Jon Ingalls left Amazon.com two years ago to start his own company. Before leaving, he had spent seven years leading the teams that built and operated the business performance and monitoring systems on which his world-renowned former employer drove successful online sales of books, jewelry, cameras, kitchen tools, and so many other kinds of merchandise. While creating and managing a system that handles billions of measurements and electronic transactions every month, Jon began to envision a new kind of company that could measure any electronic transaction and develop superior business insights for any enterprise, not just one superstar online merchant. In 2007, Jon launched TrackSimple Inc with his own money and quickly attracted five of the best and brightest technologists in the industry.
Jon knew that starting and running a company were very different from managing a team of engineers, but like most entrepreneurs, he was undaunted by this challenge. In fact, this uncertainty was highly motivating for Jon. He met with many independent and institutional investors to explore market strategies and investment alternatives. Jon and I met serendipitously during a presentation he made to a venture capital firm that had asked me to assess Jon's business plan and his potential as a CEO. After the meeting, Jon emailed me requesting to meet privately to discuss hiring me as his business coach. We explored our styles, his goals, and whether we were a good fit over the course of three meetings and then agreed to enter a business coaching partnership in June 2008.
There were three main factors on Jon's mind as we started our coaching engagement. First, he wanted to fully evaluate his strengths and weaknesses as a CEO and devise a plan to improve. Second, he needed to devise a strategy to finance his company. And third, he needed to land his first customer.
As is true for most first-time entrepreneurs, Jon wasn't exactly clear about what a CEO was even though he had the opportunity to watch Jeff Bezos perform the role successfully at Amazon. Jon was now in the hot seat and he was quickly realizing there was a lot to learn and learn fast. In addition, the economic walls were already cracking in the venture capital world in late 2007, so by the time he hired me in June 2008, many venture firms were reluctant and nervous about investing into new companies. Especially one with an unproven CEO.
We constructed an interleaved three-part coaching plan. First, we worked on a strategy to get the company funded. Next, we set a target and plan to attain that first customer. In addition to those two components, we concurrently evaluated Jon's leadership skills and areas for improvement—now and later.
A consistent coaching methodology was applied throughout each of these blended business activities. Jon assessed his situation and then presented his case. I challenged his assertions and implicit assumptions. After reconciling this discussion into a comprehensive assessment that Jon owned, we set concrete, measurable goals. My role from that point onward was to encourage or provoke Jon to achieve those milestones. Conversations ranged widely among topics including risk assessments, opportunities, progress on plans, progress with new behaviors, and leading a team of people in a sincere, honest, and direct manner.
Financing. Shortly after the company had raised angel funds in late 2007, Jon had started engaging venture capital firms to get his company funded. It was clear by April 2008 that he was not succeeding. His pitch and presentation were admirably ambitious and visionary but neither focused nor polished enough to garner investment. In his own words, "They seem to like me but they aren't buying what I'm selling." Of course, the private equity market was already quite reluctant at this point, which meant that his pitch needed to be brilliant if he was going to get an investor on board.
We focused on Jon's presentation skills and the clarity of his message. To build confidence, we practiced privately in role-playing and whenever he said or did something that contradicted his specific business message or his stature as a CEO, I stopped him and asked him why he said or did that. This allowed Jon to reflect in the moment on the sources of his own behavior, and as a result, he quickly eliminated unnecessary or confusing phrases and started acting more confident and poised in his delivery. He then moved on to business associates as dress-rehearsal audiences and ultimately refined his message and his stage presence as a CEO for the venture community. In fact, he became brilliant in his oratorical skill and his message clarity, which had the added benefit of making Jon a good product salesperson for his young company.
Contract Negotiations. During this period of fund-raising, TrackSimple was also deeply engaged in a dialogue with its first major client prospect. Jon had little prior experience with this level of complex contract negotiation, so we pulled in expertise to help Jon learn the intricacies and principles of this kind of negotiation. I facilitated role-playing with Jon and his team so they could all learn and contribute. We explored what might happen in a negotiation, what would be the best response, etc. His team moved from a confused lot to a well-orchestrated unit in the span of only a few months of practice. However, there was a raging debate on Jon's team about whether this first customer was merely one of convenience or the first of many. In other words, there were several strong opinions about which market segment to pursue.
My role as a coach was to help Jon balance a measured, Socratic approach with a more emphatic, directive approach. His team was technically brilliant, but had little experience with market analysis or client assessments. At the same time, his team had to believe in the mission to serve the client and in Jon's ability to bring the next client. Thus, while learning to negotiate through a complex, technical contract with a powerful customer, Jon was simultaneously learning to negotiate with his team on the balance of power—when he should listen and when he should assert himself as leader and demand commitment.
The team came to agreement on the market segment, landed their first big client, and our coaching shifted to retaining that client while exploring when and how to land the next one.
On-the-Job CEO Training. The configuration of a start-up company board is of vital importance to the success of the company. It is a critical time because how the board is formed sets the tone moving forward and how the board makes decisions sets precedence for future decisions. Both TrackSimple and its lead Investor were jockeying for as much board power as possible. We focused on Jon's core objectives and must-have terms, and then he worked with legal counsel to get advice on the best approach to document and close on those terms.
More generally, in every weekly coaching session, we began and ended with a grounding assessment of Jon's performance in the core skills and essential functions of leadership. In particular, we ensured that he spent more time listening and devised a plan for him to practice that skill in and out of the workplace. And we always came back to his core objective of motivating and inspiring his team to make a sustained effort toward their primary mission of delivering superior business results to all interested companies through superior measurement of electronic transactions.
The Value Delivered
TrackSimple raised $2.2 million in venture capital in a time when most firms were unable to even get an appointment with a partner. The board configuration retained parity in power and control between management team and the investors and the board has established a respectful and productive dialogue. The first client generated well over $100,000 in revenues and is now negotiating a substantially higher value one-year contract. The team is also negotiating with a second client. TrackSimple is now seen as one of the premier technology start-ups in Seattle and is attracting superior talent among technology and business professionals. The investment in coaching to date has been $18,000. The financial return on investment is well over 10,000 percent, even if you only include the fund-raising and first-client revenues.