PODCAST – David A. Rosen, Interviewed

Learn How Technical Leaders Thrive in Business with David A. Rosen

Mark Bayer and David Rosen

Produced By: David A. Rosen

Guest: Mark Bayer
When Science Speaks
Marc Bayer

December 24, 2021

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Learn How Technical Leaders Thrive in Business with David A. Rosen

by Speaker: David Rosen | With:When Science Speaks

Notes and Transcripts


What Was Covered

  • 03:50 – How did David get started?
  • 06:20 – David started his first SaaS company in 2001.
  • 08:45 – So many people fall in love with their product, but the reality is it needs to add value to others.
  • 08:50 – You can manage a company with a focus on the product, the process, or the customers. Pick one.
  • 10:40 – David recommends focusing on the customers before you focus on the product or the technology.
  • 11:45 – What are the pros and cons of managing the process of a company?
  • 13:35 – Before you pitch the investor, figure out which of three ways you plan on using to manage your company.
  • 14:20 – David talks about winning The Innovator of the Year award.
  • 19:30 – New York is now the second largest market for investments, next to San Francisco.
  • 20:20 – David talks about the three areas of TechX Foundry – Robotics, 3D Printing, and Tech Fashion.
  • 26:15 – How can you prove to investors that you and your team are the right people to execute an idea?
  • 27:25 – Remember, you can’t do everything yourself.
  • 28:10 – David recommends the book the Lean Startup.
  • 30:55 – It’s all about collaboration, innovation, and the desire to create successful lives.



[Tweet “A company has to have value. That’s the first litmus test.”]
[Tweet “What are you truly bringing to the table?”]
[Tweet “At some point, you have to divide and counter and you gotta collaborate.”]
[Tweet “Always put your ego aside.”]


This is when science speaks a new web series profiling innovative and interesting people working in science and technical fields. from academia to industry to the nonprofit world. We explore how to be a powerhouse advocate for science and your research, how to advance your career in meaningful ways that make you happy, and how to push back on the ongoing assault on science and other related issues of interest happening in the world.


Mark Bayer  00:40

Well, hi, everyone, it’s Mark bear, and welcome to this episode of when science speaks. This episode is brought to you by bear strategic consulting in Washington DC, which helps scientists and engineers get funding gain influence, and build strategic relationships with the stakeholders who matter most in their professional lives. It is such a great pleasure to have David Rosen on the show today. David is currently the CEO of acrylic group and advisor and mentor at Signal lake which is a VC firm, also a tech launch, which is an accelerator in several tech hardware, and software companies. He is a manager advisor, a leader and an executive, he said leading roles in more than 40 successful m&a transactions ranging from 500,000 to 2.5 billion personally involved in six exits. David’s also been a CEO, manage director of three businesses, and six board and board advisor positions. He’s really been a leader, and all these different roles throughout his career. And it is wonderful that David has joined us today on the show. David, as we get started, I would love for you to share with listeners, your interesting four pillars of leadership approach that you have developed.


David Rosen  02:08

The first pit pillar is understanding and being intimate with the customers and understanding what their needs are, what their demand issues are, what their goals are, what their problems are. And where does your product or service fit in those in those customers needs? And which segments of the market are you playing in? And how big is that market? And is that need continuing? Or is it changing its pace? The second part is the on the other side of a fulcrum, which is really how well do you understand that technology product or service that you’ve created? And how doable or closely available? Are those solutions to meet the needs? Or the goals or the problems of those customers? And it’s not only for today, but what about the near future in the far future? Will you continue to be valuable to them with your product or service. But the most important fulcrum in between the customer understanding and the technology understanding is really all about the business economics of what does it take to get that product to market? What does it take to, to find the largest market that you can so that you’re not going just after the early adopters. And then there’s no mass market behind it, but that you’ve been able to understand who else is going to take on your your product or service. So what I’ve typically find is those three things are out of phase with each other and they should be aligned. No matter whether you’re two weeks into a startup a year into a startup, or two years into a growth stage company or whether you’re 20 years into a business or 70 years in a family, multi generational business. Those three things have to be in alignment, but the most important part of it is the people. And if you have an A team, those people should be able to manage those three parts very effectively. If you don’t have a good team that’s nimble and coachable and fresh, then you can have problems moving forward. So that’s as I look at leadership, it’s an understanding of being a part of that people team and understanding what the business requires to be successful. And that style emanates, you know of being able to identify and prioritize your opportunities. Set a clear path and Kumi indicated effectively so that the organization is doing the things that are most, most positive towards contribution. And most importantly, if it’s a mature organization, the most difficult part is stopping people from doing things that that they’ve been doing that may be counter strategic to what they should should be doing.


