TechCrunch Live went on a business trip to Austin, Texas, and we had a great time even though the tacos were missing. Called TC City Spotlight: Austin, the show featured a wide range of guests, including the general manager Zebra-da and its former investor, Morgan Flager, Silverton Partners Partnership Management. Together, they talked a lot about Zebra’s growth, why she moved to Austin, and what caused it Keith Melnicas its current CEO, to lead the company.
It is a good story that gives a unique perspective on adding external leadership. Originally, Melnick, a former Kayak executive, was hired by Accel to strive for a Series B investment. Still, then the investment company put its investment in Melnick to take over as CEO. Five years later, the Zebra is a man-of-the-man, and Melnick still manages the company, which operates hundreds in the Austin area.
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Adam Lyons and Joshua Dziabiak launched Zebra in 2012. The company was born in Pittsburgh as part of Carnegie Mellon’s Alpha Lab acceleration program and is seeking funding, the company is affiliated with Texas investors, including Silverton Partners and Mark Cuban. The company is content to relocate its operations to Texas, where it is the backbone of the startup community.
Melnick helped start Kayak and worked for the company for 13 years, ending his 2017 term as company president. As he tells the story, Accel hired him to look at Zebra’s, which is described as a Kayak in car insurance. The company was promoting Series B and Accel was debating the investment. So it only makes sense for the former Kayak president to look at the so-called Kayak car insurance.
“Accel asked me to look at a few things in the past,” Melnick said during a TechCrunch Live segment. “I knew the trip, and I knew the search. But I didn’t know insurance, so I studied in the market.
He opened up the big market (and opportunity), he said. “I estimated at the time that the insurance distribution market was about eight to ten times the size of the opportunity we saw when we started Kayak. As with travel, there is a huge amount of customer satisfaction, which I do not think will surprise anyone who comes to it. shopped insured to see that market very divided. “
Melnick advised Accel to invest, and they came back and asked him to become general manager. “They presented me with proverbs that I cannot deny,” he said. But Melnick did not just hold the general manager; He invested his money in the Zebra’s B. Series.
I asked him and Morgan Flager what advice they have for companies that want to bring in external leadership.
Flager pointed to the founders and said it could go one of two ways. It is a negative or educational opportunity.
“As a founder, you can see a general manager change one of two ways,” Flager said. “It could be, you know, I don’t cut it, and I’m being replaced, and that’s bad. Or, especially if you’re a young founder, they might say, ‘Hey, I’m going to learn from someone who built a multi-billion dollar company. “I’m learning from someone who built a multi-billion dollar company.”
“I think what has done this job so well is that the founders of the company have not felt it,” Melnick said.
For both Melnick and Flager, there is always another option built on previous experience – such as transfer control and taking on the role of pilot.
“You have to put your wealth at the door and be ready to learn from the old man.” That is Melnick speaking of his usual form of humility.
Flager advises the founders of this position to look to the future and take the opportunity. “Next time you [the founder] came up with a new business, it is better, faster, and stronger. In addition, you have the opportunity to make contact with other managers and investors who are following a successful company. “
As in the case of Zebra, Flager points out, the other side of replacing the general manager is financial only.
“We have always known true ambition [The Zebra] was a potential public asset of $ 10 billion plus. It is a market place. Sometimes in a market place, you have to build a market with flying tires before the business turns, and it is profitable. So you need someone who can go out and invest in a modern company that can raise capital to ensure the full potential of the business. ”
To Flager, the replacement of the general manager is about ensuring the full investment potential of the founders, too. It’s about boosting their investment, too.
“But, again, I think you need to be in the right mind to accept that.”
Watch the entire episode here, where I explore the challenges still facing the site of the explosion in Austin, Texas.