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Utah Business

Roundtable: Technology Entrepreneurs

Every month, Utah Business Magazine partners with Holland & Hart and Big-D Construction to host roundtable events featuring industry insiders. This month we invited the top technology entrepreneurs to discuss funding, resources, and the growing tech environment. Moderated by Sara Jones, founder of the Women’s Tech Council, here are a few highlights from the event:

How is the new administration affecting you as entrepreneurs? What are you seeing?

Patrick Nelli | CFO | HealthCatalyst

There was a decent amount of uncertainty, especially a year ago. And that uncertainty, to some extent, still exists. Our customers have seen that there’s always going to be change and that they have to keep moving forward.

Rob Rueckert | Managing Partner | Sorensen Capital and Sorensen Ventures

I’m seeing that a lot of talented people in countries outside of the US are not wanting to come here.  I’m seeing a lot more companies started in Canada as opposed to the US. There is less talent because people are more hesitant to immigrate, and then there are fewer companies that are started and formed here as opposed to other places.

Stephan Jacob | President, Co-founder, & COO | Cotopaxi

This administration has taken a much stricter stance on H-B approval rates, general immigration, and Green Card granting. So it’s harder for talent to come in and for companies to acquire talent from abroad, there is no question.

Senator Hatch, who used to be the chair of the high-tech task force, is retiring.  What are people’s thoughts about him transitioning out? How do you think that will impact our local Utah economy, our voice?

Bret Jepson | Managing Director | Utah Capital Investment

Thankfully, it looks like [Mitt] Romney is going to be the one that will take the seat. I think what’s great is that he understands the private sector and understands high-tech.  I think there’s real possibility to take that high watermark and maybe set it a little higher.

Lisa Davis | CFO | ExpertVoice

It will require the leaders in Utah to become more involved and engaged. We can’t take for granted that we have a leader in Washington that will be an advocate for us.  He will, but it won’t be at the same level and in the same way, because of the seniority and how that works in Washington. As leaders, we need to be more engaged with our political representatives here, in Washington, and in the broader technology conversation to ensure that our interests are represented and played out in policy.

What are we seeing in terms of growing our tech companies?

Eric Montague | CEO & COO | Executech & Beddy’s

We are having such a hard time hiring. There is just a huge lack of people to fill the jobs.

Randy Rasmussen | CEO & Co-founder | BioFire Diagnostics

We’re seeing it across the board. Even on the manufacturing floor, just with our touch labor, we’re finding it a real challenge to fill the jobs that we have.

Rob Rueckert | Managing Partner | Sorensen Capital and Sorensen Ventures

We’ve done a great job at building a thriving tech environment here in Utah, but we have a limited population. If we want to be ten times the size we are today, we need to have people attracted to come here.

Rachel Hofstetter | Chief Marketing Officer | Chatbooks

One of the things we’ve really done at Chatbooks is try to create a strong cultural identity. One of those stakes that we put in the ground really firmly is that we want to be a great place for women of all levels to work. The family culture we already have makes Utah a great place for women to work because a lot of people go home at 5:00. They want to go home to their families at the end of the day, but that’s not the cultural norm, and it doesn’t feel like they can. Whereas here, that is the cultural norm.

Sunny Washington | CEO & Cofounder | Because Learning

One of the things we can do is focus on the students that are here and providing a better STEM pipeline. There are ample jobs here, but Utah does not do a good enough job in retaining or bringing up students that are interested in STEM.

Kat Kennedy | Chief Product Officer | Degreed

The bulk of this discussion is that people are asking, will Utah be a good place to work? That is where we should focus our marketing, not just on IPOs. When people look at Utah, they’re not asking: will the company be successful? It’s: will that culture be a place in which I can thrive?  

Erin Valenti | CEO | Tinker Ventures

I run a networking group called SLC Tech Startups.  Many of the engineers that are networking in our group have been taking virtual positions with Silicon Valley and New York-based companies, primarily for two reasons: they want higher salaries, and they opt for working remote. They like the lifestyle of being able to work from anywhere, live from a van if they want to, whatever. We’re seeing a lot of people in our networking group that are here, want to be in Utah, but they don’t want to be paid less than the market will bear since they can work anywhere.

Kyle Muir | Founder & CEO | Fuzeplay

I have very much focused on internal professional development. Being an education company, the idea of internal training programs are very underrated. And these ambitious kids are literally just up the street. With the right leadership and the right training, there is magic that can happen with individuals like that.

