Get buy-in
In the aftermath of Hurricane Katrina, Stream had only been in business for six months, and its EBITDA projection for the year swung from a positive $7 million to a negative $7 million over the course of three weeks, putting a $20 million capital hole in Snyder’s operating plan.
“I had to raise $20 million for the business at a time when we couldn’t give anybody, given the uncertain state of the markets, any determinate guidance as to what the economics for the business were going to look like,” he says.
Throughout an 80-day period, he had to get people to buy in to his business if it was going to survive. Whether you’re growing your business, trying to get your people excited about your annual goals or selling a new customer, it all starts with buy-in. Snyder has to have investors buy in with their checkbooks, senior managers buy in by joining his team and customers buy in by switching providers.
“You’ve got to be passionate and absolutely transparent, and people have to understand your own level of personal commitment,” he says.
Show what you have at stake. For example, Snyder’s situation spoke volumes in convincing one major investor.
“I basically didn’t need Stream to work,” he says. “I was retired, and there was no real reason for me to be doing this other than just the act of creation, but (the investor) knew I had a significant financial stake in this, and, more than that, he knew I had a significant reputational risk here, so he knew I was committed.”
Having that genuine excitement is key to selling yourself, your company or your product.
“Having a reputable investor is key, but more critical than that is people understanding that you are committed and that you believe in the vision of what you are trying to pursue,” Snyder says. “That’s not really something you can fake. I think people sense whether you’re really committed to trying to make things work.”
You also have to show the value in the idea and convince them to trust you.
“It’s basically, ‘Be my friend, give me your business and save, relative to the major competitors in the marketplace,’” he says.
As long as Stream kept its operating costs low, Snyder could offer that value proposition of saving money. For customers, it’s a win because they save on their monthly expenses, and for investors, it was a win because they knew with that value proposition, Stream would bring in customers.
In attracting managers to the business, it was about getting other people as excited as you are.
“You got to get them to not only drink the Kool-Aid, but they’ve got to understand not only do you drink the Kool-Aid, but you love it,” Snyder says. “They’ve got to buy in to the vision.”
The more solid people that you get to drink that Kool-Aid, the more others will want to join you.
“When prospective members of the management team understand that not only is this wild-haired Rob Snyder guy something, but it seems that a lot of smart people are surrounding him; that really makes its own case,” he says.
And the more people buy in, the easier it becomes to lead in the future.
“I am increasingly reliant upon the expertise of the people who have demonstrated time and time again their proficiency,” Snyder says. “People who have been here for three and four years, they’ve completely bought in to the Stream way of doing things. They like it. They embrace it, and when someone has demonstrated expertise, it’s increasingly necessary for me to micromanage less and less and to rely on their expertise.”
How to reach: Stream Energy, (866) 447-8732 or www.streamenergy.net
Story feedback: Kristy O’Hara, [email protected]
