Disinfecting Hospitals, Impacting Healthcare: Morris Miller, CEO of Xenex (Part 5)

Sramana Mitra: You funded these other founders who came up with the concept of Rackspace. That’s how you got involved with Rackspace?

Morris Miller: That’s how I got involved, yes.

Sramana Mitra: Did you actually take an operational role or were you just an investor in Rackspace?

Morris Miller: Part of their deal with me was we would coach them. It was written into the contract that we would help and support them. Every Tuesday afternoon, we’d meet them for lunch. We’ll be there just to solve problems with them because I have been through a lot of these things in the legal publishing business, so it was helpful to them and it was a lot of fun for me. What started off as a one-morning-a-week became a morning and an afternoon. Then it became morning and afternoon the next day. Finally, I moved my office above theirs because I really wanted them to have the joy of running the startup.

Richard Yu, who was the CEO at that time, came to me and said, “I actually think that my talent is in being a CTO. I really think you’re the CEO. If we could make that transition, I’d like to do that.” I said, “You really need to go think about that. That’s a big move when you’re doing this with your company.” He did. I’m great friends with Richard to this day. He knew what his skills were and from that point on, I started running the company, raising the capital that it needed, organizing the people, and bringing in that talent. The company grew great.

We had a differentiator in the market. Everybody was focused on infrastructure. They were all competing on data centers. Instead of doing that, we competed on something called fanatical support. I’m a customer service nut. You can call me any day of the week and tell me what you need. I’ll figure out how to get it to you. It was our job to instill that same service spirit in all of the employees. To this day, if you call the main number, you’ll still get a live person to answer the phone because nobody likes to have an automated attendant answer the phone.

Sramana Mitra: What timeframe did you run Rackspace?

Morris Miller: From 1998 to 2005.

Sramana Mitra: I’m sure you want to focus on your current company for the rest of the interview but just very quickly, summarize or synthesize for me some of the key strategic moves that you made that are worth learning from.

Morris Miller: I think part of the success there was that the founder group was complementary. Richard was tremendous when it came to computers and networks. Dirk was incredible with software. Pat was great at the business side of things. They had a skill set and they all trusted each other. They worked well together. They were open to being coached. That’s the key for any entrepreneur. You have to be open to being coached. Even at my age, when talking to the Board of Advisors at Xenex, they are the best world class Board of Advisors you can get because I want that same coaching. When you’re on the inside, you don’t necessarily see things as objectively as somebody from the outside. You need to embrace the idea that you can find other people who can maintain that 50,000-foot view. You can go bounce ideas off of them and they can really give you insights as long as you’re willing to listen. I think that was the key.

Then, another critical element was this idea of fanatical support—of having a theme that employees could rally around and that they could try to live up to. I realized that a lot of mission statements end up less interesting than they can be and less specific to that company. By being specific to that company , you can hire people that want to embody that mission statement. That could be everything from selling things as inexpensively as possible. That leads you to one kind of business. In that business, we want to be recognized as one of the world’s greatest service companies like Ritz Carlton and Federal Express. People understood it.

Sramana Mitra: You chose to do Rackspace in San Antonio, right? It’s one of the few significant sized companies in San Antonio, isn’t it?

Morris Miller: Yes. All of the growth happened here in San Antonio. San Antonio was great for Rackspace and it’s been great for Xenex. I think it proved to the city that you could start a high-tech startup here and grow it successfully. The talent is here. It’s a hidden gem of a city.

Sramana Mitra: By the time you left Rackspace, had the company gone public?

Morris Miller: No. We had one opportunity to go public, but we didn’t. It was on the precipice of going public. I think we were approaching 2,000 employees and $200 million a year in revenue. It was profitable. It was in a great position.

Sramana Mitra: You didn’t want to do the post-IPO chapter of that company? You wanted to sell something else?

Morris Miller: I wouldn’t adopt that phrasing because it wasn’t that binary. It wasn’t even that I necessarily had my focus on other specific things, but I had little kids. When you do these startups, it is a huge commitment of time and effort. You know this. They have to be ready for that sacrifice. After you’ve done something for seven to nine years, sometimes it’s good to take a sideway step and reflect on what you have created, especially if it’s at a point where it’s just doing so incredibly well.

This segment is part 5 in the series : Disinfecting Hospitals, Impacting Healthcare: Morris Miller, CEO of Xenex
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