Tag Archives: Company
I was in the first 24 months of my first startup, a B2B services business. My team and I had been pursuing a contract at one of the highest-profile early stage companies in the United States, and to our amazement we actually won the deal.
Our revenues tripled overnight, and it put our company on the map. As excited as we were to win the business, had I known then what I was about to experience I would have managed things very, very differently.
Winning this deal nearly became a death sentence for my business. Here’s why:
Servicing the account consumed all of our resources.
Winning this deal was akin to the dog catching the car: we latched on to the bumper and quickly realized that we had zero control over what would happen next.
I knew that this account would require us to marshal most of our resources – cash, time and people – to deliver on our promises. Quickly we realized just how understaffed we were in order to meet expectations, and pulled nearly everyone into the mix; we more than doubled the company’s headcount within 60 days of the program going live.
Our cash funded the headcount growth, our new hires consumed all of our management time, and our inability to do anything but service this customer prevented us from developing the systems and processes that would have made the model replicable. Our lack of bandwidth also prevented us from winning any new business, which became problematic down the road.
This customer knew they were our biggest account by far, and they took full advantage of that dynamic. Every meeting request, every late night phone call, every weekend email barrage — we couldn’t say no.
Customer concentration put our balance sheet under immense stress.
I didn’t have the bandwidth to service new business, and I didn’t have the cash flow to expand the sales team to add more business. In fact, the last thing I wanted at the time was another account to service. This was flawed thinking, as I came to find out soon enough.
Our customer’s business was growing exponentially, and our relationship with them grew in lockstep. It was exhilarating, but it was during this time that I learned a priceless lesson about hyper-growth: it’s a cash furnace.
Our billings with the customer doubled, we doubled our headcount, and our payroll would also double. The payroll debits hit every two weeks, but our customer’s checks came every 60 days. Before I knew it, I was tapped out on a $ 1 million line of credit (personally guaranteed, of course) just to float our customer’s growing receivables. They weren’t aging more than 60 days, but they were growing so rapidly that my credit line couldn’t keep up. I nearly grew myself out of business.
Losing the business was catastrophic.
I received the call two years into the relationship at the contract renewal: this company was bringing these operations in-house. There was no hint that this result was going to happen. Over forty percent of my revenue evaporated overnight.
We hadn’t done the work to diversify the business (we were cash poor, after all) so I had nowhere to put all of these now-idled people. In one of the toughest days of my entrepreneurial career, I had to send 20 amazing individuals packing on little notice. It was one of those soul-crushing moments that hardens you as an entrepreneur.
About those receivables: the customer’s interest in paying us in a timely fashion for services already billed dropped precipitously after the cancellation. I spent the next six months fighting off the bank while I worked to get this now former customer to pay their outstanding invoices. On more than one occasion, I tapped personal savings (including a 401(k) loan) to make payroll. It was a decidedly not-fun experience.
Looking back on this entire episode, the mistakes that I made are glaringly obvious. Seeing only massive revenue gains, I failed to anticipate the negative impact on our operations. We didn’t add new customers, because we didn’t have the cash flow or bandwidth. I was naive about setting a customer credit policy.
Sometimes, landing the whale can be the worst thing possible for your business. In this case, the worst thing for my last company became the best hard-knock education as an entrepreneur that I’ve ever received.
WASHINGTON (Reuters) – Facebook Inc Chief Executive Mark Zuckerberg told Congress on Monday that the social media network should have done more to prevent itself and its members’ data being misused and offered a broad apology to lawmakers.
His conciliatory tone precedes two days of Congressional hearings where Zuckerberg is set to answer questions about Facebook user data being improperly appropriated by a political consultancy and the role the network played in the U.S. 2016 election.
“We didn’t take a broad enough view of our responsibility, and that was a big mistake,” he said in remarks released by the U.S. House Energy and Commerce Committee on Monday. “It was my mistake, and I’m sorry. I started Facebook, I run it, and I’m responsible for what happens here.”
Zuckerberg, surrounded by tight security and wearing a dark suit and a purple tie rather than his trademark hoodie, was meeting with lawmakers on Capitol Hill on Monday ahead of his scheduled appearance before two Congressional committees on Tuesday and Wednesday.
