Splitting of R&D into own entity

Exciting changes.

Today I officially announced the splitting of the R&D group into its own company RedStores Ventures under the leadership of Gerry as CEO – and assignment of a GM for the RedStores Operations (Pearls business).

With this change, my goal is to infuse fresh energy into things and prepare the corporate structure for investment and separate working entities.

With this decision, I have created PearlsOnly as a standalone company that is outside of ‘investment’ and the ‘new’ things as its own start-up with a startup flavor that is investment friendly.

I will continue overseeing HR and Finance.  Finance is not ready for handover so I still need to focus on getting it working.  HR has a large number of complexities which I will transfer to Jessica with time.

The new corporate reporting structure looks likes this:

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My own responsibilities will be changing as well.   I will manage the two above businesses using 3 KPI’s each.  My own KPI’s and roles and responsibilities are defines below:

Chhairman (Paul Lepa) responsibilities

As Group Chairman, Paul Lepa will focus on the following:

· Assist GM with learning new areas, guidance and mentorship
· Assist CEO with strategy, vision and direction
· Fund Raising – funding
· Relationship with 3rd parties (TaoBao), Amazon (executive level), DHGate – and other party co-operation and opportunities
· Financial Performance of the Group
· Investors Relationship
· Contracts and 3rd party agreements
· M&A (if applicable)

Construction and renovations on our new RedStores Ventures office started and will be done in two weeks.   Our first hire, Sean, that will be dedicated to RedStores ventures onboarded today.  His hummingbird demo for TMX software is great and we will drive that forward.

This is the email that went to all staff.

Dear All:

After several months of planning  – I’m pleased to announce several large change to our company.

Starting in March 1, 2011 – our current company will be split into two separate companies:

· RedStores Operations
· RedStores Ventures

RedStores Operations will have its primary focus on Pearls, and to support logistics for RedStores Ventures.

RedStores Ventures will be focused on Research and Development, and its goal will be to provide rapid growth to our both companies.

With this change, I’m pleased to announce the following promotions:

· Jessica Hu – is being promoted as General Managers of RedStores Operations and will be responsible for smooth operations and growing the pearl business.    Jessica will move to my (Paul’s) office later this week.

· Gerry Reid – is being promoted as CEO of RedStores Ventures and will be responsible for development of software, marketing and growth of our new business ‘outside’ of pearls.   Gerry will move to the 5th floor in March – and will head up a team of developers and marketers that focus ONLY on RedStores growth.

With this change, myself, I will be assuming a role as Chairman of both companies, and my focus will be on enabling Jessica and Gerry to grow their respective businesses.  Further, this year, I will be focusing on obtaining funding of $1 to $2 million USD for RedStores Ventures.

I will have small desk on the 5th floor but for most part my work will be done out of the office.

Today later in the day we will be welcoming our first official employee of RedStores Ventures – Sean – who will lead in the development growth specific software for RedStores.   

Later on, I will share with everyone the more detailed plan for RedStores Ventures – so that we can all understand what RedStores Ventures will be focusing on.

I have enclosed for you a more detailed document that describes in more detail the changes and more specific information about changes to reporting structures.

As always – I’m happy to answer any questions you may have – so feel free to email me, talk to me or call me.

With warm regards,

Paul