David Lancashire – Chairman & CEO, projekt202

As chairman and CEO of projekt202, David Lancashire leads a company that sets the standard for experience-driven software development. With headquarters in Dallas and offices in Austin and Seattle, projekt202 has refined a methodology that reveals people’s true needs, providing insight that guides the firm’s design and development of software that delivers the best possible user experiences.

Under Mr. Lancashire’s leadership, projekt202 has made the Inc. 5000 list for seven consecutive years and the Dallas 100 list of fastest-growing privately-held companies for six consecutive years. Renowned industry analyst firm Gartner noted, “The perspectives and processes projekt202 is focusing on will, over time, become standard operating procedure for any application development project.”

Prior to joining projekt202, Mr. Lancashire was founder and CEO of Geniant, a technology management consulting firm. From its inception in 1998 to its acquisition of three business units by 2005, Geniant became the third fastest-growing tech company in the FastTech 50, and gained recognition as one of Microsoft’s top National Partners and a three-time Dallas 100 award winner. Geniant’s success led to its 2007 sale to EMC, a transaction valued at 181 times the original invested capital.

Mr. Lancashire has previously served in senior management roles for ObjectSpace, Uniplex and Amstrad PLC. He earned a Bachelor of Science degree in Business, graduating from the CASS Business School in London. Mr. Lancashire and his family reside in Dallas.

Tell me about your early career.
Interestingly enough, my first official job out of university was with Lord Alan Sugar, who was on the UK version of The Apprentice. He started a company called Amstrad, which was essentially the PC-clone king of Europe. The Amstrad PCs were the dominant force across Western Europe. Our university’s business school had given the company’s founder, Alan Sugar, an honorary degree. As a result, he wanted to offer a job to what he called an apprentice, so he had this idea of having apprentices long before The Apprentice TV show came along.

I joined Amstrad out of business school in 1987. At the time, it was the most profitable company in Britain. He only had about 220 employees and, in U.S. dollar terms, if I recall, it was probably around $1.5 billion in revenue at that time, highly profitable. I had the chance very early on to see a computer company basically taking PCs to the masses, taking it out of the business channel and into retail, and making sure that people in homes and small offices across the country could afford to have a high-quality computer.

That was pretty pivotal. I was able to help them set up their German subsidiary and help them hire their managing director over there. One of the big takeaways from that early experience was that distribution of products, services, or ideas is very key to business success. To this day, I would say that has influenced how I think about packaging offerings to make sure they are distributable on a broader basis.

How did the concept for projekt202 come about?
I had been involved in building a company that built software applications for big business. Having sold that company in the summer of 2007, I was brainstorming with my business partner on ideas for the future.

We decided to set up a holding company to invest in different areas. We knew one of those areas would involve going back into the software development consulting services space. We had strong ideas that there needed to be key capabilities that would include heavy-lifting software development technology skills, but would absolutely include thinking about the customer and user experience. We had bought a company like that in 2005 and seen some of the early potential of putting a lot more focus on the customer and user, and the way solutions were being developed.

We also knew that we had to embrace digital in a bigger way, everything from the way search had changed what was going on in that era, and how more and more dollars were moving to online in terms of the way people were promoting and influencing brands. So, we invested in and hired a founder and CEO of that business in 2009, and started organically growing the business with those capabilities.

Projekt202 came about because we were introduced to the company out of Austin in 2010. After meeting with their team, we saw some really powerful and very well-packaged elements driving to the heart of understanding unmet needs, aspirations, and emotional connections in customers and users. We saw the possibility to push fast-forward on what our UX team was already doing and, in a way, to make it more distributable and more scalable into more places around the world.

Ultimately, we decided to merge those businesses in 2011. We took on the projekt202 name because of the amount of R&D and investment they had made in this programmatic approach, and we wanted to leverage that on a go-forward basis.

How was the first year in business?
That was a fantastically creative, exciting period of time. It was an extremely entrepreneurial environment of hustling for business opportunities and trying to effectively get into the conversation with potential customers. It’s hard work developing opportunities when you are not very well-known. People don’t totally understand your value proposition and you have to instill confidence that the team is capable of delivering, even when the size of business is only a million in revenue. It was very hard work and the team has to take an incredible amount of credit for the tenacity that was exhibited during that period.

