I have it on good authority that  June has been declared New England Innovation Month, per Scott Kirsner who has been tireless tender of the innovation flame here in New England for years now (http://www.boston.com/innovation).  See the growing list of June events at http://neinnovation.com.

In honor, a few thoughts follow on Innovation in New England.  First, a pointer to a related concept, called National Entrepreneurs’ Day to recognize what entrepreneurs do for this country.  It’s an idea sparked by a fellow New Englander, David Hauser, founder & CEO of successful tech start-up Grasshopper.  The date being requested of the Obama administration happens to be the first day of spring each year.  [Coincidence that the French word for “start up” also references the spring season–“jeune pousse,” loosely translated as “young sprout” or seedling).

See the video clip below for serious entrepreneurial inspiration, and the other link to add your John Hancock (yes, yet another famous New England innovator) to the virtual petition.

* Killer link for entrepreneurial inspiration– http://grasshopper.com/idea

* Link to petition– http://www.entrepreneursday.org/dh

Now, back to June’s month-long celebration of innovation.   Indeed, New England  has a storied innovation past.  However,   what may begin as a strength in our region can at times turn to weakness, the metaphorical double-edged sword.   I’ve penned a wish list of five ideas for innovation here in New England along that thematic refrain, akin to “innovation on innovation”:

• #1 “Coopetition” in New England to foster national visibility
  New Englanders are known for their fierce independence and self-reliance.  We needed this when we came over as settlers 300+ years ago and put our MacGyver-esque skills to the test to survive (note, MacGyver was no doubt was an Irish immigrant from good New England pioneering stock).  It’s been said that unless you can trace your lineage to the Mayflower, you’re still considered an outsider.  New England has never been known for leaving fresh-baked pies for the neighbor who just moved in next door.  In fact, at times, neighbors live next to neighbors for years without getting to know each other, all in the name of “independence” and a desire to not meddle in others’ affairs.  However, New England could benefit a great deal if we pulled together and collaborated just a wee bit more.  Example, Peter Rothstein, recently named Director of the New England Clean Energy Council, has been driving for both State and Federal government resources (Department of Energy and other), to fund the concept of a “Regional Consortium” that would bring together all the components of the cleantech ecosystem in New England in a thoughtful, harnessed approach.    The only way New England can achieve this national recognition (and funding) is via collaboration.  OK, just to prove to hardy New England stock, we’ll call it “coopetition” just to retain a bit the independence streak that runs so deep up here.

• #2 Greater sense for openness for new ideas/ways of doing things
  New England also has a wonderful sense of tradition—Mayflower, Plymouth Rock, the Boston Marathon, Red Sox, clam chowder… we’ve pioneered our fair share of “we were first to….” And “we have the oldest of….”  I’d like to see us bring back a bit more of the revolution versus  evolution.  A bit more General George Washington and Lexington/Concord derring-do, rather than what has grown to be our reputation as conservative  in all things “blue sky”-oriented.  Wouldn’t it be great if we didn’t have to wait for the imprimatur from an MIT lab or a Harvard Business School professor before we tried something new?  New Englanders are possessed with pedigree.  And until something has been anointed with pedigree pixie dust, an innovation often languishes in ignominy.

• #3 Be more “what you know” versus “who you know”:
  As an outgrowth of #1 and #2 above, New Englanders often suffer from an acute case of “who you know.”  This to some extent is a derivative of the circular logic involving #2 above on pedigree.   Despite our reputation as the nexus of sophistication and erudition, New England seems to grow more and more insular in letting outsiders into board rooms as well as bar rooms.  New England, despite being the original crucible of diverse cultures, has homogenized. Amazing ideas and innovations come from equally surprising and diverse sources.  One of the best examples of “what you know” is exemplified in one of my favorite recent Malcolm Gladwell articles in the New Yorker Magazine (dare we say also a New England masthead), chronicling a Silicon Valley entrepreneur from India who heretofore knew nothing about the sport of basketball, who—when tasked with coaching his daughter’s middle school basketball team—innovated game strategy to turn a weakness into a strength and a last place team into a near division winner (see http://www.bostonsearchgroup.com/blog/type-leaders-required-to-outpace-competitors-in-recovering-economy/ )

• #4 “Hold” vs. “Fold” or “Sold”
  OK, so I’m not pioneering this idea, but if imitation is the highest form of flattery, I’m a big fan of this growing mantra in the innovation community here in New England that goes like this.  Massachusetts used to have an incredible set of tech & science crown jewels:  in biotech, Genzyme, Biogen & Millennium Pharma.   In tech, companies in hardware and systems like Data General, Digital, Wang, 3COM, and Banyan Systems.  In software & Internet the likes of Lotus & Lycos.  However, over the years, these companies have either been sold or forced to fold.  One of the few remaining companies embracing the “hold” mentality is EMC, preferring to buy others than sell themselves out.  However, just one EMC, or even a handful more doesn’t make for a robust, sustainable innovation ecosystem.  Innovation can metaphorically be cast in the same light as combustion– that combination of spark, oxygen and fuel that powers innovation and drives creativity.  Spark is the new idea, fuel is the money provided from investors in the idea.  And oxygen is the people who take the idea and the money, the business-saavy entrepreneurs who partner as the steel to the innovator’s flint to spark the novel idea, tech innovation, or scientific breakthrough.  I wish we were making more oxygen in New England.  This type of oxygen only comes from the talent that grows up and makes small companies into big companies.  These bigger companies serve as a training ground for the next generation of entrepreneurs to cut their teeth, get their training, build their network.  These larger companies offer entrepreneurial training wheels.  When we sell companies too early, they never get the chance to develop a critical mass of next generation talent who can apprentice at the knee of others and with greater security to make mistakes without having each decision be a bet-the company-one that risks putting the company in mortal peril.  When there is no larger company safety net, fewer young talents practice jumping into the uncertainty of innovation acrobatics, often key experiences required to be able to drive younger companies to success later in their innovation careers.

