Photo by Triumfrewards Photo by Triumfrewards

“Entrepreneurship is all about learning: learning how to succeed with customers.” That’s the mantra of Graham Weston, co-founder and chairman of Rackspace, the San Antonio, Tex.-based Web-hosting pioneer, in a rare Canadian appearance. “If you don’t like to learn, an entrepreneurial organization is not for you.”

Weston, who’s related through his grandfather to the Weston clan of Loblaws fame, was in Toronto last week to address the graduating class of the Next 36, an entrepreneur-development program that exposes high-achieving university students to the no-frills thrills of business startups. He described entrepreneurs as the essential backbone of economic-development efforts around the world, but noted that most countries “are missing the infrastructure needed to support entrepreneurs.” While crediting the Next 36 program for its work, he criticized business schools in general, saying they turn out heavily-indebted graduates who can’t afford to start businesses because they need high-paying corporate jobs to repay their student loans.

Weston advised the Next 36 students to go “all in” in their entrepreneurial endeavours. You have to burn the boats,” he said. Leaders must convince their staff, supporters, customers and suppliers that winning is inevitable: “You have to be totally confident that you’re going to succeed – even though you have doubts.”

What does it take to win? “Entrepreneurship is about being famous for something very specific—something you do for your customers,” said Weston. Just as Federal Express set out to “own” overnight delivery, every business must have a clear brand value that both employees and customers can rally around. In 2000, when Rackspace was still struggling to rise above the herd of hosting companies, Weston asked his staff who Rackspace was: Was it Coke, “The Real Thing,” the brand leader, or was it Royal Crown Cola – an underperforming brand whose only virtue was lower price?

From now on, Weston pledged, Rackspace would become famous for not just great customer service, but “fanatical service.” “We’ll go above and beyond,” he said. “We’ll be the company you can trust.”

“It sounded crazy at the time. We were nobodies,” says Weston. But did it work? “Then we had 80 employees. Now we have 4,500. There’s no other reason for our success except ‘fanatical support.’ Those two words did it.”

That mantra, he says, focuses the efforts of everyone in the company. “If we’re going to be famous for fanatical support, everyone must ask, ‘What’s my role in that?’” says Weston. “Can you see the simplicity of it all?”

Rackspace is now a billion-dollar company, and provides cloud and hosting services to two-thirds of the Fortune 500. And now, for the first time in 12 years, Weston says Rackspace is bidding to be known for one more thing. “We want to be famous as the birth mother of the Open Cloud” – an initiative in which major IT providers such as IBM, HP and Rackspace agree on open protocols that will enable customers to move their data between service providers.

Most current “cloud” protocols are proprietary, making it costly and time-consuming for clients to switch platforms. “That’s good for vendors, but it’s not good for customers,” says Weston. “We think it’s bad to lock you in.” Putting customers’ interests first is a big investment for Rackspace, which will provide its hosting software to competitors for free. But he believes that what’s best for clients will be good for Rackspace: “We’re betting our company on it. We have the opportunity to become ‘the real thing’ on the Open Cloud.”

He urged the Next 36 entrepreneurs to bolt inspiration onto their business plan. “Build something inspiring,” he said. “If your goal’s not inspiring to you, it won’t be inspiring to your team. When you’re inspired, others will sense your leadership.”

How will you lead? What will your company be famous for?

Rick Spence is president of Canadian Entrepreneur Communications, a Toronto-based business writer, speaker and consultant dedicated to entrepreneurship and helping businesses grow.

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