How to rescue a start-up that is failing

An Interim Manager Success Story of rescuing a failing start-up

Mission

Company: You Take Control
Market: Privacy
Industry: Health Care
Position held: Interim CEO
Responsibilities: Worldwide Sales, Marketing, Service, Support, Business Development
How hired: I met the founder at a conference and he hired me to come in to grow the start-up.
Company status when started: Burned thru $300K with no product, no partnerships, no channels for distribution and no cash to run the company.

Methodology used to rescue the start-up

Step 1 – Evaluated the current state of the start-up

• Employees
• Who to keep, who to let go
• Who was good at their jobs including the current executives
• What did they think were the problems?
• Did they have any solutions
• Product, Quality of the product, Pricing, Reliability
• Competition
• Is it a win-win for them
• Software development, engineering resources, cost of testing and QA
• Service and support, Policies
• Financial condition, Balance sheet, P&L, revenues, expenses, investors
• What did they think were the problems, would they put in any more investments

Step 2 – Put together a plan and get buy in

• Worked closely with the founder and developed a plan
• Got buy in for the plan with the executive team
• If executive team did not support the plan then we let them go.
• All the team supported the plan
• Met one on one with the team
• Presented the plan to the entire start-up

Step 3 – Implemented the plan to rescue the start-up

• Met weekly with the team
• Monitored the effectiveness of the plan
• Raised another $2.3M from new investors
• Hired a new sales team and new marketing team
• Refined our brochures and presentation materials
• Hired a new development team and new branding company
• Developed a new brand for the product
• Changed the messaging
• Launched a new web site, created new demos
• Hired my replacement CEO from Pfizer

Step 4 – Exit strategy

• In the process of selling the company

What I learned:

1. Hire a CEO that is comfortable with start-ups
2. Take the right amount of time to understand the situation
3. Once you have decided to clean up the company do it quickly
4. Play off of your strengths and minimize your weaknesses
5. Act faster to resolve the problems

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About the author: Steven Lund raised $40M and is the founder of 5 companies. He also was CEO/COO of 3 technology and medical companies. He closed a $3B deal for a tec firm, restructered a company and sold its assets, and he created strategic alliances that generated $20M annually in sales.