Teaching Investors to Bet on You

These are exciting and stressful times in the business world – especially for those who are looking for funding.  Everyone has to adapt to stay relevant, to succeed, but CEOs and Founders looking for funding have to be veritable contortionists. New businesses and projects have unique challenges in finding start-up and second-round capital in the wake of COVID-19. Who knows what investors are thinking as a result of the immense pace of change?

We do. Investors are in the same swirl that we all are. They are conflicted. On the one hand, they need to invest – but on the other, they want to reduce their risk. With the changing, fast-moving business landscape, can you blame investors for wanting to place their bets on a winning horse? But the best horse must have an excellent jockey. The jockey that delivers innovation and translates it into a return.  A jockey that can adapt to the rapidly changing circumstances during the race is a Vision Master.

I invite all you “jockeys” to read on and get a leg up in the crowded field of finding investment. Enjoy the interview.

This is Robert Steven Kramarz of Intelliversity and this is your Vision Master podcast. Today, I thought you’d enjoy an interview I did with Mark Cofano, who’s the head of Overture and the chairman of the Innovation Weeks program because it revealed some information about why I do what I do and why Intelliversity does what it does. This would give you some leverage when dealing with us, and I thought you’d also enjoyed some of the bloopers that we left in on purpose so you could have some fun with us. And then afterward, I’m sure you’ll want to pick up the phone or make an appointment on the website to talk further about how we can work together. Here goes, enjoy it!.

Mark Cofano: Hi, my name is Mark Cofano, founder of Oviture, and Global Chair of the Oviture Innovation Weeks. Today I have the pleasure of interviewing Robert Steven Kramarz of Intelliversity. Rob is passionate about helping really state companies achieve the success they need and deserve. Rob tells me he’s created a system wherein more than 50% of the companies he works with are able to successfully raise capital. That’s especially important today, as COVID-19 has turned many of those startups upside down. Let’s join Rob online now.Hi there, Rob, how are you today?

Robert Steven K: I’m doing great, Mark.

Mark Cofano: Awesome. So happy to have you on our Innoview. You’re one of our early stage participants, and we’re particularly excited to have you share some of the information that you have about startups, scale ups, and COVID-19, which is a fantastic subject. And before we get into the meat of that, I want to just make sure that I share with our audience a little bit about how you and I came to know each other. And in particular, the fact that we met each other at an investment conference, and we started talking about Microsoft, which I thought was fantastic. Because you and I both had a background in the day with Microsoft. Could you just remind everyone about kind of your connection to Microsoft?

Robert Steven K:        Well, simply I was something of a celebrity in the early eighties as a young CEO of a medium sized hardware company, and Microsoft was a client. I mean, pardon me, a vendor. And I got a call from Bill Gates and he said, “I know what you’re doing. We’ve met a couple of times. Come on up to Seattle, and let’s talk about doing something together.” So I got in a plane, we had dinner at the Space Needle with Paul Allen, and he offered me a position as, as I recall, Director of North American Sales for Microsoft. [crosstalk]

Mark Cofano: That’s just amazing. That’s the call of a lifetime. I think most people-

Robert Steven K: It was the call of a lifetime. Yep. The place where I’ve been kicking myself ever since for not taking the position is grown, scarred, and blemished, but that spot is not visible to the public. But I’ve been … The guy who took that position, I think, was the internal Steve Ballmer. And of course, he’s now worth $49 billion and I’m not. But it [crosstalk].

Mark Cofano: Well, hey, hindsight is 2020. But the fact that you actually were asked by Bill Gates to lead a significant part of Microsoft, that was remarkable. And there’s a couple of things I remember about you. First of all, that you had a bigger picture view of not only the startup world, but also of the world in general. And I’d like to focus on one thing in particular. Basically the connection between startups and innovators. How are they the same? How are they different? And what part of your world is actually focused on helping startups and innovators?

Robert Steven K:  Well, actually, I’m a champion of innovation perse, not necessarily startups. Because innovation is intelligence in action, right? So to me, that’s our highest value as human beings, is intelligence in action. So I’m a champion for innovation. It just so happens, my work day is around supporting the financing of startups and scale-ups. Not all of which are innovative. So we focus on innovative startups and scale ups. Not all startups and scales ups are innovators, and certainly, not all innovators are running a startup and scale-up businesses. So there’s an overlap like a Venn diagram.

Mark Cofano: Yes.

Robert Steven K: So we’re looking for that center. I look for that center area, where it’s a startup or scale-up business, and it’s innovative. World-class innovative.

