Innovations: The Neglected 97% – Entrepreneur Interview #2
I never tire of talking with innovators; intrepid vision masters who buck the odds, find their way through the maze of advice and challenges and build companies that make a lasting difference in the world. The ones that stop at nothing to come out the other side and be successful.
This week I was fortunate to talk with Ford Winslow, Founder, and CEO of ICE Cyber Security, with the help of Intelliversity associate Ed Rholl. ICE provides an AI-based solution to data security for mid-market companies that includes an innovative method for engaging clients and training employees and engineers, allowing average employees to perform like cybersecurity experts. Its AI-based technology also ensures that senior management teams have a defensible strategy against cyber attacks and a plausible compliance system to combat the effects of unforeseen data breaches including breaches that result from the conduct of employees.
Ford is participating in the Entrepreneur'$ Bootcamp, working one-to-one with George Kenney and me, as a new member of the instructor team, to hone his investor presentation skills and company positioning. ICE Cyber Security is a going concern for clients, revenues, and profitability. The company is raising funds for the specific purpose of growth: a need for funds to cover the human and infrastructural elements of taking on bigger client projects with the same excellence they’d accomplished up to now. This week, I had an opportunity to speak with Ford about his experiences with the Bootcamp.
As an engineer, operating a highly technical business, what has been a key learning element of the Bootcamp?
You’re right, I do come from a highly technical background and I appreciate a structured approach to accomplishing important tasks. The Entrepreneur’$ Bootcamp has been just that, providing me with a systematic approach to raising capital that gives me a reliable system for creating and delivering a pitch. I make ‘tweaks’ to the pitch depending on the specific person or group to whom I’m pitching, but the core is the same. George has given me the confidence to understand how investors view my pitch, which is really unique. Typically, I’m getting advice from other entrepreneurs, books, seminars . . . it’s a rare and really valuable experience to get direct advice from someone who is a major investor and understands how sophisticated investors think.
Can you provide a specific example of how that kind of coaching has helped you?
Absolutely. George is a major investor as co-founder of Shepherd Ventures, who, like so many of the investors I sit down with, has been there, done that, heard it all. They can be jaded and I often wondered what can I say or do to be new, unique, refreshing . . . how can I explain the complexities of what my company does and why it is so beneficial to customers, to people that get pitched a dozen times a week? George and now you have gotten me to focus on something different: instead of trying to impress them, get them to court me as the prize! Wow, very enlightening experience and the core was to consider that who I choose to take money from was more important than just getting the money. In other words, if I’m trying to so hard to impress them, maybe I’m going about it wrong. Instead, give them the facts and the value that we deliver and let them express their interest in that. Otherwise, I’m just swimming upstream with someone that probably won't invest anyway.
So, it’s like turning the tables on the investor?
Well, you could say that, but the essence of what I’ve learned is that the source of money is really important. I’ve got to take money from someone that actually understands the value of what we do for customers, not just someone who sees the potential profit margin. This is going to be someone that I work with, happily hopefully, for a number of years, and they have to understand and appreciate the core value we provide to the market. If they only understand the balance sheet, they may not be the right long-term partner, because like any business we’re going to experience inflection points and infrastructural and human dynamics that come into play as we scale up. I'm gaining the confidence now to maybe say “no” to someone that has the money and the interest in my company, but maybe not the deeper understanding of what makes us tick and why we’re special.
You’re specifically raising capital for growth, not as a bare startup. How does that fact play into what you’ve learned in the Bootcamp?
It’s a very important distinction. The offer I have for investors is probably more of an incremental return, rather than exponential, because we’re already in business and looking to scale. On the other hand, we represent a far less risky investment than a startup might. I’ve got to make sure investors understand that while we might be “small” in some sense of that word, we’re not a startup with an idea – we’re a going concern that has a lot of clients and makes a profit already. I am just not going to be hoodwinked into considering funding based some investor’s desire for X% return on capital over Y years if that won't fit our growth model. Bootcamp has helped me to frame that conversation powerfully and make our offer really attractive, without giving up more or making promises about ROI that we can't realistically produce given that we’re already in revenues and profits.
Does the Bootcamp get into all aspects of your business?
Yes and No. Yes, we explore the business model and sales strategy to a degree. But I do that constantly, with myself, with my team, with other advisors. What’s refreshing about the Bootcamp is that we focus on funding. Whatever else comes up, we apply that to the pitch, the proposal, the terms – getting me the funding I need to grow. It’s actually a really nice break from the day-to-day grind, to be honest. I care so deeply about my company, our employees, and stakeholders and the customers we serve. The Bootcamp is the one place where I can kind of set those things aside for a few hours and focus 100% on the funding we need. And I know when I do that when we develop strategies to get that funding, that it’s positively impacting all of our stakeholders.
Anything surprising that you’ve learned about the pitch?
Well, maybe not surprising, but let’s say really helpful – I’ve got a method for how to present our company and the investment opportunity. When I apply that method, even if I make a tweak or two, I’m now confident that I’m giving investors the specific things they want in order to make an informed decision about our opportunity. I’m confident that I’ve got the right information, delivered in the right order, portrayed in the right way . . . and if we get off track I’ve got the skills to re-frame the conversation to get back in control.
Control . . . That’s probably something most entrepreneurs would love to be able to gain in their investor conversations. You’ve learned the ability to do that?
Yes, and no. Yes, in the sense that the Bootcamp teaches tactics and strategies, some of which I was familiar with through the work of Oren Klaff, that help me to stop, pause and reframe a conversation. I think what the Bootcamp is doing is cementing the confidence to do that at the key moment.
You said yes and no. What’s the ‘no’ part?
The “no” part is just the fact that in any conversation you can sometimes lose focus. You know, here is an example . . . when I sell our security system to clients I often take a fairly soft approach. What I mean is that I focus on the positive aspects of our services – the peace of mind of knowing that you’ve done everything possible to prevent a disaster. On the other hand, investors I speak with tend to want to know about the disastrous events that we can reduce or prevent. They want to hear about the sensational things, the terrible risks that our potential customers face and how we can reduce them. So, at times there can be a disconnect when an investor wants to know how we do our sales pitch and it doesn't sound sensationalistic enough. So, if I switch to sales-mode, I’ve learned to reframe things, maybe even suggest to the investor that his or her fund or firm should be using our product! That almost always gets their attention.
Has the Bootcamp provided any valuable things that impact your personal life?
You know, that’s a really interesting question. I’d say that what I’ve noticed is that my own confidence level as the guy responsible for bringing in the capital we need has grown. I can tell that my team trusts me more as the guy who can make it happen. And, honestly, my wife trusts me as the life-partner who is going to win, going to succeed in the things we’ve put our mutual time and energy into. I can’t quantify that kind of benefit. It’s really a big thing because as a CEO and a husband, I feel the responsibilities I have so deeply. I HAVE to succeed or a lot of people are impacted negatively. As a leader that’s something, I’m aware of every day. What I’ve gained from the Bootcamp is a true confidence that I have what it takes to make it happen.
Key Takeaways: Entrepreneur’$ Bootcamp is one of the only places a leader can go to focus 100% on how to get the all-important funding needed for his or her company. While the impact of the Bootcamp can reverberate into other areas of the business, the focus is solely on achieving a sought-after investment target. The confidence of being fully prepared to meet with sophisticated investors can impact one’s relationship to his or her team and even to his or her family. Confidence from thorough preparation and a systematic approach to getting funded is an irreplaceable value.