Scot Wingo is one of my all-time favorite entrepreneurs (and current Inflexion Advisor). It doesn’t hurt that he was one of the first entrepreneurs I backed (AuctionRover) and proceeded to knock it out of the park in less than a year (acquired by GoTo/Overture). He builds great teams, a passionate culture and eats competitors for breakfast. I think he’s also the guy who launched the “startup office dog” trend with his border collie Mack — a 3-time serial dogpreneur.
Yesterday Wingo came up a couple times.
First, because his latest company, ChannelAdvisor, acquired competitor Marketworks — giving the combined entity $2.5 billion of gross merchandise value (GMV). If accurate, that would be about 5% of eBay’s $52.5 billion global GMV! Congrats Scot, Aris, Michael and the whole CA crew on your latest step towards world domination.
Second, when talking with a current portfolio company I remembered one of my early discussions with Scot while starting ChannelAdvisor (CA). It was the worst time in the market and being profitable was even more critical than it is today. CA wasn’t profitable, but Scot came up with a great way to demonstrate progress towards that goal. Specifically, Scot started reporting CA “divisions” based upon the categories of products they were managing. For example, consumer electronics and luggage may have been profitable; whereas tools and home products were not. Thus, being profitable in 2 of 4 divisions was better than being profitable in 0 of 1 companies. This way of telling the CA story was a lot more palatable, and helped investors understand a path to company profitability. Some might call it “spin” and the idea of “divisions” in an early-stage company seemed crazy, but it really helped align company resources and tell the CA story. From that story forward, ChannelAdvisor has secured over $60M in funding, grown many times over, acquired its closest competitor and is the leader in auction management.
Does your startup have profitable “divisions” that get lost in the broader story?