You are only as good as your last favor! I come from Germany and at least at the time before emigrating from Germany you had also business friendships, where you could rely on longstanding relationships, and not on the last positive thing you might have done for them. The US is much more about what did you do for me lately and past relationships do not count as much for anything. I have built two companies by utilizing what is known as Manufacturer REP channels. Both times some of the same REPs made a lot of money, but when it became time for round 3 about 6 years later, there was no effort made to introduce new product lines into their existing customer base. And I had thought I can put the band back together. Every go around is a start from scratch, and especially in these times it might be even harder.
As part of our series about the “Five Things You Need To Be A Highly Effective Leader During Turbulent Times”, we had the pleasure of interviewing Axel Tillmann.
Axel Tillmann is the embodiment of a serial entrepreneur that came to America to fulfill his dreams. Having run a few companies in Germany, he, however, learned the true skills here in the US with several companies he was involved in, and particularly through one acquisition receiving mentorship of two extraordinary people. For the last 6 years he has been coaching, and mentoring startup companies, including the spin-out of a 20B dollars Japanese corporation. Axel is comfortable in many different verticals and has embraced entrepreneurship as a way of life. He describes his way to success as de-germanificaton.
Prior to his role as Chief Executive Officer of WORLD SUMMIT he was CEO of RVC-USA, a Going-To-Market strategy firm for foreign companies that wanted to enter the US market, during which time he was also advisor to Maxwell Biotech, a venture capital firm for Biotechnologies, ALPHA CONSULT, a consulting Firm (among many projects lead a team of German Energy developers to work on the opportunity for 300 MW wind power in New Hampshire cooperating with the then Governor of NH), Arcsight (acquired by HP), Azure Technologies (acquired by GN), ENIRA Technology (acquired by ArcSight) and GBS Laboratories. In 1998 he founded NOVILIT, Inc., a firm specializing in tools for the EDA industry. At NOVILIT, Mr. Tillmann oversaw and successfully ran the funding, market strategy, all product development and R&D for the firm.
An accomplished speaker and author well known for his technical expertise, Mr. Tillmann advises numerous industry organizations and served as Chairman of the Board of Alion Energy, Chairman of the Board of Appnow, past Member of the BoD of SMI (acquired for 300M dollars by Intel) and is in the BoA of more than 10 other companies.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
My parents were in the gas station and gas oil distribution business. At the sweet age of 10 I started washing windshields and filling up cars. On a good and sunny day, I filled my pockets with about 40 DM, a great amount for a 10-year-old kid. During university time I found more pleasure in managing rock bands (among them ACCEPT a great heavy metal band), than the theory of Electrical Engineering. Needless to say after finishing my BS in EE I went on to study business in order to be able to run a business. Back at home, I came across an American Businessman that one day said, “you want to start a business with me”? Absolutely! And the rest was history. Traveling to the US to meet suppliers, I could not resist but wanting to emigrate, which I finally accomplished in 1991. Now we are 3 of my own startup companies later, over 500 startups that I helped one way or another, several board activities with the biggest exist being north of 300M dollars for a semi-conductor company (sold to Intel) that I had the pleasure being on the board of.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
Ooops, funny and mistakes do not go easily hand in hand. But in my philosophy, there are not any mistakes to begin with — there are only experiences and lessons you can take away. Granted all these experiences left an impact, from hiring the wrong person, or not listening to my gut instinct. I recently learned that if you make a decision in 30 seconds or less (what we call gut or subconscious) you have a chance of being over 70% right and if you think through the problem then you are only about 30% of the time right!
So the major take aways are:
Listen to your gut/inner voice and
Relax because in everything is a purpose, even though you might not see it right away
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
Every single individual in my life played a role and accomplished to participate in forming me into the person I am today. If it was my father teaching me “Do you have this in writing” when he bailed out delivering on his promise, or “only the cleared check I the bank account counts” indicating that you cannot live off dreams and promises but only on the completed transaction, or going to Reed S. in Nashua, NH who finally made me the offer “come to work for me” and that enabled my emigration. In the last 10 years two C-Suite Executives from Arcsight made the biggest impact, their CMO and CSO. The later making it clear that sales is not an artform but a science, and the former of teaching the best methodology for going to market strategy.
Extensive research suggests that “purpose driven businesses” are more successful in many areas. When your company started, what was its vision, what was its purpose?
WORLD SUMMIT wants to foster entrepreneurship — and not only in the US but in the world. We have a unique idea on how to accomplish this. And the big question for some is — Why? If we can teach what it takes to have a chance to build a unicorn, and we can do this in many corners of the world then we democratize wealth creation. Only when those opportunities are developed around the globe do we have a fair chance at better solutions and answers to problems that are facing all of us. Around the world, we must come together, we must appreciate everybody’s input, because diversity breeds better solutions and outcomes. And the more people have opportunities the lesser can we be dominated by a few. Absolute freedom is not the mantra for an equal society, because that creates anarchy. Absolute capitalism is the same as anarchy. We need to have a world where everybody can try and succeed and that requires moderation to curb monopolism. Monopolism prohibits solutions and is almost closing the circle to dictatorship.
