an IC an individual contributor more of a lone lone wolf that be it could well be a senior individual contributor now it may be that what you're looking for and this is why it's important to understand the context it may be that you're looking for somebody that is going to radically move change something in a direction that you think that the business or a division needs to go and therefore you're hiring somebody that may go way beyond where you want to but actually you're comfortable being dragged in that direction because that's the right direction you want so therefore you're willing to put that up for that if it's somebody however that's forming part of a team that's the last thing you need so so it's about context and it's about you know what skills do you require for that particular role or that particular stage of companies act

33:38you know what this really grinds my gears for those of you familiar with this podcast you'll know that traditionally we have one little slot where we ask our guests to tell us what's been grinding their gears in the tech industry recently and i believe you've got something to say colin i'm most concerned about and the thing i'm most sort of you know gets me angry when i talk about the tech industry we've talked about all these wonderful things opportunities all these things that are actually sort of emerging But the context in which they're happening, which is in the UK, what does Brand UK stand for?