7 Takeaways From Diana Kyser’s Entrepreneurship Journey
Taking jobs in corporate America and also founding startups gave Diana Kyser, now a founder of COO on Demand (Summit), a unique skill set. As an entrepreneur, she’s learned all the aspects of running a business.
While in corporate America, she went through intense training programs, met great people, learned how to dress, make presentations speak in public and handle herself in important meetings. And corporate America paid for her MBA, she told the audience at Morris Tech Meetup Nov. 3.
Kyser’s journey, she said, isn’t the normal path entrepreneurs take, but it has served her well.
“A lot of people take a straight path, but that just hasn’t been my experience,” she said.. “My path has been a combination of entrepreneurial and big companies. The advantage of that is that in my early entrepreneurial experience, when I was too dumb to know it was a scary thing to do, I had nothing to lose.”
After starting her first company with her sister, Kyser “went to American Express and companies like JPMorgan Chase, where they have fabulous training programs and I had access to the greatest business tools.”
When Kyser left American Express to start C3i, she was prepared to deal with customers in a professional way. The experience also helped her understand company politics, since she was exposed to many cultural perspectives.
“I’ve worked for a number of startups, and I’ve learned that there are some places you fit and others you don’t. You fit the most in your own company,” she said.
Kyser formed C3i in 1993 with two of her colleagues from American Express. It began as a call center for salespeople who were working out of their own homes. Kyser explained she had been in marketing at American Express, and the marketing department had developed and deployed a system for the salesforce. However, the IT department was unable to support the system for the new class of road warriors who worked out of their homes.
“So we decided to start our own business. We thought we would pitch our boss (at American Express) and that this company would be our first customer,” but that didn’t happen. However, American Express did become the company’s third customer. After five years of profitability, C3i raised approximately $10 million in venture capital and continued to grow steadily, she said. Kyser left the company a number of years ago.
Here are some lessons she has learned over the years:
Not All Exits Are Equal
At Kyser’s first company, which she built with her sister, “we just sold our client list.” Exiting a startup called ExceedGlobal meant a merger with ClearPoint Learning and a stock deal. C3i was sold to Telerx, a division of Merck. It was the most profitable exit.
Managerial Incompetence is Top Reason for Business Failure
The No. 1 reason companies fail is managerial incompetence, she noted. “That’s not what people want to hear, but lack of experience, really not understanding how to run a business,” an inability to find a market, and lack of focus on the numbers are primary reasons for failure.
Taking Venture Money Increases Your Chances to Become Rich
Kyser talked a bit about “The Founder’s Dilemmas”, by Noam Wasserman. Particularly about the tradeoff between being rich and being in control, which he discusses in the book.
“If you want to have total control of the company, you are going to have financial gains that are well below their potential,” she said. Mark Zuckerberg and Bill Gates, two people with almost total control and also great financial results for their company, are extremely rare, she noted.
When C3i wanted to find venture money, Kyser said she was skeptical. “My partners said to me, ‘do you want to own 100 percent of a $1 million company, or 10 percent of a $100 million company?’ ” It’s something you’ve got to think about.
Take on Partners
Also, she noted, while many founders are leery of taking on co-founders or partners, “My partners have all been fabulous. My first partner was my sister, and when she was up, I was down, and vice versa. My partners at C3i all had really complementary skills, so one was very good at sales, one at finance, and I was the tech guy who turned into the operations person.”
Have a Niche
It’s important for a startup to have a niche, she added. “All we did at C3i was sell call center services for salespeople using laptop computers out of their homes, so it was relatively easy to go to a big company like Merck and ask them to hire us, even though we were just three people on a phone. We went to the VP of sales and told them that ‘we know your sales people better than anyone else and we’ll take care of them.’ ” Our niche let us compete with bigger companies which had less focus, she said.
Also, she advised, stick to the niche. “When a salesperson sold contracts to the Ohio Power Authority, I told them to take it back to them, because we didn’t do onsite support.”
Think Big
“When we first started out at C3i, we didn’t have an office. When we did have an office, we had five phones that all rang together and I wrote the program that tracked the calls. But we presented well because we had all been ‘raised’ at American Express, we were all passionate and we had professional folders and sales kits. We went into the prospect assuming the sale,” she said.
Hire people who are smarter than you
“I think your business is only going to be as good as the people you hire. By the same token, it will be as weak as your weakest link. So hire great people and spend money on a quality workforce,” she said.
Kyser is currently a founding partner of COO on Demand, a company that provides chief operating officer expertise on an interim, part-time or project basis to startup to mid-sized companies. Focused on service and technology companies, the firm offers Fortune 500 experience, professionalism, and expertise to the middle market at what it says are affordable rates.
The company recently unveiled a new offering called Back Office on Demand aimed at smaller companies that don’t need a COO, but do need some help in areas like bookkeeping, human resources and operations.
