The Challenge

As a 25-year-old early employee, I was tasked with helping this company establish its U.S. market presence from scratch. With no existing distribution network and little brand awareness, the company faced the challenge of creating a scalable, effective distribution model that could drive market share and build brand recognition in key regions. Operating with only 25 employees, the company’s coverage was limited to about 20 states.

My Approach

I recognized an opportunity to take control of the company’s distribution. Over a weekend, I taught myself PowerPoint and Excel, and crafted a proposal to build a self-owned distribution network in select markets, rather than relying solely on third-party distributors. This plan aimed to ensure consistency across markets, directly control sales, and create a replicable model for nationwide success.

After presenting my idea, I received the green light to execute the plan. I began building the company’s first self-owned distribution network in Arizona, where we quickly established market dominance and reached $30M ARR. This became the birthplace of our on-premise strategy, which involved placing the product in bars, clubs, and restaurants to boost visibility. I then trained other company-owned and independent distributors on our model, which became the blueprint for expansion.

The Results

• Revenue Growth: Grew Arizona’s distribution from $0 to $30M ARR within three years.
• Scalability: Our Arizona model became the training ground for distributors nationwide.
• National Expansion: Replicated the model in Florida, achieving a market share best and $40M ARR.
• Turnaround Success: Implemented the model to revive a struggling Los Angeles distributor, underscoring its adaptability and impact.

This experience shaped my approach to business transformation, instilling a passion for building scalable, strategic systems. Over my nine years with the company, I managed $350M in revenue and influenced $1B in additional sales, setting the foundation for my future work. This was my master class in business, with the PhD coming later.

Key Takeaways

This case study highlights my ability to spot opportunities for strategic innovation, develop scalable models, and execute transformative ideas. The distribution system I created became a cornerstone of the company’s U.S. strategy, demonstrating the long-term impact of aligning operational solutions with growth goals. This early experience solidified my drive to build and transform businesses—a philosophy I’ve carried into every role since.

A business turnaround success history

Revitalised the company , successful Due Diligence, acquired a start-up and established a Joint Venture with a fortune 500 all within 12 months followed from fast growth , global expansion and acquired within 3 years.
Company: Medium Size , 5 years in B to B business , offices in 7 countries (Hong Kong ( Headquarters) , USA , 4 EU countries , Japan ) , selling in approx. 15 countries through partners and company present across the whole value chain from Product/systems planning, design, manufacturing (outsourced) to marketing and sales with partners.
Industry: Renewables – Lighting Solutions
Job: Hired as Global Managing Director to Turnaround the company with 2 years contract and the founder kept the CEO title with focus on Business Development.
How Hired: I had met the founder and CEO in a conference 3 years ago and after 2 failed turnaround attempts he approached me and asked me if I could help.

Company status when i joined:

• Various shareholders were managing the different subsidiaries and there was a very fragmented strategy as well as no agreement on fundamental common policies. So No 1 company
• People competencies and skills not up to the level for a fast growth and global company ambition
• Lack of adequate processes for a full value chain and multinational footprint.
• Product/system Quality issues
• Lack of Product Strategy, Product management, Innovation processes and outsource processes
• Slow design process
• Slow manufacturing and supply partners
• With a few exceptions low quality sales partners
• Loosing money every month
• Good Brand name in a few countries and won a few key projects. Something to build upon.
• Execution of projects: Not mature with delays and quality issues
• Relatively ok from cashflow point of view. One problem less among so many.

1. Turnaround Phase I

After 1 month talking to all key people and attempting to understand the Business starting from Customers and Sales ( B2B was slow and new to me as I came from a fast and global Consumer Electronics background with many restructurings and turnarounds ) I decided to focus first on the whole value chain excluding Marketing and Sales . Before the Marketing and Sales area could be addressed the Shareholders Structure had to be simplified/changed as these minority shareholders were controlling marketing and sales subsidiaries.

After 30 days it was disclosed to me that the founders had the ambition for a Joint Venture with a big global Fortune 500 company and the serious talks could even start within 2 months with due diligence within 5-6 months . I said wow, let’s make it happen and sharpened the focus.

As all companies are succeeding or failing due to People I decided as first step to focus on People changes starting from the 2nd month. After I decided with which functions I needed to start first I hired a few key and experienced professionals which I knew personally from my previous career and together with the very few existing competent people started redesigning the processes and planning replacements. Together with the experienced professionals we made a plan to change 60 % of the people (within 6-9 months) in the Headquarters (Hong Kong) without yet touching the marketing and sales subsidiaries worldwide.

It was clear that this was a risky process but we did not have any other option with what was coming to us. With the better people we brought on board many of the existing employees decided to leave themselves making the life partly easier.

Evaluated all short term expenses that could be reduced and took the necessary actions. Within 60 days I met all subsidiary shareholders and all key employees outside of HK. It was clear to me that with the current shareholders it was impossible to create a serious global company and I made it clear to the major shareholders in HK that this needs to be addressed within the current year otherwise this 3rd turnaround attempt is planned to be a failure . It was agreed to happen at the right time within the coming 6 months cause such process takes time.

After 90 days the first negotiations started with the fortune 500 company and within a few months we reached a basic agreement of preliminary terms for a Joint Venture to be followed within months from a due diligence before we go to the negotiation details including the legal lengthy process.

Preparing for the due diligence process

8 months later and preparing for the due diligence process we had replaced 60 % of the people to be replaced , redesigned all processes and started working to buy out the minority shareholders ( 6 legal entities around the world ). When this process had been finalised we started to replace and add a few new marketing and sales employees.

9 months later a successful due diligence process took place with a delegation with as many people as all of our HQ employees. We have been complimented about a few processes that have been considered world class and many good people!.

At the same time and in order to increase the value of the company before final negotiation started we acquired a start-up partner, a company crucial for us to create competitive solutions. This has been discussed a few months earlier and executed within a few months.

As all above was going on we had to improve our product quality, make our offerings more flexible , increase speed of design and execution, address delivery reliability and finally sales growth and profitability improvement .To achieve that beyond focus on internal process improvements we decided to improve the quality of our supply and demand partners . 2-3 new and more competent manufacturing and component suppliers have been chosen , we started evaluating a few new downstream solution sales partners with better capabilities as well as we pursued partnership with 1-2 partners we could create new Innovative solutions together.

Joint Venture negotiations

The last 3 months of the first year on the job have been devoted on execution of all improvements, introduction of a new company operating model and Joint Venture negotiations which were very lengthy with great leadership from the CEO but at the end we signed the JV agreement 12 months after I came on board. Moreover we started the preparation to execute the new JV Business Plan.

What an unexpected first year with so much work , much broader focus than originally requested , many successes AND the key message that any turnaround focus can be different than for what you have been hired for !

2. Turnaround Phase II

After the JV agreement was signed , our main focus was to deliver the JV business plan which had as main focus min 50 % sales growth per year for 3 years . Started by establishing a new Mission , Vision and Operating strategy for the new JV which we deployed worldwide

With more competent & experienced people , better processes , new customer creation and interaction process , better products and systems in the pipeline, better suppliers and better downstream partners we were optimistic to achieve our growth .

To find out more about our customers and what to improve we started a detailed NPS (net promoter score) process including many qualitative questions.

To strengthen our brand in a competitive way we decided to devote more attention to marketing with focus on website, superb marketing content & materials, PR, partner events and digital social networking to create a community!

The main challenges we had to eliminate and/or solve were:

1. Avoid to be slowed down being in JV with a big company. We negotiated in advance as much autonomy as possible.

2. Life cycle of the most of our projects/solutions were average 2 years and we needed to grow sales with above 50 % within 1 year. We managed to achieve it with a list of strategies and tactics :

2.1 Attempted to leverage the JV partner for short term sales : It did not work as we had completely different business model than the partner who did not have access to our market segment
2.2 Extended our business model with a different distribution strategy to enable shorter term sales : that worked only a bit
2.3 With the newly introduced design processes + new more flexible systems + new supply partners we could speed up our systems design and delivery by 6 months as well as offer a lot of flexibility and satisfy many more customer requirements : Consequently we focused to find and win faster projects ( 1 year lifecycle) and this strategy worked partly .
2.4 With the better people that came on board as well as more flexible systems and faster deliveries we started to win projects from competitors as we could deliver faster and better systems & solutions!
2.5 Some of the better newly acquired sales partners helped also to increase sales.

