The last we heard from Kerem Durdag, he shared his thoughts on why his previous company, Biovation, had failed and what he had learned from the experience. You can read that interview here.
Today, I bring you another interview with Kerem, this time about the insight he gained over the course of 15 months serving as an Entrepreneur-in-Residence at the Maine Technology Institute, during which time he worked with 16 separate startups.
His main takeaway? The Entrepreneur-in-Residence program needs to be massively scaled up in Maine. While there’s a lot of entrepreneurial activity and community building going on in the innovation ecosystem, he fears that without more experienced mentors to help new entrepreneurs get past the startup phase and build a sustainable business model, “this pipeline of activity runs the risk of collapsing onto itself because if the founders/entrepreneurs are unable to show progress and notch up milestone execution and success, the champions of the ecosystem will tire out and the community at large (the population of Maine, the taxpayers and all the other stakeholders) will get discouraged and disillusioned.”
“So we have to engage, we have to help and we have to create the infrastructures to incentivize and allow for the value of this assistance to be recognized,” said Kerem, who recently joined GWI in Biddeford as chief operating officer.
Below is the full, yet lightly edited, interview, which we conducted via email.
Maine Startups Insider: You became EIR at MTI after going through probably what is one of the most traumatic experiences for an entrepreneur—the shutting down of your company. What did you learn about yourself during that transition?
Kerem Durdag: Well, for me the transition was going from a sense of exhaustion (coupled with a feeling of momentary irrelevance) and a desire to re-achieve a sense of quiet and centering to wanting to completely engage in action… a desire for epic-ness (I mean watching a clip of Jamie McDonald does massive wonders of perspective and joy). I am not suggesting a linearity of approach here; far from it. The intent to impact things (people, processes, businesses, initiatives, world at large, et. al.) went through stages of evolution arriving at (yet again) a familiar location: I want to belong/matter/help, therefore I am.
The learning for me was the fanatic love of music, movies, running with my younger daughter, book hunting in Boston with my older daughter, screaming on top of my lungs as I finished a really tough race with my son, poetry, working with my wife being hyper-active at the local political level, trying to feel and not be numbed by the madness in the Middle East—these are very constant denominators in my life. We tend to want to believe in a separateness between our “business/start-up/professional activity” and our “real selves,” but that’s mythic bunk. We are human beings that need to remain connected to meaning at all times. For me, that forward-leaning intent to remain connected never disappeared. I dissected, analyzed, talked and listened to my friends running their companies or funding companies or being themselves in a transition zone, asking myself continuously what do I want to do next—I learnt that (like most of us) at this point in my career I really know who I want to work with and in what kind of environment do I feel maximized.
And so for me, the transition was a progression toward, “what do I really, really want to do that is potentially transformational?” The EIR gig at MTI gave me that hand to grab onto tightly and allowing a vibrant mental space to think things through while engaged in the act of doing.
MSI: How much experience did you have mentoring startup founders before transitioning into the EIR role?
KD: Fair amount. I have been part of the Top Gun Mentor and Maine Mentor Network program (facilitated and administered by MCED) for a long time and have been involved with working with founders. Also, with my private investments into startups I have been engaged hands on with mentoring entrepreneurs. When I was on the Advisory Board of the College of Science, Technology and Health at USM, I was very available to the students who had startup ambitions. With dear friends (MTI, Maine Angels, Innovation Policyworks) I was one of the members of the core group that authored the $3 million Blackstone grant, which resulted in a lot of hands-on work in the ecosystem (the results of which, I must say, are still present…) and ended up doing a fair amount of work with founders and entrepreneurs. I am keenly familiar with Cloudport and Jess Knox and engage in that ecosystem as time allows. I have been fortunate that for the last fifteen years, folks believe I have a sense for listening, absorbing, empathizing and having a couple of shop-worn adages of experiential wisdom. So my phone rings a lot, leading to one-on-one meetings that are productive. I get buried with email requests and my LinkedIn account is always getting pinged with questions and invites (advice for folks who are cold calling me: get to know me first before you ask for help). I am blessed. I really am. For me it is a very Benedictine-Muslim-American-Turkish-Pakistani things to do.
MSI: What value does an EIR provide to a company in MTI’s portfolio? Is it different than more traditional mentor roles?