Thank you for all that. Let’s now turn to the main focus of our discussion. Can you share with our readers a story from your own experience about how you lead your team during uncertain or difficult times?
Now and in the past, I can share that nothing is certain! While right now it feels that the times are more uncertain than ever before I can say that in the 2001 crash and the 2008 crash the immediate future looked dire. As a good German Philosopher (Eckhardt Tolle) said “Live in the Now”, I like to lead by example and say right now (in this second) nothing is uncertain. Uncertainty is a projection into a future that does not exist. One of my favorite sayings is: “Men makes plans and God laughs”. Anxiety, disappointment, fear — all come from the anticipation of a non-existing future based on past experiences that neither exist anymore. I made many plans, and they all turned out different because we are truly not in charge. I like to say that the world is a gigantic Matrix.
Did you ever consider giving up? Where did you get the motivation to continue through your challenges? What sustains your drive?
When my father physically abused me two to three times a week (poor man with two many problems), I was ready to run away, did suicide ever cross my mind — honestly, I do not remember, yet I always felt I have a purpose in life to fulfill. Over the years this feeling got stronger and stronger, and daily I wake up with a fresh spirit (even if yesterday something did not work out as I had envisioned it) happy to tackle the day.
What would you say is the most critical role of a leader during challenging times?
Keep your calm and share your own emotions. Nobody (I feel) needs a drill sergeant screaming “Follow Me”. If you can share that life is always in perfect harmony even if we do not like it, but what choice do we have other than accepting? If you bought a movie ticket and you did not like some parts of the movie, what can you do (other than leaving the theater)? Some of the greats in the world (including Albert Einstein) stated that “Life is pre-destined” and the best you can do, roll with the punches. Or as I say, you are a water molecule, and you go downstream. It does not help the molecule to want to go upstream or sideways, you always end up in the ocean (sometimes just more exhausted). You might as well enjoy the ride.
When the future seems so uncertain, what is the best way to boost morale? What can a leader do to inspire, motivate and engage their team?
If all of this sounds too abstract, then go into smaller steps. Identify even the smallest accomplishments, bring people together (more often probably than in the past) and keep on going and teach everyone to keep ongoing. Have an open-door policy for anybody who needs to talk. Team spirit is very important — the New England Patriots had been on the top for a long time, not for their individuals but because of the team.
What is the best way to communicate difficult news to one’s team and customers?
Tell it like it is, no honey — no sugar. There is an old German proverb that says “Lies have short legs” meaning you cannot run away fast and the truth in this case catches up with you quickly. Point in case — Ponzi scheme. I believe many businesses that turned out to be Ponzi Scheme did not start out that way, but one lie piled on top of another lie and voila the whole ship sinks. Whom are you helping when the company runs out of money and you stand in front of your employees and say “Don’t worry — money comes tomorrow, next week, in one month” if you deep down know that this is not the truth? People that might have followed you for an extended period for no pay, will now distrust you and you lose them all. Same true for the customers. Better tell them the truth and they might surprise you. I was VP of Sales of the 3-man band (2 guys in the garage developing stuff and me selling it). We were back pocket funded, and a big fortune 100 company had just completed a trial and I was called in a meeting. My partners wanted to have hour long discussion on what to say. So here is what really went down:
I sat down, and the head of the team started talking about the trial and about our company. After a short while I stopped her and said, “May I say something? I know what you would like to know, so here are the facts, I don’t like to lie. We are a small 3 people company, with no funding other than what we are financing out of our back pocket, you are our first customer, and I don’t give any discounts!” With that I stood up and said “I don’t think there is much more to discuss”. To which the answer was, “please sit down, we like you guys and want to give you a 350K dollars order”. What do you think the outcome could have been if I would have made up stories? At best the outcome I got, but more likely than not I would have tripped over my embellished stories.
How can a leader make plans when the future is so unpredictable?
By not really making them! OK don’t get me wrong, you make spreadsheets to determine your burn, you might have to cut costs and people which is all based on projections. And that knowledge is good, but beyond this — all I can say be alert, see changes, pivot quickly, and don’t hold on to any pre-conceived notions. It is more important to be persistent as a business leader than persistent with any particular idea.
Is there a “number one principle” that can help guide a company through the ups and downs of turbulent times?
Flexibility should be your #1 guiding principle. And if you have true value to offer people will find you or appreciate what you offer. Of course, this requires that you have worked out your G2M value preposition. Without this you are in difficult times more lost than ever.
Can you share 3 or 4 of the most common mistakes you have seen other businesses make during difficult times? What should one keep in mind to avoid that?
