Roxanne Quimby Case

Zacharakis

Roxanne Quimby Epilogue

1998 $8 mm rev. 35% pre-tax income massive product turnover - all skin care products 20 employees 3000 stores Bought Burt out in 1999, he stays on as spokesman 2001 $21M -- 32M rev; 120 person plant
Zacharakis

Patricia Cloherty Zacharakis Patricoff and Company

Benefits of Lifestyle Firms

Need fewer resources bootstrapping Greater control over operation
Fewer employees Fewer investors; probably no active investors

Can adapt business model based upon market reaction fewer fixed costs

Zacharakis

Benefits of HPV
Greater interest from professional equity investors Smaller equity position, but greater reward
Small piece of a large pie

Create legacy
Generate jobs Generate wealth to yourself, employees, investors, other stakeholders and community
Zacharakis

Organic Growth
Quimby saw an opportunity to grow her baby. Not serendipity, but a vision that evolves Take steps early on to keep options open
Lay groundwork (build network) Establish model that is replicable Record of success to show future stakeholders
Zacharakis

Executive Limit

Growth

Time

Zacharakis

Executive Limit Symptoms

Entrepreneurs have a difficult time managing on-going organizations Transition is most difficult during the high growth phase Failure to replace entrepreneur can lead to venture failure

Zacharakis

Who is most susceptible

Dogmatic authoritarians Lack management experience Engineer/technician

Zacharakis

How did Roxanne Manage Transition?

Lives in NYC Backfilled talented executives she is not involved in day-to-day Hit $56M in 2003 sales Sold for $180M in late 2003 Retain minority shares Employment contract as consultant for up to 2 years Considering a run for Governor of Maine
Zacharakis