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June 18th, 2019

Elevate EIR Mark Gramelspacher: “Recognize the things you can control, change those …”

Central Indiana Entrepreneur-in-Residence Mark Gramelspacher considers his role at Elevate Ventures essentially a “third career” after spending most of his life in school and professionally briefly practicing law, then as an entrepreneur starting and building companies. Now, he helps other entrepreneurs build their innovative ideas into enterprises. The whole process of taking something smaller or even just an idea itself and building something that works and gets bigger is a primary driver for Gramelspacher.

In your role as an EIR, what are key areas you consistently work on with entrepreneurs?

While nearly every engagement with Elevate is in pursuit of capital, there are primarily two areas in which I spend my time. The first is of course capital planning.  For entrepreneurs ready for investment from a firm like Elevate, EIRs generally guide them through that process. Elevate’s process is similar to any institutional venture capital firm but because Elevate is a venture development organization, we can spend much more time with the entrepreneur on the ground, meeting them where they are in their journey.

The second area is coaching. Whether you’re a first-time entrepreneur or a seasoned entrepreneur, there’s an element of coaching that is undoubtedly needed.  Even the most wildly successful serial entrepreneurs (maybe I should say “all” of the wildly successful entrepreneurs) know that they do not have all the answers.  It’s really an interesting phenomenon as I find that nearly all the “seasoned” entrepreneurs, i.e., the ones who clearly have built a personal balance sheet, are the most curious about your impressions while cloaked in true humility.  In this way they gain valuable insight, closing the gap from yesterday’s knowledge.  They are constantly thinking, calculating and recalculating how to get to their objectives whether that’s early in the ideation phase, during growth or pursuing exit.

“Most likely, when an entrepreneur walks in the door what they need is not just money, it’s perspective and objective input from someone who’s fought similar battles in their careers.”

Most likely, when an entrepreneur walks in the door what they need is not just money, it’s perspective and objective input from someone who’s fought similar battles in their careers. There’s a lot that goes into the highly-dynamic, highly-variable experience of building a business and seeing it get traction, get funded, get more traction and more funding. As an EIR attached to Elevate, we tend to go a little further with an entrepreneur than a pure venture capital firm might, which is what being part of a venture development organization is all about.

The entrepreneurs you advise often have little to no business experience. When do you see the most ‘aha’ moments happening?

Everyone has preconceived ideas of what they’re working on, and often it’s not what they end up working on.  So this “aha” experience or eureka phenomenon is where the personal journey meets the actual business, which in turn meets that opportunity they have been beating around on sometimes for quite a long time. I think the most “aha” moments happen when they sign the first customer who’s going to pay them. They often find themselves saying, “that’s not what I expected them to be paying me for, but I’m going to make it work. I was close, but it wasn’t exactly how I thought it would happen.”

The second area is when entrepreneurs realize that the startup experience is actually an established process itself. It has been documented, studied and refined, even though it’s still a highly variable and dynamic situation involving human-beings, ideas, markets, products, customers and yes, investors. They don’t have to have all the answers to questions around what it means to bring a product or idea to the marketplace. They just have to put their toe in the water, be willing to learn about it and surrender themselves to the process.

In business, what have you learned the hard way, when an EIR could have helped you avoid a pitfall or see an opportunity?

This could take a while as I’ve learned “the hard way” pretty frequently in my career.  I didn’t have someone called an EIR, but I had and have mentors, good ones. They were called founder, inventor, CEO, owner, investor, judge, legislator, professor, brother-in-law, uncle, dad, and grandma. They had different titles but they provided a value similar to what an EIR offers and can offer today.  If not for my Mom’s mom, most likely I would still be practicing law.  She drilled into my head pretty early on the concept of “nothing ventured, nothing gained.”

But during my career the thing that resonates the most was coming to a place where I learned to recognize the things you (and your team) can control versus the things you just can’t control. You must learn to recognize the difference. If you can’t, you (and your team) will spend valuable and critical time trying to change something that you have very low or no probability of changing. Until you’ve experienced your own failures, you don’t really know what the characteristics of that are.   And this idea moves right into the “calculations” that the entrepreneur (and his or her team) are routinely making.

