We (and when I say "we," I really mean I) talk a lot about the challenge of starting a company from scratch -- after all, that's what the vast majority of entrepreneurs do.
But what happens when you step into the top slot at an already thriving business? What happens when you take the helm of the leading business in your industry?
To find out I talked to Richard Jalichandra, the recently-appointed CEO of Bodybuilding.com, the number one online retailer of sports nutrition products, apparel, and equipment. Prior to joining Bodybuilding.com Rich has been the CEO of companies like iSocket, MapMyFitness, and Technorati.
Starting a company is tough, but so is taking the reins of a company whose website carries over 13,500 health and fitness supplements and accessories and ships to customers in more than 155 countries. The site also contains over 35,000 pages (25,000 articles and 10,000 videos) of training, nutrition, and fitness programs.
You've stepped into the CEO role before. What do you do first? How do you approach your first 90 days?
I have about a 15-year history of coming in and being the person that either partners with or replaces a founder and is charged with reigniting a business or stimulating new growth. So I've learned how to take an existing vision and pay homage to that vision... while continuing to grow and finding ways to generate new growth.
But that doesn't mean it's always been easy. The first time I was playing number two to another CEO; that went fairly smoothly. The first time I was on my own I got my butt kicked.
At this point, I think I've been sitting in a CEO chair for over 20,000 hours, twice the 10,000 hours principle. Time and experience helps you develop frameworks and processes that you can apply to any size business.
So what is rule number one when you take over the leadership role?
The number one rule is: Don't screw it up. Take Bodybuilding.com; it's a business that has a fantastic history and growth story, so you definitely don't want to go in and screw anything up.
Always start by sitting back and observing and asking a lot of questions to ensure you don't pull the wrong proverbial Jenga block out of the stack. You need to really understand the company and its strengths before you take major steps. And you definitely need to understand why things are working.
Typically what I do is go back to the board and investors after thirty days and share my initial thoughts. I focus first on the good news. Then I try to have a few concepts for how we will address the areas for improvement. Sometimes I have those answers, sometimes I don't -- at least not yet.
With all your web pages, and SKUs, and customers... you have a massive amount of data to make sense of.
30 million people visit our site every month. We store 336 terabytes of data. (One terabyte equals 174 billion pages of text.) All that data is an opportunity because it helps us create and deliver the kind of content that different users and customers want -- we have something for everyone.
Of course to deliver our content and commerce, we invest a tremendous amount in software. We have over 150 people on our development and IT teams. So we're a fitness company, but we're definitely also a tech company.
Lots of companies struggle to expand beyond their initial "hardcore" base; when they try to go broader they lose their core audience. How do you avoid that?
We have really good data concerning what is important to both hardcore and more casual fitness enthusiasts. When we create content, we absolutely don't just guess. Data shows us what is important to those audiences.
The two other enthusiast audience businesses I ran faced a similar issue. A company starts with and grows through the hardcore base, but the major growth opportunity lies in whether you an attract the more casual user. The key is to serve the hardcore audience yet stay accessible with broader content.
Those two goals are not mutually exclusive. They're definitely not mutually exclusive for us since we provide such a huge volume of content. We can provide comprehensive information for a broad range of audience segments; that's how you ensure you keep your core audience while building new audiences.
Many small business owners use celebrity associations as part of their marketing plans. Any advice for how to make that work?
We do have some very famous people in videos: people like Arnold, the Rock, Mark Wahlberg... talking about their own workout routines, and we associate with a number of fitness celebrities and athletes as well. Those associations work well for us for one main reason: authenticity.
So my first advice is to be careful. What works for, say, Nike doesn't always work as well for small- to medium-size businesses. What a small business needs to achieve is very different from what a large scale business, a global business, can do with an association with an athlete.
The number one rule is authenticity. For an association to work, it has to be authentic. And even then it still might not work. For every celebrity association that seems to be a magic bullet, fifteen others failed.
Say I'm a would-be entrepreneur, I run into you in an airport lounge, and I ask you for quick advice. What would you tell me?
If you ran into me in an airport, you'd probably see me doing squats or isometric stretching. You've be surprised by where you can exercise if you're creative.
The first thing I'd ask is whether you're passionate about whatever it is you're selling. It doesn't have to be something you love, but it definitely needs to be an area of interest, and it really helps if you're an expert. That helps a lot.
Bottom line, though, running a business is not that difficult. You need to take in more money than you spend, and if you stick with that plan you will generally be successful. I know that sounds too simple, but so many people lose sight of that.
That's also why so many small businesses over-invest early on. Instead work to come up with a creative solution that costs no or a little money -- that forced discipline helps you spend less than you make.
Sometimes capital is necessary, but at some point there must be return on that capital. I have nothing against taking equity investment, and investing for the future, and losing money for a number of years... but your plan has to get you back to that simple equation.
That's a hard leadership position to take when a company does have significant resources, both in money and in employees. Many big companies default, over time, to throwing money at problems.
It definitely is, and that's why I repeat it all the time. It's not as simple as saying it. You have to explain why spending money to solve a problem isn't answer.
I focus on the benefits of creativity, and not just in order to solve the immediate problem. If people are using their creativity at every level of the organization, that not only makes the organization better but it also helps people learn to grow in the organization and even become entrepreneurs.
So I tell you I'm taking over a big company; how should I approach that?
My philosophy is to run every company, no matter how large, like a tiny startup.
Act like you have no money. Act like you have no power. Act like you still need to prove yourself.
That approach forces you to think of more creative solutions in terms of marketing, operating, selling... everything.
Forcing yourself to be creative almost always results in better solutions -- and better companies.