A History Of Malfeasance – Turn Of Century #DCTech Part 2
When we last left our protagonist (see part 1) he, as in me referring to myself in the 3rd person as if I’m some kind of hero, had just stepped into a pile of poo called Ikimbo. Ikimbo at one time was one of those magical acts of reverse-alchemy where mismanagement, misdirection, and misrepresentation spun gold into a pile of turds (see turd to gold ratio).
The first day I went to work with the following priorities:
- Earn team trust and limit the loss of talent
- Take stock of assets and liabilities
- Cut burn rate
As I arrived in the office for my first day as boss and went about working the list:
- Address the troops – “Folks, we are in a bad place…. I won’t lie. Not everyone here will be here in 45 days. We… as in all of us. will have to make some hard decisions. Which means asking ourselves, do we want to make this work, do we want to be here and am I critical to the company’s success. I’m not going to pretend I know more about our company, our people or our market than all of you. I’m not going to make any major changes without talking with all of you and until I feel I understand our business. I know we have an asset here. I believe we have a business worth saving. My plan and hope is that we can all figure out how to start bringing in paying customers to earn the trust and full support of our investors.”
- Find a parking space – The previous CEO had a huge corner office… a palace. A computer that was top of the line, all kinds of toys. He had a big boy, business man, master of the universe office where he could pretend he was a big boy business man. I skipped the worthless trappings and set up shop in an 8 by 10 foot windowless office. I wanted to send the troops the message that I was here to get sh&t done and not pretending I was a big shot wasting resource on my comfort or self-aggrandizement.
- Meet with the exec team – Had one-on-one’s with each direct report to build relationships and take their measure.
- Mary, the CFO – Mary was hand-picked by the former CEO. He had brought her over from their previous job together. Prior to meeting her, I suspiciously doubted her loyalty. I had just finished reading Machiavelli’s, The Prince… a Machiavellian would have shown her the door on the first day. We had a frank, confrontational conversation and in the end… against all logic, I decided to trust her. I never regretted that decision. Mary is a True CFO… the CFO who is loyal to the books, the truth, her character and her profession.
- Bobby, the CTO – Bobby was solicitous, he had survived all three prior CEOs, had tons of information about the company and the other team members. He was eager to throw the ex-CEO under the bus and embrace the new-next-ex-CEO. He was Mr Helpful.
- Jeeves, VP of Professional Services (I don’t remember his name but he was some uber-British polo-playing wanker. For the sake of the narrative I’ll just call him Jeeves). The prior CEO had purchased Jeeves’s consulting company and I couldn’t figure out why. I had 3 possible reasons: a) he wanted to waste money, b) he wanted to have completed a shitty acquisition on his resume, and/or 3) the company had a few consulting customers and revenue which made them 20 times better than Ikimbo. Without that consulting arm, Ikimbo had zero revenue and fewer customers. Jeeve’s business wasn’t related or synergistic to Ikimbo’s business. He was overpaid and burdened Ikmbo with a second office 20 miles and one state away (Ikimbo was in Herndon VA and Jeeve’s company was in Gaithersburg MD) and a leased Infiniti on which we were obligated to make payments for years.
- Dave – Director of Product Marketing. Dave seemed to be a meat and potatoes, straight shooter. He’d been at Ikimbo from the beginning and worked his way up the ranks. He was quiet and hard to read…. a survivor who’d been through all 3 prior CEOs. I didn’t trust him. He later proved me wrong… he was smart, loyal to the company, a straight shooter. Dave was and still is a dependable guy you can count on.
- Larry – VP of BD – Larry seemed like a good and capable guy. He was also one of the prior CEO’s hand-picked boys. Yet because he was smart, capable, and was so embedded in our strategic partnerships and any possible future revenue I decided I wanted to try and keep him.
So what did I learn on the first day?
- Our Software Development was outsourced to a South Carolina company called DDLabs (the same DDLabs that made an offer to buy the company) whose development team was in the Ukraine.
- For some unknown reason, we had switched to DDLabs from GlobalLogic, a very reputable company run by an extremely reputable and capable CEO, Peter Harrison (Peter later successfully sold GlobalLogic and is now CEO of Snagajob). No one I questioned in the company could explain why we changed horses from Global Logic to DDLabs. Global Logics work was excellent and pricing was similar and we had a common investor in Draper Atlantic.
- The prior CEO and the DDLabs CEO went to Highschool together.
- The prior CEO had a $70,000 severance package that I was going to have to pay (this is from memory so I may be off a bit on the exact number) and we had already paid out $20,000 of the package.
- That I had access to the prior CEOs outlook email account.
- The prior CEO was stupid enough to leave an email between him and Peter Noce (pronounced No-Chay), the CEO of DDLabs, outlining a deal where if the prior Ikimbo CEO could get the board to give Ikimbo to DDLabs, he would be granted a major share of DDLabs stock! Did you read that? Yup! You read that right. He not only breached his fiduciary duty but he did it in email and left a record. That’s why he had said, we either do this deal or I quit. Thank you for the gift…ass hat!
- In day one I found a way to cut burn by $50,000 in severance expenses due to CEO Ass Hat.
Digging deeper, I found good people worked at Ikimbo who deserved more than they got. I found lazy people who didn’t belong. My early introduction to the nefarious actions of DDLabs turned out to be the best part of my relationship with that company. More to come about DDLabs, Peter Noce, the 2 times I wound up in Court representing Ikmbo and much much more….
This is part of the Wolves of Startupland Series