Wednesday, December 5, 2012

The mechanics of managing a fast-growing company

Usually when you read about how to manage a company well, you find tactical tips on how to delegate tasks appropriately, communicate clearly, be a good listener, empathize with team members, appreciate and recognize employees' hard work and accomplishments, and so forth. We've talked on our blog about how Stroll uses some of these tactics in its management activities.

But for Stroll, management is more than a series of tactics to guide employees' actions. Management is one of the cores of our business. And so I wanted to bring our management discussions full circle today to flesh out what we mean when we say that management is a pillar of our business model. In future posts, I'll also bring home the three other cores of Stroll's business that we've been blogging about -- marketing, analytics, and HR.

Friday, November 30, 2012

6 ways to create a knowledge-sharing culture

No high-growth company will survive by operating in an information silo. Nor will the company grow its business using knowledge from a year ago, a month ago, or even last week. Instead, fast-growing companies must realize the importance of creating a knowledge-sharing culture to foster ideation, ignite innovation, and accelerate change.

Sharing knowledge is a fundamental component of Stroll's corporate culture, which I discussed in a previous post. There are several core ways we foster knowledge sharing, and we wanted to -- you got it -- share them to give you some guidance on building this crucial element into your company's culture.

Wednesday, October 24, 2012

The 5-step process for optimizing employee performance

The biggest element missing from a typical employee performance review process is the process itself. Many employers do not have an established program for tracking and evaluating their employees' achievements, strengths, weaknesses, and other key performance indicators. Rather, employers often create some general success metrics, from which they arbitrarily reward and discipline employees.

But you cannot optimize employee performance if you lack deep insight into employees' contributions to the company. That's why we've created and institutionalized a 5-step process for monitoring, measuring, and optimizing our employees' performance. Our process is rigorous and well-defined, and has powered the continual improvement and advancement of our management team over the past several years. I wanted to explain how it works for my third post on HR best practices.

Friday, October 19, 2012

3 recruitment tests to know if a job candidate is right for your company

Individualized candidate testing is a crucial part of the interview process for any high-growth organization. We administer not one, not two, but three tests to candidates to find the people who can power the company forward.

But what truly makes our tests effective is how we customize them according to the position. Our tests are designed to validate the quality of a candidate. Consequently, our tests must measure the exact skillset we seek. This might sound obvious, but administering inappropriate tests is one of the biggest recruitment mistakes employers make.

Thursday, September 20, 2012

Inc. editors ink Stroll as a fastest-growing company in America

I was honored to find out that Inc. Magazine named Stroll to its 2012 list of the 5,000 fastest-growing companies in America. The recognition is a testament to the talent and passion of my team members, who have embraced the Stroll mantra and continue to take it to a new level.

Our growth has been fueled by their drive to continually improve our company by identifying and making incremental changes that have allowed us to compound our growth rate over the past 12 years. I'm certain we wouldn't be a $40 million company without the extraordinary contributions of each one of the professionals who walk through our doors each day.

Wednesday, September 5, 2012

The corporate culture paradigm of a hypergrowth company

In order to grow -- and grow quickly -- a hypergrowth company needs to develop a culture that celebrates innovation, encourages risk taking, and understands the value of breaking new ground over cultivating previously tilled soil.

At Stroll, we work to engage each employee in our cultural mission and empower them to take action and make decisions that encompass our core believes to improve the company's performance and bottom-line results.

From this base, we've also developed five other crucial qualities that drive our ability to continuously unearth wide-ranging opportunities and outperform our targets. We wanted to share them to help you turbocharge your business. Here are the cultural underpinnings that are crucial to creating a hypergrowth company:

1. Entrepreneurial. Every team member at Stroll has a passion for the business, which is fueled by the entrepreneurial nature of our CEO, Dan Roitman. He injects excitement into the company and drives us all to excel. He's engaged, approachable, and unrelenting, constantly questioning our assumptions and planting seeds of change that result in continual improvement to our operation. Dan consistently walks the floor of our business to discuss the day's assignments, tasks, and goals. He doesn't so much as look over our shoulders, rather he serves to constantly ignite our entrepreneurial spirit by challenging us to think differently, make change, break assumptions, and optimize our performance while maintaining a laser focus on Stroll's growth objectives.