• #5 Create a “Celebrate the student Week”
  I’ve always been in awe of many of the Asian countries who celebrate things that we in the U.S. might find odd.  I believe they have a day that celebrates children.  And a day that celebrates the elderly wise ones in their communities and cultures.  There is likely no region in the U.S. that has more undergraduate and graduate students than New England.  And these students are the equivalent to our regional “innovation fountain of youth.”  Undergrads, Masters students, PhDs, Post-docs, Fellows.    I wish we could celebrate them.  What better time to do it than during New England Innovation Month.  Make them feel welcome.  Give them social stature to counterbalance the grumblings around U-Haul vans that descend like locusts in late August, or parties that get a bit too raucous.   New England students should be lauded.  Perhaps a regional “student innovation awards” as capstone to this celebration.   OK, at minimum, a free scoop from yet another New England innovation legend, Ben & Jerry’s.  A  scoop of a new flavor in their honor, “College Cram Crunch.”

What do they mean when they ask?  There’s actually a lot of nuance in the question-when are skills and experience most important to success in the role versus pure talent and aptitude?

• •    Just because a CEO is moving from one industry to another, does s/he lose his ability to successfully lead?
• •    If a VP Sales has been successful at one stage of company growth, can s/he take that same sales toolbox and be successful in another stage company, say either emerging-stage or mature-stage?
• •    Can a VP Engineering be equally effective managing in large companies and small?
• •    Do companies look for the same types of leadership in good economic cycles as well as bad?
• •    How does an executive’s move out of their wheelhouse of skills and experience impact their compensation and/or level in a new industry and company?

These questions are only a few of the factors that impact the answer.    The following discussion is aimed at trying to lend some clarity and context to question.

Let’s take a look at the hour-glass graph below to lay down some of these factors against our “expert or athlete” question:

1)     Level of management: The first factor is where an employee sits in the organizational chart.   In general, skills and experience are most critical at the “waist” of the hour-glass graph-mid-to-upper level management, starting at manager, through director- and VP-level.  At the top and bottom of the hour-glass, aptitude often ends up as the greater emphasis in “hireability.”  This may be fairly intuitive for many.

a.     Entry-level: When you first get out of school, employers often hire for a combination of attitude and intelligence and look for those who exhibit room to grow or “headroom.”   In fact, at entry-level, skills and experience for those roles are often a liability.  Employers may feel someone is overqualified, or a “flight risk” if that employee finds another better-paying and/or higher level position at another company.

b.     CEO-level: When you achieve P&L/CEO status, employers often will place more emphasis on the track record a CEO has in leading a company versus a tenured career history in a specific industry area.  Can a CEO move from rust-belt manufacturer to biotech?  Likely not.  However, there isn’t the same granularity of fit applied at the CEO-level as at the middle-management layer.  If a CEO has been broadly successful in in a number of software companies, it often becomes less important what type of software, or what industry vertical that software was developed for.  Certainly some screening is applied to industry, with some of the below more general industry characteristics takingi precedence-

i.      Experience in selling to similar customer base, B2B vs. B2C or government

ii.      Experience raising equity capital from venture capital or private equity

iii.      Experience creating exits for investors that have generated good returns for those investors

iv.      Experience taking a company from one industry into other industries, popularly referred to as “crossing the chasm”

c.     Mid-to-upper management:   Mid and upper management are where skills and experience over mere aptitude are often most sought after by employers.  Those who are hiring at this level will often even emphasize industry skills and experience above managerial experience, giving the edge to a candidate with industry-relevant background and a lesser degree of leadership experience, assuming that management is a learned skill and can be taught or picked up on the job.  Is this right?  That’s not the focus of our discussion here.  Rather, our goal here is to describe corporate hiring  norms from our observations.

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2)     Stage of company:  Does stage of company impact whether you hire a best athlete or domain expert?  Common practice dictates that yes, the later stage more mature company can be successful hiring a “best athlete,” where a faster-growth company needs to hire a candidate with more domain experience relevant to that industry.  Why?  The theory goes like this-

a.     Fast-growth companies: The faster a company is moving and growing, the less time there is to cross-train an employee on anythng. This applies to all candidate characteristics: level of industry knowledge, stage of company experience, and management experience.  In fact, if a fast growth company needs a VP, if anything that company may want to over-hire, looking for an executive who has managed larger teams over broader geography because it’s only a matter of time before this fast-growth company will experience its next growth spurt, and hiring an executive who’s seen what’s around that corner before is priceless in order to smooth out the growing pains inherent to all fast-paced companies.

b.     Slowing-growth companies: As a company matures,  hiring in a “best athlete” may make a lot of sense.  First, there is time to train up the executive being hired on the domain areas in which he or she has little/no experience-industry, geography, etc.   Also, best-athlete executives often like to learn new things, and be in continual learning-mode.  If they can take their business athletic ability and learn a new sport/industry, it keeps them motivated, excited, fresh, and leaning into the role rather than what can be called “career-coasting,” where an executive is just doing the same thing for a different company-same industry, same title, same goals, etc.

3)     Large versus small companies: Similar to fast-growth versus mature companies above, common wisdom dictates that large companies can support the “best athlete” better.  Often, large companies have an established internal employee training group tasked with taking new and existing employees and helping to round them out, whether that be by offering management or leadership training, functional skills education, or industry knowledge and education.  Smaller companies rarely have this pre-existing infrastructure.  Yes, an executive can go outside the company for supplemental business education by taking courses offered by industry trade groups and universities. However, the fear by the employer is that it will take time, cost precious budget resources, and detract from the time an employee has to give to achieving critical company goals and objectives.

4)     Impact on hiring of macro-economic cycles:  It’s worth noting that the prevailing economic cycle creates another impact on whether a company may be willing to consider a best athlete versus a domain expert.   From our experience, in a growing economy companies are more willing to consider best athletes for the following two reasons:

a.     Supply/demand of domain experts-In a flourishing economy, demand for talent often outstrips supply.  We saw this in the Internet bubble where talent available was so scarse that it became a serious constraint on new company formation and venture creation.

b.     Cost of domain experts-as a growing economy impacts the supply-demand equation, this also drives up price.  Even if you can find the domain expert, it may simply be considered too expensive, and the company instead decides to take a “wean-and-train” approach to filling the need,  favoring the hire of a best athlete.

