Monday, March 21, 2011

The Best Exits Start Early

     Perhaps one of the least well understood parts of being an entrepreneur is how to incorporate an exit strategy.  With all the demands start-ups face, exits often appear low on the “to do” list with the result that CEO’s and their Boards sometimes miss the optimum window. That window often opens before rather than after a company hits its peak because after the peak,  the company’s market value may begin to slip. At least that’s the way investors see it.

     One pro in the exit arena is Jim Estill, who until 2009 was CEO of Canrock Ventures, a technology investment fund where he remains a partner.  Out of 100 angel investments, Jim has been an active participant in about 20 exits. Jim’s advice is to “put exit on the agenda” as soon as you join a board, or start a company. He believes it’s important to start building relationships with potential buyers by courting them at trade shows, for example, and then staying in touch. “Identifying acquirers early,” Jim advises, “provides input for strategic planning to align the company’s activities or descriptive materials with potential buyers’ markets.” He also advises gathering materials to build a selling document periodically by adding anything “helpful to the sale, ” such as financial statements, patent information, legal documents; he also includes links to articles on industry news or sales which provide potentially useful competitive data.

Monday, March 14, 2011

Guest Post: On Company Cultures from Nancy Land

"What started more than 40 years ago as a means to provide myself with a satisfying, creative career evolved into a company with a striking work ethic and unique track record with employees: No employee has ever been fired from Publications Development Company. That does not mean employees have not left, but people who come to work for the company either decide that the work climate suits them or they want or they choose to go elsewhere. Key principles are trust and mutual respect.

To foster mutual respect, I insisted that all new employees spend time learning what others do before choosing the job they want for themselves. This was the way I learned the business so I decided that the best way for employees to learn to respect one another was to teach them about each other’s jobs. In the course of this training program, people discovered some surprising things about themselves—one woman who applied for work in the shipping department ended up  heading the proofreading department; another who expected a position in project management found a far more satisfying niche in the art department. As a result of this crosstraining program, PDC ended up with a tightly knit, mutually respectful workforce able to support and back up fellow employees whenever deadlines were tight or personal emergencies or even vacations intervened.”

After graduating from Bryn Mawr with a major in chemistry and anthropology, Nancy Marcus Land worked as a research chemist at Union Carbide for five years before she developed the germ of a totally unrelated business idea:  to convince New York publishers to outsource publication services, such as  copy editing, design, and composition, to facilitate the publishing process and relieve constant in house bottlenecks. Starting in New York City and later moving to Crockett, a town of 7000 in East Texas, she assembled a team of 20 full time and 20 part time employees who for over 40 years handled contracts from many major publishers, including Random House and John Wiley and Sons. Her business idea spawned a new industry.  Soon every major publisher using outsourced services with the result that more than currently 50 such companies exist.  Nancy reports she always paid close attention to the atmosphere of Publications Development Company as well as the quality of the work. Resisting the current push to resort to less expensive offshore outsourcing, Nancy has now turned her attention to producing and promoting  books for niche authors who want their work published with care and customized attention. Her first product is a novel  on the women of Rwanda, When The Stars Fall to Earthby longtime human rights activist Rebecca Tinsley. 

Thursday, March 3, 2011

Creating A Company Culture Takes More Than Free Lunches

  When Laura Ching and her two co-founders of Tiny Prints, a Sunnyvale, California-based online customized stationery company, first sat down to create their enterprise in 2003, they were four years out of the Stanford Business School and had all spent time working at big companies. “We saw  an opportunity to create a utopian culture to fix some parts that we saw were broken at  some major corporations,”  Laura says.  “So we set up some  core values, including to instill a passion to win, to nurture creativity, to treat each other like family and to insist that every dollar counts—even building our own IKEA desks because we couldn’t afford anything else” Now five years later the three find themselves  at different stages of their  lives, both personal-- with spouses and children- and professional, with about 250 employees, but  “we still maintain those values,” says Laura, “ though we have to work harder to stay true to them.”
     Company culture is one of those buzz phrases that gets some managers boasting about Nacho Wednesdays and Bingo parties or wearing t shirts and flip flops and   allowing pets in the office, but many start ups find competitive value early on by going beyond bells and whistles to create a productive atmosphere. Flexible hours and competitive compensation certainly help. But Towers Watson workforce strategist Julie Gebauer, author of Closing the Engagement Gap, notes that “engagement” or getting employees to participate in the company culture with heads, hands and heart, “is not about employee programs but about what kind of leaders they have and leadership’s focus and commitment. They care about what their company stands for and their ability to build their own skills.  If you talk only about projects and schedules, there is nothing for them to connect with personally.”  Her observations are seconded by culture guru Howard Schultz, CEO of Starbucks, who says even when you start a company, “everything matters — everything. You are imprinting decisions, values and memories onto an organization.”