Monday, August 27, 2012

6 factors that have the biggest impact on profit

As we've blogged about before, our overarching goal is to continually increase Stroll's profitability and contribute every possible cent to the company's bottom line. To that end, we've identified six factors that are most important to converting our advertising expenditure into maximum profit. These six factors form what we call our "Growth Acceleration Model." The factors are:
  1. New customer acquisition
  2. Conversion rate
  3. Average order value
  4. Repurchase rate
  5. Fixed costs
  6. Variable costs
Every member of our team understands this model, the factors that define it, and how it all impacts our profits. Armed with this knowledge, our team's collective brain power is focused on the most critical and influential leverage points in driving profits in our business.

Wednesday, August 22, 2012

Some insights on Stroll's founding and growth

If you've been following Stroll in the news lately, you might have seen some articles covering our founding and growth. The stories take me back to some of the most poignant days of my professional life -- the tough decisions, the new discoveries, the exhilaration and fear of carving a fresh path. I wanted to highlight a few of those news articles on our blog, because I thought they included many insights that are relevant to the hypergrowth story we've been cataloging here.

First, syndicated columnist Mildred L. Culp wrote about how I started Stroll from my college dorm room. She included some of the factors that bolstered the company through those challenging start-up years, and how we overcame some major financial challenges.

In addition, the editors of Technically Philly covered some of our more recent growth. They wrote about Stroll team's reaching 170 employees, and recapped some of our other growth metrics.

Monday, July 16, 2012

There's a reason they're called financial "statements"

A good friend of mine teaches his accounting students to "make the financial statements talk." This advice is brilliant in its simplicity, yet seldom followed in finance departments around the globe.

Instead, the typical financial review is comprised of a senior financial person passing out the income statement and balance sheet. While the managers around the table stare blankly at the list of numbers, the finance person, usually renowned for his ability to captivate an audience with his charisma and eloquence (think "Bueller … Bueller"), walks everyone though the income statement as follows:

Revenue increased by 2.1 percent, fueled by 2.8 percent growth in our Central region, partially offset by a 7 percent decline in our Mid-Atlantic region. SG&A increased by $50,000, as a result of an arbitrary expense allocation from the corporate office of $200,000, partially offset by a $150,000 cushion we had on the balance sheet in the event of an arbitrary expense allocation from the corporate office.

Usually this is met with awkward silence and confused expressions. It's no wonder why. The financial statement did not clearly communicate what management needs to know to understand the economic performance of the company and make good business decisions based on it.

Thursday, July 5, 2012

7 ways to hire the perfect employee

Every employer has excuses for why employees don't work out at their company. But at the end of the day, most bad hires are due to missteps and miscues during the interview process.

The interview process is crucial to garnering a complete and detailed picture of a candidate -- their skills, experience, and talent. That's why we've developed an interview process that is thorough, rigorous, and well-defined.

Our entire interview process is designed to find individuals who reflect Stroll's core values:

1. Strategy-mindedness
2. Mental toughness
3. Ownership thinking
4. Results oriented
5. Being the best

To find these individuals, we've made our interview process intensive and exhaustive. You can read through Stroll's interview process on our website. But more than that, we wanted to share some best practices for finding individuals who can unleash untold growth potential for your company.

1. Know what you want. Recruiters often simply create a recruitment ad and take to the phone to screen candidates. It's all done without fully understanding what the organization needs in a new hire. Before beginning to recruit, you need to identify the specific expertise, talents, and worldview you are seeking in a candidate. We start by creating an HR scorecard that details the hard qualifications that are non-negotiable. These vary by job function. For instance, we might require HTML proficiency for our web professionals. For our call center professionals, we look for softer factors, such as their ability to effectively and diplomatically interface with customers. The HR scorecard lays out our needs in black and white, and gives us a definitive game plan to score our success.

Wednesday, June 27, 2012

A note of thanks on winning Ernst & Young's Entrepreneur of the Year Award

This has been one of the most memorable years of my career. Last week I had the honor of being named Ernst & Young's Entrepreneur of the Year. The judges recognized me with their Retail and Consumer Products Award for the Philadelphia region.