***

Related to the question of experience versus aptitude is how this may impact executive compensation and management level for the employee considering a change out of their area of domain expertise and into the new.

Below is a bull’s-eye diagram that represents what we believe to be the inverse relationship in play.  When an executive decides to change any of the following characteristics in their employer, they are likely to move out at least one ring:

• •    Impact of size of company on title/level: If an executive wants to move from a smaller company to a larger company and they were a VP at the smaller, they should expect that they will move out a managerial ring, from VP in a smaller company to a director-level or even manger-level title.
• •    Impact of industry shift on compensation: If an executive wants to move from one industry to another (say software and/or tech to cleantech / renewable energy), often this will have to come at the expense of a reduction in compensation. Of course, if this is a CEO candidate, compensation may be less impacted than if it’s a middle management employee.
• •    Impact of functional shift on compensation: If an executive wants to move from sales to marketing, or technology development to sales, or any of those to an operations-focused role, this too is likely to negatively impact compensation.

If you try to combine more than one shift above into two or more, expect that with each compounding factor you’re likely to move out another ring on the bull’s-eye.

Impact of industry & function shift on compensation & level

]]> http://www.bostonsearchgroup.com/blog/aptitude-experience-important-hiring-equation/feed/ 0 http://www.bostonsearchgroup.com/blog/interviewing-tips-dos-donts-collected-scott-kirsner/ http://www.bostonsearchgroup.com/blog/interviewing-tips-dos-donts-collected-scott-kirsner/#comments Tue, 12 Jan 2010 04:01:29 +0000 Clark Waterfall http://www.bostonsearchgroup.com/blog/?p=941 Scott Kirsner recently penned an article in the Boston Globe on interviewing tips, what not to do.  Great compendium (our contributions excepted perhaps but for you to judge in the article sidebar on page 2) of what some might think intuitively as “faux pas”, but many simply may not think of at all, and are at risk of committing.

http://www.boston.com/business/articles/2010/01/10/you_have_your_foot_in_the_door_how_to_keep_it_there_1263010162/?page=1

A weekday morning in late November.  A brownstone residence on Beacon Hill in the shadow of the State House.  A dozen of the foremost experts in technology transfer and intellectual property in the Boston innovation cluster.  And a representative from the Department of Energy.  We at BSG Team Ventures had the recent opportunity to host a salon-style meeting in a home of a friend of the firm during Clean Energy Week here in the Commonwealth (for more on Clean Energy week, see http://greenovationconference.com/conference-info/cew.html).

The purpose?  Bringing the best minds in the Boston venture, entrepreneurship and innovation community together for a brainstorming session with the Department of Energy around best practices in technology transfer out of our national laboratories.   Attending the meeting were Alan Gordon from Harvard University Technology Licensing Office, Chris Noble from MIT’s TLO, head of the Mintz Levin cleantech practice Tom Burton, Peter Rothstein from the New England Clean Energy Council, Director of the Massachusetts Technology Transfer Center Abi Barrow, Director of Partners CIMIT John Collins, General Partner at Flagship Ventures Jim Matheson, and CEOs Chris Hobson and Peter Vandermeulen each running cleantech start ups with technology licensed out of several of the national labs themselves.

The challenge the current Obama Administration is taking on under Secretary of Energy Chu is how to better mine the metaphorical gold created inside the U.S. Department of Energy-funded  national laboratory network of some 15 that are spread across the country.  Some of these labs are household names–Los Alamos and  Sandia (New Mexico), and Lawrence Livermore (California).  Others are less well known-Argonne (Illinois), Brookhaven (NY), and Ames (Iowa).  Even the National Renewable energy Lab (Colorado, known more often as NREL), are not as well known as one would hope.  The history of these national labs springs from energy research spurred by World War II.  What the layperson may remember is that many of these labs were where secretive nuclear energy research was conducted.  However, much of the mandate for these labs some 60 years later is focused on discoveries that will broadly contribute to advancing the United States’ understanding of energy, renewable energy, energy conservation, and all the various scientific disciplines that can contribute-physics, materials engineering, chemistry, and more.  These labs are panning for a 21^st century gold-energy discoveries and breakthroughs that will create new batteries using renewable resources, wean the U.S. dependence on oil and coal as primary energy sources, and break new barriers in energy efficiency.

However, the problem has been that these labs have explored a lot, and engaged in extensive primary research, but have punched below their weight class in bringing innovation from discovery through to successful commercialization.  The DOE budget in FY 2009 topped $25 billion.  The national labs budget made up approximately $10 billion of that.  And with the Obama administration’s  stimulus package, these numbers only look to be increasing.  One example brought up in the conversation to punctuate the problem from one of the Boston-based attendees was that fact that Argonne National Laboratory in the last decade has created less than a dozen successful out licensing/royalty events that generated meaningful returns.   Logic holds that in terms of return-on-investment, there remains much room for added improvement.

So, two hours later, what were the issues that were brought up by the braintrust, and potential solutions that were tendered to improve the return on investment the DOE makes in the national laboratory’s innovation mission?