KD: It is a massively important and far reaching resource that is deployed. In my opinion it is a transformative game changer that needs to be leveraged by 10× and deployed at a larger scale. Traditional mentor roles are defined (as they should) with guide ways of involvement and engagement, which are contextually driven (mentoring as a board member is different than mentoring as a trusted confidante which is different than mentoring as a consultant which is different that mentoring as a member of the ecosystem). Expectations are commensurate with desire and availability (psychological and as well as financial).
However, in the MTI EIR engagement two enormous aspects are addressed that enable an efficient, scalable and data driven ROI. One is financial (EIRs are compensated with no financial burden to the company) and the second is a sense of connectivity and understanding (the founder who has been funded by MTI feels, “Hey, these folks care about me and are extending a helping hand”). So there is a rapidity to the trust that is created. There is longevity to the engagement, on a consistent and constant basis (I met with some companies religiously once a week for several hours). Also, keep in mind that the EIR group has a multiplicity of skill sets and expertise in its ranks; so, if there was an occasion where I needed additional perspective on say manufacturing process, financial systems, equity raising, sales training, I could reach out to my friends. Members of the EIR know each other well because we have been members of the business community for a long time. Folks like John Karp, Carl Spang, Roger Brooks and Paul Myers are my really good friends.
I don’t want to forget about the underlying reason for our engagement as EIRs: We want to give back. We want to maximize involvement. There is a general selflessness here to contribute. And to be in the thick of things. In that act of selflessness, the potential of underlying agendas disappear (founders are passionate and sometimes paranoid). We are not helping in order to gain any kind of involvement in the company (monetary, legal, corporate, employment, etc.). We are just there to help.
So when we engage, we are all in and can bring in a fair bit of real world and honest advice that is rooted in reality and experience. MTI has appropriate ways to track our engagement, so the data is there for everyone to parse through and monitor our efficacy. There is an infrastructure present there so that as the EIRs work with the MTI staff (what first started as perhaps a consultative arm of MTI now is an integrated as part of its day-to-day deployment and team) the companies are progressed through various stages of milestones and funding. There is buy-in all around (though that is not to say, there are some companies who simply can’t get out of their own way and just can’t see daylight with this approach and completely forgo the opportunity to get world-class help).
Given there is already a very large paucity of second-stage, large-growth capital in Maine … we can’t allow the highway of travel we are on to contain the carcasses of failed companies, where the failure was predominated by lack of entrepreneurial experience and maturity.
MSI: Can you tell me anything about the companies you worked with or favorite problems you helped solve?
KD: I worked with 16 companies (this inner drive to have an impact… dangerous). They ranged from a lone entrepreneur trying to figure out how to transition the birth of his first idea to a going concern with 20 employees that was having operational, sales and finance issues. There was a six-person startup whose initial screw-ups to commercialize their product were only outstripped by their ambitions to be a nine-digit revenue company in five years who were a joy to work with. Then there were two two-person companies that I absolutely loved working with that had done a Kickstarter campaign for their products and were trying to figure out a way to grow and ship product without frying themselves. And oh… a three-person company that was shipping out product (which the market absolutely and utterly loves) at their lunch breaks at their regular day-time jobs and all of us together working to see how they can use free cash to hire a sales person to rack up more sales. So… welcome to Maine with products ranging from technical (air control tower related) to fashion (bags) to equipment (automation for the aggregate industry) to medical device (to hopefully cure side effects from specific procedures).
Favorite problems I helped solve:
- I was spending a significant amount of time with a company with a lifestyle product (they are shipping units to a loyal customer base), helping them strategize a broader marketing strategy to further fuel sales that would eventually leverage into corporate development. The plan was use the broader strategy to execute a plan that would eventually lead to institutional investment to further grow the company. Lo and behold as we ramp up marketing, they get an offer from an interested large national company to be acquired. So for several months I intimately guided them through the process and acted as a “protector” of company interests and perspective. Was a lot of fun and it has enormous value to the company (the transaction close is slated to be soon).
- I was very actively mentoring a capital equipment company to troubleshoot their product design and implement methodologies that would allow them to manufacture in scale with robustness, repeatability and reliability. I met up with them when they were applying a MTI seed grant (and trying to raise money) and worked with them through the process where they received a large development loan, got systems in place to conduct corporate development and are currently rolling out products to large customers which are actively testing them and which will eventually lead to commercialization.
