The Secret Life of a Serial CEO

Tweet

The slides drag on; there are 25 of them. Cramer wants the presentation cut to no more than 15. Faucher seems exasperated. "I've barely slept in three days, and not just because I have a new baby," he finally blurts out.

Cramer suggests they wrap it up, telling Faucher not to worry. "In this A round of financing, VCs want to see you've got a great idea that's unique and defensible, and a good team," he says. "You'll figure all the rest out for the B round." He tells Faucher to think big. "VCs aren't like angels. They're not thinking about how they can make $500,000. They're thinking about how they can build a billion-dollar business. Don't refer to exit opportunities--think next major media company; think replacing the labels."

As the group leaves the room, bound for a late lunch at a nearby Brazilian restaurant, Cramer grabs three coffee mugs and takes them to a sink to wash them. "Hey, it's a start-up," he says.

March 12, 2007
Atlas Venture, Waltham, Mass.

Atlas is situated in a warren of high-tech VC firms huddled together behind a snazzy glass façade in a bucolic setting. These are pricey digs, and Faucher has cleaned up a bit for the occasion, looking more Hollywood than grunge today. Antoniades, meanwhile, looks even more menacing. They're both nervous. Cramer, on the other hand, seems in his element as he chats up the two executives who have come to the conference room to hear the pitch.

Faucher gets less than a minute into it before partner Axel Bichara starts interrupting. "Your metrics are unclear," he snaps, gesturing at a slide that shows how the music market breaks down into labels and independent artists. "What are you measuring? Sales? Units? You have to understand segmentation if you're going to be in a long-tail market." Antoniades responds that revenue figures for independent musicians are conservative because they don't include gigging. Bichara fires back: "Well, what are the gigging revenues?" Faucher and Antoniades stare blankly. Cramer, who has clearly been at pains to try to stay in the background, jumps in to assure Bichara that gigging will be integrated into the Nimbit system and carefully tracked.

Eventually Faucher seems to find his footing, and the Atlas partners appear to be taking in the pitch with interest. Peter Shannon, an Atlas associate, asks about the competition, whose names he can rattle off without glancing at notes: Indie911, Snocap, CD Baby, Echomusic, GigShare.

Faucher maintains they're not really competitors, because Nimbit will actually help musicians sell at all these sites, even updating the listings there automatically.

"Will you be competing with iTunes?" Bichara asks.

"iTunes is becoming like a major label," says Antoniades, with what seems like heartfelt scorn. "They're doing the same things to independent musicians that labels did. They're making musicians pay for exposure." Faucher adds that while Nimbit will help artists place their songs on iTunes, it will advise the artists to try to shift sales away from iTunes to avoid Apple's (NASDAQ:AAPL) cut, which can be as high as 50 percent.

The partners both nod, impressed. Sensing the upswing in interest, Faucher goes all-in. He jumps to a slide showing revenue projections, waits a beat, lowers his voice, and says, "This could be a billion-dollar business."

If the partners doubt it, they aren't showing it. In fact, they briefly take over the pitch themselves. "What we're really looking for in a company like this is a network effect," Bichara says. He apparently means viral marketing. He wants to know if there is some way that interest in Nimbit can be made to cascade online, so that musicians end up recruiting other musicians. In other words, will Nimbit have to market hard to win over bands one by one, or is there a way to get it to catch on instantly with tens of thousands of bands?

But Faucher either doesn't understand the comment or chooses to ignore it. He continues on with the next slide.

Shannon persists: "Where's the network effect?"

Faucher stammers. Antoniades shrugs. Cramer speaks up. "We could give you 10 different answers to that question off the top of our heads, but we really need to think that through," he says. Both partners look at their watches. "We're just about out of time," says Bichara.

"I can finish if you just give me two uninterrupted minutes," says Faucher peevishly. Cramer flinches. The point of the presentation is to engage the partners, not to force them to stare mutely at a parade of charts and bullet points.

 PREV  1 | 2 | 3 | 4 | 5 | 6 | 7  NEXT 

Read more:

David H. Freedman

A Boston-based contributing editor, Freedman is the co-author of A Perfect Mess, which examines the useful role of disorder in daily life, business, and science. His other books include Corps Business: The 30 Management Principles of the U.S. Marines; At Large: The Strange Case of the World's Biggest Internet Invasion (co-authored with Charles C. Mann); and Brainmakers: How Scientists are Moving Beyond Computers to Create a Rival to the Human Brain.

Sign-up for our Start-up Newsletter

Email Address: