May 9 2009
by Todd Hixon

Managing through the downturn: TLH notes from the Nantucket conference

First panel:  Managing through the downturn

Aron Ain, CEO, Kronos
Jana Eggers, CEO, SpreadShirt (customized apparel), $10s m run rate, just raised growth capital (offers were shocking)
Christia Lampe-Onnerud, Boston-Power, advanced lap-top batteries, H-P is lead customer, growing fast
Chris Zannetos, CEO, Courion, Info SW co, security business, manage provisioning of systems for employees (eg, 800 new interns at a major hospital)

Courion went through very tough times when a major customer imploded in 2002 [sounds like it was CA].  Employees went into bunker mentality.  Key to show via bonuses and raises that there is a strong opportunity still for high performers.  Top 20% of co. going to president’s club:  “ruthlessly rewarding high performers”.

Kronos:  cut 10% of staff at start of year to anticipate 20% revenue cut and maintain profit.  

  • No pay or hour cuts — keepers are paid what they are worth
  • Over-communicate
  • “Sizing company to what the market is allowing us to be”
  • 10% cut from each group and each level, planned in Dec, announced in Jan
  • Upped severance by 25% above norm
  • “Hall monitors” met departees, helped them pack, and walked them out (kindly)
  • Town hall meetings the next day
  • Some people in the company had lost their edge and everyone knew it:  company perceived that the right people were leaving


  • chose to focus the business — exited bulk shirt printing business, cut entire team, even though profitable
  • theme of the company is promoting self-esteem


  • young co:  4 years old
  • some people can’t scale with the co, some can — moving ahead with the people who can be “bearers of the culture” and help us scale [growing fast, no need to cut for revenue reasons]

Courion:  saw slow down coming in late 07:  deals got smaller, customers buying a few modules versus suite

  • shifted to customer lifetime value management
  • new products and acquisitions to leverage relationships
  • programs for deep engagement of customers have added a lot of value
  • need to help customers figure out how they can scrape up $$ to buy from us — they conclude too easily “there is no money in the budget”
  • board, esp financing investors, is more in the bunker than I am


  • “competitive attack plan” to drive revenue
  • ROI focus with customers
  • pursuing selected strategic opportunities: $10-$20m of additional investments in ‘09
  • did an LBO in June 07:  easier to do the right thing as a private co.


  • still testing new marketing ideas, but with smaller $, maybe more frequent

Raising money:  very different from any past experience

  • Janna:  Focus:  chose potential partners carefully, based on people who understood how we saw the opportunity, fewer pitches and more conversations
  • Christina:  have raised money every year since 2006
    • had to learn to tell the story concisely
    • Granite for B, Oak for C, Investor AB for D
    • Used term sheet from A each time, closed deal in “2-3 weeks”

Key lessons:

  • Kronos:  communicate even more, open honest dialogue outside and inside co, manage company monthly and weekly, not quarterly, while keeping an eye on where we want to be in 2-3 years
  • Jana:  “hope is not a strategy” is our mantra, use experimentation to reduce risk, our brand promise is self-esteem, focus on the end customer (sell-through), help the immediate customer be successful
  • Christina:  be data-driven, tenacious, and gracious
  • Curion:  investors, don’t do unnatural acts.  Remember that you need the CEO to be emotionally committed.
    • Being cash flow positive gives you power
    • Remember that CEOs job is to be 2 steps ahead of everyone

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