- A medical device company, just starting out, was looking at putting together a functional prototype and so by providing them guidance on the design, which vendors to approach, what kind of market value proposition to provide and was sources of capital made sense to approach; helped them just get rid of massive number of distractions and unknowns. They are still a little way from getting product to market, but now they have a functional prototype that is in beta testing and is demonstrating efficacy.
One last thing that I am very proud of accomplishing with MTI: We implemented a pilot program where we studied the impact of targeted funds that would solely go to fueling sales and marketing activities of the portfolio companies. The initial pilot program was on an invite-only basis and will last a year and I am very hopeful that its efficacy will be proven, allowing the program to deploy on a larger scale.
MSI: What did you learn as an EIR about the state of the startup ecosystem that maybe wasn’t apparent when you were in the trenches yourself?
KD: The need is far and wide and deep for mentors to help the ecosystem. Oh my God, the need is far and wide and deep. There is a state-wide clamoring for help by companies; they need folks to know that they are not alone, that we care and there is expert help to be at their side at a very continual basis. And the help is present that can transform (and sometimes save… in my tenure we actually saved several companies from literally evaporating) the companies because the EIRs are involved up to their elbows with the nitty-gritty stuff (because they are trusted and they are spending the time). Keep in mind that startups and small businesses are not just like any other business; they have their own dynamic, their own challenges and their own world they operate in, so unless you are from that world it is awfully hard for someone else to navigate the mentorship journey.
In the last 15 years we have done a fairly good job of creating a culture where risk taking is at least not rejected at first moment of ideation… so there is a good amount of startup activity that is fundamentally aided and abetted by seed money from the likes of Maine Angels, MTI, MVF and CEI on a state-wide level. The issue is that without the mentoring this pipeline of activity runs the risk of collapsing onto itself because if the founders/entrepreneurs are unable to show progress and notch up milestone execution and success, the champions of the eco-system will tire out and the community at large (the population of Maine, the taxpayers and all the other stakeholders) will get discouraged and disillusioned. Given there is already a very large paucity of second-stage, large-growth capital in Maine (capital that fuels the growth of the company once it has achieved sizeable revenue and breakeven), we can’t allow the highway of travel we are on to contain the carcasses of failed companies, where the failure was predominated by lack of entrepreneurial experience and maturity. So we have to engage, we have to help and we have to create the infrastructures to incentivize and allow for the value of this assistance to be recognized.
Such best practices need to be deployed here in Maine. Otherwise, the results are not going to be those we are proud of.
Which is why I utterly, completely and absolutely believe that if we are to enable economic development in Maine via startups and entrepreneurs to be a success, the EIR program has to be scaled up. Make it a professional corps and significantly financially incentivize them to be compensated for their full-time involvement; get world-class talent and focus them in for one or two years and cycle them out. It has be scaled up because the data shows with EIRs involved the success of the companies rises exponentially (there is a reason why in VC or PE investments, portfolio companies are assigned a partner). It ensures success. Such best practices need to be deployed here in Maine. Otherwise, the results are not going to be those we are proud of. The model works, there is plenty of talent to bring into the EIR program and the need is ever-present. I see no reason why it can not be scaled up right now, with the resources we have, with the talent we have available, and the institutions that are in place. There is no need to reinvent… there is a need to evolve and provide the impact where it matters the most given the 20-year trajectory of our startup ecosystem. The EIR program is what is now needed as a function of the growth of the entrepreneurial activity and base. Look… you get to be the best by surrounding yourself with the best. Ask my peers and colleagues Bob Neveu and Ben Shaw; this ecosystem has to get to where they are as benchmarks and the only way we can is to make sure we are surrounding ourselves with the best in class.
Yeah, it does indeed take a whole village to raise an entrepreneur.
MSI: Do you envision the EIR program scaled up within the Maine Technology Institute, or are you suggesting a separate effort to provide more mentor support to the startup community?
KD: I believe the program can be first scaled up within MTI, benchmarked and then replicated outside of it (think SCORE, SBDC, CEI, MVF, MCED, and Maine Angels) for maximum efficacy. The goal is not “ownership” of a particular program, but rather how do you template it. What’s standing in its way? Long-term financial commitment (which MTI can provide and hence that in itself can be used as a model for others…) and an evolution of our startup ecosystem to see the value in fueling and supporting the “execution capability” of our entrepreneurs. Yeah, it does indeed take a whole village to raise an entrepreneur.
