‘There’s no such thing as a bad business’

It's one thing to create a company from scratch and build it into a fast-growing, thriving enterprise. It's quite another to do it twice, like Alan Dabbiere has.

Dabbiere, 51, founded Manhattan Associates in Manhattan Beach, California, in 1990. The company, which he subsequently moved to Atlanta, has become a leading provider of logistics software around the world. Now, Dabbiere is hoping for similar success as chairman of Atlanta-based AirWatch. The software firm manages mobile applications and content for companies, enabling employees to do their jobs on smartphones and tablets. It grew from 100 employees in 2011 to 1,200 today. Another 800 will be hired by the end of the year.

Building companies is not magic, Dabbiere says, but requires lots of hard work. He discusses what it takes.

Q: What happened early in your life that helped shape who you are?

A: Early in my life, I was a wrestler in high school and college. The one thing I learned from that was tenacity. I probably wasn't the greatest athlete, but I probably was the hardest worker.

I had a little bit of success in my sophomore year and then I had a really good junior year. I said to myself that if I really worked hard at this, I could be damn good. So I put my mind to it and ended up undefeated in my senior year. I wasn’t blessed with a lot of natural ability, but it really taught me the old saying: “It’s 10 percent inspiration and 90 percent perspiration.”

I truly believe that about building businesses. Every idea is a winner and every idea is a loser. There’s no such thing as a bad business — because they morph.

There are no rules. The beauty of business is that you don’t have to do what you used to do. With tenacity, strategy and by assessing your strengths, every company can be a winner.

Q: How did you develop a tenacious spirit?

A: I lucked into my strategy. I only knew two moves in wrestling, but I was really good at them. I knew how to take someone down and I knew how to get them on their back.

It wasn’t that I knew 12 moves. I knew a couple of moves and drilled them and drilled them and drilled them.

I once read an obituary about the most successful insurance salesman who ever lived. He had a way of presenting himself that he worked on and worked on.

He had two pennies taped on the front page of his insurance folder. On the second page he had a $100 bill. He would go to a prospective customer and say, “You know for just a couple of pennies a day, you could provide this type of protection for your family.” He pointed to the $100.

I read this obituary when I was 29 and unsure of myself. It told me that there are a lot of ways to be successful. You have to find the one way that works for you and be really good at that.

Q: After working as an IT consultant, you launched a company, Manhattan Associates, that became a dominant player in logistics software. How did you do it?

A: I wanted to start my own business and be my own boss. I started a software company that did contract programming for companies. It was 1990 and retail stores were getting away from stockpiling lots of inventory and going to quick response, using scanners and inventory control.

Manufacturers at that time had automated offices for taking orders from retailers. But filling the orders in the warehouse was still done with paper documents that went from the office to the warehouse. We developed software programs to manage the warehouse process, and then added other features like scanning and bar-code shipping labels.

We differentiated ourselves from the competition. We could conform with every company’s routing guide, label format and packing requirement. We could guarantee compliance and we marketed our difference. We’re not about managing your inventory. That’s food and shelter. We’re about the way you serve your customer.

While our competition was beating themselves up, we found a niche we could own and dominate. We quickly grew to be the largest warehouse management system in the world.

Q: What did you learn that helped you in your second business?

A: Strategically, you can start small and be a monopoly. I don't care if you're a sub shop. If you're the best sub shop within a three-block area where the people are willing to walk, you're the monopoly that's relevant in that area.

Any business you start you’ve got to ask yourself, “What’s going to make me a monopoly?” You get to define the game and the rules. If you can’t define them, you shouldn’t be playing the game.

I also learned that ambiguity is dangerous. If you have partners, you’ve got to be crystal clear about what you’re setting out to do. It’s very seldom that ambiguity turns into something that falls in your favor, unless you’re very combative. And then everyone loses.

I know a lot of companies that got built where partners started to fight because ambiguity was in the relationship. You’re better off getting all the bad news out early and having clear understandings with people. It’s when you’re misleading that things don’t go well.

Q: Your current company, AirWatch, is growing rapidly like Manhattan Associates did. Is it easier or harder to build a company the second time around?

A: Building companies is a little bit like watching a murder movie. The first time you don't know how it ends. You're just trying to figure out who done it. The second time you know how it ends and you're looking at all the little clues along the way.

I made all kinds of mistakes the first time at Manhattan Associates, especially in recruiting the (initial) management team. We had a team of rivals, politics, people grabbing for power. We had disruptive people. I wasn’t quick enough to keep all those things from happening.

We fixed that over time. When I moved a group from there over here to AirWatch, we finish each other’s sentences. We trust each other.

You can’t be too controlling in these fast-growing businesses. You have to find creative people and give them the latitude to learn and grow and make decisions.

In the companies I’ve built, we’ve grown so quickly that if I was controlling we would implode under our own success. When you go from 30 employees to 600 in three years like we did in Manhattan Associates, or 100 employees to 1,200 in two years like we did here, you can’t build the infrastructure fast enough. You point people in the right direction and tell them what you want accomplished. They can find a way, with some guidance.