These 2 Founders Demoted Themselves, Then Reached $100 Million in Revenue

Two decades after starting their international travel insurance company Seven Corners, co-founders Jim Krampen and Justin Tysdal reached what for many would be a painful conclusion: their CEO wasn't cutting it and would have to leave.

Here's the thing, though: Krampen and Tysdal were the CEOs. So they fired themselves.

Their story is an instructive one for any entrepreneur who wants to grow his or her company sustainably.

When Krampen and Tysdal started Seven Corners in 1993, "[w]e knew everything. We were in our 20s and decided to build a better mousetrap," Krampen told us from his office in Indianapolis. "The barriers to entry were very low. All you needed was a brochure, a phone, a fax machine and some business cards. Everything was done on paper."

Fast forward 20 years. Seven Corners was a success, but there were signs of a sea change: two years of growth in the two to three percent range, when the company had previously been seeing double digits.

"Justin is the one who said, 'Look, we're either going to grow or we're going to die. Let's just blow it up, and we need to set bigger goals,'" Krampen said. So they shot for the moon:

The goal was to double revenue to more than $100 million in five years.

How would they do that? By looking outside for help.

"One of the things we realized was that we were entrepreneurs and we were not going to get this company to $100 million by being entrepreneurs," Krampen said. "We knew we needed the talent to scale it. So we demoted ourselves."

Krampen took the title of chief revenue officer. Tysdal became chief strategic officer. Then, they started the lengthy process of filling up the C-suite, which took the better part of a year. That length of time is not unusual; in fact, for many entrepreneurs, talent acquisition is the biggest and toughest task to tackle when starting a business. Greg Norman, the legendary golfer who built Great White Shark Enterprises, told me in the video below that becoming the number one golfer in the world was easy compared to hiring the best talent to grow his company.

The talent that came into Seven Corners was skeptical at first.

"We'd send them out to dinner or drinks with the other C-level people, and that question came up every time," Krampen said. "'Do they really not dictate? Do they really value your positions and value your input?' And the answer always is 'yes.'"

Change didn't come easy. A lot of long-term employees couldn't understand why Seven Corners needed to bring in outside management. The company replaced most of its IT team, then doubled the size of the department. Krampen jokes that while he once worked at an insurance firm that used technology, he now works at a technology firm that provides insurance.

In all seriousness, though, Krampen believes that Seven Corners had no choice.

"It was the best decision I've ever made," he said. "We had no training or experience outside this company, which is terrible. You cannot scale a company if you have not seen things somewhere else and seen the trials and errors of other people. The Bill Gateses of the world are one in a million—the type that can take it from their garage to where it is today."

Besides, he said, the change plays to his strengths.

"I'm terrible at operations. I hate operations. I hate management," Krampen pointed out. "I'm very good at sales and relationships. I am not going to be the CEO of a $100 million company. I'm smart enough to know I have to hire someone to do it."

So, how's it working out? Well enough that Krampen and Tysdal may soon demote themselves all over again.

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