Zuckerberg did not respond to questions as he entered and left a meeting with Senator Bill Nelson, the top Democrat on the Senate Commerce Committee. He is expected to meet Senator John Thune, the Commerce Committee’s Republican chairman, later in the day, among others.
Top of the agenda in the forthcoming hearings will be Facebook’s admission that the personal information of up to 87 million users, mostly in the United States, may have been improperly shared with political consultancy Cambridge Analytica.
But lawmakers are also expected to press him on a range of issues, including the 2016 election.
“It’s clear now that we didn’t do enough to prevent these tools from being used for harm…” his testimony continued. “That goes for fake news, foreign interference in elections, and hate speech, as well as developers and data privacy.”
Facebook, which has 2.1 billion monthly active users worldwide, said on Sunday it plans to begin on Monday telling users whose data may have been shared with Cambridge Analytica. The company’s data practices are under investigation by the U.S. Federal Trade Commission.
London-based Cambridge Analytica, which counts U.S. President Donald Trump’s 2016 campaign among its past clients, has disputed Facebook’s estimate of the number of affected users.
Zuckerberg also said that Facebook’s major investments in security “will significantly impact our profitability going forward.” Facebook shares were up 2 percent in midday trading.
Read the full testimony tmsnrt.rs/2IDTHwF
ONLINE INFORMATION WARFARE
Facebook has about 15,000 people working on security and content review, rising to more than 20,000 by the end of 2018, Zuckerberg’s testimony said. “Protecting our community is more important than maximizing our profits,” he said.
As with other Silicon Valley companies, Facebook has been resistant to new laws governing its business, but on Friday it backed proposed legislation requiring social media sites to disclose the identities of buyers of online political campaign ads and introduced a new verification process for people buying “issue” ads, which do not endorse any candidate but have been used to exploit divisive subjects such as gun laws or police shootings.
The steps are designed to deter online information warfare and election meddling that U.S. authorities have accused Russia of pursuing, Zuckerberg said on Friday. Moscow has denied the allegations.
Zuckerberg’s testimony said the company was “too slow to spot and respond to Russian interference, and we’re working hard to get better.”
He vowed to make improvements, adding it would take time, but said he was “committed to getting it right.”
A Facebook official confirmed that the company had hired a team from the law firm WilmerHale and outside consultants to help prepare Zuckerberg for his testimony and how lawmakers may question him.
Reporting by David Shepardson and Dustin Volz; Editing by Bill Rigby
WASHINGTON (Reuters) – A Republican U.S. senator warned on Sunday that Facebook Inc may need to be regulated to address concerns about the company’s privacy and foreign propaganda scandals, saying they may be “too big” for the social media company to solve alone.
“My biggest worry with all this is that the privacy issue and what I call the propagandist issue are both too big for Facebook to fix, and that’s the frightening part,” Senator John Kennedy said on CBS’s Face the Nation.
Asked if lawmakers need to seek regulations on Facebook, Kennedy replied: “It may be the case.”
Facebook Chief Executive Mark Zuckerberg will appear before the U.S. Senate Commerce and Judiciary Committees Tuesday to address questions about how his company handles its users’ data.
While some Democrats have suggested laws may be required to police Facebook’s data privacy practices or limit foreign interference on its platform, Kennedy’s openness is significant because Republicans generally support free-market principles and are loath to regulate U.S. companies.
Kennedy, a member of the Senate Judiciary Committee, said he wanted to ask Zuckerberg on Tuesday if Facebook had the ability to know the identities of the hundreds of thousands of entities that purchase ads on its site.
“I don’t want to hurt Facebook. I don’t want to regulate them half to death,” Kennedy said. “But we have a problem. Our promised digital utopia has minefields in it.”
Facebook on Friday endorsed legislation known as the Honest Ads Act, which is aimed at countering concerns about foreign nationals using social media to influence American politics.
The legislation would expand existing election law covering television and radio outlets to apply to paid internet and digital advertisements.
The legislation, introduced last October but not yet passed, is aimed at countering concerns about foreign nationals using social media to influence American politics, which is part of the investigation into possible Russian meddling during the 2016 U.S. presidential campaign. Russia denies involvement.