Mark Bayer  05:01

Great. David, I’d like to ask you this point in your talk about the sophisticated communication methodologies that acrylic uses. And I’d love to get your take on why you think many times not in every case, but oftentimes engineers, and scientists can have difficulty explaining to general audiences, important decision makers that stirs and others policymakers, in clear, jargon free terms, the real world value of their work.


David Rosen  05:39

Right, right. Yeah, I think you hit on a on a great point that about the value of communications, and it’s, it’s not just having clear and effective communications about the your intent and your vision and your direction that you’re heading in. So that people have a clearer picture of where you’re going. But it’s also important that you find ways to motivate them along the way. And, and that they want to go on the journey with you as you’re moving. Because, you know, Mark, we all know that change is probably the only constant that we know of outside of taxes to be certain, right. And so as things change, you want to make sure that people are with you when they’re changing that they’re not straggling. And, you know, it’s like a herd of cattle, if you let them just go, they’ll be spreading out across the plains, and they won’t be heading in the same direction. And it’ll take you a lot longer to go to where you need to go. I’m not saying that people needed to be need to be herded. But hopefully that puts a picture in people’s minds. You know, and I’ll give you a great example where I learned about the aspect of kin medications. It’s not just driving clarity, but it’s more important to drive and validate an understanding and acceptance by all the people and employees that need to go with you. So I mentioned this earlier ones. But I worked for a very large engineering organization of 6000 software engineers that developed software for the telecommunications industry, on the Operations Support System side. And we needed to help that business evolve from being a project run organization, where they’re running 50 and $100 million projects from year to year with change requirements and acceptance criteria for just that year. And their bonus was based upon reducing the expenses for that project, to a point where they would pay a bonus back by getting a 20 to 30% reduction over the estimate of cost to build that software. And we had to evolve that to a business that was going to be independent and financially driven, and run to more common operating characteristics of a commercial company. And, again, I’ve gotten to work for some great people and Sanjeeva Huya. My boss was the President of Software, who basically, we talk through the issues of how do we get an engineering organization to drive 35% margin out of their business for two or three years to become a commercial enterprise. And what would normally be a business plan approach to get them to create their business plans, forecast out their financials and manage to their financial outcomes, which are typically lagging indicators of health. We knew we needed something that we’re going to drive leading indicators to know that we were going to get there sooner, but also be something that would incensed the people independently of driving the right behaviors. And what we found and what Sanjeev drove was the perspective that the engineers wouldn’t respond effectively to just financial targets because they’ve never been driven by p&l targets in the past, but that they do have a lot of pride in their work. And they do have a lot of pride in their engineering and their problem solving. So what we did was we set off to drive the profitability of the business by setting targets to be the most efficient and effective software development organization that could be quantified in in the world what, which at that time was the Carnegie Mellon Institute, the CMMI level five certification, which there were only a dozen companies in the world at the time, that were of that highest certification and What that did was it drove processes for best practices to say, here’s how many lines of code that approximately need to be created and how many sections that lines of code. Here’s how many people should be staffing that. So if the best practice was to staff 25, but the original team started with 100, they quickly figured out how to get the team down to 25 in the same period of time, so that they would become best practices that they could get so that they could drive towards that certification. And that whole process drove 35% margin out of that business for two years in a row, and then another 25% in the third year. Really, really? So yeah. Yeah. So well, so then the net of that was that I’ve learned throughout life is that you have three ways to get people to, to want to do something, you you can, you can incent them through their hearts, minds or wallets. And here was a perfect example where we, we worked with them through their hearts and minds. And, and it helped everyone’s wallet, if you will, by being more profitable, we could be more effective, we could pay down our debt covenants faster to the company who had just bought us and therefore be freed up to do more things as an independent entity. So it was a win win for everyone. And it was just an amazing lesson learned about how to get a large technical organization to drive efficiency and effectiveness out without really driving them by the financial numbers.