Some of the key issues with the current structure that came out of the dialogue:

•    Risk aversion of national labs researchers to leave the security of the lab to spearhead a risk-laden venture

•    Innate interest of lab researchers is more geared toward research and “discovery” versus market-matching and commercialization

•    Low/no financial incentive to take a discovery beyond research phase

•    No business ecosystem or business-savvy catalysts to help focus lab research talent on “known problems,” or the sifting through lab breakthroughs to match-make with existing  business  problems

Suggestions for improvement focused around the three ingredients that are key to metaphorical “combustion” of the innovation commercialization engine:

• “SPARK” = the novel ideas, innovations & discoveries that come out of the labs
  • + Create a centralized online portal for intellectual property created by the national labs. The Commonwealth of Massachusetts has done this via their Massachusetts Technology Portal, http://www.masstechportal.org/.
• “FUEL” Funding resources for
  • + Create a www.grants.gov website, that clearly allows entrepreneurs the ability in a single location to see what grants are available for which to apply (SBIR, DARPA, ARPA-e, etc.).
  • + Create small “mini-grant” offering within the labs, that awards small amounts (between $50,000-250,000) to discoveries to help fund the next stage in proof-of-concept creation
  • + Create meaningful business competitions that galvanize scientists and business entrepreneurs to come together for a cause (great examples can be found with both The Ignite Clean Energy Competition (www.ignitecleanenergy.com ), and Clean Tech Open (www.cleantechopen.com )
• “OXYGEN” = the talent, teams, and professional ecosystem that is required to wrap around the “spark + fuel” to make the engine run.
  • + In addition to the current national laboratory scientists, technologists, and inventors there needs to be an institutionalized talent flow that includes:

§         The national labs equivalent of PhDs who currently work in universities under tenured professors.  These PhDs are the “free radicals” who are capable of taking some primary research breakthroughs through their subsequent next phases, focusing on improving the breakthrough beyond peer-reviewed publications in which professors announce them.  Also, these PhD-equivalents at times are capable of spinning out of the university setting with a newco that’s created around that innovation, as they are not already career-tracked as tenured professors in universities, or national lab scientists who have a relatively safe and secure position and more often than not don’t want risk leaving to pursue some much higher-risk venture.

§         Business-side talent.  These are the CEOs, marketing VPs, sales VPs, corporate development specialists, and VPs of Strategy, Operations, manufacturing, and engineering.   The subset of all of these business types who love the zero-stage venture, love entrepreneuring, discussing blue-sky opportunities, talking to the marketplace and potential customer segments to determine if a breakthrough could be harnessed into a product for various customer segments, and if it were, would the customer pay for it, how much, and how often.

§         Entrepreneurial Business Ecosystem. This is one of the last key elements.  Wherever you find a rich geographic region of serial entrepreneurs and innovation, they are always planted in soil that offers the nourishment and fertilizing properties essential to standing up new ideas in the form of new start-up companies.  These include the consultants and professional service providers who help the company-IP & corporate lawyers, accountants and CPAs, staffing agencies and executive search firms, commercial real estate advisors and investment bankers who are all critical catalysts to maturing the start-up idea.  The ecosystem also includes follow-on funding sources including well-organized angel investing groups, institutional venture capital investors, and industry associations that provide the virtual water cooler for much of the dialogue, introductions, and business ideation that is brought to bear at various stages of company growth.

The business element could be assembled in the form of an advisory board.  A good example of this can be seen in the structure of the MIT Deshpande Center, and the catalysts who are deputized by the Deshpande Center to work with the MIT lab professors (see http://web.mit.edu/deshpandecenter/catalyst.html )

§         Replanting/grafting: Ability to move an idea outside the labs in which they were discovered.  The ability to graft a discovery onto a team elsewhere.   Or house it in some sort of entrepreneurial “launch pad” or innovation Petri dish.  Could this look like an incubator, perhaps.  Although few if any incubators have succeeded.  One such here in Massachusetts, run as a for-profit private entity is the Cambridge Innovation Center (www.cictr.com ) which may prove a potential model.

§         More “conferences as mixers”:  the NREL (National Renewable Energy Lab) just recently held it’s 22^nd annual conference out in Denver (http://cleanenergyforum.com/).  Holding more of these events with the right invitation list that would push together the sparks, oxygen, and fuel providers.  Perhaps hold them more than once a year, or in several different locations (West, Central, East) as a traveling road show of sorts.  The more frequently the “right” people meet together wrapped around a galvanizing theme, the more trust, openness and sharing/brainstorming becomes the norm rather than the exception.

At the minimum, the session demonstrated the interest and passion of both the private and public sectors to meet, share, explore, and innovate around federally funded cleantech commercialization.

My itinerary?  Starting from home base of Boston, then to New York’s JFK, through London, with the ultimate destination– Singapore.  Total air time one way? 18 hours.  Total air and waiting in airport time one way? 24 hours.

What earned me the opportunity?  First, membership in the Entrepreneurs’ Organization (“EO,” www.eonetwork.org, formerly known as YEO, or Young Entrepreneurs’ Organization ) a global membership organization that is nearing 10,000 members across more than a 100 chapters.  EO is one of a group of leadership organizations, including YPO, WPO, CEO, and several others.  Qualifications for EO membership include annual revenues of $1 million or more, and either founder or majority ownership status in your business.

Hailing from the Boston chapter of 100 or so EO members made up of computer software and hardware entrepreneurs, legal and staffing professional services business owners, and a host of other small business founders  including franchising, travel, consulting, real estate, and medical devices, I was made aware of the strategic partnership between British Airways and the EO organization.  The following paragraph, detailing what a face-to-face opportunity would mean to the growth and expansion of our boutique retained executive search firm, BSG Team Ventures, was what I jotted down–

We have a presence in Boston, New York, Silicon Valley, and London. These are key global innovation centers. However, there is clearly a fifth and/or sixth  location to round out our client value proposition of “on the ground coverage in the key innovation centers in the world”– and those are India and Asia. Although there is a term sometimes used that combines the two (“Chindia”), we feel that there is perhaps a need to be able to service our growth-stage clients in each. One alternative is a meaningful position in a location like Singapore, which is equidistant from both these key innovation markets.

The ability to set up a series of meetings with potential partners, and then bring pre-meeting calls and video conferences to an in-person, face-to-face setting, would be extremely meaningful in taking our business from EU-American only, to truly global, capable of better servicing the needs of our clients who continue to demand the need to themselves expand globally.

I had been to Singapore and Hong Kong in 2008 on business, and knew that another trip there would allow us to cement some developing relationships “face-to-face.”  In 2008, we completed a VP Worldwide Sales search based out of Singapore, and are now working on another General Manager search based out of Tokyo for a leading global technology innovator.  And with the recession of 2008-2009 projected to recover in west-bound fashion this time (Asia first, Europe second, and the U.S. last), China, Japan, and the rest of the Asia-Pacific corridor is important to every business, both large or small like ours.