Under the act, digital platforms with at least 50 million monthly views would need to maintain a public file of all electioneering communications purchased by anyone spending more than $ 500.
Reporting by Dustin Volz; Editing by James Dalgleish
LONDON/NEW YORK (Reuters) – Spotify Technology SA (SPOT.N) shares surged following the largest-ever direct listing on Tuesday, giving the world’s leading streaming music service a market value of nearly $ 30 billion.
Shares opened at $ 165.90, up nearly 26 percent from a reference price of $ 132 a share set by the on the New York Stock Exchange late on Monday.
Spotify’s unusual route to publicly trading its shares via a direct listing rather than a more usual initial public offering will likely be watched by other companies tempted to list without selling new shares, and by bankers that could lose out on millions of dollars in future underwriting fees.
Some 14 million shares had changed hands within an hour after trading began on Tuesday. Nearly 91 percent of Spotify’s 178 million shares were tradable, a much higher percentage than typical in a traditional IPO.
Some market-watchers cautioned investors not to read too much into the first-day pop, given the mixed performance of recent tech IPOs.
Spotify’s debut came on the heels of a steep U.S. equity selloff led by tech stocks, although the market had found firmer footing at midday on Tuesday.
“It’s a fair market price. It’s not manipulated or set by any puts and takes by banks or institutional investors,” said Chi-Hua Chien, an early investor in Spotify who is now at San Mateo, California-based Goodwater Capital.
Spotify shares were last at $ 160.32, up 21 percent.
The NYSE had set Spotify’s reference price late on Monday, giving an early estimate of the level at which supply and demand could be balanced.
That was in line with informal trading on Monday, with shares changing hands at about $ 132, which would value the company at more than $ 23 billion.
Since launching its streaming music service a decade ago, the Stockholm-founded company has overcome heavy resistance from big record labels and some major music artists to transform how the industry makes money.
Spotify offers access to vast libraries of music rather than making users pay for CDs or downloads of individual albums or tracks.
The company has structured the listing to allow existing investors to sell directly to the public while offering no new shares of its own.
Analysts had flagged concerns that forgoing hiring investment banks as underwriters or holding traditional promotional events with institutional investors could mean volatility in Spotify shares once formal trading kicked off.
Spotify’s opening public price was determined by buy and sell orders collected by the NYSE from broker-dealers.
Based on those orders, the price was set based on a designated market maker’s determination of where buy orders could be matched with sell orders.
While Chief Executive Daniel Ek skipped NYSE rituals such as opening bell-ringing and trading floor interviews to tout the stock, the front of the 115-year-old Greek Revival exchange building was draped in a vast green-and-black Spotify banner.
Additional reporting by Helena Soderpalm in Stockholm, Joshua Franklin in New York and Stephen Nellis and Salvador Rodriguez in San Francisco; Editing by Meredith Mazzilli and Bill Rigby
Washington, D.C., has issued a permit allowing Elon Musk’s Boring Company to do preparatory and excavation work in what is now a parking lot north of the National Mall. The company says the site could become a Hyperloop station.
The permit, reported Friday by the Washington Post, was issued way back on November 29th of 2017. The permit is part of an exploratory push by the city’s Department of Transportation, which according to a spokesperson is examining the feasibility of digging a Hyperloop network under the city. The Hyperloop is an as-yet theoretical proposal to use depressurized tubes and magnet-levitated pods to move passengers at very high speeds.
A Boring Company spokesperson told the Post that “a New York Avenue location, if constructed, could become a station” in an underground transportation network. The Boring Company last year showcased the possibility of moving cars underground on mag-lev sleds, though that concept wasn’t quite a version of the Hyperloop proper.
The increasing prominence of Musk’s own Boring Company in pushing for Hyperloop construction is a notable reversal of the entrepreneur’s initial plans for the concept. When he unveiled a paper describing the idea in 2013, Musk said he wouldn’t be directly involved with building it. That led several independent startups, including Hyperloop One and Hyperloop Transportation Technologies, to take up the cause.
