A (Dallas) Founder’s Story

Lance Crosby launched a startup in Dallas that sold for $2.1 billion. And then he launched another. In Dallas.

Here's why.

Fun Fact No. 1: the nine-banded armadillo almost always gives birth to identical quadruplets.

Fun Fact No. 2: One of the most significant events in the history of the internet—the creation of cloud computing—took place in Dallas on Cinco de Mayo 2005. While I’m sure the armadillo fact is interesting, I think more people will be surprised by Fact No. 2. You thought Amazon or someone in Silicon Valley or Seattle created the cloud, didn’t you? Actually, the cloud was created by SoftLayer, a Dallas-based company that I co-founded.

How did it happen? On May 5, 2005, 10 people went to breakfast at Mama’s Daughters’ Diner on Irving Boulevard and began to brainstorm a new type of hosting—one that didn’t require a long-term contract or custom hardware, and, most importantly, one that could be spun up at a moment’s notice with a credit card. All 10 brainstormers resigned their jobs that very day and started the world’s first cloud company. SoftLayer went live on January 23, 2006. It was the first to market, beating Amazon and its larger rivals by a few months. The ride began.

Fun Fact No. 3: Armadillos can be eaten and are often called “opossum on the half-shell.” (They are said to taste not like chicken, as many things are, but rather like pork. But I digress.)

In 2007, SoftLayer exploded into a hypergrowth phase, moving beyond its original Dallas data center at the Infomart. First was Seattle; then Ashburn, Virginia; then Singapore, Amsterdam, and San Jose, California. SoftLayer became synonymous in cloud and even became a standard reference on HBO’s Silicon Valley. As SoftLayer ramped up, the need for talent increased exponentially. Still headquartered in Dallas and with 13 global data centers, the team grew to almost 700 by mid-2013. In July of that year, IBM purchased SoftLayer for $2.1 billion in cash, and SoftLayer became the base of IBM’s cloud business. You read that right: A small startup from Dallas became the cloud for one of the largest and oldest IT companies in the world.

Under IBM, SoftLayer continued to grow to 40 data centers around the world and 1,500 employees, most of whom resided in Dallas. Today, IBM/SoftLayer is one of the Big Four cloud companies. The others are Amazon, Google, and Microsoft Azure. 

I left IBM in February 2015 and decided to launch another startup—a cybersecurity firm focused on solving the security issues of the internet. On May 5, 2015, 10 years to the day SoftLayer was created, StackPath was born. As I traveled the country looking for investors for StackPath, I was asked over and over, “Why DFW?” Everyone thought SoftLayer had been founded in Silicon Valley and very few would believe that Dallas was our headquarters. I explained to potential investors again and again that the cost of living, the school systems, the numerous top colleges in Texas, the strong economic growth, the pro-business government, and the access to human capital made the region the perfect spot for a startup. Fast-forward three years and StackPath has become a juggernaut in cybersecurity and is on its way to defining the secure edge of the internet. With more than 400 employees now part of The StackPack, we’re on a mission to make the internet safe.

How do you build things that don’t exist? First, you have to have a vision. Second, you have to find highly skilled individuals who seek change and aren’t afraid to fail. DFW might not be top of mind like other tech cities—San Francisco, Boston, New York, and even Austin, to name a few—but it has everything needed to create a successful company. What’s more: Several spectacular exits have occurred right here in our backyard. CyrusOne, a data center provider out of Houston, moved its headquarters to Dallas and went public, creating one of the larger data center real estate investment trusts in the world. Masergy, also from Dallas, just had a spectacular exit to the private equity firm Berkshire Hathaway for close to $2 billion. Adding to that, Ustream was founded in Fort Worth and had a huge exit to IBM for hundreds of millions. In short, DFW is shaping up to be Silicon Valley East. 

Last and Final Fun Fact: Texas is consistently named the top U.S. state for business, with Dallas as the best city for business in the state.

If I had to do it all over again, would I choose DFW as the headquarters for a startup? You bet I would. The talent pool, affordable cost of living, and pro-business environment is very conducive to startups—especially tech startups.

A version of this story was first published in Dallas Innovates 2019—The Magazine.

Read it online

Dallas Innovates 2019—The Magazine explores the region as a rising tech hub that will shape the future of innovation. The theme of our second annual print publication, “A Breakout Moment,” explores why now is the time for the region to grab its place in the tech universe.

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Lance Crosby is Chairman & CEO of StackPath.