How Dallas-based Embark went from startup to high-growth company the 'old-fashioned way' - The Dallas Morning News

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There comes a time when any growing startup must be prepared to make tough decisions about its identity.

Paul Allen worked at Ernst & Young for less than two years before breaking away to start Dallas-based Embark in 2010. He was intent on bucking the framework established by the so-called “Big Four” accounting firms by enabling a lifestyle that gave employees every chance possible to better assist clients.

And Allen knew early on that he wasn’t interested in building a company just to sell it.

Embark’s competition in the professional services industry is enormous. Accounting giants like EY, Deloitte, KPMG and PwC boast global operations that include Dallas, decades of client relationships, hundreds of thousands of employees and tens of billions in annual revenue. But Embark dug in for the long game — a strategy its leaders say is paying off 10 years later.

By 2015, Embark was becoming more than a startup, and it was quickly growing its annual revenue. To help the company continue growing, Allen said he had to first fire himself from various roles.

“I knew I could not provide the type of leadership that we needed for our consultants — our expert CPAs — because I wasn’t an accountant,” Allen said.

So he began recruiting leaders that allowed the company to “double down” on the growth it was seeing.

“We went through a very intentional process of about a 24- to 36-month period of... ‘what can we fire Paul from?’ ” Allen said.

Embark manager Melissa Chastain, 25, left, and associate David Floyd, 25, are shown at the company's offices at Common Desk Deep Ellum in this October 2019 file photo.(Ben Torres / Special Contributor)

One of those areas was day-to-day company operations.

Clancy Fossum, now the firm’s chief executive officer, is a Waco native and Texas Tech graduate. He joined Embark in 2016 after 13 years in Deloitte’s audit practice. At the time, Embark only had about a dozen employees.

Allen admitted that not every addition to the team was a perfect fit. But the addition of Fossum and other leaders like him allowed Allen, now Embark’s chief vision officer, and the company to forge onward.

Something entrepreneurs trip over, in Allen’s view, is not recognizing that they’re often the biggest roadblock in the way of growth.

“You’re the bottleneck for everything,” he said.

When he revisits the company’s trajectory in recent years, he said, he can trace its highest growth points as resulting from successfully installing those new leaders.

Clancy Fossum, left, and Paul Allen work in their office space at the West End area Common Desk in Dallas, TX, on Sep. 2, 2020. (Jason Janik/Special Contributor)(Jason Janik / Special Contributor)

When Allen founded the company, he decided to fund it himself. Embark hasn’t taken outside investment since then and that’s allowed the company to grow at its own pace and on its own accord, he said.

“It’s rooted in the financial realities of our capital stack. We don’t have a private equity firm in New York telling us we have to view things strictly from an EBITDA perspective,” Allen said, “We view things from a humanistic perspective.”

Turning those words into actions is the hard part, but it’s also been rewarding for Allen — and Embark has reaped the gains.

“As the founder, if I’m saying this but we’re not truly living this out, I promise you our people would call me out on social media or Glassdoor,” he said.

Prior to the pandemic, professional services saw robust job growth in Dallas-Fort Worth. Professional and business services, which includes accounting and consulting professionals, has grown more than 150% in Dallas alone in the last decade, according to the U.S. Bureau of Labor Statistics.

That’s a trend that’s going to continue, Allen said.

“The fact that we were founded here in one of the better demographic cities and markets in the country has given us a real good foundation to grow, to test, to learn,” he said.

Dallas’ burgeoning financial services community aside, Embark’s model of siphoning financial workers away from the Big Four is another place where it has found success.

Over the course of several years, Embark plucked the best and brightest from global accounting firms, usually focusing on professionals in the first decade of their careers. It enticed them with variable compensation that rewards professionals for spending more time with a client and the ability to stand shoulder to shoulder with clients and solve problems, as opposed to simply auditing financial statements.

“If you do take all the people and treat them really well, they’ll go out and provide your clients with amazing service, and you’ll win the old fashioned way,” Allen said.

On the flip side, clients that work with Embark are able to do so at billing rates that are at least half of what its national rivals charge, Allen said.

Last year, Embark pulled in $17 million in revenue and is on track to hit $24 million in 2020. The company has landed on the Inc. 5000 fastest growing companies list for three consecutive years. Its clients include brands like Neiman Marcus, Anadarko Petroleum and online western wear retailer Tecovas.

The company has more than doubled revenue every year for at least the last four years, Allen said.

Now, it’s looking to grow in new markets outside its Dallas home.

In summer 2018, the company began its U.S. expansion, opening new offices in Denver and Austin, and then in Houston and Oklahoma the following year. It opened up a Salt Lake City office earlier this year and plans to launch in Phoenix in September, “even in the midst of COVID,” Allen said.

And Embark plans to infuse its teams with emerging technologies that Allen believes will give the firm a competitive advantage in the coming years.

“We feel like as we do this — as we really invest internally in ourselves and organization to be more efficient and more technologically advanced — that will allow us to be on the front edge,” Allen said.

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