Glenfiddich presents the inaugural Legacy Award to Smarsh - FROM INC. STUDIO AND GLENFIDDICH

Summary

From the Ground Up: Glenfiddich Presents the Inaugural Legacy Award to Smarsh

Podcast: From the Ground Up
Hosts: Diana Ransom & Christine Lagorio-Chafkin
Episode: Glenfiddich Presents the Inaugural Legacy Award to Smarsh
Release Date: November 14, 2024

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Introduction: Celebrating Excellence

The episode begins with Blake Odom, the producer of From the Ground Up, introducing a special segment in collaboration with Glenfiddich Single Malt Scotch Whisky. Blake highlights the prestige of the Inc. 5000 Legacy Award, presented to Stephen Marsh, founder of Smarsh. This award honors trailblazers who have consistently demonstrated innovation, boldness, and a relentless drive to excel, much like Glenfiddich's 130-year legacy of excellence.

“[...] Stephen Marsh exemplifies the courage and brilliance it takes to redefine industries and elevate the game.”
— Blake Odom [00:03]

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Interview with Stephen Marsh: Building Smarsh

Mike Hoffman, Inc. Magazine's Editor-in-Chief, engages in a candid conversation with Stephen Marsh, delving into his entrepreneurial journey, the growth of Smarsh, and the significance of receiving the Legacy Award.

Journey to Success

Stephen Marsh recounts the humble beginnings of Smarsh, founded in 2001. Initially incorporated for consulting work, the company’s name, Smarsh, was a spontaneous choice derived from Stephen's email handle due to the unavailability of his surname.

“I incorporated to do consulting work, never thinking that the business name would see the light of day. [...] it was just incorporated as Smarsh Inc.”
— Stephen Marsh [02:21]

Breaking Into the Inc. 5000

After overcoming the initial revenue thresholds, Smarsh made its first appearance on the Inc. 5000 list. This milestone occurred as Stephen transitioned from a small consulting firm to a robust archiving and communications intelligence company.

“When we made the Inc. 5000 list, that was fantastic validation for all the hard work that we had done. It gave us a sense of credibility...”
— Stephen Marsh [03:36]

This achievement not only validated Smarsh's efforts but also enhanced its credibility, facilitating further growth and recognition.

Turning Down Early Acquisition Offers

A pivotal moment in Smarsh's journey was when a major competitor offered to buy the company early on. Despite the tempting offer of around a million dollars, Stephen decided to decline, a decision that reinforced his belief in Smarsh's potential.

“They made an offer to buy the company... it was hard as a founder to turn down. [...] that really validated for me that we had built something that was at least perceived to be of value to someone else.”
— Stephen Marsh [03:50]

Securing Growth Capital and Scaling Up

In 2007, Smarsh sought growth capital through minority investors. This influx of funds was crucial for upgrading technology infrastructure and enabling scalable growth, allowing the company to move beyond incremental changes.

“By raising capital, we were able to get off that hamster wheel, and we were also able to start making some acquisitions.”
— Stephen Marsh [04:49]

Strategic Acquisitions and Leadership Growth

Stephen discusses the significance of acquisitions in Smarsh's expansion strategy. Bringing in specialized expertise and technology through acquisitions complemented the company's organic growth driven by innovation and customer-centric solutions.

“There are a variety of ways to help grow the business... a combination of organic growth through innovation and product development... and making some of these acquisitions.”
— Stephen Marsh [05:54]

Current Achievements and Future Focus

With revenues reaching approximately $500 million, Smarsh is now focusing on leveraging the vast amount of data it stores for clients. This data is being harnessed to unlock new opportunities in sales, customer service, and product development, positioning Smarsh at the forefront of AI-driven data utilization.

“We're sitting on what we think is one of the biggest goldmines out there in terms of data.”
— Stephen Marsh [07:51]

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Legacy and Vision for the Future

When reflecting on his legacy, Stephen emphasizes the importance of a unique company culture and the enduring relevance of Smarsh. He aspires for the company to remain significant and valuable, adapting to customer needs and evolving with technological advancements.

“I want it to be an organization that... is still around, it's still relevant. Our customers still find value in what we're doing.”
— Stephen Marsh [08:05]

Stephen believes that Smarsh has the potential to thrive for many years by continuously listening to customers and addressing emerging use cases, ensuring sustained growth and impact.

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Conclusion: A Toast to Success

The episode concludes with the presentation of the Inc. 5000 Legacy Award to Stephen Marsh by Glenfiddich, symbolizing the recognition of his remarkable achievements and the lasting legacy of Smarsh. Blake Odom wraps up by celebrating Stephen’s success and enjoying a toast with Glenfiddich Single Malt Scotch Whisky.

“Cheers to your success.”
— Stephen Marsh [09:17]

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Key Takeaways:

1. Entrepreneurial Resilience: Stephen Marsh’s journey from a small consulting firm to a multi-time Inc. 5000 honoree underscores the importance of adaptability and perseverance in business growth.

