“What should I be doing right now to grow the growth and success of this business? It’s the mental prioritization and reprioritization on ‘what needs to happen right now’”.
Alan: Welcome back I’m here today with Chris Kibarian, he’s a private equity advisor, Chris welcome to today’s show.
Chris: Thank you
Alan: So Chris for the listeners can you give your background and how you got to where you are today. Let’s start from your college years and your aspirations to move in the direction that you did into private equity.
Chris: Sure, I took a year abroad in Argentina in 1990 and found a company that was in total economic chaos, and so when I came back I decided that I wanted to study economics, I wanted to study business, and that’s what lead me to technology investment banking and that led me to businesses. So I see myself as a business builder and I love building businesses. Information, software, Internet, it doesn’t really matter. I just like the challenge of orchestrating growth and building products. So I’ve been fortunate to have a lot of opportunities to run very different businesses.
Alan: So when you started your first job…a lot of people go through school and got their degree and say “I wonder what I’ll do now”. Was it at that time that you decided that you were going to build businesses or was it from the time when you got your first job.
Chris: It was a funny evolution because I was actually waiting for my security clearance for the Foreign Service, because I loved international travel and languages. So my student loans started coming due and I just needed a job, and the only job that I could get was with a technology investment banking firm in Boston and I started doing your typical 7 day a week 80 hour work week type of job helping with IPOs follow ones and private placements and follow-ons. I probably learned more in two years doing that, than I did in ten years after.
Alan: And so you started with IPOs, that’s a unique standpoint. So what position were you starting in? Were you an analyst?
Chris: I was an analyst, so I’d run the numbers, crunch the numbers, do the research, help create the marketing documents, and really understand how an offering takes place. How are investors assembled? How a book of business of institutional investors, retail investors, assembled. Really how do you tell a story? How do you explain the merits and traction of a business in a market in such a way that dig into your pocket and put millions to work?
Alan: It’s interesting when you’re looking at companies, would you consider yourself on more of the process side, and implementing processes, or on the marketing side
Chris: I’m a growth guy. I’m all about growth. What really excites me is how you stimulate growth and how you orchestrate that from the roots up. From the product, from the marking, from the channel, from the positioning, from the brand. To me it’s what makes business really exciting. I don’t mind the process, because you really need good process to drive growth, but I’m more of a growth guy.
Alan: When looking at growth and moving into that, how important is it to get everyone on the same page.
Chris: It’s vitally important and it’s something that I find challenging, especially in the early part of my career. I would see great opportunities and wanted to run at them, and often felt frustration. Why isn’t everyone running at the same pace, why aren’t we all excited about doing this, and then you realize, that in big organizations of thousands of people, you’ve got all sorts of different personalities and things that you have to deal with the get people motivated. But I’ve found that if you can express your strategy and vision with a clear purpose and a passion, you can excite the masses to really drive a business forward.
Alan: Chris, part of your experience is not only in this country but also abroad. How do other cultures really play into this issue?
Chris: You know, after my two years in investment banking, I went to the former Soviet Union of all places, and built the Eurasia small business loan program, which was a micro lending program when I was 25. I didn’t necessarily know the language or the culture and it was really difficult to do what we were doing, which was collateralizing lending for tomato paste cannery or a bakery in a foreign environment. That’s culture shock and ultimately one of the things that you realize is business is business and at the end of the day it is just money in money out and so you can find a common ground, but the cultural gap between a former Soviet bank leader and a 25 year old investment banker is about as wide as you can get. But it was a good learning experience on how to bridge cultures.
Alan: Chris, I’m running against the break time. I’m visiting here today with Chris Kibarian he’s a private equity advisor and we will be right back after these messages.
Alan: Welcome back! I’m visiting here today with Chris Kibarian, he is a private equity advisor, and Chris we are starting in the early days of your career but one thing that happened in Russia that you didn’t pick up in the last segment is that you met somebody…
Chris: I met my wife.
Alan: You met your wife. And so that truly was blessing for the little time that you spent over there in Russia.
