The day starts early. Right as you hit the office you’re in a meeting followed by two presentations, an investor’s update that leads straight into an international call. Before you know it, it’s past three and you never made it to lunch. As the afternoon progresses, a question lingers in your mind, “When does it get any easier?”
The answer, as you well know, is that it doesn’t. Every level of success brings a new set of challenges and some old ones to boot. Issues like competition, staffing, changing customer requirements, raising capital and new product developments all demand your constant and undivided attention. Then along comes someone in marketing wanting you to get on the phone and talk to the press and online bloggers. As if you have time for PR.
What’s the big deal? Your organization has been putting out press releases and most people already know about your company via word of mouth. Besides, yours is a great product that practically sells itself – once the right person has heard about it.
Certainly that reasoning only fluttered through your mind for a moment or you wouldn’t be a medium-sized business today. As the CEO of a public relations firm for 20 years, I recognize these concerns and have watched hundreds of CEOs struggle with them. The goal of this article is to share with you the successful habits of five executives I have worked with who took their companies from a medium sized venture to a successful acquisition or IPO.
While going public or being acquired isn’t currently in the game plan, you already now if you become stagnant and keep doing what you’re doing (even if it works today), you will eventually lose ground relative to your competitors and risk failure. Within the following stories you may find innovative insights or recognize your own successful traits.
From a Garage Start-up to a Global Leader
I had the good fortune to work with a company that had a new Internet-based product well ahead of its time. The CEO hired our organization to ensure that the company was effectively promoted in industry and business publications.
During a press tour, I noticed the CEO never made a call to his office or checked his email. Since I am used to watching CEOs and executive team members scrambling with their smartphones to catch up with their correspondence at every free minute, I asked him how he managed it. His response, while simple, was profound. “I have hired a good team. It is their job to look after the details. My job is to provide the vision for the company, secure the capital, and do this – promoting us to success.”
From that day on I pulled back (as much as my ego will allow) from the everyday, granular, minutia of running my company and began following this CEO’s precepts.
Lesson Learned: That company sold within a year for $1B and I have since then doubled the size of my firm.
Keep Your Friends Closer
This company had a great product that competed with dozens of similar offerings in the workflow market and was at risk of being lost in the crowd.
Their goal was to be acquired. The company was approaching $10M in sales and wanted five times yearly earnings or better. We started by identifying potential acquirers and tracked what trade shows they attended, where they were speaking (and to which analysts) and joined their partner programs. We worked in lockstep with potential buyers, bringing customer success stories to their door, attending their pavilions at shows and presenting with them on stage.
To make sure our message was well received, we clearly defined their key-differentiators, highlighting the strengths where the potential acquirers had weaknesses. We went out on press tour every four months. We focused heavily on the press that covered the acquiring entities and on the analysts that they paid for advice. It took less than twelve months before a bidding war took place between two of the three we had identified.
Lesson Learned: Never stop selling to the press and analyst community. Think of them as one of your dedicated and loyal customers (not to mention most influential).
Building a Company First
This success story focused first on the technology, not building the business. The CEO kept his eye on the bottom line wanting to grow the company through sales and acquisitions. This worked for the first $25M in revenue, but then as the low hanging business opportunities dried up, the going got rough. In order to continue growing, there needs to be an infusion of additional capital. That meant going out to the markets or raising venture capitalist (VC) funding. Unfortunately both, situations came with a web of attached strings and provisions.
In the end, his choices were between a reverse merge or funding from a tier A California based VC firm. He went with the VCs who immediately informed him he would need to take on a new CEO; he would become the founder and CTO.
In spite of his challenges, our diligent founder discovered that through PR he was able to get his vision out to a much larger audience. Through press tours, speaking opportunities and contributed articles he promoted the company through its unique technological solution and built a reputation for quality.
Two years later his company was acquired as the heart of the most influential security vendor on the planet.
Lessons Learned: Be careful who you take money from, because from that point on you are beholden to them.
Going for the Brass Ring
“That is all fine and well enough for them,” you say. “But I’m not looking to sell my company. I want to go public.”
Be careful what you wish for. If you thought the workload was excruciating before you considered the IPO, you can quadruple it in preparation for going public. With the 16 companies we’ve taken public, the CEOs were all taken by surprise and generally never want to go through that experience again.
But, I digress, let’s skip past the scare tactics of getting to the IPO and move on to that happy day when you pop the champagne and pull that Cuban cigar out of your pocket in celebration of going public. Enjoy it while you can, because a whole new level of work is about to hit your doorstep.
Requirements and mandates that you had intellectually understood now become a fact that you live and breathe everyday. What’s more, all those details you liked to dabble in (new product design, listening to the SEs, attending your sales manager’s wedding) are a mere fond memory. Now you are beholden to the stockholders, your board and financial analysts. This means you function daily to keep the world informed as to what you are doing and thinking. Implementing public relations lets you speak through a microphone. If you think there is a better way – there is always taking the calls from the stockholders over the phone one at a time.
Lessons Learned: Although it can sound like an exciting and effective way of securing funding for your company, IPOs often bring with them unnecessary complexities and can take away from company resources and time, leaving the company less able to focus on their core competencies.
At the end of the day, standing still means losing ground to competitors. In the increasingly complicated world of business, just staying profitable is no longer enough. As we all continue to expand operations and outreach, the complexities increase exponentially. Fortunately, with the right attitude, insights and team, the complications can be successfully managed and exceptional growth can follow.
About Paula Phelan
Paula Phelan has 20+ years of experience in global marketing, market research and public relations for high technology companies. Founding Nadel Phelan in 1993, she stays involved with each account to provide strategic direction. Ms. Phelan is continuously updating and streamlining ‘best practices’ within the firm to leverage the latest technologies and collaboration offerings. During her tenure, Ms. Phelan has guided scores of companies through the IPO process, on both domestic and international exchanges, and actively participated in the promotion of almost 80 companies through the acquisition phase. To date, Ms. Phelan has worked with and provided counsel to industry leaders including Cisco Systems, Symantec, Oracle, IBM and Microsoft. Prior to starting Nadel Phelan, Ms. Phelan managed marketing departments at Veritas Software, Hewlett-Packard and a variety of start-up organizations in Silicon Valley.
Edited by Ryan Sartor