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But last summer, Musk started touting tentative Hyperloop partnerships between the Boring Company and governments in the Northeast U.S. A few weeks before the D.C. permit was issued, Maryland issued a permit for the Boring Company to build a 10.3-mile tunnel on a route between Baltimore and D.C.
The Hyperloop concept as a whole, though, has come under renewed scrutiny lately. It’s unclear how such a huge project would be paid for — selling Boring Company flamethrowers is unlikely to cover the bill. More fundamentally, urban planners have argued that the Hyperloop, which would use small pods to carry a few riders at a time, can’t scale sufficiently to really address urban transportation needs. Musk, in an unusual fit of pique, recently replied to one such criticism by calling its author an ‘idiot.’
Finding Space to Experiment.
In my recent interview with McDerment, he described a moment in the winter of 2013 when he had been feeling uneasy about the steady growth of his business. Freshbooks, which had long been the darling of the DIY bookkeeping industry, needed to keep innovating to remain competitive.
The reality, which McDerment recognized, is that software products, by their very nature, are malleable and constantly changing. In today’s business landscape, consumers expect products to be constantly improving.
But how do you make major changes in a way that does not disrupt existing users? Especially when their livelihood depends on your product?
How does a company allow for the exploration required for innovation without screwing up what it’s already getting right?
McDerment asked himself these questions. And he believes he’d found the answer by rolling out an updated product, but not under the FreshBooks brand.
And so, he started BillSpring.
Newcomer BillSpring could market its product as “in development,” thereby creating the space for experimentation and attracting new users with its updated design.
Sure, this strategy is logical, but it’s jarringly unconventional. However, McDerment says Freshbooks has sought to establish a culture of putting people at the center of every decision, so for him, it was an obvious move.
FreshBooks took the coveted first place spot in the highly competitive Great Places to Work survey. The secret sauce, according to McDerment, is the company’s ability to embody a human-centric approach to all facets of the business: from product development, to hiring and training.
Employees aren’t the only people who matter when it comes to making decisions at FreshBooks. Customers are in constant focus–a concept McDerment calls customer proximity.
To make sure that all team members understand customers, all newly hired employees spend a month in customer service. And this pitstop in customer service occurs without exception, not even for the new CFO, who had taken three companies public. Despite not having any customer-facing interactions, he too spent 30 days getting to know customers on the front lines of customer service.
As a result of this mentality, the company is hyper-sensitive to customer satisfaction. So in retrospect, the decision to create a completely separate brand is no surprise. In fact, it’s a considerate way of introducing change.
A Considerate Approach to Introducing Change.
Whether change is as simple as a minor feature update or something as significant as starting a whole new company to compete with, the consideration of the impact on all people involved should always remain at the forefront.
It’s not just what Freshbooks values, but as so many companies have proven, it’s just good business.
Eighteen months after the experiment, Billspring had shown improvements in business performance and customer satisfaction, exceeded those of Freshbooks. At this point, McDerment finally decided it was time to come out of hiding, dissolving the Billspring brand and merging the products back under Freshbooks.
“When we launched we didn’t want our users to worry. So if they said ‘you know what? It’s great but not right for me’ then they could return to Freshbooks classic,” McDerment says. “We did everything in our power to not destabilize our users’ business, and so the vast majority of people recognized that and chose the new version when they had the chance.”
The Takeaway: Create the Conditions for Innovation.
The extreme stealth-mode approach may not be the right answer for other companies looking to navigate change and growth, but creating the conditions for change and growth is–for the organization and, more importantly, the real people they serve.
Despite the radical time and cost investment, McDerment stands by his 18-month experiment to deliver positive outcomes for its employees and customers. Ultimately, affording the freedom of time and space is what has enabled the award-winning success that the company enjoys today.
(Reuters) – Uber Technologies Inc [UBER.UL] failed to disclose a massive breach last year that exposed the data of some 57 million users of the ride-sharing service, the company’s new chief executive officer said on Tuesday.
Discovery of the company’s handling of the incident led to the departure of two employees who led Uber’s response to the incident, said Dara Khosrowshahi, who was named CEO in August following the departure of founder Travis Kalanick.
Khosrowshahi said he had only recently learned of the matter himself.