I wrote an email dedicating the award to my team and friends, who have truly been the catalyst for this honor. I wanted to share my email on our blog, because it captures the gratitude I want to express about winning Entrepreneur of the Year. Thank you to my team and our friends, and thank you to the program's judges.

Dear Team and Friends,

This has been a great year so far! In May, the Philadelphia Inquirer flattered us with a feature article. And now this.

Thursday, June 21, 2012

How Stroll has kept its marketing machine well-oiled

Sometimes others tell your story better than you, and the media can be one of those narrators. We find that our customers and business friends like to read coverage of our company and people in the press just as much as they like to read our own blog posts. So we thought it would be worth highlighting some of Stroll's press coverage on our blog.

I wanted to share two recent articles with you today, both of which detail more about our approach to Internet marketing and web analytics, and how it's fueled Stroll's hypergrowth. The first comes from The Philadelphia Inquirer's Diane Mastrull. She took the time to pay us a visit at our offices, and I showed her our operations and talked with her about our processes that allow us to continually optimize our business and drive tremendous growth for the Pimsleur Approach. After our meeting, Diane wrote about Stroll's marketing machine in an article for The Philadelphia Inquirer.

MIND YOUR MARKETING: Diane Mastrull documents Stroll's steadfast approach
to marketing and analytics

Monday, June 4, 2012

Binding the tribe: The ties that bind in 5 easy core values

As you will learn over the course of this blog, the key factor in achieving triple-digit growth all melts down into one definable difference -- the quality, passion, knowledge, and shared values of the team. It's cliché to reduce it all to people. But at Stroll, we are obsessive about the people we attract, and their ability to think strategically and tough it out when things get difficult.

To bind our tribe, we started by reducing our company to five key core values, guiding principles of our company that every employee knows and can repeat. These five core values serve as our organizational compass, a way to chart our future and share our vision among ourselves. They drive who we hire. How they attack their work. Who is rewarded, and ultimately, how our business has managed to grow at a compound annual rate of 73 percent since 2002. What they are:

1. Strategy-mindedness. Simply stated, strategy-mindedness is being an expert on what's going on throughout the company so employees can do their jobs better. At Stroll, we are big believers in employee transparency, and we share every material fact about the business with employees. They know our numbers every day. They understand the challenges. They revel in our successes and work to overcome the challenges. But they can only do this when they understand the broad vision of the company, its go-forward strategy, and their role in it. We unlock their ability to think strategically to overcome a challenge and to constantly optimize our standard operating principles. Great ideas percolate to the top when employees understand how small incremental improvements can be compounded over time to unleash huge growth gains for the company.

Thursday, May 31, 2012

3 ways to use customer lifetime value to maximize revenue

Many companies have long recognized the importance of customer lifetime value (LTV). There's no shortage of customer lifetime value calculators and formulas out there to help companies compute LTV and use it to predict and evaluate the potential results of new marketing programs. But few companies understand how to take LTV to the next level and use the analytics to generate triple-digit growth for their business.

Customer lifetime value essentially tells you the projected revenue a customer will generate for your company over his or her lifetime. From this, you can determine several powerful marketing metrics: how much you should spend to acquire the customer, how much you should spend to retain the customer, which customer segments to target, and the ROI of your marketing campaigns.

I took the concept of LTV to heart early on, especially with advertising costs soaring through the roof during the dot-com era. My mentors emphasized how crucial it was to properly calculate your customer lifetime value to inform your cost per acquisition (CPA) choices, and develop your online customer acquisition strategy and customer retention strategy.

Herein lies something most companies don't understand. They often don't think about optimizing revenue as a way to increase a customer's lifetime value and thereby boost profit. Rather, they focus on minimizing costs, especially marketing spend, to increase margins. So here are three core steps you should bake into your customer lifetime value calculation process to help you maximize your revenue:

1. Determine how long your customers generally stay with you. If you're just starting out, take it easy here in your estimate so you don't lose your shirt. If you've been in business for some time, review your metrics monthly and by acquisition source.