Lauren Treasure | VP of Product | Chatbooks

We really need to be more creative and flexible with the backgrounds that we’re looking for. If everyone comes from the same background, with the same type of career experience, it’s hard for us to do that. Looking at someone’s background and considering how that might be helpful in your company and the types of jobs that they can grow into is really important for the product managers.

William Borghetti | CEO | APIO

We’re all stealing from each other. And if you really think about what’s happening, it’s this giant poachathon, and it’s a beauty contest, right? We’re not really growing the base; we’re just stealing from each other. That has other consequences; that’s not necessarily a good thing.

Marva Sadler | CEO | Veracity Solutions

We’ve been a virtual company for a long time. Eighty percent of our people are not in our main office, and that’s deliberate, but it also means that your management structure has to be really intentional about how you manage those people. In a lot of ways, it’s a whole lot easier to manage people that you can reach out to, physically touch and keep them connected and part of the tribe. A lot more of our energy has to go into how do we keep people engaged and culturally attracted.

Eric Montague | CEO & COO | Executech & Beddy’s

Some of our brightest stars are our youngest employees. We started a program a couple of years ago where we we bring in kids and train them in what we want the year after they graduate high school, go through multiple different transitions, and then we hire the top three. That’s been helping us get people before they get out in the workforce.

The willingness to train has not caught on like wildfire in tech. Is it a business model issue?

Randy Rasmussen | CEO & Cofounder | BioFire Diagnostics

This conversation should turn to supportive education in Utah, both secondary and universities. We need people coming out of the U, BYU, and SLCC who bring those skills into our place, and that requires an investment on the part of the people of Utah.

Lisa Davis | CFO | ExpertVoice

We have a CEO who came in about a year and a half ago, and he had a mandate to all of the leaders in the company to hire really young and also to try to find the talent within the company first. It’s built this culture that we all know that we have potential within the company, that we can grow our careers, that they are very committed to helping us grow our careers.

We know what it’s like to build a career here and build companies here. Do we feel like the market is on par with what needs to happen? Is there different messaging that needs to go out there?  

Rachel Hofstetter | Chief Marketing Officer | Chatbooks

We have to start by acknowledging that there is a stereotype. The first thing I heard from people when I told them I was moving to Utah was, ‘they let women work there?’ But you hear that over and over, and you think, wow, that’s what people think outside of Utah. They don’t ask about what the technology is, what the jobs are. There are some really strong stereotypes that we should just know are out there.

Marva Sadler | CEO | Veracity Solutions

On the other hand, the Economic Development Council, their biggest issue is that we may be too successful bringing people here. We can’t actually support the growth that’s coming, thinking about what it’s going to do to our commutes and the housing, the infrastructure, and the air. Because if our answer is, let’s just grow faster and it will solve itself, we’re going to find ourselves in a world of hurt.

William Borghetti | CEO | APIO

We also have an opportunity to be ambassadors. Humor can diffuse a lot of situations. And as soon as they say, “Oh, you’re from Utah, you are having a glass of wine. You must be all right. There must be others like you, right?” But even if you don’t drink, there is an opportunity to sort of dispel the myth and be inclusionary.  

Kat Kennedy | Chief Product Officer | Degreed

How we speak about it in the press and things, that doesn’t echo the conversations that we have one-to-one. And one-to-one is wonderful, but we need to scale. I would just challenge that our marketing reflect what we do in personal interactions.   

Eric Montague | CEO & COO | Executech & Beddy’s

When we recruit people from outside the state, often they want to come here because they want to raise a family here.

Heather Mercier | CEO | ExpertVoice

Being a working mom and having lived on both coasts, I may have a lower salary than if I was still in New York, but there is value to being able to pick my kids up from school if I want, or drop them off at school, or be home for dinner. And I say the value is different for every person, but you have to figure out what that is.  

 

What resources do you wish you had more of that we need to talk about in growing our tech companies? What are we lacking? Where can we do better?

Kelly Slone | President | Bio Utah

We need public/private partnerships to help these companies get to a certain point that will attract capital. Right now the state legislature is questioning whether or not they should even invest in startup companies. That’s really alarming. The commitment of the state to support technology is a big need that we need to all work together on.

Dalton Wright | Partner | Kickstart Seed Fund

What we’re lacking are entrepreneurs who have experience scaling businesses to a really substantial size.  There is a gap in the senior management, experienced people who have built businesses to a global scale. We’re really strong in getting companies from zero, conceiving ideas, testing them, validating and then maybe growing them to a million in revenue. Beyond that, being able to build out a team that can just take it from there is a little challenging.

Johnny Hanna | CEO | Homie

There’s a housing shortage. Any of our mid-level managers or lower-level employees can’t afford homes right now.