Chris: Well, I met the most beautiful woman in the world and she motivated me to stay for a while, we stayed for two years, it’s where we ended up getting married and we go back every year. I’m lucky, I’ve got family all over the world now
Alan: With that said you have a lot of experience not limited to the US you’re very cosmopolitan working in several different countries and cultures. I want to spend a little time though on one of your more recent ventures. You actually exited the corporate world with Private Equity and did a little bit of philanthropy. Could you tell us a little about the organization?
Chris: Yeah in the middle of 2014 I was approached by a private equity firm about a company called YouCaring and YouCaring was a crowd-funding platform for personal and charitable causes. It was a free platform. What they wanted to do was to build it and expand it but they only had one employee so it would literally be like doing a startup, which was very different from my last job where I had 4,000 people in 26 countries building software and properties for intellectual science and research. So crowd funding was completely new and with a single employee you have to build a technology team, a marketing team and really stand on your own in a digital marketplace where you have no brand, no identity no sales force. But what you have is a very powerful tool for how people raise money for how to deal with medical expenses or funeral expenses or fund educational expenses. It’s an interesting way for how people fundraise in the 21st century.
Alan: Wow, and how big was the organization when you started then
Chris: It was literally one person. We had one customer service rep. And literally no employees. No office. No paper. It was just a fledgling website that was started by a husband and wife team in their kitchen. So the whole point was to sustain, and build and grow a platform that was driving $150 million in donations every year and had an audience of 50 million unique visitors a year. You actually had to build much stronger technological platforms and customer service. Build out social media and marketing. SEO and SEM. So we did that in San Francisco in a span of 18 months and doubled the business a couple times over.
Alan: That’s amazing and I’ll say that, when it comes down to looking at your true strength, a business builder.
Chris: Well that’s the funny thing. I thought “it will be so different moving from a billion dollar business to a startup. But the reality is that the thought process is the same. It is fundamentally “what should I be doing right now to grow the growth and success of this business”. It’s the mental prioritization and reprioritization on “what needs to happen right now”. Sometimes what needs to happen right now in a startup is assembling the furniture for the 5 employees that’s about to walk through the door in a couple hours, but ultimately it’s the same thing. Building, is building, is building.
Alan: You know in the experience with YouCaring, do you have any good stories or any success stories that have come about by working in that space?
Chris: Well everyday there are thousands of stories that are about people. It could be that my aunt whom I love and raised me just got diagnosed with cancer. There’s been a shooting someplace. It’s amazing that people rally around a picture and a message, but it’s human drama played out on your mobile phone. Most of what happens in crowd funding happens on a mobile device. Of the 50 million people, a majority of those are woman on a mobile device, so it’s a really interesting dynamic on whose driving the social media phenomenon on the Internet. And at the end of the day people give millions of dollars to people they k=don’t even know but what social media does is that it connects people starting with friends, family, former colleagues, your neighbors, and then you realize that you have a massive social network that is much more easily connected by a Facebook or an Instagram. So you create a fundraiser and you share it with you 20, 50 or 100 friends. They share it and they share it and all it is getting hundreds of views and thousands of donations in a matter of days. It’s an amazing phenomenon that’s occurring.
Alan: I’m visiting here today with Christ Kibarian. He’s a private equity advisor and we’ve been talking about your recent experience with YouCaring. Chris I need to take a quick break and we will be right back after these messages.
Alan: Welcome back I’m visiting here today with Chris Kibarian, he’s a private equity advisor and also spent a recent experience with a social media project, YouCaring, it is a crowd funding site for charitable causes. As I listen to you Chris what came to mind is one of my former guests, some of the background for our listeners is that you have some heritage from Armenia.
Alan: I had a guest also from Armenia and his name was Arman Bijerkly and he started what was called the Experience Project in social media and grew that to 500 million individuals by the time that he was 26 years old. It must be something within the culture that gives this inert drive to build and to connect and I’m very impressed with what you’ve been able to do in your career and that you’re real a builder of businesses. I want to change topics and move off the YouCaring and get onto the private equity industry, where you’ve spent a period of time and where you hold yourself right now. What exactly is a private equity advisor?