Is there a typical way you kick off a relationship with an entrepreneur?

I have a very practical way of dealing with entrepreneurs. People get hired to do difficult jobs, right? But it’s a job. It’s unlike the startup process, which takes an extraordinary passion to see through, so I start with entrepreneurs at the beginning. I encourage them (and anyone for that matter) to commit to writing out personal and professional goals and objectives — three to five in each bucket. They have to be internalized, thought through diligently and be in sync with each other, supporting each other and supported by your personal stakeholders (partner, family, friends, colleagues, etc…), because you can’t do it all. There’s a balance to be achieved. That’s something I probably learned the hard way early on, being a little too ambitious and not realistic about what my goals were.

Mark Gramelspacher

Tell me about your experience as an entrepreneur.

I’m a builder by nature, whether it’s building projects or companies. I was and am always intrigued by the idea of taking something of lesser value and creating something of more value – even the buying-low-selling-high concept in creating a gross profit and then having a little left over to do something else with was intriguing to me as a young boy.  After a finance degree from Notre Dame and law school in Bloomington [Indiana University Maurer School of Law], I ended up with different building projects in my life, including helping build an elementary school in the Caribbean, starting several companies, some of which just outright failed and some that had some legs.  Now I’m a father of three, and that’s a major building project, perhaps the very biggest and most important building project life offers.

I’ve built, restructured, reorganized, or innovated businesses about a dozen times in industrial economies around the world.  I did a startup import-export trading company while I was practicing law. A friend from college and I bought a business here in the Midwest, built a team, added innovation to get patents and new products, exporting them all over the world and it successfully exited our hands.  I had an investment company which led to involvement in more businesses. When my wife and I had our third child it really changed my own personal goals and objectives and led to cutting way back on travel and daily involvement in business so I found an exit, more like a window, so I climbed out.  I officially retired from that career in September 2013 and took time to be more hands on as a dad.  By 2016, Elevate was looking for its first official EIR in Central Indiana, and I came on board.

In business, who you know is critical to making progress and finding success. Agree or disagree, and why?
“I don’t think there’s any magical individual who is critical to success and relying on that one person is a fool’s errand.”

To the extent that it covers a critical part of the process of startup and the core idea, I would agree. But I don’t think there’s any magical individual who is critical to success and relying on that one person is a fool’s errand. Absent the engineered components of startup, the team is critical. We tend to think that venture-eligible startups have a team of three. We talk about the hipster, the hacker and the huckster. This combination tends to be true in our portfolio too. We want to have somebody who has the vision and extreme passion for the idea and can relate at many levels to that idea: the hipster. And then we want the hacker, who can fulfill the idea, make the product and then make the product better and better as the business evolves in the marketplace. And then there is the huckster, a business seeking and gaining momentum always needs someone to sell it in the marketplace and if that person can also manage a sales process then that’s a real bonus.  That team of three, especially early on, is critical.

What is the most common piece of advice you tell a brand new entrepreneur?

Commit your personal and professional objectives to paper — a stated purpose. Management experts and researchers have studied this at some length and the results are pretty impressive. People who actually write down their goals are up to 10 times more likely to reach them. I’ve been doing it for about 25 years and can say it really works.

Can you recommend some favorite business-related books or podcasts?

For building an employee-oriented, impact team and culture, “First Break All the Rules” by Marcus Buckingham is a must read.  As for the startup process, all of Eric Ries’ lean startup work is worth reading. “The Startup Owner’s Manual” by Steve Blank is a step-by-step guide for diving into an idea. Another good foundational work is “From Impossible To Inevitable: How Hyper-Growth Companies Create Predictable Revenue” by Aaron Ross and Jason Lemkin. I’ve loaned that one out many times.

As for podcasts, I love to listen to “How I Built This with Guy Raz.” I’ve never been disappointed by the stories of entrepreneurs and their teams building great companies.

Do you have a favorite business-related movie?

I just watched the HBO documentary “The Inventor: Out for Blood in Silicon Valley” about Elizabeth Holmes, the entrepreneur behind Theranos. She raised some $900 million to fund a product that really never worked.  It’s an interesting story of venture capital, the entrepreneur and the human mind.

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