Rachel Hofstetter | Chief Marketing Officer | Chatbooks

FrontRunner is a really amazing start, but it only gets you to a small handful of places.  I know people like Johnny are building offices next to train stops, but not everybody can. And there is a big group right along with it and then nothing for anybody else.

Tricia Schumann | CEO | BachHealth

I’m interested in diverse boards, which we have one of the lowest percentages of in the US. I think that’s another good way to attract management talent to Utah, where they might actually not live here, but they can actually start to integrate into the culture here and demonstrate that Utah has opportunity for women or diverse management talent here.

Patrick Nelli | CFO | HealthCatalyst

Ongoing education is critical. I moved from San Francisco to Utah. It’s hard to walk a few blocks [there] without seeing boot camps. With the changing and growing technology needs, including the rise of machine learning, there is always a need to re-educate. Specifically, more in-person boot camps here in Utah would be helpful.

William Borghetti | CEO | APIO

We’re hiring college kids that haven’t graduated yet, and it’s giving us some really interesting insight into what they are being taught. There is a huge gap in what these kids are learning and what they are graduating with. They are not up to speed on really any of the stuff that we use. It’s amazing how much work has to go into a single hire.

Bret Jepson | Managing Director | Utah Capital Investment

That’s the frustration that we see at Utah Capital―we’re having this great experience with a few select tech companies, but anybody who has lived in New York or in the Bay Area, we’re not even scratching the surface of what we could potentially be. And that’s really frustrating because our legislators aren’t hearing that message. Once you get out and you experience some of these other massive tech companies or life science economies, they’re really eye-opening.

William Borghetti | CEO | APIO

A lot of times you say more money for education, pay teachers more. But it’s not changing anything. It’s not mixing it up or having better outcomes; it’s just paying more. It needs to be less about that message and more about specific programs to improve education.

Randy Rasmussen | CEO & Cofounder | BioFire Diagnostics

One of Utah’s great strengths is its high birth rate, and we are squandering that strength by not adequately educating. We should spend more money on our kids, and it will pay off in the future.

Lauren Treasure | VP of Product | Chatbooks

One of the things that’s really important for tech companies to invest in is a really strong and consistent internship program. It’s a good way to invest in students and invest in that education. And they are still in school so that those students can go back, and they now know what’s needed in these types of jobs, they can still adjust,  get the education needed, and have a better idea of what’s required in the workforce.

Let’s talk about funding in Utah. What are you seeing? What do you wish you had more of?

Bret Jepson | Managing Director | Utah Capital Investment

What we’re seeing is an unusual high―a lot of pressure being put on these guys to fund that earliest part of the market, because it appears that it’s very underserved in Utah continually.

Dalton Wright | Partner | Kickstart Seed Fund

On the capital side, it’s becoming much easier than it’s ever been. We have funds reaching out every week wanting to meet our portfolio companies. We have funds that are focused on the flyover zone, looking for strategies in these states, and Utah is at the top of their list. The gap is in the pre-seed round. The angel groups get hit up so much at this point that they’re a little tapped out. The quality of the investment opportunities that we are seeing right now is really impressive.

Rob Rueckert | Managing Partner | Sorensen Capital and Sorensen Ventures

Money chases opportunity. The thing that Utah could benefit from is people around this table and people at other companies doing more mentorship, to prepare those young entrepreneurs to be ready to pitch and raise money. We have to be a little bit more active to help mentor the budding entrepreneur to be ready to raise a round and build a big company.  

Patrick Nelli | CFO | HealthCatalyst

What Silicon Valley does extremely well is when companies go public or sell, individuals feel an obligation to give back to the community by becoming angel investors or mentors to entrepreneurs.  That’s what I hope will happen in Utah over the next several years, especially given the recent and possible upcoming wave of companies going public.

How do we get women into those networks?  Utah struggles with the number of women tech founders. I mean, what’s going on?

William Borghetti | CEO | APIO

I’ve heard side conversations, how come they are not home raising kids? Why aren’t they with their families? But I think there is a way for a sponsor, someone like myself, to help with networking and help dispel those myths and break those walls down. You get an introduction to somebody and you walk them to the table, they’ve got a seat at the table. But if they just picked up the phone and tried to get in, it would be a totally different deal. The human connection is a powerful way to break that.

Sunny Washington | CEO & Cofounder | Because Learning

I have talked to multiple female founders in and outside the state, and one thing I keep hearing is that the first time they felt like they hit the glass ceiling is when they were trying to raise capital. We have a problem here of female founders getting funded. My advice when I talk to a female founder is to practice your pitches on Utah VCs, but then plan on raising elsewhere.  Their success rate is just going to be much lower here.