Mark Bayer  11:44

Right. And David, I actually would also like to ask you, you know, rather than just assuming that the benefits that were desired here were just financial in nature, it was a, it was a clear, a more comprehensive, kind of a more holistic look at this. And ultimately, it did have financial benefits. But it wasn’t just an assumption straight off the bat that financial


David Rosen  12:09

exactly, and Sanjeev had, you know, had come to this conclusion from his, you know, large experience. He was head of software development at IBM for a number of years. And it was just, you know, it was great to be a part of that team that was pulling this together. David


Mark Bayer  12:27

is somebody who’s so experienced, who’s seen so many different challenges, looked at them from different perspective figured out how to overcome them, given where we are right now with the Coronavirus and all the associated problems that we are facing, you know, really across sectors, corporate America, nonprofit government sector, thinking about leaders in those areas. You know, what do you think leaders should be doing right now to confront and we all hope overcome the difficulties that


David Rosen  13:06

we’re facing, we’ve all been through, we were just talking about this yesterday. We’ve all been through a number of other crises, whether it was 911, whether it was the financial crisis of 2007. And those crises, those crises were things that you had you dealt with, but it really maybe affected one side of your business. And it affected the world at different times in a different strengths. This pandemic is something that’s affected the entire globe, and has shifted our way of living our way of, of buying products, our way of demanding for things in addition to our way of delivering and fabricating and, you know, the entire supply chain and people’s ability to forecast demand has entirely been thrown up in the air and landing who knows where. And so, you know, the most important things that that we’ve been talking about recently with the companies that I’m the board of or other C suite people that I’ve been talking with, cash is clearly King and you have to, you know, you have to retain it and free it up from wherever you can. And make sure that you’ve got running room to survive, you know, not only the first wave of the pandemic, but a potential second wave that’s coming up. And you have to know whether you’re deemed essential or non essential and what impact that will have to your business. But if there may be creative ways to free up cash by getting rid of, of old inventory that you’re holding on to that that could even get You 20 cents or 30 cents on the dollar, or, you know, I’ve seen metal manufacturing companies that hold on to their molds for 30 years that nobody comes back to buy. But, you know, if you could get scrap value for that you could free up cash that might give you another month of payroll. The second item would be, you know, don’t waste time, don’t hesitate. You know, if you have an opportunity to get PPP money or the new program, I forgot what the term is of the new program, but, you know, get that PPP money to help you sustain because right now, any lines of credit, or any credit you’ve had, is suspect and is subject to change and, and change, unfortunately, at the banks schedule, not on yours. So your cache lines are going to shrink. And your ability to get through these periods is going to be questionable. And so can you free up assets or inventory? You know, and the most, I guess, the fourth thing is make sure you’re checking all the reports that are coming from your management team, and ensure that that nothing’s nothing of value is is being left out or unknown. Or again, there may be hidden assets that are sitting in warehouses or distribution points that could be winnowed down to free up cash. Right, again, I can’t stress it more cash is king. And I’m a bootstrapper. So when you know, when I don’t have cash to make payroll, for the companies that I’ve started, it comes out of my back pocket or comes out of my savings account. So I’m always doing everything I can do to get the most from our customer revenues and from the cash that we have. The fifth thing is revisit all your agreements and contracts and understand what flexibility do you have to reduce expensive expenses and obligations? Do you you know, your landlords are putting a lot of pressure on you, because they’ve got mortgages that they’ve got to, you know, retain, but are there opportunities to get out of your lease early, are there opportunities to reduce the space, that you’re not using it all, and make sure that you’re shutting down your utilities, so that you don’t have any ongoing expenses while your workers are working from home. You know, so look, look for other ways, like that, but you’ve got to learn to, to stretch out the business as long as possible. And so that means even developing six month plans if you can’t think a year ahead or develop a year long plan, if you if you need to understand where your business is going, because again, the demand factors and predictability of your of most businesses now are different than what they were pre COVID. And the sixth item of seventh item, I think is look for unprofitable parts of your business. Maybe there are some parts of your business that could be spun out and could be created as a separate business or maybe someone else has a better idea about how to get that business from my a losing cash flow or EBIT perspective to a winning business. And so there may be this may be creative ways to free up value from your business. If you’ve acquired businesses that may not be fitting today, but you know, valuations are really tough today. So you’d have to look at ways to monetize it without having to put in cash into that business. But it may be better run by someone else or you know, create a value assessment for the the spin out opportunities or figure out a way to turn some of your businesses more into cash cows, and let them drive the business or maybe they maybe they are an essential business. And maybe you can expand your in your reach today for the products that you’re selling because you’re doing something that COVID has made an opportunity for you. So you need to look at both sides of that equation and say where can you put investments into things that are going to currently be demanded higher than others?