The company’s admission that it failed to disclose the breach comes as Uber is seeking to recover from a series of crises that culminated in the Kalanick’s ouster in June.
According to the company’s account, two individuals downloaded data from a third-party cloud server used by Uber, which contained names, email addresses and mobile phone numbers of some 57 million Uber users around the world. They also downloaded names and driver’s license numbers of some 600,000 of the company’s U.S. drivers, Khosrowshahi said in a blog post.
He said he had hired Matt Olsen, former general counsel of the U.S. National Security Agency, to help him figure out how to best guide and structure the company’s security teams and processes.
“None of this should have happened, and I will not make excuses for it,” Khosrowshahi said in the blog post.
“While I can’t erase the past, I can commit on behalf of every Uber employee that we will learn from our mistakes,” he said. “We are changing the way we do business, putting integrity at the core of every decision we make and working hard to earn the trust of our customers.”
(Corrects paragraph 1 to data instead of date)
Reporting by Jim Finkle in Toronto; Editing by Tom Brown
How many times have you walked into a restaurant with plenty of free tables, only to have wait while a waiter busily cleared the dishes left behind by departed diners from another table? How many times have you gone up to a check-out counter ready to make a purchase and stood unhelped by a salesperson who was engrossed in reshelving inventory that others had not chosen to take home? How many times have you watched someone field a personal phone call instead of reaching out to a customer in her midst? Undoubtedly, the answer is countless. Why? Because many business owners have either never understood or somehow forgotten, the importance of putting the customer first. I have found that keeping this one idea–that of framing everything my company does in terms of the customer’s needs–at the heart of my business strategy has netted growth at every stage of my business. Here are some simple ways I do so.
Ask employees to handle customers before inventory. Regardless of how messy your shelves may look, how many tables are left uncleared, or how many items need to be restocked, all of those issues will be there long after your customer is gone. Help your customer first, and put every other task behind him in line. You don’t want to let your customer walk out the door empty-handed because you’re engaged in something other than seeing to his needs. You have his attention for as long as he is willing to give it to you, and that depends entirely on how important, valuable, and significant you make him feel.
Instruct staff that, when on the clock, their personal lives take a backseat to the customer’s experience. People seem to blur the lines of personal and professional more and more every day, and when they get caught up in their own interests, they forget everything else around them. Ask employees to put away their phones, table intra-staff conflicts, and silence any unnecessary chatter when customers are within eyesight and earshot. A customer should never be made to feel like a burden, an interruption, or downright uncomfortable when he is visiting your company and considering buying something.
Prioritize a customer who is ready to purchase over everything else. Deciding to purchase is a very emotional experience. It’s when a customer feels most vulnerable because he is about to hand over his money and he wants to know he is giving it to a company that deserves it. Take him in hand quickly, so he feels reassured that he is making the right decision. Whether this means accompanying him to the point of purchase, showing you are ready to take his order immediately, or just asking if he needs help, the important thing is to be alert, attentive, and accommodating.
Customers are precious. They walk through our doors fleetingly, unless we are prepared for their arrival, forthcoming with our help, and devoted to their needs. It is only by peaking their interest, earning their support, and winning their business that we can grow.
Video streaming platform Roku has raised $ 219 million in its Wednesday initial public offering.
Priced at $ 14 a share, the company sold 15.7 million shares from Roku and some of its private shareholders, valuing the company at $ 1.3 billion. The stock will make its debut on the Nasdaq exchange today under the symbol “ROKU.” The IPO was a success for Roku, which had initially proposed a $ 12-14 a share range.
Roku’s boxes allow users to stream content from a variety of video services, including Netflix, YouTube, and HBO. As of June 30, the company has 15.1 million active accounts, with users streaming more than 6.7 billion hours in first half of the year.
While the growing streaming trend has made Roku popular, the company has had largely unprofitable growth since it was founded in 2002. Last year, the company brought in $ 399 million in revenue, but lost $ 43 million. In the first half of this year, it lost $ 24.2 million.
According to TechCrunch, Roku had previously raised more than $ 200 million in capital since 2008. Menlo Ventures was the largest stakeholder prior to the IPO, owning 35.3%, and Fidelity owned 12.9%.