Mark Cofano: Well I think in that regard, we share a common interest because I’m passionate about innovation, and we’ll get into a little bit more of that in the future. But in particular, we’re in a time where we want to be able to focus, for the people who are listening in today, on the subject of how startups and scale-ups are in fact living in a different environment some five months after this whole COVID thing is started. But we’ll get to that in a minute. The other thing that I thought was pretty fascinating when I got to meet you on the front end is you’re kind of a philosophical guy. In addition to having a background in finance and startups, whatever, you have a background in physics. And you got to study with another amazing, amazing guy. Maybe you could share the details of that. And it’s perhaps caused you to come to a conclusion about the importance of science as it relates to the future of humanity. And if you’d share a little bit about that, I think our audience would be incredibly interested.

Robert Steven K: Well, I studied under Richard Feynman, Nobel Prize winner at Caltech. I did not graduate from Caltech. I went into business psychology at a different … At UC Santa Cruz. But I studied for two years under him when I used to hang out in his office, and he used to hang out in our dorms. And he taught that science requires humility. Because he said, “I know everything that we teach, that we learn, is going to be obsolete or superseded at some point. So therefore …” Oh boy, that’s interesting. What happened there?

Mark Cofano: We are in the Zoom room. In fact, I think you can … Why don’t you just go ahead and bring it back, and see if we can do it Rob? We’re going to riff on this. We’re going to see, can you bring your background back? There it is. Oh, hey, that’s exciting.

Robert Steven K: I don’t know what happened there.

Mark Cofano: So what was it about science and humility? Did we just have a moment of humility?

Robert Steven K: That’s a moment that requires humility right there. Including you could see my spare green screen in the back, that’s when I use it. So all the better. So I came to understand that even though we were humble about what science, the results of science, that the effort, the endeavor of science, which is once again, intelligence in action by respecting reality, respecting evidence. That’s the scientific method. And ignoring fantasy, and superstition, and emotion is really the highest value of mankind. It’s where we come from. It’s where we’re going.

Mark Cofano: Yeah, that’s fantastic. Yeah.

Robert Steven K: And if we don’t adopt science as the common language, and the common purpose of mankind. By science, I mean broadly discovery of what the universe … How it really works. With small and large scale. If we don’t adopt that thing, we’re doomed. Because that’s the [crosstalk].

Mark Cofano: Yeah. Well, and you know what? I just want to share with you, we’ve had those fun conversations about where science, and philosophy, and even existence intersect. And obviously anybody who’s had the opportunity to traffic with people like Bill Gates and Richard Feynman is an interesting person to be sure. So I think everyone will be sort of appreciative of the fact that here’s someone that can bring a lot to the conversation. Not just to the issues associated with how startups and scale-ups work, but ultimately how they work in the greater subject of the world at large.

And so that brings me to another place where ultimately what we want to talk a little bit about is this thing called COVID. And ultimately the trajectory of startups and scale ups, they’re living in a very different world, I think, based upon the communications I have with people. And in particular, the issues of funding, the issues of planning, maybe even the issues associated with whether they should stay in the same building. Business rather. So with that, maybe what you can do is tell me a little bit about this issue about waste. It seems to me that we’re in a place where we have this world of startups, and venture capital, and early stage companies that are funding stuff, but we’re not producing a lot of success. What do you think about that?

Robert Steven K:  Well, venture capitals, which the business I’m in. And venture capital wastes about 80 to 90% of all capital. It’s designed around the principle that it will still make money if it wastes 90% of the capital invested/ And that’s, to me, unnecessary. In fact, it never was necessary,, but it’s ever more unnecessary now because, with the exponential change that we’re going through, there’s no way you can predict the success of a business looking at the business plan. Three, four years from now, anything you would write in a business plan is fantasy. So the only way to predict the future of a business is by looking at the team. The navigators and the captains of the team that has to, what we call the jockey, drive the business into the future, and make the necessary pivots and changes.

Who could have predicted COVID-19 a year ago, right? And it’s just going to get more rapid and more unpredictable. But the interesting thing is, if you do predict, or attempt to predict, if you understand how to do it. And predict the success of a business based upon the qualities of the management team, the success rates are much higher than 10 or 20%. And we’ve been very fortunate, my partner and I, to achieve a 67% success rate. [crosstalk].

Mark Cofano: Well, we’ll get to that in just a second, but I want to ask a question. And the question is ultimately that if we sort of make an analog between using products, and then recycling. Where that idea is is that we can take plastic and we can make it into more plastic, or we can take things that we throw away, and turn it into things that can be used in a more affirmative fashion. I don’t think many people have a problem with that idea. In fact, a lot of people hold themselves accountable to be recyclers. And yet, in the world of startups, it seems like it’s exactly opposite that. Everything is a zero sum game.

Robert Steven K: If we throw away the whole-

Mark Cofano: We don’t recycle at all. In fact, there’s the whole idea is we’re going to use up people, use up ideas. If they work, they work. And if they don’t, we’ll just start from scratch. And we’re going to create a bunch of waste.

