Build with known talent
As he learned how to handle the absolute essentials of the business, Marcille eventually cut the company down to two people by the start of 2005: his CFO and himself. He kept the company alive by moving from vendor credits to a factor (for which he was paying 48 percent interest, given the company’s troubles). By year’s end, USG&E was still operating at a loss, but was up to $9.6 million in sales and Marcille began to slowly add people.
This was a tricky process, because the company was still hanging by a thread. Marcille’s recommendation for how you can survive a cycle like that doesn’t include hiring industry experts.
“We started layering in other people that we knew and had worked with in other companies,” he says. “And that process was also very important to our survival because we had critical functions that needed performed as we got bigger, and we obviously weren’t able to do all of those functions ourselves, but we couldn’t afford to make any hiring mistakes.”
It sounds counterintuitive to build a business up on people you know, regardless of industry experience, but Marcille says that’s the No. 1 priority.
“We started this without knowledge or experience, but that wasn’t as important as knowing the talent that I had around me,” he says. “We were hiring the person we thought they were. So what we did was we outsourced the industry-specific things we needed, such as our natural gas supply chain or the EDI function that we needed in order to exchange information between us and the utility.”
That’s not to say that Marcille just hired anyone he’d ever worked with. He’d probably worked with thousands of people in his career, but he says you have a feel for those with the necessary skills for the ultimate challenge.
“The way I thought of it was, there were many times that there were people that I really wished worked here,” he says. “And I held off approaching them until I was comfortable that there was enough substance in the company and there was enough of a possibility that we were going to continue before I approached them.”
Marcille used that philosophy to get through 2005 and 2006. With the close of the informal SEC investigation — USG&E settled the case without admitting or denying wrongdoing — the company grew to $23.3 million in sales but was still relying on a factor, now at about 27 percent interest. To keep up, the company had to grow or die.
“When you’re going to do that, it’s very important to keep a lot of things within the company moving forward on parallel tracks,” Marcille says. “And if any one of those critical areas gets too far ahead or too far behind, especially when you’re extremely thinly capitalized, you’re courting disaster. So one of the things that we were able to take off the table was personnel, because we knew that we had the right people.”