Chris: You know, I spent a lot of my career building many different kinds of businesses. At the end of the day, like when I was at Thompson Reuters for example, I had led a new business almost every two years. What that means is that you kind of get parachuted into a new situation, new business, new challenge very regularly and so you really have to adapt and figure out what’s the strategy, what’s the path for going forward. And what a private equity advisor does is advise on what to buy, how to buy it, how to structure an asset so that you can build it grow it and create value in a very short period of time and then sell it to another strategic buyer or another private equity buyer. But the whole point is that you got to make things better and create value, profit, and growth, get the cost structure in line in a relatively short period of time. So I think most of my career has been leading to this point where you got a capital partner, private equity is often times a capital partner and what they need is management. And so if you’ve got the management and the capital you can take businesses that have often times lost their way, lost their passion, lost their purpose and really turn them into stellar performers.
Alan: So when you look at companies, and I’m putting your advisor hat on as a private equity advisor, what are the key components that you look for? Do you invest in them your time and resources or not?
Chris: Well every business has a unique set of challenges, whether it is the competitive environment, but there is a reason why the business has lost it’s way and often times it’s intensifying competition, or a bloated cost structure and asset allocation. I was looking at one business recently that put a ton of money into infrastructure that wasn’t necessary, and they took it out of product. When you take money out of product there is less for the sales force to sell. There is less for the customers to buy there’s less pricing power, and it starts to create a little bit of a decline and decay. Very easy to turn around, but the point is that it doesn’t’ take long for a business to lose it’s way once it gets that asset allocation or that cost structure out of kilter with what the market and the customer demand.
Alan: So how important is the leadership of that company if you are working with them.
Chris: Absolutely. Ultimately you can’t be afraid to change leadership or change structure or change strategic direction, but ultimately business is about people and people who’ve got the keen since of the potential of business can rally others and rally the momentum that’s necessary to drive a business forward and do so quickly and effectively.
Alan: I want to talk about a word that often I hear that driving entrepreneurs have within them and that is persistence, to push through adversity. How do you keep your spirits when things aren’t going right in a company and getting everyone to push through the problems
Chris: I think that it’s either in your or its not. I don’t know where it comes from necessarily, but there’s nothing more exciting for me than having a business where you can drive the full potential of that business and you can bring your passion to it. Because passion is infectious, when people realize “look we are building something fantastic”, you know every business, enterprise has a higher purpose. That purpose sometimes is changing the world, making the world a better place and when you can find that nugget of truth and insight that really motivates a team of people, customers, stakeholders, investors, you can really move mountains because it’s not so much about what challenges are coming at you, but it’s about that vision. A vision about where you are going and what that business can do that propels everyone forward.
Alan: When you look at the world today and heading to the future what do you see out there? Let’s go back to staying with the private equity.
Chris: One of the things I’m seeing…I’ve come from business to business and so I’ve just worked recently in from business to consumer, and one of the things I’m seeing is a convergence in business models where every individual uses a smartphone to some degree, and what their expectations are about how they are communicated to and what they expect in product performance is converging to a point where business to business models are converging with business to consumer in the sense that everyone expects and effective social media presence and to be communicated to in a timely and efficient manner. Everyone expects to feel speed in terms of search ability and a good visual design experience in some of the most arcane products. There is a kind of higher standard that the consumer markets have brought to the B 2 B world
Alan: You know I think you just described Pokémon Go…and isn’t that ironic on how something like that, the mindset, took off like wildfire
Chris: I think you’re absolutely right. The ability to communicate and engage a global audience is so much more prevalent now. You can do that. You can do that in a very powerful and effective way with design concepts that are motivating across cultures. You know it’s a unique phenomenon when people all over the world are just literally chasing these objects. The reality is that it’s what you can do now in a way that you simply couldn’t do 10, 20 years ago.
Alan: I’m visiting here today with Chris Kibarian. Chris I have a lot of listeners that are startup companies trying to get to the next level. If a person wants to contact you and have you come in and help with their company, how could they do that?
Chris: Well I’m on LinkedIn and so Chris Kibarian. I get a lot of inquiries to advise in companies and to invest and I love it.
Alan: Chris thanks for being on today’s show.