The day starts early. Right as you wake up you’re answering emails and mentally mapping out your day. You walk into the office and find yourself gridlocked in back-to-back meetings, presentations, investors updates and international calls. 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, “Does it get any easier?”
The answer, as you well know, is that it doesn’t. With every level of success, comes a set of challenges: competition, staffing, a shift in customer requirements, raising capital and new product developments. But, wait, there’s more! Then there’s the marketing staff wanting you to speak on the latest product news with press, online bloggers and analysts. As if you have the time.
You may be thinking, why do I need PR? Most people know about your company through word-of-mouth and you have a steady stream of press releases. Besides, your product practically sells itself – once the right people hear about it.
I’m sure that reasoning has passed through your mind at least one or twice, or you wouldn’t be at the head of a successful business today. As the CEO of a public relations firm for over 20 years, I recognize these concerns and have watched hundreds of other CEOs struggle with them. I’d like to take the time to share five successful practices I’ve learned from executives who took their companies from a medium-sized venture to a successful acquisition or IPO.
Even if expanding or going public isn’t in the game plan, you already know you want to maintain the status quo (even if it works today), you will eventually lose ground to your competitors and risk failure. I hope the following stories will provide you with some innovative insights as you move on to your next set of challenges.
Learning to Loosen the Reins
I had the good fortune of working with a company that had a new Internet-based product well ahead of its time. The CEO hired our organization to ensure the company was effectively promoted in industry and business publications.
It was during a press tour that I noticed the CEO never made a call to his office or checked his email. Since I am used to watching CEOs scramble to access their smartphone to catch up on correspondence at every free minute, I asked 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 – promote us to success.”
From that day on I pulled back (as much as my ego would allow) from the every-day, granular minutia of running a 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
Another company I worked with had a great product, but competed with dozens of similar offerings in the market and was at risk of being lost in the crowd.
Their ultimate goal was to be acquired and as the company was approaching $10M in sales they wanted a yearly earnings of five times or better. We started by identifying potential acquirers and tracked what trade shows they attended, where they were speaking and joined their partner programs. We worked in lockstep with these potential buyers, bringing customer success stories to their door and presenting with them on stage.
To ensure the company’s message was well received, we worked diligently to define its key technological differentiators, highlighting the strengths where potential acquirers had weaknesses. By going out on a press tour every four months, we were able to build a name with press that covered acquiring entities and the analysts to whom they paid to advise them. It took less than twelve months before a bidding war took place with two of the three we had identified.
Lesson Learned: Never stop talking to the press and analyst community. In the end they have the potential to become your most influential champions.
Building a Company First
By keeping his eye on the bottom line, this next CEO wanted to grow the company through sales and acquisitions. By the first $25M all the low hanging fruit business opportunities had dried up, and to continue growth there needed to be an infusion of additional capital. To do so, they had to go out to the market or raise venture capitalist (VC) funding. But, unfortunately, both situations come with a myriad of strings attached.
It came down to a decision between a reverse merge or funding from a tier A California based VC firm. He decided on the VCs who immediately requested a new CEO and pushed him to the role of founder/CTO.
Despite the unwelcome news, this fearless leader discovered that through PR he was able to push his vision out to a larger audience. With press tours, speaking opportunities and by-lined articles, he promoted the company’s unique technological solution and built a (good) reputation for quality.
Two years later his company was acquired to become the heart of the most influential security vendor on the planet.
Lesson Learned: Be careful who you take money from, because from that point on you are beholden to them.
What you Should Know Before the IPO
Being acquired is great. It’s a big accomplishment. But, you aren’t playing that game. You’re going for the big punch, you want to go public.
Be careful what you wish for! If you thought the workload was tough before, it will quadruple in preparation of your IPO. With the 16 companies we’ve taken public, the CEOs were all taken by surprise at the amount of work generated and he related later he never wanted to go through the 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 reality. 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 merely fond memories. Now you are beholden to the stockholders, your board and financial analysts. This means you now function 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.
Lesson Learned: Although it sounds like an exciting and effective way of securing funding for your company, IPOs often bring about unnecessary complexities that can take away company resources and time, leaving the company less able to focus on its core competencies.
The Most Important Lesson of All
At the end of the day, standing still means losing ground to competitors. In the increasingly complicated world of business, staying profitable is no longer enough. As we 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.