While all the principles are important most of the time, difficult times are less forgiving than normal times.
- If you can raise funding do not hackle the percentage points. Survival and long-term outcome are more important. Do not think that the investors do not have options. Always remember to shoot for a small piece of a big pie then the whole pie for which you need a microscope to even see it.
- You need to know your true market opportunity. “Build it and they will come” might have worked in the movie but does not work in the business world. You need to spend most of your time and identify as well as validate your thesis on how the customers will accept you.
- Do not spend millions of dollars on product development without having at least talked to 100 customers prior about your ideas. It actually helps to have an open conversation and please take a neutral person with you, because you need to protect yourself from hearing what you wanted to hear.
- Never lead with this is the best product in the market, there are too many examples where the best product never won the major market share. Concentrate on how you sell into the market.
Generating new business, increasing your profits, or at least maintaining your financial stability can be challenging during good times, even more so during turbulent times. Can you share some of the strategies you use to keep forging ahead and not lose growth traction during a difficult economy?
It is a quite natural notion to believe that discounts are the way to go. I disagree, your price/value is a precious good, that once you erode it, you will never get back. It is better to throw extra service into the equation. But remember if this is nice to have a product and not must have you will not be making a lot of headway during these times. If you can afford the development time, then scale the product back and offer a less feature-rich version (where this is applicable). Offer deferred payment is another option, or take payments over time broken out into monthly payments. While the cash flow might be difficult, having 20 new clients with monthly payments might get you the investment, especially in these difficult times. If customers make this commitment you must have something to present value to them. Nothing more “sexy” to the investors than seeing that the dog eats the dog food.
Here is the primary question of our discussion. Based on your experience and success, what are the five most important things a business leader should do to lead effectively during uncertain and turbulent times? Please share a story or an example for each.
1. In these times more important than others, but if you feel uncertain about any team member — cut this team member loose, and do not look back — otherwise one day it could cost you your company. If have two examples, one where I did not follow the important lesson, and one where I did. Once I brought on too early a VP of Sales while we were still in product development, and after two months he constantly came into my office and asked am I doing a good job? Right there and then I went to my co-founder and said, ”I think I made a mistake we need to let him go”, and my Co-founder said, “Oh give him a little more time”. That was the end of the company within 12 months. Learning from this lesson, the next time around when I felt wrong about the decision, I terminated the person immediately and succeeded.
2. Never believe that your customers are too dumb to see the value, and then feel compelled to try harder to convince them. We did the right thing and started a customer focus group and everyone told us “We will never buy this tool technology”. Yet my CTO believed we need to try harder to convince the engineering teams of our customers. And of course, this did not work.
3. Lead the uncertainty and do not draw a picture of a certain future when there is none. Your subconscious messaging radiates your fears, and your words are immediately invalidated. I went once into a board meeting saying we will reach in two months a specific goal, and right there and then I knew it wasn’t true. You definitely didn’t want to be in my shoes two months later.
4. Control with your CFO or by yourself very conservatively your budget. While in good times I support “push the accelerator method” in bad times I advise to error on the side of caution. Go back to the beginning of my interview, “only trust the cleared check in the bank account” as an order that is booked and it’s money can be used. I was promised a 1M dollars order for our product and then outside of our control the management of the buyer changed, and the order evaporated because their priorities had changed. And we had already started the hiring process based on this anticipation we believed we did not want to fail the customer by missing deadlines.
5. You are only as good as your last favor! I come from Germany and at least at the time before emigrating from Germany you had also business friendships, where you could rely on longstanding relationships, and not on the last positive thing you might have done for them. The US is much more about what did you do for me lately and past relationships do not count as much for anything. I have built two companies by utilizing what is known as Manufacturer REP channels. Both times some of the same REPs made a lot of money, but when it became time for round 3 about 6 years later, there was no effort made to introduce new product lines into their existing customer base. And I had thought I can put the band back together. Every go around is a start from scratch, and especially in these times it might be even harder.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
Forest Gump, “Life is like a box of Chocolates — you never know what you are going to get”. Oh my God, how often did I think things are going to happen by a certain time, and then come to find out that they didn’t happen. I was often at fault to have made plans about things going to happen after the anticipated data, and more often than not, that failed. My good friend always tells me “Have no expectations”. There is a great teaching and lesson book called “A Course in Miracles”. One of the lessons is “Nothing real can be threatened — Nothing unreal exists”. Think about it. If it is meant to be it will come to you, and if not it will not, no matter how hard you try.
How can our readers further follow your work?
My Life is dedicated to Health and Wealth, consequently, we have launched (always with partners) two companies https://www.anmodehealth.com and https://www.ourworldsummit.com . If it is meant to be you will hear great things about both in the years to come.
Thank you so much for sharing these important insights. We wish you continued success and good health!