Mark Bayer  19:34

David at this point, I would like to ask you about notify one of the companies in which you’re an investor, also a co founder, of course. Can you tell us more about the market that notifies serves in manufacturing any new initiatives you know its mission and the vision that you and the other leaders have for notify at this point.


David Rosen  20:01

Sure, yeah, this is a good one because it’s, it’s as an angel investor, and as an entrepreneur, it’s in my sweet spot. So I don’t want to make a short story long. But when I sold my last software company in 2012, I looked around and realized that while I’ve been growing up in tech, and Tech has been doing great things that manufacturing had the exact inverted growth curve. And so in New Jersey, where I was living in 1986, there were 115,000 manufacturers in the state of New Jersey. And how many companies do you think there were there? About four or five years ago, when I last looked at it mark?


Mark Bayer  20:54

Maybe 20,000,


David Rosen  20:57

right, your your close, there were less than 12,000, left of the 115,000. It’s less than 10%. And so that set me off on a course to better understand because I always look at challenges like that as an opportunity. And I look for ways to identify areas where the these factoids that I’m seeing are creating opportunity. So to net it out. I realized I spent time with about 150 170 manufacturers from New York, New Jersey, Pennsylvania to understand what was going on there. And then with my experience, in tech, I found a combination of things that drove me to put together a an investment thesis around software connected to physical products. And so as a part of that thesis, there’s there’s several assumptions. One is that manufacturing is definitely moving closer to demand, as opposed to being close to supply, where you get low cost labor and low cost materials. To that manufacturing is going through a sea change very much like computing went through from mainframes to PCs and client server. And now back to the cloud. That manufacturing is going through from mass manufacturing, to mass customization, and personalization, where today you can order a Chrysler car and have 8000 paint options. While you know that you can give orders to the factory on your phone for that car. Three, that with the advent of low cost microprocessors and the formation of what’s being called IoT, reconnect dollar microprocessors running anywhere that could be on a factory floor connecting devices, it could be on a pipeline connecting, you know, hundreds of miles of, of, of gas pipelines or oil pipelines or energy systems or utility systems. And you can have things that will detect and correlate problems going on so that valves can be closed, to make it safe, all these things are happening, and coming together to say that software is going to be a driver of physical products. And that’s a good space to be in. So that’s taken me into areas of manufacturing, advanced manufacturing, Smart City technologies, autonomous vehicle technologies in the application of AI, artificial intelligence and, and AR VR towards different industrial spaces. So as I was looking at manufacturing, I had, Bob Wise come to me with a business plan, because I have people as an angel investor, a lot of VCs and other angels will send me something that has software connected to physical products. And so Bob actually came to me with a business plan that I just, I really, I felt bad. I feel like I shredded the business plan. And I said, you know, I said, I’m here. We lived in the same town. So you know, he came back like five months later with his first shell around notify. And so I started working with him on notify, and we started trying to work out. The original issue is that manufacturing is very fragmented. So 95% of manufacturers are under 300 employees. 85% of manufacturers in the US are under 100 employees. So if you think about the types of businesses that would need automation and support, it’s not the typical ones that you see from the big equipment players like Siemens and GE and others. They have tremendous overhead staffs. And they’re much bigger. These are all companies that are living hand to mouth and aren’t going to take solutions that require a lot of thinking and a lot of overhead in order to put them in or a lot of change. These are companies that are all living hand to mouth being competitive, and trying to compete on a global scale with delivering their products to one of the largest demanding countries in the world, which is the US. So with, with my experience in manufacturing, and, and those areas, it was very clear that the small to mid sized manufacturers, which were the dominant part of the industry, had much higher accident rates compared to the largest ones. And so we realized that if we could do something for workers of who were operating heavy machinery in a factory, that if we reminded them that they were about to operate a very dangerous machine, potentially show them a video of what could happen with that machine if you weren’t safe, and then get them to be accountable and responsible that they’ve got their head in the right space. Very much like a captain of a plane, a commercial aircraft, walks around, they’re playing checks all the things. So as a part of their opening story and opening operational checklist, we incorporate these safety points and we put it on a tablet right there, we can, we can add a lot of value and reduce the reduce the accident rates of companies, which will dramatically reduce their their out of pocket expenses for taking care of the workers that have had accidents in their companies. And it’s been an amazing traction time for the company. We started last year in 2019. And built the software got the tablets, we have 10 pilots in place. And those pilots are now converting from beta pilots to paying customers. And the fact that you know, what we found is some additional value propositions for the manufacturing space have just been amazing. We’ve been able to cut out slack time of about 20 to 30 minutes a day where a machine operator leaves their station puts their machine on hold, and goes around looking for a material handler to either take the finished parts away, or to bring more raw materials to the site, they can just do that from the tablet, request them. And then the material handlers come over and pick up the materials. We’ve also been able to automate the paper process of the what’s called a job traveler. So the job traveler is is a piece of paper that defines what the input looks like, what the process should go through with that part or material, and then what the output specifications should be as, as well as the number of parts and the types of finish and the types of of material work that has to get done. And potentially a jig that has to be put on the machine to use it. And so we, our customers are now automating that job traveler, which in the age of COVID is a great thing, because the paper that you send the job travel around from station one to station to station three to continue the part process, that paper can transfer, you know, COVID. So now we have an automated way where the tablet stays at their machine and the next station that gets the product is able to have that process automated. So it’s just you know, we’re still at the beginning phases, we’re at a growth stage and growth phase. But I think there’s tremendous value proposition and there’s tremendous exception, acceptance and adoption by its customers.


