Over the past year, Andrew Beebe scored $60 million in venture capital for Bigstep.com. He grew the rolls 3000% — from 5 founders to 150 employees. Under his leadership, the Bigstep team attracted 180,000 new customers and launched a major initiative with AOL. That’s a formidable record for any CEO, but this fall Beebe topped it all. He resigned.
The success Beebe and his team achieved might inspire envy in many entrepreneurs, but for Beebe it became a dilemma. For the first time, he didn’t know all his employees’ names. He struggled to maintain the chemistry that Bigstep had at its inception. He wanted Bigstep — which offers small businesses the tools and space to build an online marketing, sales, and customer-service presence — to grow even bigger. That would eventually mean two buildings instead of two floors, a billion-dollar budget instead of million-dollar budget, and engineering a platform that would allow for dozens of different applications, intranets, and extranets — all daunting prospects for a 28-year-old CEO who designed Web sites up until a few years ago. He began to consider recruiting a more experienced leader to take the reins. The more he thought about it, the better the idea sounded.
Beebe stepped down on September 1 and brought on Lucy Reid, who previously headed up a team of roughly 3,000 people at Wells Fargo & Co. “It feels great to have someone who’s been in management longer that I’ve been alive,” Beebe says, “someone who can teach me, who can scale the company quickly, and who can bring context to a lot of hunches we were running on.”
If you’re lucky, Beebe’s latest problem will be yours too. Sure, Bill Gates steered Microsoft from nothing to world domination, but Bill Gates’s are rare, and even he eventually stepped down from the top spot. Since Beebe moved out of the top office, half a dozen young Internet CEOs have called him. They all want counsel on making the same transition smoothly.
Following is Beebe’s advice on how to pass the torch without getting burned or sacrificing the speed and success of your team.
The hardest part of my transition was making the resolute decision to recruit a new CEO. Think through where you want the company to go. Figure out who or what you will need to get it there. Put aside your ego. Finally, get a fix on the timing. Do you have the money, the image, and the culture to attract top talent?
We wanted Bigstep to be a multibillion-dollar success story, and we needed experienced help to attain that goal. Bigstep’s growth in employees, in partnerships, and in customer base were all attractive to a good, seasoned candidate. We had a great team and a recent round of funding — the timing was right.
Above all, know what you want. Plenty of entrepreneurs choose serial startups — they live to take a bright idea, deliver on it, and then hand it off. If that’s the plan, you’ve got to be pretty frank about it with yourself, with your team, and with your board. I knew I wanted to stay on. I won’t feel I’ve accomplished enough until Bigstep is wildly successful. Being a zero-revenue place that’s fun to work at and that is doing great things is not enough — Bigstep must be all that, and it must make a lot of money.
Be Up-Front — With Everyone
Transitions cause anxiety; major transitions can incite panic. Stop it before it starts by keeping everyone in the loop. As soon as we made the decision, we shared it with the entire company. People worried, but they had the same worries I had: Could we find the right person? Would this change the culture? We were all on the same page. Being up-front quelled the rumor mill.
Be up-front externally too. Don’t recruit on the sly. We told the world what we were up to, and we got some great recruiting leads as a result. Telling the world also allowed Bigstep to present its story its own way: We didn’t get cast as a company in trouble, but as a successful company looking for the best possible talent.
Find a Good Match
Finding a candidate with the experience you need and a personality that will fit in your work culture isn’t easy. We interviewed a dozen candidates in our search. But don’t let that challenge stop you from interviewing twice as many candidates to get the right match. I look for three things in a candidate: integrity, passion, and intelligence. A group of people with open, passionate spirits and raw intelligence can do just about anything. Lucy Reid passed the gut check on all three in five minutes.
Don’t Get Married After Five Minutes
Despite her excellent first impression, Lucy underwent 20 interviews — with the board, with employees from across the company, and even with outside advisors. She passed all her interviews with flying colors. What’s more, she drove some of the process, insisting on meeting with more than just board members and senior executives — I think that’s a good sign for the future.
Work Out Your New Role Together
Finding the right match, difficult as it is, only opens up a new challenge. Whether you’re leaving or transitioning internally, if you care about your company at all, you’ve got to aid your new CEO in her ascension. Introduce your CEO to the executives and teams, and help get her up to speed.
But realize, too, that some of the most effective ways to cement your successor into power are subtle. Learn to fade into the background of big meetings, letting the new leader take control. I began reporting directly to Lucy because I didn’t want to leave any room for ambiguity over who’s really in charge. Lucy and I are working out exactly what my new role at the company will be. You may shrink at the thought of letting an outsider decide your future, but if you say “Okay, you’re the CEO, but here’s what I’m going to do,” then she’s still reporting to you. I came to the table with a lot of ideas about what I wanted to do, but I leaped on faith that if I found the right person, we’d have no problem working out the particulars of my job.