Jan
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9 Lessons from a Serial CEO
January 2, 2008 |
Bob Cramer, a serial CEO who has successfully led six companies to big paydays, shares his 10 month journey of leading a different startup than he’s used to - Nimbit. With a company mission that has a goal to “put musical artists in complete control of their own music business and brand, enabling them to reach their full potential as quickly as possible,” Nimbit appealed to Mr. Cramer’s personal interests when he was recruited to join their team as executive chairman. The original article is told through a series of conversations that occur nearly monthly and can be found here. It was a great read and here are a few of the lessons to be gleaned from this engaging and charismatic leader.
1. Build an all star team. It seems every great start-up begins with a rock solid team. Having an impassioned leader, a web development guru, and a marketing all-star, preferably with some sort of track record, says volumes about your credibility to VC’s and angels when you’re looking for some seed money.
2. Take on mentors with similar passions. Not only should your team work well together, but also a rock star board of “veterans” with similar passions and solid connections could quickly take your business to the next level. Two of the reasons Mr. Cramer was an excellent fit are that he was passionate about the venture’s vision and he knew the ins and outs of raising seed money.
3. If you don’t know the answers, say that you will get them (and get them). At one point during a beginning round of investment, the VC’s asked a couple of questions in which the founders didn’t have any answers. Instead of letting the inexperienced leaders flounder, Cramer, acting in his then-advisory role, told the VC’s that they didn’t have all the information to give an informed answer, but would do so as soon as possible.
4. Hesitation can be costly. After meeting with a few venture capitalists and being told that they would pass on funding combined with Nimbit’s seed money running dry, Mr. Cramer became more proactive in his role and approached the then-CEO about giving up the reigns and letting Cramer take control. Many of the VC’s were looking to Cramer to take on a larger, more committed role, but he hesitated (he can only speculate at his reasoning) and by that time the company had lost enough momentum to be lethal.
5. Continue to beat up support, even when opportunity’s doors seem to be closing. Even though, in hindsight, Cramer feels he waited too long to take control, he proceeded to round up angel money to keep the company afloat while continuously pursuing VC’s for the money they needed to take the business to the next level.
6. Be bold and stick to your guns. Nimbit was receving no after no from VC’s, and after every visit, they would tweak things a little bit here, and a little bit there, but nothing too major. “Those kill companies” Mr. Cramer wisely pointed out, and he says that you should stick to the fundamental mission until that is proven flawed. And if that happens, you’re in serious trouble.
7. Know your audience. During a key presentation that involved people that could be potential clients, Cramer strategically had Faucher, the founder and former CEO, give the presentation. The reasoning for this is that Faucher is an ex-rocker who is passionate about Nimbit’s potential. The results were immediately appreciable, with one of the principal individuals letting out an enthusiastic “Wow.”
8. Build a great business in uninteresting territory vs. a struggling business in interesting territory. While it’s important to be passionate about what you are doing, if the business itself cannot work financially, it’s over. Things may have to be scaled back, reworked, and retooled, then approached again in order to be successful. There may be a number of other reasons why the business isn’t succeeding, such as bad market timing, inappropriate revenue model, etc. The important thing to note is that passion alone will not build a great business, and in a moment of Mr. Cramer’s reminiscing, we realize that half the fun in running a business is creating one that is rock solid, regardless of industry, product, or market.
9. In spite of everything, if failure occurs, live, learn, then move on. Sometimes things just don’t work out as expected. That’s life, as many people will easily point out. The key here is to reflect on what worked, what didn’t work, and how to prevent the same scenario from occurring again. Mr. Cramer took home a couple of these valuable lessons, and then moved on to the next big project.
Conclusion: Even though they were unable to raise the money necessary to take the business to the next level, the founders decided to scale back to reduce its costs and continue to operate. It is still making real progress, in spite of the tight budget. Mr. Cramer, on the other hand, took the CEO slot at Tervela, a data-messaging company based in New York.