Like so many bright-eyed tech entrepreneurs in 1999,
23-year-old Colin Day never anticipated what the coming years
would bring. Day's company,
, builds software-as-a-service (SaaS) solutions for human
resources departments. At the time, iCIMS was investing heavily
in growth, depending on bridge loans to operate.
But as the dot-com bubble burst, access to capital suddenly
dried up. One day, when it seemed like every week brought news of
another web-based company going bust, Day received a fateful
phone call from iCIMS' lenders.
"It's over Colin. You've got to get profitable because we
cannot fund this anymore."
The very next day, Day cut his company's staff from 30
employees to 8. "Firing someone for no other reason than not
being able to pay their salary is the worst way to fire someone.
I promised myself, once I'd done that, that I would always run
the business profitably," he recalls.
Fourteen years later, iCIMS is raking in $40 million of annual
revenue, with more than 1,400 customers. Running on a
subscription-based business model, 95 percent of that revenue is
Day employs an unorthodox leadership technique to improve his
company's productivity. Every year, iCIMS selects an employee to
receive a $5,000 "Not-To-Do Award" for correcting a stupid or
counterproductive practice at the company. It creates a culture
where employees constantly seek waste or inefficiencies that the
company should scrap.
One year, an employee was awarded for replacing long car trips
to check on the software's servers with a remote monitoring tool.
Another winner eliminated line-by-line paper renewal contracts,
instead utilizing a simple online interface.
Benzinga asked Day what has been the greatest key to iCIMS'
success? In an industry where most players are always looking to
expand their reach and capabilities, the company instead doubled
down on its niche specialty -- staffing solutions.
"A lot of our competitors kept saying, 'we have to do more and
more and more.' We always took the opposite approach, asking,
'How can we be narrower and just be better at our area of
expertise?' That focus has been the greatest key to our
Ultimately, Day sees the most important function of a startup
CEO as being in sales. "Nothing for a CEO or an entrepreneur
starting a company beats doing all the sales yourself. First of
all, you learn directly what the customer needs. Second, you give
yourself an extreme confidence that the product can be sold.
That's the confidence you need to run a company."
(c) 2012 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.