Having won the right to cash in the BA offer, a plane load of entrepreneurs amassed down at JFK airport in New York.  BA was everything they’ve built their reputation on-service-oriented and courteous, only as the British can be-with a send off in the first-class lounge that was rich in food, spirit(s), networking with other entrepreneurs, and a few humor-filled greetings speeches by both British Airways officials and the British government.   Example of the power-networking in the BA lounge? I met up with Morgen Newman, co-founder of IdeaPaint, another Boston-based start-up that was a BA travel recipient, with a company out of Babson (my alma mater so plugging here) that has formulated a special paint that can be applied on any work surface that then functions as a “whiteboard,” completely erasable when using dry-erase markers.  IdeaPaint is a tool for entrepreneurs that simply brilliant.  Most entrepreneurs are visual thinkers, and this now allows us to scribble on every surface…. (“Beware office cleaners-these walls aren’t “dirty”…. DO NOT ERASE!”)

My itinerary and goals for the trip looked like the following:

-          Tuesday:  Departure from JFK New York on flight into Heathrow, England, arriving at 9:30pm, with champagne reception at the end at the hip Sofitel Hotel in the new BA swanky Terminal 5.  “Bubbly” is the right term for a plane load of entrepreneurs bottled up for 5-hour trans-Atlantic flight….

-          Tuesday eve: Trip into London to stay at one of BSG Team Ventures’ partner’s flats, Simon Haworth, for early meetings the following morning

-          Wednesday morning: Meetings with an affiliated venture fund Dr. Haworth is a partner of, IPSO Ventures, focused on zero-stage technology transfer out of UK universities

-          Wednesday lunch: meeting with Simon and additional BSG Team Ventures staff in UK to review firm-wide global priorities

-          Wednesday dinner: Meeting with Sean Sean-Rogers, venture capitalist originally based in Boston with Commonwealth Ventures, then London with Benchmark Capital, and now out with his first cool media start-up venture fund of his own, called PROfounders Capital .

-          Wednesday late eve: Flight out of Heathrow to Singapore

-          Thurs eve: arrive in Singapore 13 hours later but given time zones crossed, a full calendar day later.  On way to hotel, bump into another fellow EO Boston chapter member, Warren Katz, who’s military software simulation company MAK Technologies based in Cambridge, MA was recently bought by a Singaporean company and where he had meetings completely unrelated to anything to do with EO, British Airways etc.  The probability of bumping into a fellow Bostonian and dear friend 9,500 miles and 15 hours away from home in the same hotel lobby in Singapore is….. rough math? Zero.  If anything proved Thomas Friedman’s claim that “the world is flat,” this certain did.  Serendipity works in strange ways.

-          Thurs late eve: After a run on the treadmill and a shower at the hotel to shake off the jet lag, meet-up with Warren at the hip Equinox Bar at the top of the SwissHotel in downtown Singapore for a nightcap on the 70^th floor overlooking the city (Warren holding porcelein statue of a lion, the symbol of Singapore, as proof of authenticity and handy memory jogger for old age).

-          Friday day: Meetings with the Singapore Economic Development Board regarding the state of the cleantech industry in Singapore, and the Ignite Clean Energy Competition I currently chair.  Potential partnership with Singapore on global cleantech competition expansion.  This was followed by three meetings with boutique retained executive search firms with a similar focus and specialization to our own firm.  Great meetings.  All three firms turned out to be potential partner-caliber opportunities.  And each of them had active retained executive recruiting practices that did search work in India, Singapore, Mainland China, Hong Kong and Korea.

-          Saturday:  Meeting with existing technology client who went public earlier in 2009 for lunch to discuss current and future expansion searches both in the U.S. and Asia

-          Sunday:  Originally, I had booked the trip to try to squeeze in one more business day by staying the weekend and leaving late Monday eve to allow for more business meetings.   However, once there, was greeted with the fact that Monday was a holiday, the end of Ramadan for the Muslim religion, and business was closed.  It’s a great example of Singapore as an Indo-Chinese melting pot not dissimilar to that of the United States.  However, in Singapore, it is a fusion of Chinese, Malay, and Indian cultures that co-exist and create not only incredible cuisine, but a vibrant cultural diversity where all three associated religions are celebrated and many languages spoken.   Moved from hotel in downtown Singapore out to a small island just 15 minutes out of the city called Sentosa, a former military base built by the British half a century ago to protect the island, now converted to a natural wildlife habitat and recreational weekend playground for Singaporeans with several resorts anchoring each end of the island, dotted with golf courses, tennis, beach, dolphin petting, and lots of beach and water sports.  Note to self-keep windows of hotel room closed….

Ran back into Singapore the city to do some late Sunday shopping, and again bumped into the cultural diversity of Singapore, with a street celebration capping off the end of a period in Chinese culture and I believe Tao religion that starts In May, and ends in September, often referred to as the “Moon Cake” festival.  This is a festival  and celebration on the streets of Singapore and many other parts of Chinese Asia I’m told that celebrates the return of all the ghosts to the underworld who each year are let out to roam the earth and make trouble for their living relatives.  At the end of September, these ghosts are all returned behind the gates to the underworld, rendering the earth safe again until the following May.  The Chinese celebrate with parades, demonstrations, the burning of special urns the night before on the streets, and the Chinese pastry called “Moon Cakes” made up of a bean paste with some sort of frosting over the top.

Below is a picture of several groups of Chinese children rehearsing before the start of the parade.  The boys were part of a martial arts school; not sure what the girls were part depicting.

All said and done,  in 4 business days the dash across the globe was a great opportunity, albeit an exhausting one.

Here’s to entrepreneurship and the pioneers in all facets of enterprise who take on the unknown every day, week, and month, in an effort to forge new business value.  Whether those pioneers are in the U.S., UK, Singapore, or India, we’re all very much the same, driven by a like urge to grow and nurture an emerging idea.  Hats off to the rest of that planeload of globe-trotting entrepreneurs.  Can’t wait to hear their stories no doubt more compelling and inspirational than mine….