Tuesday, May 29, 2012

Stroll's first step to success: Unraveling the riddle of online customer acquisition

Everyone remembers the dot-com bubble of the late 90s and its subsequent collapse during 2000 to 2001. Right after the bubble burst, online advertising also took a hit and became much more affordable than the ridiculous costs and expectations of when sock puppets ruled the world.

That deflation convinced me online marketing was the wave of the future, and it could achieve the economics needed to drive triple-digit sales growth for products and companies. It was then that I realized the more I could entrench myself in all things online, the more successful we would become as a company.

This is when I started unraveling the riddle of online customer acquisition. I found that the secret ingredient to a successful online customer acquisition strategy is to target one advertising channel at a time (unless you've got the money to burn).

Thursday, May 24, 2012

Building the tribe: How I fired my best friend and lured a new partner

It's a tough day when you fire your best friend and subtract someone important from your life. But business isn't a popularity contest, and you learn early that success often depends on surrounding yourself with people who reflect your values and vision, and those who can bring something more to the table than just what you know.

The year was 2002, and Stroll was just hitting its stride. We went from nowhere to 50 sales a day. It totally swamped everyone. We didn't have enough people. We didn't have the right systems and everything had to change quickly.

Perhaps no one was more stressed by it all than my best friend, who for the past six months had spent just about every waking hour by my side. We were brothers in arms, sharing the exhilaration of seeing the first few orders come trickling in over the Internet. We weathered the frustration of working ungodly hours around the clock, occasionally putting packing peanuts in a garbage bag to make a nice pillow for another night crashing on the floor in our office.

Monday, May 21, 2012

The garage story

Every great company has a garage story. Most are embellished, many are made up. My company's garage story dates back to 2000, when I decided to open a business in my dorm room at the University of Maryland. At the time, I had stumbled upon a study aid that had been developed by a Swedish company. Youthful enthusiasm put me on a plane to Lund, Sweden, where, as a 21-year-old kid, I sat face-to-face with the company's head of marketing.

I played my hand big. I explained that, as a college student, I knew better than anyone the value of their product. And who could market it better than me? It was the Wild West days of the Internet, and I used that exuberance to argue my case that the web, still in its infancy, provided the ultimate accountability.

By marketing the product offline -- gaining free access to the campus mail system by donating the product to the libraries -- and capturing the orders online, we could monitor and track our ROI, continually improve performance, and hit the ball out of the park.

They bought what I was selling, and agreed to co-op the costs of the advertising. I returned to my cramped quarters believing myself to be Sean Parker, Mark Cuban, or any of the other masters of the Internet bubble. The delusion popped as hard as that bubble did in 2001. Twelve months into marketing the project, the Swedish company sent an email. It decided to pull the product from the U.S. I was left without a product to market, floundering.

Thursday, May 17, 2012

Hypergrowth: Framework and tools for igniting triple-digit growth at any company

If you're not growing, you're dying. And if you're not growing extraordinarily fast, you are missing the full exhilaration of life. At least, that's my mantra. Since 2000, when I started my business, I've played with speed. It's incredibly rewarding pushing the limits of what most people believe is possible while using limited resources. But it's not for everyone. The book, "Now, Discover Your Strengths," calls it always living with a "whisper of discontent."

I'm Dan Roitman, an entrepreneur unlike any other. I've never invented a thing. I don't produce or even own products. I'm not some computer-programming whiz kid. My success started in a dorm room at the University of Maryland, and led me to build a $40 million business that grew an astounding 135 percent last year.

Over the past decade, the company I founded, Stroll, has transformed an all-but-forgotten language learning system into the second best-selling product of its kind. That product, the Pimsleur Approach, is second in the market only to Rosetta Stone, a publicly traded company that I guarantee you've heard of.

But whether you've heard of the Pimsleur Approach or not, I'm sure you've never heard of Stroll. We are that secret sauce, the "Intel Inside," that has allowed the Pimsleur Approach to steal more than $40 million of market share from Rosetta Stone, despite the fact that the company has a worldwide footprint. It has more money, employees, exposure, and awareness than Stroll, but we're nipping at their heels.