3. As we became more competitive (faster, better quality, more flexible, better partners that build a better ecosystem,…) we set the foundation for structural growth and we reached agreement (Lead from the CEO) with the JV board to invest in more sales resources so we started hiring people in 10-12 additional attractive locations worldwide . People were located in existing premises of the JV partner but kept autonomy reporting to the JV. We were hoping in more future synergies as well but it did not happen as much as we expected because of our different business model and market segments.

The first 2 years after the JV establishment we managed to achieve more than 50 % growth in sales per year and the 3rd year went also well when the JV partner decided to fully acquire the remaining stake of the JV shareholders and make it a 100 % subsidiary. I will stop the story here without explaining what happened afterwards but I will focus on the key lessons learned.

3. What we learned as this was a team effort:

Assembling a core team with the best people available for the task is number 1 priority.

Such a drastic, complex and fast turnaround can only happen with a good Team of top professionals having the right experiences preferably from a different industry , are determined to succeed , are able to think out of the box and are lead from an inspiring and disciplined leader.

To achieve breakthrough a focus on only 1 key business attribute is not enough. You need change of multiple business attributes. In this case we focused on:

FLEXIBILITY AND SPEED AND BETTER PARTNERS AND BETTER PEOPLE AND new customer interaction process AND…

Our 10 tips to achieve a successful business turnaround

• The Turnaround Leader + Team needs to be determined to follow the plan even if it is needed to disturb individual shareholder interests
• JV Partners with different business models and market segments can rarely add value to each other on short to medium term
• A JV needs autonomy to deliver.
• To seriously Innovate cannot be done within an established company which protects the established core business model without full autonomy!
• Software and systems/solution thinking becomes more and more important in our networked world.
• Learning by establishing fast feedback loops from market to the company is vital for success
• Leadership to inspire and focus people behind a bigger vision/purpose than themselves is key for success
• Embracing more and more digital marketing , crowdsourcing and all the new exponential technologies that go across many industries becomes vital for success
• EXECUTION. We delivered what we planned with many challenges but we did and that is what is counts!
• Finally we inspired and nurtured many better managers and employees that started with low level of exposure and learned so much with such a wealth of experiences within 3-4 years time period!

About the author: Mike Mastroyiannis is a highly experienced CEO of Business Units in Global Multinationals as well as CEO and/or Co Founder of technology start ups. He lived and worked in many countries and understands East and West. He created innovative scalable global systems and businesses (15 million to 2 billion USD sales, 100 to 5000 people) as well as reinvented, simplified, automated and grew effectively. He handled many fast turnarounds (6 – 12 months turnarounds) for big businesses as well as Start Ups. View Mike’s short bio

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

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.

You’ve seen it too many times before – the free-spending startup company which burns through their funds like a cocaine addict on vacation in Columbia. It’s ultimately a sad tale, with great potential often wasted, many jobs lost and multiple lives hurt. But it is sometimes hard to feel sorry for the management teams that put these companies in precarious positions with poor judgment and lack of self-control – they should know better, and end up getting what they deserve.

1. Spend it almost as fast as it comes in, because the market is overheated. This was endemic during the Internet bubble years, when even formerly conservative VCs were imploring their portfolio companies to “spend money faster”, and “get the eyeballs now, we’ll figure out how to monetize them later”. A lot of that was going on back then. Crazy, as we all look back at it now.
   
2. A more common situation where money tends to get spent way too fast is when a startup management team is staffed primarily with “big hitters”, coming from big company backgrounds. I remember in particular a mesh networking company here in San Diego, which burned through over $60M in VC money, while creating almost no revenue along the way. They hired an almost endless list of VPs from name brand, blue chip companies, paying them well over the going rates at early stage companies. The CEO came from a big telecommunications company (with no startup experience). He was paid a SALARY of $750,000/year. Yes, you read that right–I’m not even counting his bonus and option grants. In a company that was barely past the pre-revenue stage, and nowhere near profitability. It still amazes me.
   
3. Another scenario I have seen quite a lot, are pioneer companies that are developing a novel technology or product, attempting to create a truly new market. What happens often in this situation is what I’d call an “itchy trigger finger”. That’s when it’s still too early to create the critical mass needed in a market. Instead of being patient, marshalling their resources and continuing to develop their products while educate the market, these innovators get impatient. They blow through their investment capital with a premature, huge ramp-up in Sales and Marketing, well prior to their product or the market being ready for this expansionary phase. Their large expenditures in Marketing serve only to prime the market, to the great advantage of their fast-follower competitors.
   
