Mays Business School, September 27th, 2011
Draw from your strengths and give your best to those around you — those are the recommendations of Graham Weston ’86, a founder and chairman of Rackspace Hosting. He says he fought against those philosophies the first few years of his career, and now uses them to direct the 3,000-plus employees of the world leader in hosted computing, including cloud computing.
Weston serves as a mentor and advisor to numerous entrepreneurs, and has a penchant for tweaking workplace culture. He expresses his business philosophy in two words: “People matter.”
Rackspace Hosting chairman and 2011 Conn Family Entrepreneurial Leadership Award honoree Graham Weston expresses his business philosophy in two words: “People matter.” (view more photos)
He says everyone who works wants to be a valued member of a winning team on an inspiring mission. “Asking people to bring their best work to work every day really makes a difference,” he says. “We must create a workplace culture where our people want to volunteer to do their best every day.”
Weston was honored at Mays Business School with the 2011 Conn Family Entrepreneurial Leadership Award, which was established nine years ago by the Conn family to recognize outstanding business leaders who have achieved extraordinary success. It is made possible through the generosity of C.W. and Dorothy Conn; C.W. Conn is the previous owner and former president of Conn Appliances and chairman of Conn Development Corporation.
The Center for New Ventures and Entrepreneurship at Mays hosted Weston, who spent a day presenting a lecture, attending a luncheon in his honor and meeting with MBA students.
Weston was born to a ranching family in the San Antonio area, and says his father is still disappointed he didn’t come home to run the operation. Weston launched his first business venture as a seventh-grader, marketing organic pork in newspaper ads that read “Go Hog Wild!” In high school, he built a business to take photos at livestock show and sell them to the contestants.
He was selling commercial real estate when a trio of Trinity University students approached him in late 1998 about a business idea they had. They met all day at Chester’s Hamburgers, and sealed the deal within days. “They wanted to rent servers to people. I had been in the commercial real estate business so I understood renting things to people,” he says. “But our business quickly went from the being a rental company to a service company. Everything changed.”
“I knew about renting real estate, so that made sense to me,” he says. He invested $500,000 in the start-up company and helped with corporate strategy, marketing and business development. He was CEO until 2006, when he became chairman.
While CEO, Weston was named a 2006 “Best Boss” by Fortune Small Business magazine and was recognized as regional Entrepreneur of the Year by Ernst & Young.
In 2005, the city of San Antonio honored him for converting one of his vacant properties into a temporary shelter for victims of hurricanes Katrina and Rita. The shelter, nicknamed the “Hilton of Shelters” by the Denver Post, housed more than 2,500 refugees.
“Every time there is a natural disaster around the world, I think about that day,” he says, describing the 180,000-square-foot Montgomery Ward store-turned-shelter, which was equipped with free telephones and Wi-Fi. His employees even wrote a computer program that helped the refugees track down their relatives. “I really think entrepreneurship is jumping in and doing what is needed when it is needed. That is all we did back then. We were fortunate to be in a position to do so.”
(L to R) CNVE director Richard Lester, 2011 Conn Family Entrepreneurial Leadership Award honoree Graham Weston, and Mays Business School dean Jerry Strawser (view more photos)
In introducing Weston, Dean Jerry Strawser said he was honored to host him. He says he considers Weston’s act of hosting the Katrina and Rita refugees a true testament to his character. “Entrepreneurs do things for other people, entrepreneurs share what they have and entrepreneurs make the work a better place,” he says. “Graham Weston is a great example of that. He is not only a successful businessman, but also a successful man.”
Weston says Rackspace, which went public about three years ago, generated about $1 billion in revenue last quarter — surpassing Amazon, AT&T and Verizon. “We were the last company to go public before the recession started, and now we’re back, growing about 30 percent a year,” he says, adding the company manages about 2.2 million email accounts. He expects to add about 1,000 employees over the next 12 months, bringing the total near 5,000.
Rackspace serves more than 100,000 customers, but Weston says the company doesn’t cater to consumers — instead it caters to IT, marketing and human resource departments.
“Rackers” — Rackspace employees — average 31 years old and compete to provide “fanatical support” to each customer. Every phone call to the company is answered by a person — usually by the second ring — as Weston illustrated during his lecture in Ray Auditorium. The call is then transferred to a problem solver. “I think most of our competitors think answering the phone is kind of quaint. I think it shows accountability,” he says. “We want to keep the attitude of a start-up, where we earn every single customer. You get that by providing even more than you have promised, by figuring out what the essence of the problem is and solving it.”
At Rackspace, awards are given to the “Fanatical Racker” of each quarter — an honor Weston even received once, in honor of the shelter project. “We celebrate our heroes within the company,” he explains. “That communicates to every single person in the company what greatness looks like.”
The company’s awards and inclusion in the top 10 fastest-growing on the New York Stock Exchange help keep the quality high, he says. “It means we get the pick of the litter; we get to be more selective,” he says. “It means we don’t have to work so hard to recruit people. We seek to be a people magnet, and once you get that started it gains its own momentum.”