William Borghetti | CEO | APIO

I’m surprised how many entrepreneurs who are raising money don’t contact another entrepreneur who just raised money. If you are out raising, you know exactly who has money, who is at the end of their fund, who is launching a new fund, who writes checks, who doesn’t write checks, what are the terms.  Everything that you really need from an inside perspective is a phone call away.

Sunny Washington | CEO & Cofounder | Because Learning

There’s absolute data that shows that women have a harder time selling themselves. That’s where the challenge is. It’s a thing that has to be addressed by both parties at the table.

Rachel Hofstetter | Chief Marketing Officer | Chatbooks

There have been a lot of studies and research done that both men and women will evaluate men based on their potential and women based on what they have actually done.

Heather Mercier | CEO | ExpertVoice

We also have a lack of diversity on the investing side in Utah. And all the investment funds, the angel networks, I’ve never been in any meetings when there have been women partners or women angel investors, and so that is going to just naturally, I think, hinder that flow of money.

Kat Kennedy | Chief Product Officer | Degreed

For female leaders in Utah, it is rare to have gone from angel to growth stage. What we can do as a community is to ask the talent that exists to come and to help and to mentor so that we can overcome that gap of, she hasn’t done this before, but that’s okay because we have people that have, and they can help so that we overcome that jump.

Tricia Schumann | CEO | BachHealth

I would encourage us to grow the pool. I haven’t had any experience that men aren’t open to working with us. As a matter of fact, I feel like we have a huge advantage right now as founders or as management team members, board members because there’s a strong appetite to involve women, or even diversity, in general, but I just don’t think the pool is big enough.

Dalton Wright | Partner | Kickstart Seed Fund

If you look at our portfolio, we have backed a number of women entrepreneurs, but disproportionately selected from out of state. We’ve had a lot of great companies come to Utah―women who struggled to raise in their local markets, Bay Area, Colorado, and they came to Utah. And we saw what we love in founders: a lot of scrappiness, resourcefulness, they treat our money like their own, and they have a little bit of a chip on their shoulder. When Minna Wang was the first female member of our investment team, she set up a group of all the women in our portfolio to get together to go to dinner together.  So they have that support. There is more awareness around what female entrepreneurs are doing in the community.

Rachel Hofstetter | Chief Marketing Officer | Chatbooks

The big overarching thing I think is opening the door for other people, inviting them to sit at the table. There are many people around this table that have done for that me, men and women, and I try to do it for other people as well.

Stephan Jacob | President, Cofounder, & COO | Cotopaxi

In terms of widening the pool and growing the pool, a lot of responsibility is on everybody in this room to make sure that our workforces are providing those opportunities for future female entrepreneurs to grow and build the experience that will make it easier for them to succeed and grow as first-time founders.

William Borghetti | CEO | APIO

Women can’t do it on their own. This is not a situation that can be solved just by one half of our population. Men have to lead this and have to sponsor that, and we have to say, hey, where is there a great place, and do we have opportunities to put a woman in a leadership role and support them and mentor them? We’re struggling just to be open, like any company in Utah that starts tech-heavy, right?  It’s the field of available tech workers that happen to be women is incredibly tight, it’s very small. So companies end up being pretty heavy male-oriented. We have a smaller pool to deal with that we just have to grow. We have to hire.

Lauren Treasure | VP of Product | Chatbooks

I think that there is a problem that women don’t get invited to social gatherings unless it’s with other women. I’ve never been invited out for a drink or any type of social gathering here in Utah, but with my San Francisco co-workers I’ve been invited all of the time. I think Utah struggles with this social problem, right, that men want to go home to their family, which is great, but they are leaving women out of social gatherings and tend to just get together with other men.  

Kat Kennedy | Chief Product Officer | Degreed

It is up to us, as a community, to make sure that it is known that just as a man can be a father and a productive employee, and that is never part of the equation, why is that part of the equation for me because I am a female? That, to me, is absurdity.

Lisa Davis | CFO | ExpertVoice

I think it’s also expanding the definition of what family-friendly means or what is an environment that is a good place to raise a family. It’s not necessarily kind of the traditional mom stays at home, dad goes to work. It’s an expanded view. That may be one version of a family. There are many other versions.

Rachel Hofstetter | Chief Marketing Officer | Chatbooks

I think that’s expanding our definition from motherhood to parenthood, and supporting men in all sorts of parenthood roles too, including paternity leave. At Chatbooks, we have a family leave policy. Men take leave just like women take it, and it norms it for everybody. The more we can start doing that, it’s not just women doing things, it’s parents doing things.