The Company

Becoming the leading content provider of geospatial imagery for mapping & monitoring applications

Our client has its roots in rocket science… literally.   Since the first image was collected from space over 30 years ago by classified government imaging systems, only a limited number of people have been permitted access to highly detailed photos of the Earth, and the industry was tightly regulated.  Since its deregulation in the 1990’s, our client is changing this historical usage of Earth information through the commercialization of high-resolution satellite imaging and an innovative approach to conducting business with customers, partners and resellers. The company was founded in 1992 to launch satellites into space for the purpose of taking high-resolution photos of the earth for defense and intelligence, government, and commercial use.   In early 2000, the US government awarded its first significant contract for satellite imagery to the firm.  Currently, the company offers the world’s highest resolution commercial satellite imagery, the largest image size, and the greatest on-board storage capacity of any satellite imagery provider.  In addition, the company’s comprehensive ImageLibrary houses the most up-to-date images available.

In 2004, our client struck an exclusive portal agreement to supply much of its satellite imagery to Google’s new product launch, branded Google Earth.  This deal served as both validation for a broader explicit push as well as anchor tenant into the non-federal government, commercial sector.

The company is headquartered near Boulder, Colorado, with other offices and facilities in key geographies throughout the world.  Commercial division headquarters are in Needham, MA.

The company filed for an Initial Public Offering in June of 2008.

Market Opportunity

Popular business and technology soothsaying magazines have trumpeted mapping as the next “killer app.”

Image-enhanced mapping – typically associated with markets based on GIS and GPS – have now begun to penetrate the mainstream lexicon.  Use of satellite imagery is definitely no longer the exclusive province of the intelligence community but is broadly used by business and the consumer as well.  [Even somewhat capricious mapping use has taken off like wildfire, as evidenced by the overnight popularity of photo posting sites like Flickr that tag location coordinates to each image.]

Based on market data from ASPRS and Frost & Sullivan, the estimated global addressable market for sub-1 meter imagery (including aerial) is $680M.  The combination of strong underlying growth in the traditional (GIS-based) market, and new emerging web-based applications will increase the addressable imagery market to more than $1B in 2010.  Very high resolution commercial satellite imagery is expected to be the major growth driver, taking share from aerial imagery providers.

The Position

The Vice President of Sales, Americas will be responsible for managing the overall sales plan, associated P&L and budget for the commercial sales group in the U.S., Canada, and South America.  The VP Sales, Americas (VPSA) reports to the CEO.  The position and associated team is focused on driving new sales into commercial markets, including but not limited to industry sectors including Oil & Gas, Telecom, Utilities, Online Mapping & Portals, Consumer Navigation, and the broadly defined corporate enterprise.

As the Company is headquartered in Longmont, Colorado, just outside of Boulder, Colorado, this position will be based at Headquarters offices.

The successful candidate must possess excellent organizational skills and the ability to lead a multi-continent distributed sales, business development and sales support organization.  Specific sales leadership background is in the broad-based area of web-based content. He or she must have experience establishing and managing one and two tier distribution sales structures internationally.

The Americas sales team is comprised of approximately 16 dedicated staff, including regional sales managers and directors (~6), business development (2), and sales support staff (8).   A Sales operations group of approximately 20 is shared between the various sales organizations, including the Americas, EMEA, and APAC regions.

Highlights of the VPSA responsibilities include:

• Exceed quarterly and annual revenue targets
• Develop and execute sales plans and strategies to position the company for sustained long-term geographic growth in the Americas, especially in key emerging geographic markets such as Brazil.
• Develop and execute sales plans and strategies to expand the industrial customer base, further grow the fast moving online and mobile content and mapping customer segment, and achieve demonstrated success penetrating the enterprise customer marketplace.
• Manage, develop and coach company’s America sales force to ensure success in each region
• Foster teamwork and create a positive work environment for a distributed sales force
• Lead and develop a dynamic and creative sales infrastructure that fits the needs of our business and the products we provide our customers
• Drive internal discussion about strategies, ideas, new opportunities and the best methods for achieving success in a changing marketplace
• Consult with customers on their needs and provide feedback to other departments supporting sales efforts
• Forecast, track and report sales performance using internal tools and application, such as Salesforce.com
• Conduct internal pipeline meetings and reviews with the executive team
• Manage overall sales plan for territory and associated P&L and budget
• Lead team in structuring strategic and integrated partnerships with key customers
• Personally assist in closing large deals and managing strategic accounts
• Travel as needed to ensure that sales and clients needs are met and exceeded
• Participate actively in business planning and budgeting process as a key member of the business unit’s executive team

Staff & Global Office Locations

Commercial Business Unit offices exist with headquarters in Longmont, CO, and other offices in Colorado, Boston area, Singapore, and the United Kingdom.   The sales team is comprised of 4 regional  Director/VPsThere are Regional Sales Managers, for a total of approximately a 5, including all sales VPs, Directors and Managers.

Financial Backing

The largest shareholder in the Company is Morgan Stanley, occupying several seats on the board. During its seed and growth stages, the company has also received venture capital (August Capital, www.augustcap.com), private equity (Frontera www.fronteracapital.com), and strategic investments (Ball Corp’s aerospace division, www.ballaerospace.com [NYSE: BLL]).

Compensation

Compensation will be competitive with the position’s requirements, comprised of three basic components– base salary, incentive compensation driven by a combination of achieving revenue targets and management-by-objective milestones, and appropriate equity stakeholder position.

Below is a partial list of Jude’s lessons learned, selected for those that carry strong correlation both to a natural disaster such as Katrina as well as an economic disaster.  Following it is some interesting Q&A in dialoging with him about the experience.  And to learn more about Jude Olinger’s firm, go to www.olingergroup.com.

After crisis strikes…

-         Lesson #1 - Don’t panic but act quickly.  Stay focused on the tasks that you have to accomplish to recover.  Prioritize tasks and act upon them immediately.  Time, or rather lack of time, is your enemy.  Everyone is going to want your time… so have to prioritize and think ahead.  Anticipate things that might happen and prepare for them.  If you know you have to lay people off, and it’s a reality, then do it.