4. The final situation that you often see leading to overspending is the company that has been bootstrapping successfully (but also painfully) for a very long time – then finally is able to attract a round of Institutional Capital. Every startup has a long list of “like-to-haves” that they would spend money on – if they only had it. So it’s ok to knock off the most important areas at the top of the list, when that initial funding finally comes through. But like a starving man let loose after hours at McDonalds, some of these formerly prudent managers gorge on the newfound capital – spending it like its ongoing cash flow – not the precious investment capital that it actually is. Not being miserly with investment capital is one of the cardinal sins indicative of bad startup management. In this particular situation, it is otherwise sound managers who undergo a bout of “temporary insanity”– a particularly sad story.

So that’s one side of the coin – overspending. We’ve all seen it, and when you’re not inside the eye of the hurricane that is a startup company, it’s pretty easy to recognize. There is no doubt that this free-spending behavior has killed many promising startups.

But what about the flip side of the coin – when managements are TOO miserly, and spend too little? This is an area that I have not seen discussed very much lately, in early stage tech circles.

Now please keep in mind, I’m not advocating spending funds that you simply don’t have. Borrowing is rarely a good idea for an early stage software or tech company. If you don’t have the money – please, don’t try to find a way to spend it anyway! Conservation of capital is one of the basic pillars of good startup management practice.

Yet, there are some places where an early stage company simply HAS to invest, or the outcome will be almost certain crib death. Below are a few important examples:

STAFFING THE STARTUP WITH GOOD PEOPLE

Good companies are built with good people. Great companies are built with great people. Even the company with great brand equity and outstanding IP, are doomed for a fall without the continued benefit of committed, smart staff. In a startup, it’s even more critical, because you don’t have any of the built-in advantages that a big company has, which might allow the enterprise to coast for a bit before heading south. Without good people, startup companies will not thrive for long. Even if a profitable business can be built, it will eventually hit a wall, as a result of lack of depth in the employee pool. The initial founders can only take it so far without a strong supporting cast-growth will eventually stall. I have a client, a young CEO, who has done a great job building a strongly profitable, multi-million dollar business in a large and competitive market. But his growth appears to be stalling, because he views much of his staff like desk chairs, or any other overhead line item – an expense item to be minimized. Don’t make this mistake. Your staff is your lifeblood, not a ball & chain to be jettisoned at every opportunity.

CREATING A GOOD PRODUCT

Almost important as good people to a software or high tech startup, is a killer product. Although there are many, many things that are important to a successful startup tech business, by their very nature, tech companies are almost always driven by a great product. There are exceptions, no doubt – but this is a pretty good rule. It makes little sense to cut expenses in product development (assuming that you’re spending the money wisely!), until you have created a product that can lead to winning in the marketplace. With a startup, that almost certainly means something that’s not “me too” – it needs to be faster, cheaper, more capable. A strong product is the muscle that allows you to break though the barrier of embedded competitors with strong positions and brands. Don’t kid yourself and save your money for other things, until you’ve hurdled this bar.

BUILDING A CRITICAL MASS OF UNIT SALES

Lastly, you’ve built a killer product and have a savvy staff pushing it out into the market. With whatever you’ve got left in your tank – use it. Stomp on the gas peddle, spend whatever you can muster on outbound sales and marketing programs. This is where the proverbial “crossing the chasm” really takes place. There are a certain number of successful customers you need to sell, before you get over the peak of that initially steep sales curve – and things start to get easier. Once that happens, people know your company name and product. Enough happy clients are out there so that word of mouth marketing kicks in. Instead of fighting for every new customer, they start coming to you in increasing numbers – without any effort at all. Your product is now showing up in the market share figures. The press and analyst community start to call you, instead of you leaving endless unanswered messages in their voicemail boxes. Yes, at some point, believe it or not, it really does get easier! But this happens only if you are able to close the number of initial sales necessary to reach critical mass in your specific market. Until you reach this point – SPEND WHATEVER MONEY IT TAKES – AS LONG AS YOU HAVE IT.

About the author: Phil Morettini is an experienced High Tech senior manager with functional expertise in product marketing, new product planning, business/corporate development and sales management in a BtoB and BtoC environment.

View Phil’s short bio