I am often asked if experience is helpful? Simple answer is yes. I have worked with thousands of entreprenurs. I have been directly involved in almost 200 startup. But I am still surprized from time to time. I can never tell who is going to succeed but I can tell with great accuracy, who is not. This has served me well as an investor.

First time entreprenur is an even bet. One never knows who will transform and rise to the occasion. A once failed entreprenur is a great bet if he owns his failure. He has twice the fire in his belly, he has something to prove. The failed entreprenurs who blame others for the failures are likely to blame others again. I don’t want to be the one who gets blamed.

First time successful entreprenurs are a poor bet, genrally speaking. They think they have the magic. They don’t sweat the small things any more. They delegate rather than do. They want a much bigger success. They already are living a good life, the success will not transform their life in any meaningful way. Failure will not hurt as much either.

John Bosch was a board member at Excelan. He was rough and gruff character but he was very matter of fact in his approach.

After I started to get my sea legs as the CEO and started to feel good about things, I got very excited about business prospects at a board meeting. John with his usual straight face, cut me short in a mid sentence. Yadi, yadi yah, he said! Spare me the story, show me the numbers. It has been 35 years but I have never forgotten the incidence. Your numbers have to tell the story! Everything else is just fluff.

Entrepreneurs have to learn to run the business by numbers and various ratios. Reveue, gross margins, costs, expenses, head count, growth rates, are minimal basics to start with. Changing/improving ratios are the first level of derivative nymbers. One has to set numerical goals for himself and one’s team members.

One of my favorite ratio was the revenue per employee. It reflected the productivity. I fixated on that and worked to improve it as my primary goal.

A good entreprenur is on top of its numbers and the numbers of its competitors. He must benchmark against the best of them. As the business grows, the only good way to manage is by the numbers

Customer satisfaction/customer success functions are fairly common now. Novell had a customer satisfaction unit (separate from customer service) in the CEO’s office back in 1989 when Excelan first merged with Novell. Ray Noorda, Novell CEO, was obsessed with the customer satisfaction. I, as a part of the my responsbilities, managed that function. It was very interesting experience. As a rule no complain was too minor to be ignored.

Customers are what businesses exist to serve. Repeat customers define the success for businesses. It is very expensive to acquire a new customer and in most of the consumer businesses, it takes several transactions before a customer becomes becomes a profitable customer. Customer churn can be disasterous for the bottom line. CAC (Customer Acquisition Cost), LTV ( Long Term Value of a customer) and Customer Churn are three metrics that a CEO must pay close attention to.

Business need employees to take care of the customers. Happy employees normally leads to happy customers.

A CEO must have a good handle on customer sentiment and must spend time first hand to have a feel for it. Happy customers and happy employees normally lead to happy investors.

This plaque was displayed widely at Excelan.