Becoming a public company is a big step for a business. It’s also a perilous one. Shortly after Minneapolis-based SPS Commerce Inc., which builds and manages cloud-based business-to-business exchanges for retailers and manufacturers, went public in 2010 (Nasdaq: SPSC), CEO and president Archie Black tapped Phil Soran to join the board.
It wasn’t the first time Black had asked for his help. “When we went through the public process, I probably called him three or four times with five to 10 minutes of questions,” Black recalls. “I’d ask, ‘What really happens? What should I be looking out for?’ ”
Soran had the answers. He’d co-founded two tech enterprises, Xiotech and Compellent, and took the latter public. These highly successful Minnesota-based storage-tech firms were later acquired by Seagate and Dell, respectively. Now the chair of Flipgrid, a Minneapolis-based video-discussion platform startup, Soran is helping Black and his team handle the challenges of a public tech firm, including scaling the business, working with public markets and hiring the right leaders. All can trip up a fast company.
“Phil’s not afraid to get into the problems, but he does it in a positive way,” says Black, adding that Soran sees “challenges [as] opportunities to improve.”
For one thing, Soran knows from experience that it’s crucial to land in-demand tech talent—and be ready to make a move fast. Shortly after Soran became SPS board chair in 2014, SPS had the chance to hire an important executive. “They found out on a Friday afternoon that the key executive that they were looking at had a job offer accepted [and ready to start] next Tuesday,” Soran recalls. “So with a little bit of strategy work with the CEO, we put together a plan to do a lightning round of interviews, communicated with the board and made sure the person was the right fit. They made the offer on Monday, and he accepted.”
Soran’s experience also came in handy when SPS decided to make a secondary stock offering to raise more money to pursue growth. “The other board members had never done that,” he says. “Having been there, done that, I could provide perspective on what the effect would be on the stock, how the Street might view it, what’s going to happen if the investors are trying to sell—those types of things.”
It was a “very successful offering,” Soran says. SPS “was able to position it as a positive event for the company in the natural course of its evolution,” rather than a worrisome one. (Investors could have wondered whether the company was running short on cash.) “You want to do it at the right time so that the market is accepting of your strategy and where you’re going and seeing the results,” Soran adds. By clearly communicating the reasoning behind the move, bankers and investors were reassured.
The money allowed SPS to make several acquisitions and open new offices overseas. The company also was able to hire some top C-suite talent, including chief customer success officer Beth Jacob, a former Target Corp. CIO, and CTO Jamie Thingelstad, who held the same title for the Wall Street Journal’s digital network.
When SPS went public, the company had its first $10 million quarter. Then revenue hit $50 million. With the kind of growth that those numbers signify, “you have to keep evolving the business,” Black says. “And [Phil] has been very helpful on that.”
Soran is grateful for the praise, and for the opportunity to help SPS grow. “The biggest reward [in board service] is when the management team or fellow board members recognize that you’ve made a positive impact,” he says. He also views SPS Commerce as an important asset to the Twin Cities tech scene. “The ripple effect is greater than I think a lot of companies realize,” Soran says. “Helping out with that is very rewarding to me.”