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Court Cunningham: The Evolution of the Startup CEO

June 10, 2013

A startup faces longs odds to survive its infancy:  recent research suggests that the failure rate is more than 50% and possibly as high as 75%.  And while there are probably as many causes for failure as there are startups, a common theme among those who do beat the odds is having the right management in place to scale the business.  Court Cunningham offers insights into his own evolution as CEO of Yodle, a leader in on-line marketing for small businesses.

Court Cunningham

Court Cunningham, CEO of Yodle

Court Cunningham joined Yodle as CEO  in 2007 when it had 10 employees and 200 customers. Today, Yodle is generating more than $130 million in annual revenue, and has over 1,000 employees, 35,000+ local business customers and six offices across the United States.  

Cunningham was previously COO at Community Connect, a niche social networking company, and SVP & General Manager of the Marketing Automation group at DoubleClick, where he built DARTmail into a $60 million industry leading email marketing solution that was sold to Epsilon in 2005.

Cunningham received a BA in English from Princeton University and an MBA from Harvard Business School. He is also the co-author of Local Online Advertising for Dummies, the first ever comprehensive book covering online advertising for local businesses.

You’ve been CEO at Yodle since 2007.  How has your own leadership style evolved since then?

Catlin & Cookman Group identifies 4 levels of leadership as an early stage company evolves: doer, delegator, direction setter and coach.  In 2007, when I joined Yodle I was clearly a “doer.” As the company grew over the years my leadership style evolved to “delegator” before becoming a “direction setter.” With the current size of Yodle – we currently have more than 1,000 employees – I changed my approach again and now have a “coach” leadership style.

It’s critical to be a “doer” in the early days of a business when it has such a small number of employees. Any CEO in this position needs to roll up their sleeves and get the job done shoulder to shoulder with the team. I moved into the “delegator” phase when Yodle started hiring more people and stuck with that approach until we had approximately 75 employees. As a “delegator” you still need to keep tight control to make sure the product is evolving to meet customer needs but I recognized the need to increasingly focus on defining objectives and then delegating them for execution. I evolved into “direction setter” mode after we surpassed 75-100 employees. I now see my role as one of setting strategy and direction and having strong directors and VPs on board able to focus on execution.

And this shift presumably gives you the time you need to spend with customers. 

Exactly.  By getting out of project management and into direction-setting the CEO can stay focused on the customer.  It is also important to make this transition happen because at the 100 person stage you need to be hiring senior people who have drive, passion and judgement.  And these are individuals who do not want to be micromanaged:  the CEO needs to get out of the way to let those newly-hired stars shine and add all the value that they can.

You’ve characterized Yodle as being in its “adolescence” — no longer a start-up, not yet a fully-formed institution.  What is required of leadership for a company in this stage of its development?

As I mentioned above, I’d now classify my own leadership style as a “coach,” and it’s exactly this approach that I recommend CEOs take when a company reaches the stage that Yodle currently finds itself. With 1,000+ employees, $130+ million in annual revenue and six offices, we have numerous departments with leaders who have the judgment and experience to run their own business. A CEO in this position first and foremost needs to get the right people on board but then needs to coach them to greatness. Setting strategy is still a critical role for me but needs to be done in tight collaboration with the leadership team across the business.

Do you encounter any generational challenges in creating an on-line market presence for small, local business owners and how do you address this from a talent perspective?

Although it’s true that the average younger small business owner is generally more comfortable with self-service online marketing tools than their older contemporaries, they still understand and seek the value that Yodle delivers.  We are focused on the SMB owner who wants a full service marketing automation suite, so there are actually fewer differences than you might expect between different generations.

Given that, the most important factor for us in hiring people is simple:  we want to find talented, dedicated and driven individuals who are committed to delivering the best possible results to our customers. One of Yodle’s key values is “Customers Rule,” something which is regularly reinforced across the company. All our customers are looking for quality service, ROI on their marketing investment, an increased online presence that results in quality calls and emails, and an effective outsourced marketing department that enables them to focus on other priorities – and that’s exactly what we’re invested in doing.

Any specific coaching tips you’d like to share?

Have a very precise answer to “who is my customer?”  This answer comes from the hard work of building and selling the product yourself in the early days.  For Yodle, a bad answer to that question is “the SMB (Small to Medium-Sized Business)” because there are so many use cases within the SMB universe  that that definition is too broad and shows a lack of customer focus.

For Yodle, the correct answer is: “the SMB with fewer than 10 employees that sells high values products or services.  These customers are primarily in 100 focused micro service segments.” With this focus we know we want to sell the 9M small businesses who fit that, not the 20M.  We know they will want a full service offering and not a self-service offering. We know that they do not have a lot of marketing expertise and therefore need things like websites as a core part of their marketing package.  The list of requirements goes on, but I am shocked when I ask people running businesses to describe their customer and they cannot.

Anything else?

Building a business is hard work.  It amazes me how many CEOs spend their first couple of years going to conferences and doing PR.  They haven’t built anything yet:  how can they be doing PR!?  You need to be focused on building a product that customers love and really DEEPLY understanding the customer problem you are trying to solve.  In Yodle’s case, I worked 6 days a week every week for my first two or three years.  Edison said: Genius is one percent inspiration and 99 percent perspiration – I really believe that.

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