OEN Member Spotlight - Sam Blackman of Elemental Technologies
Sam Blackman has plenty to be proud of.
Over the past couple of years, the 33-year-old CEO has raised more than $7 million for Elemental Technologies Inc., the company he co-founded in 2006. He’s landed several important business partners and an impressive list of investors. As if that weren’t enough, Blackman has also earned an MBA at University of Oregon, and is raising two young sons with his wife, Adriane.
But Blackman remains humble about his achievements. Though he’s built a remarkably nimble company whose technology could radically change the way video is processed for delivery over the Internet, Blackman is candid about how much of its success is due to others. He’s also keenly aware of how far Elemental still has to go, and how much both he and his wife have relinquished to Blackman’s entrepreneurial drive.
Elemental Technologies has 29 employees in its downtown Portland office. It’s backed by General Catalyst Partners of Cambridge, Mass.; Voyager Capital of Seattle, Portland and Menlo Park, Calif.; the Oregon Angel Fund; the Alliance of Angels in Washington; and the Bend Venture Conference. Three and a half years into Elemental, Blackman shares lessons that other entrepreneurs - and aspiring entrepreneurs - will find useful.
1. Learn to differentiate between what’s urgent and what’s important.
"Early on, you can spend a lot of time on tasks that you know you can get done. They may seem urgent, but they aren't necessarily the most important. For example, you might think you need to put together a detailed budget for the next year, getting really accurate about the details, like how much it will cost to attend a trade show or visit investors.
You can do it line by line and spend days on it, or you could do it so you get within $1,000 of what you’ll spend, and it takes just two hours. Investors say they want the details, but usually they just look at the summary and the details aren’t really that important.
Email is another example. I’m programmed to respond to each one as fast as I can. That’s not as important as sitting down and thinking about what I want the product line to look like in a year or two. That’s a truly critical task, but no one is emailing me to say 'Do this.'"
2. You must mitigate both market and technology risks when you’re looking for investment.
"If you come from the tech side, like me, you tend to focus on mitigating the technical risks, getting your product working right. But in the fundraising process, you realize that investors these days tend to think, 'If you can dream it, you can do it.' Investors were excited about what we could do, but they perceived the market risk as the main risk: Is this market big enough? We talked about early consumer products, but the big market out there for our technology is Internet video processing."
3. Customers first.
"A lot of entrepreneurs think it’s investors first. Elemental learned the hard way that trying to get funded before there's strong excitement or any initial customers is a really hard strategy. You have to focus on landing customers first. That's harder, because customers need real working technology. But investors don’t want to pay for development; they want to pay for a pipeline and know that there are customers waiting for the product to be done."
4. Love your employees.
"People who have read "Good to Great" [by Jim Collins] know the concept of getting the right people on the bus and the wrong people off it. I think of it as getting people on the party bus, so they love being at work. They're here for the intellectual challenge, and you don’t want them to worry about things like healthcare, dental benefits or transportation. You need to do some fun stuff, like holiday parties or barbeques. You can have a strong founding team, but that’s only a couple of people - the company will fail unless you have a strong team of people who love working for you."
5. Love your investors, too.
"I think Elemental’s done an excellent job of picking people who provide insight and value that's way beyond the capital they provide. They’ve given us strategic insight, access to customers, and a lot of good advice - especially for a relatively inexperienced CEO. I’ve learned a lot from them."
6. Entrepreneur, know thyself!
"You have to be very realistic about what’s going to go away when you make the jump: Family, friends, financial security, hobbies, exercise and passions. They'll all be under extreme pressure. You have to trade it all in for the startup for a really long time. I’ve tried to minimize the damage to the family, but I’m not the father I could be if I were working at a [regular] job. You’ve got to talk to your loved ones and make sure they are willing to do this, as well."