This is the last of three exclusive excerpts from Andreas Souvaliotis' new memoir Misfit: Changemaker With an Edge, which chronicles his life as a gay Greek immigrant and rise as a successful green entrepreneur. The book will be officially launched at next week's Social Enterprise World Forum in Calgary, Canada. You can read Part One here and Part Two here.
Green Rewards had been conceived in our sunny backyard a couple of weeks earlier, and it was born through our amazing five-hour debate at Dean's (my new business partner) dining room. He would fund it; I would run it. We would follow our own, custom-designed method of turning on the risk tap one tiny step at a time; the more we assessed and confirmed, the more we would invest in it. And, for an extra dose of sizzle and inspiration for both of us, we built our beautiful 50-50 partnership on just a handshake and without a single piece of paper between us.
I still wake up, six years later, and think I was even crazier than my crazy mother -- and I love it. What an unbelievable ride we had just launched ourselves on! Within a couple of weeks, we were already down in New York City, figuring out our technology providers for this monster we were about to build; within a couple of months, we had already hired half a dozen expensive, seasoned, sharp and well-known leaders from the industry; and by the end of the summer, there were articles in the newspapers, describing us as "the ones to watch."
The tiny snowball grew into a full-blown avalanche in an extremely short time, just because we were both going about it in such an unconventional way, tickling and teasing the media with our dreamy ambitions, hiring prominent PR and branding agencies and charming some of the biggest Canadian loyalty gurus out of their boring and uninspiring jobs. We were the shiny new thing, and we were very good at getting more and more influential eyeballs turning our way.
By the end of that year, we were in serious talks with one of Canada's largest banks about partnering on the launch of our country's first real environmental credit card. And the crazy buildup continued. My colleagues were signing up dozens of remarkably eager companies that would provide fun and authentically green products and services as rewards for our millions of points collectors, once the program was up and running. Another team was creating partnerships with retailers who would begin offering our points to Canadians as soon as we locked in a credit card issuer (a big bank) and launched the program. And a third team was continuing to build our technology, our branding and our powerful launch plans.
We had three very prominent (and expensive!) marketing agencies working with us, to help dress us up and get us ready for the big national launch. The monthly bills were growing larger and larger on every front, but so was our conviction that we were positively unstoppable and on our way to something great. The big loyalty giants had definitely taken notice and the chatter in the industry media was growing ever louder. A year into the journey we had become really good at broadcasting updates and provoking all kinds of reactions.
Somewhere around the one-year mark, I got a call from the wife of a good business friend. She was in charge of corporate marketing at BMO, one of Canada's largest banks--and a direct competitor to TD Bank, with whom we had been dancing for the previous many months. It was an exciting call, because we would now find ourselves with a little bit of unexpected extra leverage in our discussions with TD. In the span of a couple of months, our landscape had entirely changed. Our conversations with BMO escalated exceptionally fast: once they figured out how tiny and weird and potentially unstable we were, they told us they would consider getting into bed with us only if they could also have at least some ownership stake in the business. We loved it, agreed to it, and suddenly there were many more people at the negotiating table. Then, as we worked through the numbers, their appetite increased further, and they started to discuss taking a majority interest in Green Rewards, instead of a small slice, and we continued to love it. Then their investment bankers concluded that it would make even more sense for them to simply buy the whole thing -- and that's when we paused and contemplated things a bit more, because none of us had imagined becoming employees of a large, conservative bank.
But the idea of gaining that much heft and prominence in the market (not to mention the crazy temptation of such an early exit!) made our hearts flutter, so we went for it. And, once again in record time, the bank had drawn up a tantalizing term sheet to buy our baby that was barely a year old and at that point had no revenues whatsoever. Dean and I were pinching ourselves; how could this be happening so quickly?