Mark Bayer  29:10

David, I’d like to take this opportunity to ask you about an organization that you were integral in in founding and getting in getting rolling, the private Directors Association chapter in Chicago and the chapter in Boston. Now where you are located and where you started up that chapter, what is the profit Directors Association and what it’s what are its goals and what it what is it all about?


David Rosen  29:38

Oh, great. Thank you, Mark. You know, the private directors association is is a unique, nonprofit member driven organization that was founded in Chicago in 2014. Really got started 2015 So about five years ago and Its focus is unique in that it it, it supports enhancing the value of boards, board directors and their qualifications for private company owners, as opposed to other organizations like the NACD, which is focused almost exclusively on public company governance. And so the PDA has a unique position in the private space of which I did a quick research job. And there’s 15,800 companies in Massachusetts alone, that are private companies between 10 million and a billion dollars in size from revenue. So there’s a significant amount of companies, some portion of those companies have developed boards and have realized that developing a private board member or an independent board member is valuable to them, especially if they decide to take on other investments from VCs or private equity companies or Aesop’s or family businesses, as their partners, it’s always important to have an independent board director that doesn’t have the bias coming from those investors. And so the PDA helps support its members who are typically coming from family businesses, and directorships. They’re or private equity VC backed companies. Owner founder LED or employee owned and Aesop’s or Mutual’s and large partnerships. And so the PTA has grown from being Chicago as the main chapter. And then it started Detroit, Nashville and Charlotte within the first year or two. And now we’re up to 16 chapters across the country. And we have we just exceeded the 900 member Mark. And we’ll probably be 1000 members by year end. As as you know, I moved from Chicago, where I joined the PTA and got involved with their great programs. And I moved here to Boston. So as a part of moving here, I volunteered and raised my hand to start the Boston chapter. So we started and had our first meeting at the end of January, we had our second real meeting, which started in February. And now we’re up to over 40 members in the Boston area, we really cover New England. And we may change our name to New England instead of just Boston. But we have 40 Great members who are representative of all the various company business models. And most of them have had board positions, or they’ve been C suite executives. Or they’ve been investors, or owners in private companies. So it’s it’s a very collegial organization. And that’s one of the things that I loved about the atmosphere that the PGA started in Chicago, where it’s a very pay it forward, collegial atmosphere where everyone is there to help each other. And so every program that was held in person in Chicago, always had a great hour of good cocktails or beverages or wine, and good food. And I never saw anyone standing alone during that networking hour. And I’m gonna take a break here for a second some I don’t know if you heard but somebody just started. I think that they instilled so that it during a networking hour where you’ve got good cocktails and good food. I mean, I’ve never turned down good food or cocktails before. But it was very interesting that I would observe people that were standing alone, and they wouldn’t be left alone for too long. You’re also going to be in an environment where you’re expanding your network, you’re learning things, you’re testing your concepts out. And you’re being able to test it with your peers who can give you great feedback before you put into practice, as a board best practice or as a C suite practice. And I think that’s that’s the unique nature. So, you know, as we build up the Boston chapter here, that’s actually being ingrained into our principles, because