This time, our focus falls on the ‘C’mon Baby Light my Fire’ (CBLMF) company, for the fourth trope in our ongoing series. Recognizing not only when help is needed to grow your business, but also what assistance will be of most benefit is an important lesson for entrepreneurs to learn. And, admitting your business could be better off in other hands; although a very difficult realization to make, can be positive for founders.
A management team of technologists that aren’t as comfortable with sales and marketing is common in this scenario. Problems occur when they fail to scale sales and marketing, resulting in the business going ex-growth.
Characterized by a less entrepreneurial management team, the CBLMF firm has a history of growth, but hasn’t seen any recently. Yahoo has been in this phase for a while, and is still waiting for revenue growth. The company founders are typically still running the business, and usually take the view that “if we build a new or better product, revenues will increase”. In Yahoo’s case, Marissa Meyer is expecting revenue growth to come from mobile, video & native advertising.
Market & investor opportunity
The CBLMF company is normally quite mature and presents a clear market opportunity for investors. Typically, mature markets are associated with this trope as it is easier to excuse low growth rate in this environment. But remember that well-managed businesses can grow very successfully in low growth markets, often by eating up the competition.
Investors effectively become the executive chairman of the CBLMF firm. Returns for them can be positive but it requires a lot of effort to strengthen the management team and stoke the growth rate.
Flattery might get you… somewhere
If you fit the CBLMF trope, your philosophy will be that investment will re-ignite growth in your company. Be prepared for numerous rounds of investor meetings, until you meet a partner willing to take on the challenge your company presents.
Flattery could serve you well, as convincing investors that only through their investment will the business turn around, might appeal to their egos. Informing them you think they’re smart, and you need them to show you what to do with the business might just help secure the funding you need.
To improve its chance of success, this trope will likely need to hire a sales and marketing team and change its culture to be more customer-centric. A new CEO is sometimes needed, which can lead to hostility with founding partners.
We can evaluate your growth options and tell you how to maximize the equity value of your business. The solution could be to grow organically by attracting more customers and raising capital or to sell the business in the near future. In either case we can raise the profile of your business with potential shareholders.
If you’d like to know more and find out whether it’s possible to grow your business again, please
Did you miss our Tropes 3 article? Read it here: Slam Dunk, Home Run!
By David Carratt, Founder and Director, Vie Carratt