-         Lesson #2 - [In knowledge worker industries] Don’t lose your greatest asset – your employees.  Be decisive.  Communicate with employees quickly and frequently.  Be a leader and let them know the plans and intentions of the company and how they fit in.  Evaluate what you can do for them immediately and provide as much assistance as possible.  Don’t lose the key people that make you successful every day

-         Lesson #3 - Communicate with your clients and vendors quickly.  Let them know that you are still in business and intend to fulfill your obligations.  There often is  client empathy and understanding for about a week.  Then clients start to look to mitigate their risk by moving business-all or at least part of it-to another provider just to reduce their risk.   Keep them from defecting.  IF they don’t hear from you, then they’ll assume that risk is real in continuing to work with your firm..

-         Lesson #4 - Locate your advisors (accountant, insurance agent, banker, attorney) quickly and leverage their knowledge/expertise in the recovery.  These relationships should become PERSONAL…  you need to know your banker’s wife, husband, and children….  For accountant/bankers, questions like:  ”Should I do a 25% paycut?” (accountant/CPA), or “Will banks offer any forebearance in the interim?”

-         Lesson #5 – Be selfish with your time - everyone will want it, and you won’t have enough of it to go around.  Tend to your personal relationships and yourself.  Crisis will test you mentally, physically, and emotionally and you will need all of your strength and energy to survive it.

-         Lesson #6 - Get the facts - not things reported as fact by the media – before making any major life or business decisions.  Lots of false rumors will abound.  Filter information carefully.  Be as close to the information as possible – the further you are away from it, the less accurate it is.

-         Lesson #7 - Don’t consume too much media.  It will discourage you and take away from your focus.  Expect lots of inaccuracies in the news – see Lesson #8.

-         Lesson #8 - CASH is KING – even more so in a crisis.  Build up cash reserves.  Manage cash flow very wisely.  Be prepared for a 3 to 6 months cash flow crunch and figure out how to survive it.

-         Lesson #9 - Don’t count on ANY government assistance (FEMA assistance, SBA loans, or other federal/state assistance).  By the time you get it, if you get it, it may already be too late.

-         Lesson #10 - Keep a positive attitude - no matter how bad your situation – or you are done.  It’s the one thing that you have total control over and is critical for you to persevere.

-         Lesson #11 - Don’t expect things to be what they were before.  They won’t be the same.  Adapt, adjust, and keep moving.  It will never be “what it was before.” And don’t expect it to be.

Times of crisis test us in ways that we can never imagine.  It’s these times that makes us stronger and more determined.  Don’t let ANYTHING, not even a catastrophe, get in the way of reaching your goals and achieving success.

In further discussing the lessons Jude took away from the Katrina experience as an entrepreneur/business owner, here are some of Jude’s sentiments some three years out from ground zero:

Q: How are you entrepreneurs in New Orleans different after than before?

A: We’re smarter.  We had a chance to start from scratch, and can be anything we wanted to be (operationally).  When you lose everything, you have an opportunity to start all over again, and you can do it better the second time you build the house versus the first.  All of us have gotten smarter about who we want as clients, focusing on more profitable clients that fit the core value proposition of the company, versus taking on all comers.

Q: Has it permanently changed, or only temporarily changed your prioritization of work, family, and personal?

A: Jude said that one word was crucial on keeping balance…. “perspective.”  It’s all about perspective, keep proper perspective, and realizing that not everything may be as bad as you might think it is.  Put all things in perspective.   Events like Katrina [or the current economic crisis] create incredible stress.  Perspective is critical to subdue this stress.

Q: And “that which doesn’t kill you makes you stronger”?

A: True.  But it’s an unfinished sentence.  The end of the sentence is “but leaves deep scars.”  Think about PTSS (Post-Traumatic Stress Syndrome… Vietnam/Iraq…) Your life is turned upside down, you spend 3 years re-building it, and you always will fear that something will happen again.  “I cry a lot more.  Am much more empathetic… in a good way.   I believe the Katrina experience has allowed me to can connect to people better than before.”

Given survey responses, it appears the bell curve peak is in the 20-40% reduction in headcount.  The group of CEOs who indicated these reductions were approximately half of the 60 CEO respondents.

• •    40% or more staff reductions? ~ 10% of total CEOs surveyed
• •    Less than 20% staff reductions? ~ About 17% of all CEO respondents

Winner on this question was “more than 9 months,” with more than 40% of the CEOs.  Runners-up were the “0-to-6 months of cash” CEOs, evenly split with 25% saying 3 to 6 months, and another 25% saying “less than 3 months.”  What this may indicate is that there is a bimodal distribution of funding in the market –those who are well-funded, with 9 months or more, and those companies who are running out of cash (popular definition = less than 6 months of cash remaining).  This is reinforced by the fact that very few companies responded that they had 7-9 months of cash (less than 10% of companies).  Therefore, one might imagine that those companies who are shortest on cash are also those who are making the deepest cuts in staffing.  In addition, that there may be another round of cuts in store for those low-cash companies if they can’t get another round closed soon.

Top implied answer here?   Don’t raise a venture round in 2009.  And this is what the largest slug of CEOs responded with (33%).  Of those who are going to try to raise in 2009,

• •    one-third of CEOs see a flat round
• •    16% feel they’ll get an up round
• •    and almost half (45%) are predicting a down round

Winner for this question shows some great optimism however, with about 1/3 each of the CEOs responding answering with either “revenues up 1 to 25%”  or “Up more than 50%.”

There was an intentional effort to get a fairly even distribution of venture-backed CEO respondents for this survey, to try to avoid sector bias.  We were fortunate to have at least 10% (6 or more companies) from each of life sciences / biotech, medical devices, and the cleantech sectors.  Software/Internet/telecom was the largest category represented, with 42% of CEOs hailing from this sector.

BONUS SLIDE

Q: If YOU could survey your peer CEOs, what question(s) are both urgent AND important to running your business you’d like us to consider asking in future polls?

