GC: I was the founding CEO of Empact. When we started, there were 6 founders. I worked as CEO until last year, when we got funding. It was my goal to get us to that stage, and then to step down, so that a more experienced CEO can take us to the next stage. So I moved to product management and now to deployment (and I do a bunch of other things).
SA: Where was your initial funding from?
GC: Initial funding came from the founders and the family and friends who believed in us. Then we self-funded the company by doing a lot of IT consulting while we refined our business strategy. We received additional investment from angel investors along the way and received our big investment last year when our business model was refined and crystalized.
SA: But it was your plan all along to step down as soon as you got institutional funding?
GC: Yes, definitely. I knew that (1) I wanted to take the company to funding, and (2) I wanted to step down and not let my ego get in the way of the company's success. I had very clear and strong feelings about that.
SA: Where and how did you find your new CEO? And what were the selection criteria?
GC: Good questions! Well, I worked with the VCs and a fellow co-founder, hired an executive search firm, and selected the best available candidate. Selection criteria were: (1) lots of operational experience to run a tight ship and grow the company, (2) strong industry experience so that he/she "gets" what we're all about and is able to articulate the vision to everyone, and (3) a good fit with the company and its team. Personally, I wanted to learn from this person, and fortunately, I believe we have such a person and he's been great about mentoring and helping us to grow.
SA: So the VC didn't just hand you a name and say, "Here's your new CEO"? I've heard a lot of horror stories about that.
GC: Oh no, M/C Ventures has been great to work with. They've been involved closely as advisors and helpers and worked with us every step of the way. They always exert a strong influence on our decisions, but they are careful to never force a decision. They ask great questions (the right questions), provide good feedback, and leave the execution to us.
SA: It's nice to hear that kind of success story. VCs have gotten a pretty bad rap among the tech community lately.
GC: Indeed.
SA: You went straight into a startup right out of college, one that was highly successful, going public in four years and then acquired by Borland. That was right during the hey-day of the technology boom, but the economic landscape is totally different today. What lessons did you learn from that success that are still applicable today?
GC:
(1) Hire great people.
We were fortunate to have very, very smart people straight out of college and grad school who were hungry to change the world a little for the better, and in the process, make a name for themselves. There is a saying, "you can buy my arms and legs, but you cannot buy my heart and back." Everyone there believed in the company and the vision, and we gave it all. The energy was incredible. I still have very strong friendships from that crew.
(2) Don't get money unless you need to, and get it before you need to.
We were self-funded through a large IT consulting team. It also helped that we had the backing of an existing company (Cambridge Technology Group) to help us with leads and investments. But the IT consulting that we did really helped us to grow without having to spend a lot of time and effort in seeking funding.
(3) Have a solid business model, with paying customers.
It's all about having a real product that delivers real value to real customers. That, more than ever, is true today. OEC got started in the early 90's when the tech market actually was not that great. We survived by having real reference customers that spoke well of us.
Keep reading at Part 3: Growth Strategies & Innovation