Although Doug was considered a “veteran entrepreneur” he did not contributed to Lynx as mush as a founder member is expected to do. He was not a technical expert so he couldn’t contribute technically to the company. He had lot of experience with VS but reading the case it doesn’t look like he had a lot fo contribution in getting funding for Lynx and it was primarily Milmo who was the captain to secure funding whether it was from Early Advantage Capitol, Novel Ventures or RazorzEdge Captial Partners. There are also concerns that Doug have ethics issues.
Although Milmo concluded the issue of Doug paying himself more than he deserved to be a one time lapse but I think Milmo didn’t wanted to make a big fuss about this issue so he settled on his conclusion. But I still have concerns how ethically positive Doug was. 2. Partnership with Javier Pascal I believe Milmo made a very good decision of partnering with Pascal but didn’t do a good job at very clearly defining Pascal’s role and responsibility which eventually caused lot of issues. This was especially imperative considering Pascal’s strong personality.
Its clearly evident that the software Pascal architected was great, considering that software was architected in a scalable manner thus enabling Lynx to change their strategies few times and come with different products with the same baseline software. 3. Equity distribution among the founder members. I believe Milmo did not distributed the equity in the company wisely esp considering he had learnt a lesson early in his life during the venture he made in the “Jeopardy” game show. As the idea and concept on which Lynx is uild upon was of Milmo he should have strived for a much higher equity than Doug and should not have divided the equity equally among the founders. AlthoughI agree with his decision of making the equity of Curtis and Pascal vest over two years so as to keep Curtis and Pascal focused on the job. 4. Continuing with his MBA at Harvard. I believe Milmo made a very good decision to get into Harvard the second time and finish one sementer and then left to pursue his idea. It was a right choice as it kept the Harvard MBA option open for Milmo as if he would not have joined Harvard the second time, it was pretty much a closed door for him. . CEO structure I believe Milmo made a big mistake in defining the organization structure and did not clearly defined the roles and responsibilities of the founders. Ideally all the founders should have taken the roles which are their primary strengths and should have clearly defined the decision making structure. Although Milmo mentioned that the “triumvirate” structure worked for them but I believed it also let to several confusions for the employees and as Lynx expanded this confusion increased more and more.
Apart from confusion, I believe making Doug CEO didn’t resulted in making best use of his expertise in sales. 6. Hiring strategy Question 2. Has the founding team done a good job of structuring itself and building the Lynx organization? I believe the founders didn’t do a good job in structuring and building the Lynx organization. Clearly the executive team structure was not defined based on the core expertise of the corresponding individual esp. Doug Curtis. For example Doug Curtis is considered expert in Sales for VC backed companies, so should have been focused on Sales.
Similarly for Pascal although the role of CTO was correct for him but the roles and responsibilities for CTO position did not seem to be clearly defined and communicated. Pascal’s sole existence in the company was technical in nature but he started getting interested in pricing and business development discussions which is not the right thing to do for a CTO of a technology startup. Considering the primary business idea was of Milmo and he was instrumental in bringing Doug and Milmo on board he should have taken the lead in being CEO, President and Chairman.
Further instead of making a triumvirate making decisions, he should have made a clear decision structure. He should have let Pascal take all the technology based decisions and Doug all sales based decisions. For any decisions overlapping in need for sales and technology, Milmo should have got involved and ensured that in case of situation where there is no agreement among all 3 founders, the decision will be taken by vote and all the 3 founders has to abide by the decision and move forward in the best interest of the company.
Clearly this structure was missing and all the founders spent and wasted a lot of time arguing with each other. Also I believe Milmo did a good job of having a clear strategy about hiring but at some point in time as Lynx expanded he should have acted fast and changed his strategy. I believe having a good mix of “Renaissance people” and not so ‘Renaissance people” would have helped Lynx especially when they transformed and expanded. I do not believe if someone wants to leave, paying him/her double the salary is right strategy as this might set a wrong precedent and cause a ripple effect of everyone doing the same thing.
Question # 3. If you are James Milmo, are you going to fight back against changing your strategy, or are you going to agree to the change demanded by your board member? What factors motivated his demand? Should James have known this was coming? How could he have avoided the problem? Answer: Question # 4: If you are James Milmo at the end of the case, what is your biggest worry? What can you do to manage that issue? Answer: As James Milmo my two biggest worries would be: 1. As Milmo my first biggest worry is the spoiled relationship with Pascal.
My immediate target would be put an end to the spoiled relationship with Pascal. Spending or wasting lot of time and energy in debating and arguing on simple things is not helping Lynx or Milmo in any way. (to me, demands of Milmo sounds reasonable as he is reacting to market and is seeing what his competitors are doing and what Lynx should do to ensure they don’t land up behind the competition in few years. ) I would setup a process on how key decisions can be taken esp when there is not a clear agreement amongst all the parties involved.
There has to be a process on moving ahead and not keep circling with debates and arguments. I also believe Milmo should take the position of CEO so he has the final decision making authority for Lynx in case a decision cannot be taken at people below him. If these processes are put in place and still do not work I will let go Pascal. Although loss of Pascal will be a loss but I think there is enough technical talent within Lynx ( brilliant kid, technical manager etc) to fill the gap of Pascal in due course of time. . Strategic direction of the company: As Milmo, my second biggest worry would be set a clear defined strategy for Lynx. What is the market Lynx should go after, should Lynx focus on their current target market, should Lynx keep growing customers and increase revenue. Milmo with his executive team has to do due diligence and come with a defined strategy and then spent all the energy executing that strategy, with an open eye on the market.