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BPV Annual Meeting – keynote speech by Mike Quilty
BPV was honored to have Mike Quilty, founder of Matrix Medical, give the keynote speech at our Annual Meeting last Wednesday. Matrix Medical – a former portfolio company of ours – provides physician services and prospective assessments for patients in long-term care facilities on behalf of managed care plans and skilled nursing facility operators. (The Company was a very successful investment for BPV I and was sold to Welsh, Carson, Anderson & Stowe in October 2011.)
Mike discussed the inevitable ups and downs on the path to entrepreneurial success, dispensing several bits of advice along the way.
Get the right team members into the right roles.
U.S. Grant enjoyed great success as a general, but not so much as president; and Babe Ruth, while a good pitcher, was too good not to play every day. We’ve covered this topic ourselves, within the context of the roles venture capitalist and entrepreneur must play to make the team work well. The long-term partnership is best served when (switching sports…) each learns when to take the shot and when to pass the ball.
Getting this piece right isn’t so much about control as it is about chemistry. If VC-CEO partnerships are like marriages (as is often said), then the issue of control needs to mirror that of a healthy marriage. It’s not about 100% control, or even 51% control – it’s about playing to each others’ strengths and making the concessions and adjustments that a given situation demands.
Of course before you can get people into the right roles, you have to get the right people. As Mike put it, “We had to turn over a few B and C players to get to the A’s.”
Once we found our lightening in a bottle, we had to act.
Or, as James Dyson, British Inventor, puts it: innovation often grows in unexpected directions. When BPV looked inside the mind of great entrepreneurs we found that the successful ones thrive on contingency:
Professor Saras Sarasvathy of the Darden School of Business likened great entrepreneurs to Iron Chefs: “at their best when presented with an assortment of motley ingredients and challenged to whip up whatever dish expediency and imagination suggest.” Professor Sarasvathy had several keen insights on the difference between this mindset, which she termed effectual reasoning, and the causal reasoning of successful corporate executives.
Corporate managers believe that to the extent they can predict the future, they can control it. Entrepreneurs believe that to the extent they can control the future, they don’t need to predict it. Entrepreneurs thrive on contingency. The best ones improvise their way to an outcome that in retrospect feels ordained…
Thriving on contingency, outcomes that feel ordained… some could argue this conflates luck and skill. Napoleon famously (and apocryphally) was said to prefer lucky generals over clever ones. He was reliably quoted on the subject thusly: “A bold general may be lucky but no general can be lucky unless he is bold.”
“I have not yet begun to fight.”
Mike – a graduate of the Naval Academy in Annapolis and a former nuclear submarine officer – cited John Paul Jones’ immortal words to recount the persistence required to build his business. “We had so many of these moments, really hard times.” He also quoted the creator of the P90X workout, referring to how many times they redesigned their infomercial: “The 22nd time is the charm.” We ourselves wrote on persistence as part of 10 rules of entrepreneurship:
Develop flexible persistence – the sense for when to stay committed to your vision and when to pivot in the face of new realities. You are at least partially wrong about your product. Launch early enough that you are embarrassed by your first product release, and find out how people are using it. Aspire, but don’t drink your own Kool-Aid. …[A]lways look for good perspective on how you are doing. It is very easy for creative innovators to get caught up in their own story rather than learning where they should be headed.