In my experience, nearly every successful entrepreneur is gifted with focus and tenacity.
I learned the importance of focus when I was CEO of a startup called Intralinks, which makes digital workspaces for large financial transactions. When I took over for the founders, Intralinks had $3 million in annual revenues and was losing $18 million a year. It had seven different products and was on the verge of going out of business. Lack of focus was one reason.
The first thing I did was figure out which of the seven products we could shut down, and why this made sense strategically. We decided to shelve six of them and focus on a product that solved the biggest problem for our clients.
I explained to our team that it’s hard enough to be best in class at one thing, much less seven. The board, mostly venture capitalists who’d never run a company, were aghast. They felt that it was insane to cut products when the company needed revenue so badly. I argued that making choices and achieving focus was essential. Ultimately they agreed.
Later, Intralinks decided to try to stage an initial public offering. By then we were growing very fast, from $3 million in revenue in 1999 to $20 million in 2000. We went on a road show in August 2000. We did the standard 75 or so presentations to investors. We worked with our bankers to set the price per share at which our stock would open trading. But stock markets were plummeting as the dot-com bubble burst. So we had to stay private, at least for the time being.
After that, one bank stepped forward to lead another private round of funding for us. We made another 50 presentations to investors, but that bank had to drop out because of a conflict. Another bank came forward, with another 50 presentations — and then one of that bank’s clients decided to make a bid to buy us, forcing that bank to drop out.
Finally, we found an amazing VC firm named Rho Capital. After eight months and more than 215 presentations, we closed on a $50 million round. Were we insane for taking 215 meetings and hearing “no” after almost every one? No, we were simply exhibiting tenacity, which is what it takes to succeed as an entrepreneur.
(Jim Dougherty is a senior lecturer at the Massachusetts Institute of Technology’s Sloan School of Management.)
