Spring Break
RPM-Strategy.com CEO advises Entrepreneurship Club on starting own business
Jeff Sullivan
Issue date: 2/26/08 Section: News
He said once a company gets too large, it cannot pay each customer the same amount of attention, which ultimately causes it to lose touch with its clients.
"Our company soon started to diversify, I mean you can't have just one customer," Panoff said. "[But we got so big] our customers themselves became a buffer that separated us from them and kept us from understanding [their needs correctly]."
Panoff named another problem within the transition from smaller to larger businesses. He said normally the original members of the company have a great amount of trust within one another in both their character and competence because of the experiences they all shared, and this can be lacking once the company gains new employees with its growth.
"When you're in a small business, everyone does absolutely everything," he said. "Back with my first startup we actually had a contest to see who would clean each bathroom."
Panoff said when a company has to hire new staff there is a general mistrust between the old and new regimes. He said that the old members' ego and exclusive bond would isolate the new employees from their bosses, which could lead to pointless bickering and inefficiency.
Panoff also touched upon the importance of what could be called "laboratory" business practices, in which one tries an idea out in a smaller area with the hope of eventually implementing it into a larger pool of clients, which he referred to as the "big pond."
"Rhode Island is so small, that you could easily come in and do an innovation here and perfect it at some volume," he said. "Learn all the lessons you need to learn, make your mistakes and then bring it to the global market."
"Our company soon started to diversify, I mean you can't have just one customer," Panoff said. "[But we got so big] our customers themselves became a buffer that separated us from them and kept us from understanding [their needs correctly]."
Panoff named another problem within the transition from smaller to larger businesses. He said normally the original members of the company have a great amount of trust within one another in both their character and competence because of the experiences they all shared, and this can be lacking once the company gains new employees with its growth.
"When you're in a small business, everyone does absolutely everything," he said. "Back with my first startup we actually had a contest to see who would clean each bathroom."
Panoff said when a company has to hire new staff there is a general mistrust between the old and new regimes. He said that the old members' ego and exclusive bond would isolate the new employees from their bosses, which could lead to pointless bickering and inefficiency.
Panoff also touched upon the importance of what could be called "laboratory" business practices, in which one tries an idea out in a smaller area with the hope of eventually implementing it into a larger pool of clients, which he referred to as the "big pond."
"Rhode Island is so small, that you could easily come in and do an innovation here and perfect it at some volume," he said. "Learn all the lessons you need to learn, make your mistakes and then bring it to the global market."
