How do you step down as CEO of a $1.3 billion-a-year company that you built from scratch and yet remain the sole owner of the business? For that matter, how do you raise the capital to grow a company to that size without taking on a single outside investor?
Curt Richardson, founder of OtterBox, did all of it, with good gross margins along the way and more than $4 million that he borrowed from "angel lenders"--private individuals, many of them from his home town of Fort Collins, Colorado--promising them returns of 15 percent to 20 percent. "I’ve had partners," he told the audience at the Inc. Leadership Forum in San Diego. "I don’t want others."
OtterBox is the leading provider of protective cases for smartphones and other electronic paraphernalia, although it began as something quite different: a manufacturer of waterproof plastic containers for people into various watersports--hence the name OtterBox. Richardson, who had bought his first business--a plastic tooling company--at 21, invented the first OtterBox in his garage in the early 1990s and launched it as a separate business in 1998. The company had its ups and downs, especially after the dot-com crash, but regained its footing and enjoyed a huge growth spurt from 2008 to 2011, rocketing from $10.2 million to $347.5 million and landing at #85 on last year’s Inc. 500 list. Even so, last year Richardson resigned as CEO and turned the reins of the company over to his successor, Brian Thomas, who had been with OtterBox for nine years.
How did he do it? "It starts with knowing who you are and what you want," he said. “You need to ask yourself, ‘Who am I? What do I want to be remembered for?’ I’m always surprised at how many people never even think about those questions."
Richardson said that he began thinking seriously about naming a successor four years ago, but the process actually started many years earlier, when he happened to read Michael Gerber’s classic, The E-Myth, on a plane coming home from China. Upon landing, he contacted Gerber’s organization and began restructuring his business according to E-Myth principles. "The goal was to build the company so that it could run without me," he said. "I couldn’t have done it without a coach."
So when should an owner begin grooming someone to be his or her successor? "You should start now," Richardson advised the attendees. "You need to give it a minimum of two or three years."