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Thursday, June 9, 2011

Carroll Shelby Was Right

by Smyth Performance on Friday, March 4, 2011 at 11:38am
These notes are a work in progress and a great way to store the thoughts for the yet another installment...

Carroll Shelby was right:

Even though the old man tried to sue Factory Five for millions over the years(we have beaten him soundly several times in several legal venues now) there was a moment between Carroll and I outside of the courtroom years ago that seems to come up over and over again.

There I was at the culmination of Shelby's bogus law suit against FFR and sitting in the hallway with my childhood hero Carroll Shelby...weird enough at face value....really weird when I explain that the guy was suing me and I still found him to be an engaging personality.

So we swap a few car stories back and forth like all car guys do(even ones that are in legal action I guess) and Carroll turns to me and says "Mark, you tell your brother to's just business" and he said "biuzzness" in his best southern drawl.

Here he was as cool as can be, the famous Carroll Shelby, the world's longest living heart transplant recipient, at the end of his days, suing me for flippin millions of dollars, telling my very excitable younger brother Dave indirectly... to's just business.

I turned to my famous opponent and  said   "Dave is  in there quoting Abraham Lincoln Carroll...I think we go the distance and see what happens."

As most of you know, we won the suit as well as the next one five years later, and then the patent fight after that  But the more I think about it, the more I think Shelby had a point.  Business is business.  It can be a wonderful connection between customers and a company, and it can be  a very personal connection between employees and customers.  I have great friendships I have made over the years from various customer relationships and business dealings with vendors...some quality people cross your path.  But in the end a corporation is a separate entity,  it is not is its own person both legally and in practice.  It is...just business.  Noble  as the endeavor can be with all the benefits you bring to society as an employer, in the end you can't let it define you as a person.  Your role at a company is as an employee or a stockholder, the company is there to serve you and you are there to serve it...both of the parties get educated and obtain financial gain.  The system works well.

As I make the move away from my beloved FFR by starting the process of selling some of my shares and allowing others to own part of the company so it can grow, I am finally getting it....if you can sell something...don't get too attached to it.  In a normal world Dave would have already wrapped up the purchase of some or all of my FFR shares and been on his own by now...the financial mess of the last years put a wrench in everyone's plans so rather than leaving FFR and going on to my new company we are stuck in a middle ground where deals are hard to structure...such is life.  I have made the move to separate but have to help cleanup FFR for a sale and restructuring of my holdings.

It becomes clear that we entrepreneurs and founders that have our blood in the companies we start,  have the hardest time letting go and changing.  When you go to sell or leave the ownership of your company to someone else this message gets slammed home fast.  All the little things that have become the norm in a closely held organization get questioned when you start thinking of an outsider on the board as an additional owner.  But the kicker here is also the huge upside to the process...By letting go you are empowering your company to get organized as a corporation and not be a personal is the best thing you will ever do.

This transition to professionalism and transparency  to the new outside stockholders is THE it well and you have a well oiled machine after the it poorly and no one will ever invest with you and you remain a small closely held company that can't shame in that....but you have to choose...growth and transparency or lifestyle and secret?...what will it be...decide and execute..period.  When the lights get turned on in all the little corners of a closely held company it is easier to see the changes needed to grow.  If the lights of full disclosure are too bright for you then you have to look yourself in the mirror and admit that it is not a business but you want...but rather your own quality of life and empire that you value.  Like I just have to admit what path you are on...both are a ton fun.  The conflict arises when a lifestyle company acts like it wants to grow....decide.

It should be an interesting story to watch..I have started a few companies in my days as a car guy but this separation is a first for Kim and I personally.  The new blood and new perspectives that additional/new  owners will bring to the board of directors at FFR(and eventually Smyth Performance) is invaluable as the company grows toward a 20 million dollar enterprise.  The systems and management structure will change and will challenge the people in the organization from the top down to the bottom as growth/change always does.  My hope is that Dave or the next president of FFR can continue the legacy of comradery that has defined the culture and customer experience of Factory Five Racing.  With a powerful brand and a fabulously loyal customer base that loves the cars we sell it should be a great success.

I will be documenting the process of separating and selling some of my factory five related assets over the next year much as I have documented the start of Smyth Performance.  I wish someone would have written this book for me ten years ago but I can do my part in putting the simple lessons together for the many small business owners in the same situation.  Take from my experience what you wish...Lord knows I am not always right in my assessments of things but I am candid about the details that drive the decisions.  You will be getting a nice case study.

In the Smyth Performance side of the business you will see an end to the solo "mad scientist" phase of the company and a building of the team that will bring the car to production.  I am a talented car builder who can envision a product and its fit in the market....but it is the quality of the team and not my skills that determines the success we will have at smyth performance as a company.  In the end I remain convinced of the powerful synergy between the Local Motors, Factory Five Racing and Smyth Performance product strategy, and will be pushing very hard to make sure that this power is harnessed for the benefit of all three segments of the customer built car market that we serve.   you build a new car in their factory    you build a new car at home   you re-build then transform old cars into exciting new designs

Mark Smith

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1 comment:

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