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Video Interview with Demian Entrekin, Founder Innotas , an industry leading provider of PPM for IT. As founder and CEO from 1999 to 2006, he oversaw company vision, marketing, product development, sales and services for the company. After reaching cash flow positive and then raising venture capital in 2006, he took over the CTO role until 2008. Prior to Innotas, Demian co-founded Convoy Corporation and was Chief Architect of its product lines. In that role, he helped the company lead the middleware market with an annual growth rate of 670 percent. Convoy was acquired by New Era Networks in 1999. A recognized thought leader in Project Portfolio Management (PPM), Software Development Life Cycle (SDLC) and Software as a Service (SaaS), Demian has published numerous papers on PPM and his blog (PPM Today) explores current issues related to successful PPM implementation. You can find Demian Twitter @dentrekin & his blog
Transcript follows & video above. This is PartII of the interview.
- In your opinion what percentage of women would qualify then as regards having these qualities which I gather is self awareness if I summarize what you’ve just said? Could they be developed? If so what are your ideas about how this could happen?
I guess I left out also the importance of courage or fearlessness or whatever word you want to use, willingness to step out into the unknown. And say ‘It’s a big problem, I’m not sure I can solve it but I’ll try!’ So I think that’s another big piece of it. Some of the experiences I’ve had with women entrepreneurs or women in small businesses is that they were some of the keys to success in the company. Or when a certain person arrived who happened to be a woman was really good at selling a particular kind of solution.
Yes absolutely it can be developed. And being willing to go out & find mentors can be really powerful. People that will be honest & tell you ‘I’ve been down this road. I can tell by talking to you for 10minutes that you’re probably pretty good at this, you’re probably pretty weak at this. And I’ll help you close the gap. But can you have that conversation? Can you talk to a mentor who’s been down the road, had wins & losses? Have them tell you ‘Here’s where you’re soft what are you going to do about it?’ So I think Astia can really help with that kind of work.
- Do you believe that it is easier for technical women founders to achieve venture funding than non-technical? If so what are your reasons for this?
I don’t know if it’s true, it would surprise me. I would think that successful sales executives regardless of their background, would be the most likely able to be successful in investment. Because they know how to take products to market & get paid. The cynical part of me would say, well the reason venture folks like technical founders is because they can get a fully based product & an unsophisticated leader. Slowly but quicky they can take over the company & put their own sales leader in. It gets back to that self awareness issue & understanding what they’re trying to do. So if I was to be cynical I might say that that might be, if that’s true what’s happening? It might be an investor that’s very product oriented in the early stages, so being a little bit more fair about it. The investor may be very product oriented, they figure they can build a sales & marketing team if theres a viable product there.
And it has come from seed stage venture capitalists that I’ve heard this.
And they don’t want to go to market without product that’s not really fully architecturally sound, if you will.
- So I wondered what you’ve noted from the venture capitalists working as an entrepreneur with them, how you’ve been managed or not?
I guess I would say, that a lot of it has to do with the stage of the business. Yeah I’ve seen 2 real ways of engaging entrepreneurs & investors. One is yes you put your pitch together, you work your network, try & set up a meeting & as quickly & as cogently as you can make your case & see if that case clicks. It’s gotta happen pretty fast. I’d say you’ve got 2 minutes. You have 20 seconds to engage interest & 2 minutes to secure the interest. The rest after that is substantiation. You don’t have an hour. The other I’ve seen is the Executive In Residence. I don’t know if this is the same thing? But a lot of folks will bring on a successful entrepreneur type person & maybe go after a particular problem. ‘We want to do something in the mobile health care space whatever & here’s a guy who’s got some healthcare tech background, maybe he’ll help us look at some companies & evaluate some opportunities? Then we’ll build something, fund something, or plant him somewhere?’ That’s much more of a joint project where they know the entrepreneur, where they’ve done a project with him before. Sort of repeat business. I see a fair amount of repeat business. Once an entrepreneur has delivered the goods for the investor, the investor wants to ride that horse again. That often leads to the Executive in Residence approach. So taking those 2 structural things aside, I’m sure every single investor has their own style. Some may say ‘Hey you know let’s keep talking about this. Let’s see if we can’t work on this together a little bit.’ I haven’t experienced that yet. I’ve done a lot of pitches! It’s more: Can you resonate with the person you’re talking to really fast? I explored an Executive in Residence & the fit wasn’t there.
And after the pitch, once the deals been signed & you’re working with that vc, how have you found that you’ve been managed by the vc?
Well the bigger question for me is Are you looking to create a competitive situation with your project? So is the goal to say I want to get 3 vcs bidding on my project? Then essentially I’m trying to get better terms & conditions in valuation or maybe just it’s I’m trying to find what the right fit is. And that’s purely determined on the strength of your case & how well it fits with the current market conditions. If its a hot market or if the table is hot? Most venture players are craps players. They walk into the casino & they go to the hot table. That’s maybe uncharitable, but I think of them as craps players not chess players. They want to find the hot table & put the bets down. So if the conditions are right. I think they just want to play where their odds of low risk & high return are better & they put want to play multiple chips down. But if you’re an entrepreneur who’s got a hot idea then you’re probably going to want to shop it. Unless you have some special relationship where I’ve worked with so & so before, they’re going to give me favorable terms, I don’t need the noise. I’ve seen that as well.
If it’s true that cash for business is fuel & the needle maybe getting toward empty & they’re standing in front of the gas station with their arms crossed.
So they have more power in that situation?
Well yeah sure they’re the gatekeepers of the cash. And they know it! And your job as an entrepreneur is to say ‘No I’m not selling you, you’re selling me!’ Your job as the entrepreneur is to say ‘I’m the one who has value!’ ‘Why is your money better than their money?’ That’s their job! Easier said than done! My stock is worth a lot more than your cash! What’s cash worth today? What’s the interest rate below a percent now? So the job of the entrepreneur is to shift the tables.
So similar to what I’d advise my coaching clients when they’re going for a job, to interview the employer to find out whether that’s a good fit for them?
But be aware though of how strong your position really is.
Yeah. I guess the language of business is revenue & profit. If you can speak that language to some degree it makes it’s own case. The farther back you are from that, the closer you get to concept, the more you really do have to rely on salesmanship & charm & personal appeal or whatever.
Thank you so much Damien, that’s been really helpful & I’ve had a few insights out of talking to you. Thank you.