Bad Management

When we first hired our current sales director she was reporting to our marketing guy. He lasted about two months in that role before relinquishing control to the finance department in a blaze of bad management and delicate sensibilities. And during those few short months major damage was done to the fledgling system we were building for sales process and order fulfillment.

Today the marketing guy was complaining about the rock-fetches she sent him on during those first few months. Rock-fetch is one of those annoying terms that, in a few unfortunate circles, has survived from the dinosaur days of DEC, WANG and countless other dead monoliths. Anyway, in this instance the rock-fetch refers to the many random marketing materials she wanted him to create. Now if this sounds like wag-the-dog, don't worry, it is. An experienced VP of Marketing was being wagged by a newly hired sales director who, at this point, didn't know the business or the customers.

This is classic BAD management. The VP of Marketing couldn't manage the new sales director. He let her demand marketing collateral before she understood the business that he knew very well. Then he got his feelings hurt when she changed her mind or didn't like what he delivered. Because A) she didn't know what to ask for yet and B) he couldn't deliver a quality product from an uninformed request.

Here's a tip: Don't let a new hire tell you what to do unless she's your boss. Until they understand the business and formulate a knowledgeable strategy, you tell them what to do, what to use and how to do it.

Yet another example of words of wisdom too late.

Sales, Marketing, Rocket Science...

The sales and marketing functions here at exico are a disaster. The VP of Marketing hired the current director of sales (against our recommendation) and proceeded to mismanage her in a spectacular way. To make matters worse he then completely gave up on her because she was too abrasive with him. And he is too sensitive.

Now the sales function is being managed by the finance department and the VP of Marketing has washed his hands of the whole mess by saying he wants the sales director fired. Well we can't just fire her until we have a viable replacement. She is still making calls and communicating with customers. And she can be somewhat productive if tightly managed.

If anyone should get fired it's the VP of Marketing. He is useless as he can't produce collateral for the director of sales, he can't write, he can't sell, nor can he manage the products. Like I said, a disaster.

Anyway, we are interviewing a new sales candidate today.

Why is sales and marketing so much harder than rocket science?

Reasonable Goals

We're back from the trade show where we met a lot of good people and made some new contacts. We also have 10 strong leads to follow up on. We have a history of squandering leads so I hope our news sales administration will not continue that trend. It is now time to execute. We need to create a sales goal that is reasonable but ambitious. Unreasonable sales goals lead to downtrodden sales people and ultimately lower productivity and lower sales.

Make sure the targets can be reached. Do not fall victim to sales people, investors or anyone else that pushes targets beyond what you know is reasonable. We received a total of about 100 leads from the show. Ten of those are qualified and should be quoted within a week or two. One of those ten should result in an order. That is a reasonable goal. And if it is not executed then there will clearly be a responsible party. And action can be taken.

Unrealistic goals lead to ambiguity and the inability to make adjustments. Essentially you are solving the wrong problem when you set unreachable targets.

Technology 5%, Marketing 95%

After testing the web based demo and the simulator for exico, I spent the rest of the day on research for newco.

The technology behind our latest revision of products at exico was so good, we were able to deliver a project in a fraction of the time than with prior versions. And we could deliver with a fraction of the people. We now had 3 people doing the work of 12 with a much higher quality product.

A good profitable company is made up of 5-10% technology and 90-95% marketing and sales. Consequently, we are sitting on our hands with this great technology waiting for the marketing and sales department to drum up more projects...

At least we (some of us from exico) have newco to focus on. And we made a minor breakthrough on that front today.

Competence and Good Communication

Tomorrow we have a trade show; we only do two or three a year so they are usually a big deal. Our marketing department was in a shambles so show preparation and staffing was being handled by other groups in the company. I was working on the live demo. Fortunately, all of our products are web based and can be demonstrated using any web browser. All I had to do was make sure our demo was still running and all the simulators were working.

The show is in New York; we would be driving down tomorrow to setup.

The main problem with our marketing department was the group leader. He has been in a feud with the director of sales for over 9 months. It is absolutely critical that sales and marketing work together every day. Marketing needs to provide sales with collateral and selling tools. Unfortunately, we had a complete communication break down between marketing and sales. Our marketing group leader failed to provide leadership and had let personal sensitivities get in the way of a professional relationship.

Make sure you have competent and professional people in leadership positions AND do not allow communication to break down between the groups.

Focus is key

Today is slow, good thing its Friday. We finished all our project and support work for our paying customers and I was caught in the indecision trap. I couldn't decide to work on documentation for the existing company (exico) or research for the new company (newco). Indecision often leads to paralysis. It is crucial to have a plan and execute that plan. In the early going (100 days or so) the plan should be extremely detailed to help maintain focus. Of course it doesn't help our focus to build newco in stealth mode while running the day to day operations of exico.

It might be time to build that plan...

Anyway, I compromised. I spent the morning working on the last piece of documentation for the exico product set. I spent the afternoon researching strategies for newco.

And we had a late exico marketing meeting for an upcoming trade show. The marketing department at exico is a disaster. More on that later...

Its all about the Mistakes

You make a lot of mistakes when you start a business, I'm currently in my third startup and working on a fourth. I wouldn't say that I have been overly successful, however, my companies have brought in several million in revenue over the years. And I have been working (with a salary) for over 7 years. At the peak, a company I co-founded had 40 employees and a few million in revenue.

We sure made a lot of mistakes along the way, we have even made the same mistake twice. You always learn a lot from the mistakes, the challenge is to do something about it.

I'll use this blog to chronicle the day to day trials and tribulations of being an entrepreneur and starting a company. And occasionally I'll insert a snippet from past experience.