2. Strategic Decision-Making: Turning down early acquisition offers and securing growth capital at the right time were pivotal in scaling Smarsh effectively.

3. Innovative Growth Strategies: Balancing organic growth with strategic acquisitions enabled Smarsh to diversify its offerings and stay competitive.

4. Data Utilization in the AI Era: Leveraging stored data to create new business opportunities highlights the evolving role of data in modern enterprises.

5. Legacy Building: Establishing a unique company culture and focusing on long-term relevance are key to building a lasting business legacy.

This episode serves as an inspiring narrative for entrepreneurs, illustrating how vision, strategic choices, and unwavering commitment can lead to sustained success and recognition in the business world.

Transcript

[Blake Odom]

Hi listeners. I'm Blake Odom, producer of from the Ground Up. Today we have a special segment brought to you by inc. In collaboration with our partners at Glenfiddick Single malt Scotch whiskey. This year at the Inc. 5000 gala, Glen Fiddick presented the inaugural legacy award to Stephen Marsh, founder of Smarsh. This award recognizes a trailblazer, an individual who has graced the Ink 5000 list multiple times, embodying the spirit of innovation, boldness and a relentless drive to defy the ordinary. Much like Glenfiddich, a brand that has pushed the boundaries of excellence throughout its 130 year history to become the world's most awarded single malt scotch whiskey, Stephen Marsh exemplifies the courage and brilliance it takes to redefine industries and elevate the game. Inc. Editor in chief Mike Hoffman spoke with Stephen Marsh about his remarkable journey, the legacy he has built, and the honor of being the first recipient of this award presented by Glen Fiddick. Here's that captivating conversation. Enjoy and be inspired.

[Mike Hoffman]

Hi, I'm Mike Hoffman, editor in chief of inc. And I'm delighted to be here today with Steve Marsh, the founder of Smarsh, a multi time Inc. 5000 honoree and the recipient of the inaugural Inc. 5000 Legacy AW presented by Glenn Fiddick. Steve, thanks so much for joining me.

[Stephen Marsh]

Thanks for having me. I'm excited to be here. Mike.

[Mike Hoffman]

Yeah, this is great. Let me get this straight. You've been on the Inc. 5000 list 17 times so far?

[Stephen Marsh]

I think that's correct. I think 17 times.

[Mike Hoffman]

We double checked it. So you've been on the list 17 times. How many years has the company been in business?

[Stephen Marsh]

Since 2001, so about 23, I guess.

[Mike Hoffman]

So you've been on the list more than you've not been on the list in the 23 years of your corporate life?

[Stephen Marsh]

I think once we finally made the revenue threshold, we made the list and have been on it since.

[Mike Hoffman]

Well, congratulations. It's amazing to make the Inc. 5000. It's amazing to make the Inc. 5000 a couple of times. And to make it 17 times puts you in really rare error. Only a few companies have made it more than 15 times. Congratulations. Now, you started the company in 2001, is that right?

[Stephen Marsh]

That's right.

[Mike Hoffman]

Your name is Steve Marsh and the name of the company is Smarsh. Do I have it right that your original email address had something to do with the ultimate name of the company?

[Stephen Marsh]

I incorporated to do consulting work, never thinking that the business name would see the Light of day, it was just incorporated as Smarsh Inc. Because Marsh was taken by the large insurance company, so we couldn't use that. My friends at the time that, you know, my coworkers had all called me Smarsh because that was like my email handle. So I said, hey, let's just go with that. The domain name was available and many years later, with a larger marketing department and more resources available to us, more domain names available to us, we still decided to keep the name Smarsh. But that should serve as proof that it never had intention of building this business into anything.

[Mike Hoffman]

So who was your first client?

[Stephen Marsh]

My first client was a small brokerage out of Boston, Massachusetts and a friend of mine had worked there and had told me about this need to archive communications for regulatory compliance. And I knew virtually nothing. I mean, I knew absolutely nothing about that. I knew that I needed to make some money to pay rent and that I had some technology skills. So I set out to actually help them implement a solution that I thought I would source from another vendor and quickly found that there weren't other vendors out there doing this, at least to service the small and mid sized companies. The business at that point pivoted from being a consulting business to being the archiving and communications intelligence business that it's become today.

[Mike Hoffman]

When you started on the hockey stick like trajectory of growth, what was the first moment, if you remember, where you knew, oh, this is not just a consulting business, this is a real business, a technology business, and actually it's a fast growth technology business.

[Stephen Marsh]

One moment that comes to mind is we had a large competitor in an adjacent space. They weren't archiving the way we were. They did data backup or something and they made an offer to buy the company. Really in our first year of effort in trying to sell the archiving service. And it was hard as a founder to turn down. I think it was like a million dollars. But it was complicated, but we passed on it. That was a great decision, but that really validated for me that we had built something that was at least perceived to be of value to someone else. And of course, making the Inc. 5000 list for the first time after applying earlier that year and not being able to apply the year prior to that because we didn't meet the, we weren't big enough, we didn't meet the revenue thresholds. Anyway, when we made that list, that was fantastic validation for all the hard work that we had done. It gave us a sense of credibility when we would go out to our customers by being able to put the Inc. 5000 recipient logo on our emails and on our website, and that actually helped us grow to the next level beyond that.

