From IT Guy to Billionaire: The Wild Story of Fred Luddy
In 2004, Fred Luddy was a CTO at Peregrine Systems, an IT service business. That year, a police raid forced him out of a job. He turned that tragedy into a $7B success story. Read on to find out how he did it.
Brian O'Connor
Follow me to validate & grow your business | Ex-@Deloitte | Advised 30+ Fortune 500 executives | Built community of 77,000+
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In 2004, a police raid forced a 50 year-old IT guy out of a job.
— Brian O'Connor (@BrianFOConnor) April 12, 2023
He turned that tragedy into $7B.
Here's his wild story: pic.twitter.com/DKRdyVrMOJ -
It’s 2004.
— Brian O'Connor (@BrianFOConnor) April 12, 2023
Fred Luddy is a CTO at Peregrine Systems, an IT service business.
Fred prides himself in people-focused IT support.
And it shows. Employees love him.
But he's about to lose everything. -
As Fred hands an employee his new computer...
— Brian O'Connor (@BrianFOConnor) April 12, 2023
BANG!
Police slam the door open, shove past Fred, and barge into the CEO’s office.
That afternoon, the police call Fred into the office. -
Executives are going to prison for an accounting scandal.
— Brian O'Connor (@BrianFOConnor) April 12, 2023
Fred is in shock. He's innocent.
The next day - he's home, jobless.
His peers behind bars.
So he looks for work in other IT departments.
What he finds, ruins him. -
Fred looks for a job that has his user-first service culture.
— Brian O'Connor (@BrianFOConnor) April 12, 2023
But finds tech support cares about tech, not the people.
It's not how Fred ran his IT business!
His frustration is about to revolutionize the IT industry. -
So he thinks about how he can make service requests accessible by the average office worker.
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The answer?
Create software that makes any service request easy.
So he builds the initial test.
Calls it "ServiceNow."
He positions it to support all departments.
Turns out? -
No one wants it.
— Brian O'Connor (@BrianFOConnor) April 12, 2023
His solution is so broad it's not resonating with employees.
He needs to niche down.
So he focuses where he knows: just the IT service market.
He takes it back to users and… -
One customer.
— Brian O'Connor (@BrianFOConnor) April 12, 2023
An offshore gambling company.
But growth is too slow.
He has 12 employees and needs to make payroll.
Fred knows tech, but can't scale a business.
He has a decision:
Stay at the helm of a sinking ship, or find a CEO who can save the business. -
He swallows his pride and finds a CEO, Frank Slootman.
— Brian O'Connor (@BrianFOConnor) April 12, 2023
Frank agrees to join.
He starts to make changes:
• Raises capital
• Creates processes
• Adds new solutions
And... -
Their revenue starts to double every year.
— Brian O'Connor (@BrianFOConnor) April 12, 2023
They win large contracts:
• Deutsche Bank
• McDonalds
• Intel
Today, ServiceNow just crossed $6.9B in revenue. pic.twitter.com/1BbkPXFN5V -
ServiceNow won by making tech a solution to customer problems.
— Brian O'Connor (@BrianFOConnor) April 12, 2023
Companies push tech without applying the product to real customer pain.
Fred turned the lack of user-focus into $6.9B.
Here’s 3 ways you can make your solution user-focused: -
1. Understand customer pain
— Brian O'Connor (@BrianFOConnor) April 12, 2023
ServiceNow held workshops to better understand how customers were using the software.
Steal these questions to get to know real customer pain: pic.twitter.com/dPHFjusxNQ -
2. Use language customers understand
— Brian O'Connor (@BrianFOConnor) April 12, 2023
When customers see your technical terms, they stop paying attention.
Swap out jargon with simple concepts.
ServiceNow "makes work more intuitive." pic.twitter.com/9JqDu30Sot -
3. Benefits over features
— Brian O'Connor (@BrianFOConnor) April 12, 2023
Customers care about how well your solution solves their pain.
Don't tell customers what technology is behind your solution.
Look at the ServiceNow example again.
They talk about how they make your work faster, not about what tech they use pic.twitter.com/j9KgON3iFt -
Freddy built a $7B business because he cared about people:
— Brian O'Connor (@BrianFOConnor) April 12, 2023
• Listen to their pain
• Tell them how they benefit
• Use language they understand
Fortunately, caring about people is free.
And in today's world, caring for your customers is the way to win. -
That's a wrap!
— Brian O'Connor (@BrianFOConnor) April 12, 2023
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