Meeting with a serial successful internet CEO the other day I was struck how recent events in his Company's business reflected the storyline from this well received movie where a man essentially lives life in reverse; from old age back to infancy.
Fast out of the gate, his Company successfully raised capital and introduced its first product nine months after its founding. Heartened by favorable reviews and initial customer wins management, with vigorous board support, completed an expansion round and set about investing the capital to build a business leader. Remote offices, staffed with experienced sales and BD folk were established, marketing dollars helped establish the brand, and the service was scaled to provide a good (though not extravagant) user experience. In short order, the Company rapidly grew from its infancy to adulthood.
Little did management/the board know that its life-stage was closer to old age than to infancy. Expectations were that a foundation was being built to serve a long and healthy corporate life. Nevertheless, over the past 90 days, in reaction to a vastly altered stage of its target market, the Company has been living life in reverse; shedding assets, becoming 'younger', just like Benjamin Button.
We're not talking about a cut here and a cut there, these are actions being taken by an experienced, and decisive management team. Not needing the prodding of a Sequoia memo, or a series of soul searching board meeting, offices have been shuttered, employees laid-off, unworthy customers terminated, and brand marketing severely reduced. Though only a couple of years old, the Company seems to be preparing for the second half of a hoped for up ->down->up round-trip life cycle.
With a few million dollars of revenue, management is close to reducing the team back to its few core employees, thereby forcing profitability and deferring 'aging' investments till a more favorable customer solution/environment presents itself.
In the annals of our Industry's history, not many firms have successfully navigated the Case of Benjamin Button; though quite a number completed mid-course corrections (Google, Yahoo, and Apple to name a few) with profoundly positive shareholder outcomes.
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