What was your marketing strategy?
Our marketing strategy was to communicate that we could drive more empathy with the customer that, in turn, would drive better design and development. This was very consistent with what we do today. We would invite local leaders to events and talk about the key themes in business, coupled obviously with the practical and tactical business development push of getting one-to-one meetings. We were really pushing the fact that we knew how to drive more empathy with the customer or user of the system than had traditionally been done with the design and building of software, and that, by hiring our company, they would be in a far better position with the results and the delivered solution.

It was a message that was beginning to be listened to and received quite well during this time. Remember, the iPhone came out in 2007, and this was 2009, going into 2010. There’s been this jolt around the world in terms of the fact that experiences can be better than they traditionally had been in the past.

How fast did the company grow during the first few years?
We went from around $500,000 in revenue in year one to around $6 million within a couple of years. We then merged with projekt202, which quickly put us above $12 million in revenue, picking up $4 million and $5.5 million revenue in business.

We have grown organically to $35 million in 2017. It seems like a long time ago. It’s been pretty fast growth, but it was manageable for us.

How do you define success?
Success is the appropriate combining of your passions, capabilities, and desired economic outcome.

When you think about success, looking through one lens is a mistake. It’s a multifaceted thing. As we go through life, I think we all realize that balance is very desirable. You could be very successful on financial metrics, but if you don’t have the other pieces of your life or business operating correctly, it can either be short-lived or unenjoyable.

I’ve come to learn that there needs to be a connection between the things you are passionate about, things that excite you, that you really want to get into the office to do or get out into the marketplace and do, coupled with a capability you believe you have that you need to deliver on. It doesn’t have to be contained in you, the individual, or you, the entrepreneur, but it needs to be contained in the business. You need to couple that with a method that delivers financial results that allow you to continue to invest and grow that business.

The financial success is a byproduct of doing some of the things correctly, but you have to have evidence and clarity that the business model itself can produce the financial support for your success.

What is the key to success?
Goethe once said, “Whatever you can do or dream you can do, begin it. Boldness has genius, power and magic in it. Begin it now.”

We’ve heard many times that people have ideas or thoughts, or they dreamed up solutions to problems, but they never took them out into the world and engaged them, so nothing happened. You have to give life to these ideas.

The key to success is figuring out a way that you can begin. That’s not easy, because you’re trying to manage risk. If you have to invest your time and energy in something, by default you may have to stop your work or give up an income stream that’s relied upon by your family. You have to figure out how to manage risks in such a way that you can begin.

My key to success is careful risk management. For example, if you know you want to start a business, then don’t buy a really big house and have a huge mortgage. It might be better for you to have something that allows you to save money and have financial support, so you know that you have coverage for your personal burn rate for a number of months. That takes out the stress because you know you can afford to take this risk without it having dire ramifications for your family.

The entrepreneurs that I admire are those who did that careful risk management and were still able to move forward. Obviously, we have great entrepreneurs who did take extraordinary risks, but what I find interesting, particularly in Europe, where I come from, is that many entrepreneurs were people that arrived in England with very, very little. In a sense, their risk was lower because they had less to lose. In corporate America today, I feel like we have so much income to rely on that it can actually inhibit our ability to go out and start something. So, an alternative may be to ask, “Can you do something entrepreneurial within your business, within the company that you’re already working for, and find a way to get your ideas funded?” I’m very keen on that entrepreneurial thinking, finding ways to begin these ideas and support people who have them.

What is the greatest lesson you’ve ever learned?
I read Richard Branson’s autobiography once and one thing that I picked up in that book was that when Branson was looking at moving into the airline business from the music business, that the profits of the music business were something like £22 million at the time. One of the smartest things that he did was, he signed contracts for pilots and an airplane from Boeing that would fly from New York to London and access points at the airports in London and New York. Those were all on a one-year basis; in the worst-case scenario, if he had to shut the business down, he calculated the total cost for required dollar investments to get through one year. Those investment costs were approximately equivalent to the amount of profit coming out of the music business.