This was one of the most rewarding questions for which to see the responses.  Fully half of the CEOs polled had a question they’d like to pose to their peers, and some CEOs had several.  Below is a partial list of questions we’ll choose from in follow-on surveys.  If any of those CEOs would like to respond individually to any of the questions below, feel free to post a comment on this blog entry and we’ll post it for public consumption (clustered by general question subcategory as well as by industry sector).  Of course, the winning question asked by one of you CEOs, just to validate that venture capital-backed CEOs are-if anything-self-aware, pragmatic, and not fatally over-optimistic:

“What will CEOs do if their company fails?!”
1.   Cost-related questions

• •    Approaches or success stories in restructuring debt to the company’s advantage.
• •    Is it better to reduce headcount 20%, go to a 4-day work week, or reduce salaries by 20%?
• •    In addition to headcount reductions (if any), what type of expenses are you reducing?  Are you delaying new projects/initiatives?  How have investors reacted to this?
• •    Will you consider outsourcing some of your product development to make cost variable, at the expense of some know-how then being outside the company?

2.    Sales/Marketing/Revenue-related questions

• •    How are you using the economic downturn to improve your business position/model?
• •    What are you going to spend more money on in 2009 than in 2008?
• •    What changes in the sales cycle are you seeing in the last 6months, 2 months, currently?  What does the resultant trend point to for 2009 and what actions are you taking in response?
• •    How has your visibility into the level of future business changed in the last 3-6 months?Asked another way – what level of confidence do you have in your current forecast of business?
• •    (1) What emphasis do you place on marketing in your organization? (2) What do you consider the top 3 most important elements of marketing to be?
• •    How will you as CEO deal with longer term rate issues if you are a service business as it seems all labor rates are being pushed down?
• •    The number one reason why clients buy your product is? (cost, quality, service, other?)

3.    Funding/exit/valuation questions

• •    Are you finding lending lines out there?
• •    If an acquirer made an offer to buy your company today, but at a multiple less than what it would be in a strong economy, would you consider it, or wait until the economy improves so you could get a higher valuation?
• •    Are you considering merging your company with another? Are you looking at merger partners as a legitimate exit option in 2009?
• •    Are you looking to current investors or new investors for additional rounds of financing?

4.    Board of Directors/investor-related questions

• •    How will venture capital investing change in 2009?
• •    What is your satisfaction with your Board’s ability to fundraise in the future? (I think the current environment highlights a board’s function as protector of value through fundraising and too few board members are good at it)?
• •    Compensation for outside board members?

5.    Staffing/talent questions

• •    How are you balancing full time versus contract employees?
• •    How are you retaining employees during these tough times?
• •    What kind of retention ideas have you considered to make sure your key folks don’t bail for a more stable environment?
• •    What skills are you as CEO still looking to hire?
• •    What do you do to conserve cash? attract customers?
• •    How many of you CEOs have proposed reducing people to part time levels and adding equity compensation instead of releasing them all together?

6.    Economy-related questions

• •    When do you predict the market conditions to take a turn for the better?

There a few industry-specific questions CEOs wanted to ask their peer as well:

Life sciences/biotech-related questions

• •    What kind of deal structures are you seeing in liquidity-directed partnerships? What kind of partnerships, if any, are you envisioning for discovery stage assets?

Medical devices-related questions

• •    How do you expect reimbursement to be influenced during the next administration?

Asian perspective: “We’ve had tsunamis, bird flu, SARS, and financial crises like the Asian flu (1997 financial crisis), and this recession that’s hitting us now is likely worse than all those combined.”  U.S. and European entrepreneurs who were offshoring their manufacturing were saying that getting products prototyped in mainland China– something that used to be a problem because start-up run lengths were too short– was no problem at all.  Vast numbers of factories were laying off workers, and these same factories were more than willing to start with shorter runs and low/no guarantees to help offset the freefall in the manufacturing sector there.

Silicon Valley: Suffice it to say, out at dinner on a Monday night at a restaurant called A16 in the Marina District in San Francisco, there was no sign of recession.  We had a 7pm reservation, and almost got waved off for being 15 minutes fashionably late,  getting the last table squeezed in amongst the revelers.  Consumers were showing no spending fatigue.  Out near Sand Hill Road, it was a bit of a different story.  A few investors were shorting the stock market with their personal money, but still emphasizing that this was the time to do seed and Series A investments.  All in all, as is typical for Northern California, optimism abounded.

Boston:  Here, it sounds much more like Asia:  pull in all investing.  Only add follow-on investment to your own portfolio.  If you do invest, the going rate in some VC circles was rumored to be, “new valuation pre-money is equal to the amount of last money in.”  In other words, if the last round was $15 million, that would be the valuation, no matter how much had preceded it.  CEOs in Boston are talking about the return of “vulture capital.”  In the parking lot of a commuter rail train station, one late-night rider yelled back to another who was also getting off at the same stop, “What you doing getting home so late?” The response– “Went out with some of the people from work who got laid off today.  Cut 15 or 20.”  The first commuter answered back, “Yeah, layoff at our work today as well, but no one went out.  Stayed and worked late.”

New York: Quiet.  For the city that never sleeps, there was a really good imitation of somnambulism.  Everyone seemed to have had a prolonged Ambien moment.   The epicenter of the financial crisis seems to have brought down virtually every other sector along with it.

Europe: Or, more specifically, the UK.  With the Sterling down, and the second biggest stock market suffering similar downdrafts as that of the U.S., it’s also really quiet.  Unlike the last recession brought on by the dot-com bubble burst where Europe lagged a full 6 to 12 months behind in its slowdown, the UK in particular has suffered almost simultaneous with the U.S.

Ultimately, this was the take-away for me– no matter whether I traveled 3 thousand miles west, or 15 thousand miles east, the speed at which this downturn has traveled was faster than any plane I could catch.  It had beat me to each continent I landed on, each city I was doing business in.

As we cruise into the New Year, my wish is a hope that the recovery is also as globally instantaneous.