RPM Ventures Founder & Managing Director, Marc Weiser, aka GreatLakesVC, was an entrepreneur before turning VC. He started First Virtual (FV), a company he later took public.
Awhile ago I read FV’s white paper which explains what they did & how they did it from a managerial perspective.
What was special about FV?
To me what stood out about FV’s system, was that the financial tokens that underlie commerce (e.g. credit card numbers, bank account information), never appeared on the internet at all under FV. Rather, they were linked to the buyer’s Virtual PIN by FV. (This is pre-encryption)
Sure there are other cool things about FV. Read the white paper to see what stands out to you.
FV: The Virtual Company
The company’s biggest challenge was growth management.
They had no physical offices until 15 months after the company was founded (8 months after the system was operational). The larger the company grew, the more seriously its productivity was impeded by communications difficulties, which ultimately led to the decision to consolidate the bulk of the operations (particularly new hires) in a small number of offices. The biggest problem in running a distributed company were the more mundane aspects of any corporation – administrative tasks, scheduling meetings, making presentations to customers, etc. It was harder to get people together for informal brainstorming sessions. Difficult to guarantee everyone would speak with unified voice in public statements about the company. Difficult to avoid duplicated efforts. Harder to integrate new hires. Actual supervision of remotely located employees was big challenge. It is also challenging to keep up morale in a virtual environment, as it becomes easier to feel “out of touch” with the company.
Despite all the challenges with being a virtual company, the founders lived in four different parts of the country & the company could not have started any other way.
What worked best was creative projects led by small, motivated, skilled teams. The customer support system also went well. FV did nearly all of its customer support over the internet & customer service operators work well remotely. FV was able to employ people with physical disabilities for its customer support team. Training was the biggest challenge as the team grew.
By nature, any Internet service company will be somewhat “virtual” because of the need to support fully international operations. FV recommends asking not “should an Internet company be virtual?” but asking “How virtual should an Internet company be?” & then figuring out how to maximize the benefits of a virtual company, & minimize the disadvantages.
What does this mean for you?
It could mean a lot of things. To keep it simple, at least takeaway the following:
Do something innovative, think outside the box, work hard & be successful.
Venture on,
MEL aka Venture Gal
