10 Most Important Business Lessons My Friend Learned...

Hello All.. I was just on Facebook and I saw this post that my friend Ryan Allis made about the 10 Most Important Business Lessons that he's learned.  I should give you some background on Ryan, but some of you have definitely seen his company's advertisements online.

Here is some background info on Ryan Allis -

"Ryan Allis is a technology entrepreneur and social entrepreneur from Chapel Hill, North Carolina. Ryan has been an entrepreneur since he started Allis Computing at age 11 in 1995. Today, Ryan is the Co-Founder and Chief Executive Officer of iContact, the leading global provider of email marketing services to small and mid-sized businesses."


"Ryan has built North Carolina-based iContact from its start in July 2003 to its current size with over 190 employees, 60,000 customers, and $35 million in annual sales. iContact has raised $13.3M in investment from NC IDEA, Updata Partners, and North Atlantic Capital."


So how did I meet Ryan?  Well... it will come as no surprise that I met Ryan online back in 2001, before iContact was even a thought.  We met on the Rich Dad Poor Dad message board as college Freshman (him) and Sophomore (me).  I was working on a project that was similar to ZeroMillion and then I worked with him to help him start ZeroMillion.com to promote his book.  We were both young ambitious college students who had something on common.  This is also the website, where I got in touch with, now good friend, Bryan Sims who owns Brass Magazine.  If you don't believe me look here - Me on ZeroMillion.com, so yeah I'm not lying but it's MUY out of date.


You'll notice that one of the things I put in my bio was that NYU Stern School of Business was a plan back then.  Well it's funny how things come full circle, because clearly I wasn't thinking about business school then - at least not seriously.  I still need to give him a call to have him remove that.. or at least alter it a bit.  I'll do that right after this post.


So anyway that's a short background on that... but I wanted to post the words that Ryan shared about what he's learned over the years... One day I will write more about my challenges with the group of young entrepreneurs that I've become friends with over the years.  There's an internal struggle there.  Maybe I can write about that in an essay!  


In any event here are Ryan's comments.

Here are the most important business lessons I’ve learned building iContact from 2 to 220 employees over the last eight years.

1. Just get started, have a bias toward action, and don’t get stuck in analysis paralysis.
2. To grow your sales, it is critical to calculate the lifetime value of an average customer, calculate what you’re currently paying to acquire an average customer (total monthly ad spend divided by customers acquired in that month), determine the maximum you’re willing to pay to acquire an average customer, and scale your marketing scientifically by testing relentlessly and finding the channels in which you can acquire customers for less than your maximum acceptable customer acquisition cost and then growing spend within those channels.
3. Never raise more equity capital than 1x your current annualized revenue (monthly revenue x 12). If you raise too much money too soon you’ll give up too much ownership and control of your company and be tempted to spend the money in ways that aren’t carefully controlled. Wait to raise a large round until you have proven mathematically than $X amount of additional spending with generate $Y amount of additional revenue. (once you figure out #2 this is easy).
4. If you choose to raise money, raise it from investors you like and get along with well. You’ll have to hang out with these people for the next 3-7 years, make sure you enjoy spending time with them.
5. After the first year or two, your success is determined by the people you hire, not by you. Stop trying to do everything yourself. Scale yourself by hiring people more experienced than you in their field as soon as you can afford to.
6. Every member of the team should have a significant portion of their compensation based on the company’s success and their department’s success, quantified and communicated clearly in advance.
7. Your job as CEO is not to micromanage/tell your team members what to do, but rather to hire experienced people who can do their jobs better than you could, collaboratively set numerical goals, and hold your direct reports accountable for their performance individually and as a team.
8. Once you get past the start-up phase when you’re responsible for everything, the five parts of a CEOs role are 1) Set strategy and vision 2) Manage the senior team 3) Communicate with stakeholders 4) Oversee resource allocation and 5) Build the Culture.
9. It is possible to become more socially and environmentally responsible and increase your financial returns at the same time
10. If you create a great culture (a fun work environment filled with people who are high performers and who care about their work and their impact on the world) you will be able to attract and retain better people who will be much more engaged and productive and create a much more financially successful company.

Right now I'm going back to studying before the Emmy's come on tonight.  Chow