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By Daniel Barrett
Entrepreneurs can learn from the experiences of those who have been through the process of buying and selling a company.
A panel of digital media CEOs, who successfully sold their companies in the past year, spoke about their experiences with an audience of entrepreneurs in NYC recently. The panel included Dan Porter, formerly CEO of OMG Pop which is now part of Zynga; Wiley Cerilli, formerly CEO and Founder of SinglePlatform which is now part of Constant Contact; and Sean O'Neal, President and CRO of Vizu which recently sold to Nielsen.
This event brought together digital entrepreneurs and executives to share ideas, meet interesting people and stimulate valuable thinking.
We started the discussion with a focus on the challenges these leaders faced in the early stages of their company. A common theme throughout the remarks was the concept that every company changes direction at least once.
Dan Porter focused on the idea that moderate success at a company can prevent or delay changes in the business model which would ultimately achieve higher levels of success. He cited his greatest challenge was having a moderately successful site which lacked scale. Dan suggested knowing your narrative very well which led OMG Pop to pivot their strategy, leading to more changes but also a new and larger audience.
Wiley Cerilli described the lack of customer traction that SinglePlatform's original subscription model experienced. One year in, they changed to a pay per call structure but this didn't work either. It was only the third change to their strategy which led to a breakthrough.
Similarly, Sean O'Neal described Vizu's challenge to overcome the early perception of their analytical tool was simple an audience survey widget. Over time they were able to fundamentally change the marketplace perception of their tool to an enterprise software platform. Strategically, this change enabled Vizu to increase the length and value of their customer contracts.
The panel was asked about the most important actions a CEO can take to maximize the value of an exit. Wiley Cerilli, who founded SinglePlatform in 2010, suggested that early stage companies create the absolute best team so focus on team over product. Find a problem and solve it in a world class way. And, he added, attack the problem quickly. Wiley cited a Patton quote – "A good plan, violently executed now, is better than a perfect plan next week".
Sean agreed with Wiley pointing out that talent is critical. At Vizu, they did something better than anyone and kept improving the product. Strategically, they knew Nielsen was the most logical acquirer. He suggested boosting market presence via marketing & telling your story -"Play taller than you are".
Dan Porter added that companies are bought not sold. As an entrepreneur, understand your market and who the potential buyers are. Usually at some stage, you know who is likely to acquire you and it's the CEO's job is to optimize the moment when your company is most likely to attract a buyer.
The panelists were asked how a CEO can prepare their employees for a sale. Sean said that when the deal between Vizu and Nielsen was imminent, he set out to describe the strategic rational for selling to his people. The entire exercise was to avoid having any of the employees feeling they were blindsided by the sale.
Wiley described the difficulty he faced with the deal closing so quickly after the original meeting with Constant Contact. He spoke to his team leaders first to align them with a very positive message about the sale. The deal then had to be announced to the entire company over email. Wiley again sought to reinforce his point with a quote from Sheryl Sandberg commencement speech at Harvard: "If you are offered a seat on a rocket ship, don't ask what seat. Just get on".
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