It's the classic situation every founder eventually faces, oftentimes with trepidation: Giving up control of a company built on blood, sweat, tears, a couple of mortgages, maxed out credit lines and quite often, strained personal relationships.
For Percy Bhathena, the difficult decision was made even more so because his transition came sooner than most -- a scant two-and-a-half years after he founded the company.
In 1998, Bhathena founded WISP as a wireless solutions provider of software that decreases the amount the time it takes to load Web pages. Over the following two years, he scraped together enough seed capital to build a small staff, develop a full range of wireless solution products and land several high-profile clients that include AT&T Wireless, Fujitsu PC and Jansen Pharmaceutical.
In addition, last year Bhathena was named a Rising Star at the Innovation in Business Conference, sponsored by Anthem Blue Cross and Blue Shield of Ohio. He also landed a second round of financing, bringing the total funding to just under $5 million, and used it to attract key senior management and advisers.
It was a move that not only put seasoned talent in the boardroom, it also paved the way for him to step aside as the company's sole leader.
Today, WISP remains a quickly growing company. Bhathena estimates that this year, it will approach the $17 million mark. SBN Magazine spoke with him over several months. He shared his thoughts on founding and growing a company, then giving up the reins.
You originally doubted what seasoned management could do for your company. Why was it so difficult to give up control?
As a founder of WISP, I understood our products, services, focus and market position better than anyone else who came on board later ever could. After two years, your start-up becomes a part of you. It's the first thing you think of in the morning and the last at night, if you get a chance to sleep.
WISP CTO Krishna Malyala and I have been working side by side at WISP for several years. We saw our initially zero-revenue generating company quickly blossom into a professional, profit-earning business. So what was "seasoned management" going to bring us?
I liked being intimately involved with every aspect of WISP. However, I knew it would soon become impossible to continue to be a part of every project, to know every customer by the sound of his or her voice over the phone. Things were just getting too busy.
Bringing in new management was, at first, a symbolic gesture. I was afraid that the West Coast atmosphere that Krishna and I had created here in Cleveland was going to be overrun with micromanagement and old-school philosophies. I wanted to preserve an atmosphere that inspires creativity.
How did you overcome your hesitations?
I overcame my hesitation when I realized that we no longer had the amount of bandwidth we needed to handle all of the projects coming in. There was too much happening too fast. Creativity and a Microsoft atmosphere have their place, but we needed individuals to take on responsibility for specific projects, proposals and development initiatives.
I realized that in order for WISP to really grow up, we needed experienced management to handle our growth in a strategic manner.
Ironically, it was Ray Ashton, a close friend and outside consultant for WISP, who helped to convince me that management was, in fact, necessary. He has been with us nearly from the beginning, consistently giving me sage advice.
How did you find and recruit the team you brought on board?
Serendipity. Through our network of associates, we were able to find our chairman, Rao Chalasani, and COO, Dr. Jack Shoykhet. Mark Fagerholm, our CFO, actually contacted WISP after having seen the Rising Star Award that we had received. We brought him in for an interview, and the rest is, as they say, history.
Discuss the impact of experienced management on a young company. What do they bring to the table that others do not?
Objectivity is one very advantageous element that new members of management can easily bring to the table. It's difficult to be objective about your own creation. Past experience, if applied appropriately, is also a big plus. We can learn from their past successes and try to apply some of those methods.
Also, there is a sense of validation that comes with the new management. Before becoming our COO, Jack had been able to take several small- and mid-sized companies to greater heights during his position as CEO at both Gov24.com and Econex. This same man came on board at WISP fully confident that we could go somewhere. His confidence in WISP has helped to validate our model, our vision and the potential of what we've started here.
How long did it take to feel the effects these people had on your company?
The impact was immediate. Jack and I were like old friends by the second day. We seemed to always be on the same page. I was able to quickly offload some projects to Jack -- and he has shown an amazing ability to multitask.
Rao's entrance was marked by a 20-plus-hour marathon strategy session. We drilled into every aspect of WISP: What should be proprietary, what are our strengths, where is the market now and where do we think it is going?
Mark's focus has been on our financial position -- understanding our revenue streams and our profitability points. He has been able to come up with a financial strategy that will enable WISP to become more profitable.
Discuss the type of compensation package you needed to put together to attract these people.
I don't know how most other start-ups get their management teams together. I do know that WISP brought in people who wanted to be here. Jack loves working for a wireless Internet company again -- it's what he loves most, I think. To a driven man like Jack, compensation is secondary.
Rao is an extremely active chairman for WISP. His compensation has also been back-loaded, based on our future success. The same holds true for our CFO, Mark. All of these people, as well as the members of our staff, realize that we are yet a young growing company that does not have unlimited resources.
How will the roles change in the company?
Krishna Malyala our CTO, has finally been able to focus primarily on the technology developments that truly drive our company. Jack takes care of business, and Mark, the books.
I've become more of an overseer and intermanagement link. I run WISP in a comprehensive intuitive sense, backed by help from every direction, overseeing the company from a more neutral, bigger picture perspective.
I can now use my vision to help move the company strategically toward the achievement of its long-term goals. How to reach: WISP, (216) 739-1383, www.wispinc.com
Dustin Klein (email@example.com) is editor of SBN Magazine.
Title: Chairman of the board of directors
Job duties: Will work on strategically positioning WISP in the marketplace and maximizing the company's core strengths. Chalasani will also attend to corporate financing efforts and form strategic business alliances.
Last position held: Former chief investment strategist at First Union Securities.
Job duties: Will be responsible for WISP's day-to-day operations and for developing an overall corporate solutions strategy. His immediate goals are to increase sales by focusing on strategies to bring in large corporate accounts and secure the next round of financing for the company.
Last position held: President and COO of Gov24.com, an application service provider (ASP) for judicial agencies.
Job duties: Fagerholm takes care of the money. His first project is to refine the corporate business plan and relate it to WISP's overall growth pattern.
Last position held: Vice president of finance at STERIS Corp.