Sean Clark is the founder of Canada’s insanely successful online shoe retailer, Shoes.com.
In five short years, Clark has propelled Shoes.com from a one-man start-up to a company employing over 600 people, with turnovers exceeding $300 million.
Furthermore, it’s projected to achieve $1 billion in revenue by 2019.
Anthill’s James Tuckerman caught up with Clark to talk about rapid growth, raising capital and working from his mum’s basement!Sean Clark will be a guest speaker at the Online Retail Conference taking place on 16-17 March at the Melbourne Convention and Exhibition Centre. For further information, click here.
1. Find people who ‘roll it forward’
It’s important to foster a tight group of partners from whom you will raise money, especially in the early stages of your company.
Most new entrepreneurs, when seeking to raise capital, start with the obvious venture capital funds and angle networks.
But most early stage funding comes from personal networks.
So, rather than hound strangers, identify investors who like, respect, and believe in you and your company, especially people who have already experienced success as an entrepreneur.
One of Clark’s earliest investors was his former boss, Roger Hardy. As a seasoned entrepreneur, Hardy had already experienced success building and exiting a business. Today, Hardy is Clark’s CEO.
Seek people who will truly ‘roll it forward’ in the long term.
ACTION STEP: Write a list. Who knows you? Who likes and respects you?
2. Business is personal. Acknowledge that.
Often people won’t agree with your decisions or they will view the world in a different way. You are passionate. You have more invested in your business than just about anyone else. Facing opposition can feel unduly painful.
For example, Clark was among the first advocates of drop-shipping in Canada. Many of the incumbent shoe retailers had little experience with drop-shipping and opposed his suggestions to adopt the practice.
That was frustrating! And threatened some relationships in the early days.
Furthermore, making mistakes and failing is a big part of the business. Learning valuable lessons from your mistakes is essential. And, naturally, when you make a mistake, you’re going to get emotional. Accept that.
But do not let that emotion lead to further mistakes!
The idea that business is all about pure logic and that it lacks human emotion is simply not true. It’s a highly destructive myth.
Instead, be aware of your emotions. If you find yourself feeling annoyed or frustrated or even insulted, take a 5-minute break. Go for a quick walk around the block. Or, if you can, sleep on it and approach the problem with a fresh set of eyes the next day.
Business is a personal thing. Acknowledge and accept that for what it is.
ACTION STEP: When you feel your temperature rise, take a walk.
3. Cash is king. Vigilance is key.
Cash is king. It always has been. It’s the lifeblood of the business.
And that continues to apply NO MATTER how big the company gets.
There is an assumption that only startups need to bootstrap and that the ‘boostrapping-mindset’ won’t be needed when the company brings or capital or begins to grow.
The opposite is true.
The bigger your company gets the more vigilant you need to be.
Managing the cashflow of a $500 turnover business is much different than managing the cashflow of a $300 million turnover business.
But many of the same principles apply.
It all comes down to culture.
Every company needs to develop core values that will determine how its employees view money. For example, while some companies might choose to address a challenge by just throwing money at the problem, a fast-growth company, backed by investors, can’t afford to think that way.
“We always say to our employees, ‘How would you spend this money if it was given to you by your family?’ This brings the personal side of the business back into the equation,” says Clark. “It adds a moral element to spending.”
This is something that works with companies of all sizes too.
ACTION STEP: Present this question to staff, “If you were spending money invested by your parents, how would you behave?”
4. Know when to hand over the reigns.
Do you know how to self-analyze?
Ask yourself, “Am I the right person to be doing this job?”
The person who launched a business is not always the right person to propel it forward. Examples of companies where the founder maintains the CEO position from startup to global domination, like Bill Gates at Microsoft or Steve Jobs at Apple, are very, very rare.
The startup phase and the various subsequent growth phases require different skill sets.
It’s important to understand that sometimes you need to let go of certain aspects of the business. You have to know when to get out of the way, and let the professionals that you hired do their job.
This can be challenging for many entrepreneurial founders, because it is a personal thing – it is about your own ego. Learn to put your ego aside.
This can be a difficult thing to accept, and is an adjustment for sure.
Instead, build the right team around you that will allow you to focus on your core strengths. Get out of the way! By focusing on areas of the business where you excel, you’re likely to also feel happier in your job too!
For example, Clark has taken the role of Chief Revenue Officer, focusing on ways to grow the business, rather than maintain the CEO role.
ACTION STEP: Write this down. What is your core strength? What is just ego?
5. Know when to let people go.
Make sure you have the right people on the bus.
You have to know when to let go of people, and when you need to bring in some more specific skill sets. That’s simply because the needs of the business will change as it grows.
This is an ongoing process with a business, and is a part of being an executive.
On the tactical side of things, Clark uses a system called ‘top grading’ to help evaluate employees. Top grading is essentially a system where each individual employee is assigned a grade of either ‘A, B, or C’, with ‘A’ being the highest, and ‘C’ the lowest grades people can receive.
With respect to emotions, again, it’s important to know when to let go of the reigns. You must be able to trust your other executives and the team that you have in place to be able to make good decisions about the company.
Place your ego aside. This also applies when letting others go.
While these types of decisions can be very hard, it is also important to remember that you are making decisions that don’t just affect your investors, but they might also have far reaching consequences regarding the sustainability of the business and the livelihoods of other employees.
Clark has over 600 employees and keeping them employed is a far more important goal than the maintenance of one perhaps ill-fitting role.
ACTION STEP: Ask yourself, “Would you hire this person again for this role, right now?”Sean Clark will be a guest speaker at the Online Retail Conference taking place on 16-17 March at the Melbourne Convention and Exhibition Centre. For further information, click here.