When Rod Favaron was named the CEO of Lombardi Software in 2002 he was relatively young (38), inexperienced as a CEO, and not exactly accustomed to the oscillating highs and lows that come with running a high-growth software company. While Favaron was confident in his ability to lead the business, he also experienced occasional pangs of self-doubt. On one day in particular, Favaron recalls leaving the office, getting in his car, driving to a nearby parking lot, and sitting in silence for three hours. “It was one of those (weeks),” Favaron says, “where we were getting a lot of bad news.”
But Favaron prevailed. In 2009, he led Lombardi Software to an acquisition by IBM, and since 2011 he’s served as the president and CEO of social marketing platform Spredfast, which has raised more than $64 million in venture capital since being founded in 2008 (disclosure: OpenView is an investor). In this episode of Founder’s Corner, Favaron sits down with guest host and Mass Relevance founder Sam Decker to talk about the reason he believes CEOs must gain an appreciation of sales, what makes Austin such a special startup hub, and the advice he likes to give new founders.
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On the challenges of being a first-time CEO (and how to overcome them)
- It’s lonely at the top. It’s not always easy to admit that publicly, but Favaron says the sooner young CEOs actively seek mentors and speak with other CEOs, the better off they’ll be.
- Try not to oscillate. As you grow into your role as a CEO, you have to develop the ability to deal with stressful highs and lows. If you’re over the top high one day and low the next, you will drag your organization with you — and most people aren’t equipped to handle that instability.
- You can’t touch every problem or opportunity. With a small company, you can go to the source, fix the problem, and move on. As the company expands, however, you’ll find yourself spending a lot of time managing through people. Favaron says it’s critical to tactically pick and choose where you invest your time.
- Leadership is about people, relationships, and trust. When you get a job for the first time, you don’t know always know what to do or how to do it, but you can surround yourself with mentors or advisors to help out with those things. What sometimes can’t be taught is the importance of hard work,
- Doing something “against the die” is hard. Behavioral changes take a lot of time and it often requires repeated visible successes. When two very good things happen, people tend to think, “maybe we should consider that.” But this only happens when someone at the top vocalizes the need to start doing it this way.
On why CEOs (whether they’re operational or technical) must come to appreciate selling
- Turns out, “selling is about people and relationships and knowing your subject, and people trusting and learning how to run a sales process.” When Favaron entered the sales world, he gained an appreciation for what selling is all about.
On the keys to scaling a software business successfully
- The key to the next stage of growth: Repeatability. As you get bigger, repeatability becomes critical. Rather than completing things with heroic activities (think: startup), CEOs of expansion-stage companies must define parts of the company where decisions are made quickly and the processes can be repeated to create efficiencies.
- Be relentless and don’t stop giving your pitch — those are the tricks to raising money. There will be way more doubters than believers when you start something new. However, there are a lot of incredibly successful entrepreneurs who everyone thought their idea was ridiculous when they stared. So show investors that you have made progress and have a model that they can scale.
- Give people the opportunity to put on their creativity hat. At Spredfast, a full week is dedicated to innovation, creativity, and teamwork. The company’s Hack Week lets people try doing things they didn’t think were possible. By setting aside daily tasks and letting people work on things they are passionate about it, instills and accelerates innovation in the technical product, processes, and customer communication.
On what makes Austin special
- Mentors. Advisors. Talent. Creative energy. Affordability. If you’re trying to start something all you have to do is raise your hand. The collaborative entrepreneur culture allows for a lot of opportunities for entrepreneurs to get together. There are a lot of smart people who are open to help and share (see more reasons to love the Austin startup scene here).
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