[Mike Hoffman]

And you at some point took growth capital, private equity, is that right?

[Stephen Marsh]

We did. It wasn't until 2007. Yeah. First investors were minority investors in 2007, and ironically, the point at which they became interested was a point at which we no longer needed money. And I think many founders probably go through this. When you're trying to raise money, it's a lot harder than when you don't need it. When you don't need it, everybody seems to come out of the woodwork, and then they try to convince you why you should take money. I think that was a key moment where we realized we needed to significantly upgrade our technology infrastructure if we wanted to win bigger and bigger customers. We were making incremental changes every year. You know, the. The rip and replace that you hear technology companies go through, where every, you know, six months or so, we were taking out old equipment, replacing it with new, bigger, and better equipment. And that really just wasn't scalable. It was becoming a distraction to have to keep going through those projects every six months or so. By raising capital, we were able to get off that hamster wheel, and we were also able to start making some acquisitions. Became a part of life from that moment forward.

[Mike Hoffman]

What did you learn about business ownership and business leadership going through the process of acquisitions?

[Stephen Marsh]

You know, we gained access to people who had operated at the level beyond where we were, which is a pattern, you know, we'll see occur over and over in our business. But there were smarter people who had more experience in a variety of areas, and they presented some of the reasons why we would want to do some acquisitions. They also educated me and the rest of my team on how to do them, but it taught me that there are a variety of ways to help grow the business. You probably don't want to grow your business, just doing acquisitions. Although that does create value for a lot of companies. But for us, it was a combination of organic growth through innovation and product development and serving our customers with different products and services and making some of these acquisitions to bring in new technology, to bring in additional competitors, to bring in more expertise than we otherwise would possess. And today that trend continues. We're trying to bring in more AI expertise. For example, we might look to do an acquisition there.

[Mike Hoffman]

Can I ask, where are you guys at revenue now?

[Stephen Marsh]

We are about 500 million.

[Mike Hoffman]

And what's the fastest growth part of the company right now?

[Stephen Marsh]

There's a lot of focus on leveraging the data that we have stored on behalf of our customers. So if you think about the initial use case for those that don't know is that we help customers by storing their electronic communications so that they can meet regulatory requirements. You have to have this stuff, you have to be able to produce it. That's kind of the baseline service. But what we've found is that over the years, you start to amass more and more really valuable information on behalf of our customers. So we have years and years worth of emails, text messages, zoom calls, whatever it may be. In a world where artificial intelligence is taking over and people are trying to find ways to harness the value of data, we're sitting on what we think is one of the biggest goldmines out there in terms of data. It's employee communications that were captured initially for a different reason, but now can be turned into sales opportunities, customer service opportunities, new product ideas. I think we're seeing a lot of growth.

[Mike Hoffman]

So an archive can become a large language model.

[Stephen Marsh]

Yeah.

[Mike Hoffman]

So this is obviously the Inc. 5000 Legacy Award brought to you by Glenn Fiddick. As you think about the legacy of the company and your legacy as a founder, what do you still hope for? What is your idea of what the legacy you want to leave is?

[Stephen Marsh]

We have a very unique culture. I think one that reflects what I wanted to create many, many years ago. I want it to be an organization that, you know, hopefully my kids one day look back on and say, wow, you know, dad must have built something pretty interesting here. It's still around, it's still relevant. Our customers still find value in what we're doing. I just want to see it reach its maximum potential. Not every company, even, you know, not every company that is started or that I'm involved in or that I invest in has the same opportunity to persist through time. Some companies are better as a short term product that maybe gets sold to someone else and they integrate the technologies. Some technologies have a shorter lifespan where maybe it's two to three years and then you have to move on. This is a business that I believe truly has the opportunity to exist for many, many years and to be relevant by just listening to customers and adapting and finding or addressing use cases that we found many years ago.

[Mike Hoffman]

Steve Marsh, the founder of smarsh, a half billion dollar company founded in a Brooklyn apartment that's been on the Inc. 5000 list 17 times. Thanks so much for joining.

[Stephen Marsh]

No, thanks for having me.

[Mike Hoffman]

And before I let you go, we have these glasses of Glen Fiddick. Here you are, the inaugural recipient of the Inc. 5000 Legacy Award, presented by Glen Fiddick. So let's cheers to your success.

[Stephen Marsh]

Cheers.

[Blake Odom]

Congratulations again to Stephen Marsh. And I couldn't end this episode without getting a little taste of Glenn Fiddick myself. And since I got a bottle right here. Cheers to you listeners, with Glenfiddich, the world's most awarded single malt Scotch whiskey. Drink responsibly. Glenfiddich single malt Scotch Whiskey is copyrighted 2024 and imported by William Grant & Sons, Inc. New York, NY.