Robert Steven K: Mark, that’s a brilliant point because 80 to 90% of startups that are funded fail, right? Which is a huge waste of about $50 billion every year in the United States by itself. But even the ones that succeed, and are acquired, most are acquired, are then stripped of most of their personnel and most of their business processes. And even that part’s wasted. So there’s no recycling whatsoever, as soon as the company is acquired.

Robert Steven K:  And there is a different way to do it.

Mark Cofano: Right. So in the fall, you’re going to be doing some things that have to do with the Innovation Weeks, which are awesome. But in particular, what I kind of want to do is I want to dig into a little bit now about what are you going to do that’s innovative, Rob? What are you going to do that’s off the track, a newfound way to eliminate some of this waste and make the industry not only maybe more economically efficient, but maybe even a little bit more socially responsible. So we don’t have startups spending one year, two years, three years, five years of their life only be cast aside and have to start again. What are you going to do that’s different?

Robert Steven K: It’s a waste of human talent. It’s a waste of ideas. And most of all, and it’s a waste of capital. So what we’re doing differently is we’re not teaching … Well and our own investing. And teaching other investors how to predict and project the future success of a business based upon assessing the founders. Assessing the founders. We call that betting on the jockeys. As opposed to betting on the business plan. Okay? Now, and it works. Now when it comes to the jockeys themselves, the entrepreneurs, the innovators, the folks we call vision masters, we get to teach you how to be assessed positively by investors.

Mark Cofano: Ah, I see.

Mark Cofano: Right. To work in more as a partnership.

Robert Steven K: You see? So look, every investor has a dark side and a light side. The dark side doesn’t know how to do an assessment. So they do the best they can to look at the business plan, so on. And the resumes. The lighter side does believe that it’s possible to project the success of a business based upon assessing the founders. But you, as a vision master, as the founder of a entrepreneurial business, have to lead the investor by the hand to see exactly how to assess you. To see exactly how to judge you as a success, as a future success.

So the responsibiity falls on you, as the owner, as the founder, to lead the investor by the hand.

Robert Steven K: To assess you properly as the jockey.

Mark Cofano: It makes perfect sense. And so maybe there’s even something for investors are learning this too, right? So you’re in a circumstance where you have startups that are basically trying to show their stuff as founders and the quality of their team, and maybe not be as much focused on the business idea. We also have investors that are maybe a little bit myopic. Maybe some of them need to learn to ask better questions, and more broadly speaking, not just do deals. What do you think about that?

Robert Steven K: Well, that’s exactly the point. We have the opportunity as investors to lead syndicates and to lead and teach other investors how to assess the qualities of a founder team. If we do that enough and consistently, and with the help of the entrepreneurs themselves leading investors by the hand, we can shift the entire industry to less wastage, less wasting economy.

Mark Cofano: Fantastic. Well, I think that both startups and investors have to be interested in anything that even sounds remotely like a 60% success rate. And so ultimately then, we’re going to have a couple of different events, maybe a lot of events that are happening in your channel. And well, I’m just super excited Rob. And so just to sort of sum things up, let me just say that what I think I heard was that number one, you’re really a champion for not only startups, but also innovators. Second of all, you definitely think that at the end of the day, there’s a synergy between science and everything that’s going on in the world, that we can all sort of work together to create a greater outcome. That you view the world of startups as being incredibly powerful, but a wasteful industry in terms of how they come together right now. And the root of that problem is ultimately that investors are not actually looking at the most important thing, the most important asset, which is that founder, that is the jockey.

Robert Steven K: We don’t replace the founder when we invest in a company. Most VCs or many do, or try to. That would be to us stupid because we’re investing in the founder. Right?

Mark Cofano:Yeah. Right. Makes perfect sense. Rob, we’re at that magical time where we need to transition a bit. First of all, if people want to get a hold of you, how do they find you? What’s the process?

Robert Steven K: Intelliversity.org is the company’s website. It’s a nonprofit. And you can make an appointment with me on my calendar, which is found on the Intelliversity website here on my Connect page. Or just go to the connect page. And that’s the best way to reach me.

Mark Cofano: Yeah. Exciting. And we’ll have all that information at the tail end of this video. I just wanted to say again, thank you. You’re an awesome talent and a friend, and I’m particularly excited to see what you and your associates are going to do at the innovation weeks from September 16th through September 22nd of 2020. So we’ll be in touch with you really soon. Thank you, Rob.

Robert Steven K:  Thank you, Mark.

Okay. I hope you enjoyed that. This is Robert Steven Kramarz of Intelliversity on your vision master podcast. Reach out to me at Intelliversity.org/connect, where you’ll find my calendar. Until then, that’s the way it will be

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