The Cautionary Tale of Savvis Communications Corp.

Strategic Insights -

St. Louis-based Savvis Communications Corp. has grown exponentially since its launch in 1995 by two local entrepreneurs, Andrew Gladney and Tim Roberts. However, the company's remarkable success has been marred by the stresses of running a start-up in a competitive industry, leading to a bitter dispute among its earliest members. The company's founders and former employees now hurl insults at each other, disputing who deserves credit for founding the company. Despite its current market value of $1.4 billion, Savvis presents a cautionary tale about the challenges of managing a start-up and the consequences of disputes among its founders.

Key Takeaways:

  • The company's founders, Andrew Gladney and Tim Roberts, dispute who deserves credit for founding Savvis, with Roberts claiming he proposed the idea to Gladney, who had only a limited grasp of the company's technical operations.
  • Rob Shambro, a former national sales director, also considers himself a co-founder, claiming he was responsible for as much as half of the company's sales during his tenure.
  • The company's growth was rapid, but the stresses of managing a start-up led to severe dilution of shareholder value, with Gladney selling his stake in 1995 for $600,000, which shrunk to less than 10 percent by the time the company was sold.
  • Shambro and Roberts claim that the company missed opportunities to make them wealthy due to Gladney's failure to value the company properly in the early stages.
  • The company had 550 employees and 2,000 clients at the time of the interview, with its largest shareholder being Bridge, the worldwide financial information company.
  • The dispute among the company's founders has led to a lawsuit, with Gladney suing for $200,000 and options to buy 500,000 shares of Savvis stock.

Statistics:

  • Savvis was launched in 1995 by two local entrepreneurs, Andrew Gladney and Tim Roberts.
  • The company's market value is $1.4 billion.
  • The company had 550 employees at the time of the interview.
  • Savvis had 2,000 clients at the time of the interview.
  • Gladney sold his stake in the company for $600,000 in 1995, which shrunk to less than 10 percent by the time the company was sold.
  • Shambro's stock dwindled to zero due to severe dilution of shareholder value.

Sources:

  • "The Cautionary Tale of Savvis Communications Corp." is based on an article by [author's name], [newspaper name], [date].
  • Interview with Andrew Gladney, founder of Savvis Communications Corp.
  • Interview with Tim Roberts, former chief technical officer of Savvis Communications Corp.
  • Interview with Rob Shambro, former national sales director of Savvis Communications Corp.
  • Savvis Communications Corp. financial reports.