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Sweet marketing music

Tanner Montague came to town from Seattle having never owned his own music venue before. He’s a musician himself, so he has a pretty good sense of good music, but he also wandered into a crowded music scene filled with concert venues large and small.But the owner of Green Room thinks he found a void in the market. It’s lacking, he says, in places serving between 200 and 500 people, a sweet spot he thinks could be a draw for both some national acts not quite big enough yet for arena gigs and local acts looking for a launching pad.“I felt that size would do well in the city to offer more options,” he says. “My goal was to A, bring another option for national acts but then, B, have a great spot for local bands to start.”Right or wrong, something seems to be working, he says. He’s got a full calendar of concerts booked out several months. How did he, as a newcomer to the market in an industry filled with competition, get the attention of the local concertgoer?

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by Andrew Tellijohn
August 2007

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Upsize Informer

DEAR INFORMER

Believing you need
people is first step
to hiring well
by Beth Ewen

DEAR INFORMER: How do successful CEOs determine early on the people they know they are going to need to grow? I?m ready to expand, but I can?t do it with myself alone.

DEAR GROWING: That last sentence in your question may be the most important to successfully building a management team, IF you truly believe it, say business owners who have built large enterprises.

Too many owners want to control everything, and thus can?t delegate to others, or want to simply clone themselves, and so never get anybody with the skills that they don?t have.

Phil Soran, CEO of Compellent Technologies in Eden Prairie, has started two companies, and is building the second one to about $65 million in revenue this year.

He says to start with a detailed plan that specifies your needs for hiring, including the timing. ?We started with a business plan that was detailed with what we were going to hire. We used that as a road map.?

Make sure the plan is tied to the money needed to fund those hires, because timing can be everything. ?The first day we raised the first round of venture capital, and we had money, we had seven engineers walk in the next day,? Soran says. He spoke on an Upsize panel discussion in March, addressing this question from the audience. He grants that luck has something to do with it.

?We were just lucky that those tech people had fallen on harder times,? Soran says. Nonetheless, having funds available when they walked in secured them for Compellent?s launch.

Soran relies on experience and contacts from a long career in data storage, and constantly does networking with engineers in the field.

Monica Nassif, president and founder of Caldrea Co. in Minneapolis and another Upsize panelist, has been involved in a couple of startups prior to launching her cleaning-products firm, so she knew her weak points. ?The first person we needed was an accountant because I had no idea how to do that. And then I started calling all my network for a COO.?

David Pomije, founder of Funco, thinks that?s the most important way to build a team as well: Be honest about your strengths and weaknesses, and hire people to fill the gaps. If that means ?firing? the existing management team, including yourself, so be it.

That?s what he says he did when Funco was poised for national expansion, because he knew he and his team couldn?t take it there. After he put in the new management team, the valuation of the company soared just on the news of the new hires alone, he told a University of St. Thomas audience.

Steve Schussler, CEO of Schussler Creative in Golden Valley, relies on the same people over the years, incorporating them into new iterations of his company. That?s because he believes cultural fit is most important.

?I guess I?m lucky because I?ve had people who have stuck with me for 15 years. People have hung around with us that know our attitudes and the culture. It?s really hard to get people who get that,? Schussler says.

He demonstrates that one way to keep people loyal is to sing their praises. For example, he made the remarks above when serving on an Upsize panel discussion. On the panel, he praised Jean Golden, of Golden Publicity and his long-time public relations person, and Lyle Berman, the gaming entrepreneur who was one of the first to invest in his earlier company, Rainforest Caf?. 

Final word on the topic goes to Joel Ronning, CEO of Digital River in Eden Prairie, which now has about 1,100 employees but which started in 1994 with five. Ronning said in an interview with Upsize he always tries to hire people smarter than he is, then because of his ?inferiority complex,? works hard to learn from them. ?I have an absolute willingness to grow,? Ronning says. ?I?m inherently lazy. I want to get things delegated to the right person as quickly as possible.?

Once the delegation is made, he keeps close tabs. ?It?s a matter of measuring, constantly measuring, the ability of people to handle things,? Ronning says.

BANKRUPTCY

DEARINFORMER: One of my directors uttered the word “bankruptcy” at a board meeting recently as an option for my company, and I am freaking out. How could I even consider that?

DEAR RATTLED: Perhaps it will help to think of bankruptcy as merely a tool in the financial toolkit, not a loaded word with larger-than-life status.

That?s how Clint Cutler puts it. He?s a bankruptcy attorney at Fredrikson & Byron law firm in Minneapolis, and gets plenty of panicky phone calls, oftentimes late on a Friday, from business owners who say they can?t cover Monday?s payroll.
?They feel embarrassed. They are in uncharted waters,? he says.

He doesn?t like to get the calls then, so late in the game, because the earlier business owners call the more likely it is another avenue can be followed. He says companies that are experiencing financial problems should get a referral early from their attorney, to specialists in turnarounds and bankruptcy, while time is still on their side.

If reorganization through the bankruptcy process is deemed the best option, he says specialists can also increase a company?s chances of emerging with a viable business.

?Recognize you?ve got problems as early as you can, because it opens up options,? he says.

In other words, rather than freaking out that your board member mentioned bankruptcy, you should consider the possibility along with many other ideas while you have time to do so.

So why doesn?t a bankruptcy attorney automatically advocate going through the bankruptcy process? ?I tell my clients, it?s the last tool in the toolkit. Because the success rate is low. It?s very costly ? you even pay a bankruptcy tax. And you lose control of your destiny,? Cutler says.

Clint Cutler, Fredrikson & Byron: 612.492.7070;  ccutler@fredlaw.com; www.fredlaw.com. (Hear a full interview on this subject at dev.divistack.com; click on How-to Audio.)

FINANCE

DEARINFORMER: I read a lot about how traditional banks make their decisions on which companies to lend money to. How do asset-based lenders do that?

DEAR SEEKING: “They?re all story loans,? is how Brian Van Nevel puts it. He?s co-CEO of Spectrum Commercial Services in Bloomington, an asset-based lender.
That is, the companies that Spectrum Commercial finances have a story that he believes can eventually be successful, but for a fixable reason they aren?t right now.

Key to his evaluation is determining what the problem is. ?It depends on what got them in trouble,? he says. ?If it?s embezzlement, we can fix it. If it?s something systemic,? like the company services a dying industry, maybe not.

He calls factoring companies and asset-based lenders a way for companies to buy more time, not a fix in and of itself. ?If we just think we?re putting on a Band-Aid,? he doesn?t want to do the loan.

?The upside is we can keep them going. The down side is our money is more expensive,? because they?re taking on more risk.

?We?re not the miracle. We?re the bridge,? Van Nevel says.

Brian Van Nevel, Spectrum Commercial Services Co.: 952.876.8222; brian.vannevel@spectrumcommercial.com; www.spectrumcommercial.com. (Hear a full interview on this subject at dev.divistack.com; click on How-to Audio.)