Startup CEO Reveals How He Took Company From Layoffs to Lucrative Profits
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, iCIMS , 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 recurring.
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 success."
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."
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