That echoes my point about risk management. It’s a hugely underestimated aspect to being successful and finding creative solutions to problems. You don’t always have to take crazy undue risks to accomplish your goals. You need to find ways to manage risk and make smart bets with house money. For me, Branson’s example was pretty telling and crystallized that point for me of remaining committed to that type of approach.

What are some quotes that you live by? 
I love the Winston Churchill quote, “I’d rather be right than consistent.” People will criticize others for changing their positions on something, as if there’s something wrong with being inconsistent in some way. As I see it, we’re learning new things every single day. New information and data may lead us to different conclusions on things that yesterday appeared one way, and today could be very different. It’s important that leaders make decisions based on today’s reality, not yesterday’s, or some perception by their stakeholders that they should keep doing the thing they said they were going to do.

What are some of your favorite books?
As far as favorite books, Good to Great by Jim Collins has definitely been a powerful, pivotal book in helping me think about what we focus on as a business or what to focus on at an individual level. It’s that intersection between passion and what you’re good at, what you can be number one in or have unique views to share with the world, and then making sure that that’s connected to the desired economics.

The other book I’m keen on is The Innovator’s Dilemma by Clayton Christensen. In that, it began to question the status quo of well-run companies and how, over time, they could actually end up being disrupted, even though they were pursuing best practices in the industry and doing things well. The blind spot was introduced as the machine of that company took over and didn’t allow them to access what was happening in smaller niches around the world where these disruptors were waiting to strike. I love that book as well.

Tell me about one of the toughest days you’ve had as an entrepreneur.
In our first business, we lived through the dot-com crash and 9/11. I cannot think of a worse time than 9/11 itself and the days following it, and the sense of gloom and the lack of clarity as to what the future might hold. It was terrifying in many ways, because we had never seen anything like it. As business leaders, we really did have to batten down the hatches and think about how we could manage the business to break even and keep our talented team together, and find ways to support and rally around each other. I drew inspiration from the fact that my grandfather had lived through the Great Depression. I had a picture of him and his team, and I knew just how difficult their world had been and that they made it through and survived. I used that as inspiration for getting through that year.

When faced with adversity, what pushes you to keep moving forward?
There’s an instinct that we have as human beings to want to build and create and to move forward. I think there’s an innate element that we’re gifted with. I think some of it also is formed in your childhood in terms of identifying that you want to make sure that you can take care of your family, your community, and the people that rely on you.

This year at projekt202, we’re heading toward 200 people in the company. If you take the average size of a family or the community of people that work in the team, it’s not 200 people that you’re supporting, but it’s their families and their communities, so it expands pretty rapidly. It becomes something greater than simply looking after yourself and your family. It’s understanding that there are a lot of other people relying on the decision-making and outcomes of those trying times.

What advice would you give to young entrepreneurs?
Don’t go into something that is not going to achieve the financial goals that you have for yourself. You need to be able to test whether the business that you’re interested in can sustain and deliver that outcome for you. Learn about business models and how they work exactly. This is step number one.

Number two, you have to think about your methods for managing the inherent risk in taking that entrepreneurial step. Define specifically how you’re going to satisfy that safety net. You don’t want to be so stressed out that you can’t do your best thinking. We’re all human and we don’t work best when we feel like the weight of the world is on our shoulders. Configure that very carefully and try to take the stress out of it.

Make sure you can defend the things you decide to invest your time in. If somebody is challenging your belief in them, or saying that the thing you’re doing is not right or silly, you have to know in your heart that you really believe in it. That core belief is really important.

Also, be open to learning things around the core belief that make your investment premise become real. You must be able to defend it, but, at the same time, you’re going to learn from all the conversations you have with potential clients.

For example, projekt202 can deliver far better experiences for people than the typical vendors out there delivering consulting services for software today. When you hire us, we’re going to deliver something better. I have to be able to believe that very strongly in order to defend that position. At the same time, as I learn that there is something we could add to that mix or improve, we embrace that. As entrepreneurs, we don’t want to stay static; we want to evolve and improve.

Who else should we interview? Nominate someone!

Interviews are conducted for research purposes by author Jason Navallo for his upcoming book, Underdog.

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