Then, on the 19th of June, 2008 -- a date I'll never forget -- I got a request for an urgent conference call with the most senior BMO executive who was driving the acquisition deal with us. Maurice was one of the nicest, kindest and most straightforward people I had ever done business with. He had been with the bank for his entire career, and he was only a couple of layers from the very top of that huge organization. Normally, a deal of this size would have been well below his level, but he had taken a passionate interest in us and in me, in particular. At some point, after one of the long and complicated meetings with his investment bankers, he walked back into my office with me, closed the door, looked me right in the eye and said, "I hope you realize how proud I feel to be doing this deal with you, and I hope you know how envious I feel of everything you've been experiencing through this beautiful venture of yours." I already had such deep respect for that wise man, and he absolutely stole my heart with that one comment.
And now, I was being asked to make time for an urgent call with Maurice, ideally within the hour, so I knew it was something serious -- and I didn't feel particularly good about it. I cleared my schedule, set it up and sat there with a million scary thoughts racing through my head, waiting for the clock to finally read 4:00 p.m. so I could dial in. When I did, Maurice was already on the line waiting for me. From the tone of his greeting, I already knew that it wasn't going to be a happy call -- and it certainly wasn't. He was calling to inform me that, most unfortunately, our deal had been vetoed from "the very top of the organization." He was unable to share with me the reasons for that decision, other than to say, over and over again, that it had nothing to do with my business, our prospects, our team, Dean or me.
I was lost. I remember putting the phone down and feeling utterly paralyzed. My door was still closed, and outside it, all my amazing colleagues were waiting, hoping that I would come out to tell them it had been a false alarm. It was, after all, part of my job description to go out there and manage people's expectations and feelings and fears. But for perhaps the first time in my career, I was in too much shock to do what I knew I was supposed to. I couldn't get up. So, after 10 minutes of staring at my screen and my phone and my hands and every other soothing and familiar element in front of me, I dialed Dean.
It may have been our shortest phone call ever. All he said was "I'll be right there" and, 45 minutes and 20 miles of rush- hour traffic later, he was walking into my office and closing the door behind him. Obviously, I couldn't just sit there for all that time, ignoring my friends and colleagues outside that door. I gathered them all in the boardroom, and we had the big, honest conversation about the phone call with Maurice. They were as stunned as I was, but at the same time they seemed surprisingly bullish and strong. They asked lots of smart questions about our chances of reviving the defunct dialogue with the other bank, about whether the whole acquisition deal with BMO might have been an unimportant diversion from our real strategy, whether going back to Plan A and really going it alone might actually make us all a lot happier. In a moment of crisis like that, they seemed to cherish their existence as a dream team and their fun work even more than the prospect of a big, glamorous deal.
An hour later, I was making another fateful phone call. I dialed Bryan Pearson, CEO of LoyaltyOne, the company that owned and ran AIR MILES. I had known Bryan through the industry. I liked him. I didn't know him enough to say that I trusted him, but others had told me they trusted him a lot, and I had always found him to be very warm and easy to connect with. It was way past business hours by this point, still on that fateful 19th of June, so I dialed his cell phone and got him right away.
I went straight for the kill, without holding back any facts: I told him about his biggest client having circled us for months and about having gotten to the point where they had completed a term sheet to buy us; I told him about the mystery of the deal evaporating so abruptly and for a reason that could not be disclosed, just a couple of hours earlier; and I offered to sell him the business on the exact same terms we had reached with BMO. He asked lots of questions on the spot, and we had a very open and superbly comfortable exchange about the business, the dream, the options, the go-it-alone versus not scenarios and so on. He told me he was personally intrigued by the possibility, asked for a few days to discuss it with his executive team and called me back three days later to tell me that we would try to figure out a deal. Talk about a roller-coaster ride!
I was in an unbelievable bind, trying really hard to keep the whole thing together while also working to accelerate our LoyaltyOne deal as much as possible. Once again, the spectacular dream-team spirit was the highlight for me: Our money had run out, and yet all but one of my employees continued to smile and work as hard as they could.
They knew I had never taken one penny in salary from the business, so they saw this new chapter as their turn to sacrifice a bit for the pursuit of the dream; they managed kids, spouses, mortgages and all sorts of other pressures and almost every one of them kept smiling proudly and doing great things through that weirdest of summers. And then, 10 weeks after the last call with Maurice and just two weeks before the official start of the global financial meltdown, on the 2nd of September, 2008, we completed the sale of Green Rewards to the owners of the largest loyalty program in Canada.