we want to make sure that we replicate that culture. And I’m not sure whether it’s the culture of the Midwest, or whether it’s the culture of the founders. I believe it’s actually a mixture of both. A little bit of both right? Right, well So, so So that’s been great. So right now we we’ve put on since February, we put on three programs, we’ve done it all virtually. But we’re, again, we know that there’s four goals that our members have. One is that they want to find a board opportunity. Two is that they want to expand their network with people who are peers and involved in private company, business. Three, they want to educate, and they want to learn more about private company governance and board issues and leadership in in private companies. And the fourth is that they want to give back and that give back comes in the form of helping other people to being able to speak and share thought leadership opportunities as a panelist or a speaker or as a moderator. But also, I feel like the PDA is an organization Unlike others, where you can go through the directory, call somebody and 90% of the time, if you mentioned, you’re a PDA member, they’ll take your call, and they’ll pay it forward with you. And I think that’s an unusual situation. And so our goal here is to bring on board directors, owners, and C suite executives from the private companies here in New England. And I think we’re, we’ve gone from zero, you know, from zero to 40, in just a couple of months, even during the pandemic. And we’re really starting to pick up a good pace, and we’re going to keep the programming up. And we’re also doing things to network where we were holding happy hours where our own members can meet our members. And we’re going to be holding happy hours with other chapters so that the chapters can meet each other. And so you’re meeting again, people with a common interest, and an affinity for the same thing. We’re expanding their network, and we’re hitting all their goals that they have for being a PTA member.


Mark Bayer  36:58

If it as we wrap up, and this has been just a wonderful conversation, thank you so much for that. And, you know, the PDAs is an exciting initiative that you launched in New England and this culture of helpfulness that you described, pervading the organization, I think we all want to operate in such a positive, helpful culture. You know, as we, as we wrap up, like I said, you’re an experienced leader, you’ve learned lessons you’ve been on the ground, you’ve, you’ve been an executive and a founder and looked at organizations from all different angles. And I wonder, as an experienced leader, if there are techniques, strategies, proaches attitudes that you have developed during the time, as you’ve developed during your tenure in different leadership roles, things like that, that you feel could benefit someone who is just starting out in their career and aspires to one in which they are a leader, for example.


David Rosen  38:11

So, you know, I talked to a lot of potential startups, I talked to them early stage, and I get involved with students. I’ve been involved at Kellogg and their engineering school was students taking a concept and trying to commercialize it. I’ll tell you, I think the most important thing is to understand that those four pillars that I mentioned earlier, the people, the customer knowledge and intimacy, the product and service definition and durability and viability balanced by the business economics in between those three things, is really important for any startup. And you can take up a business plan canvas, and in an hour, you can use that business plan Canvas to describe the business that you’re thinking about starting up. And you can start getting other people to validate your assumptions about that. And that’s a great way to get started. But again, when when I look at a lot of startups, there’s always a bias. It’s usually a technology group that doesn’t want to talk to customers because they’re too busy developing the product. Or it’s a bunch of people who who understand consumer marketing or b2b marketing and sales, who have no clue that the technology is still five years away from viability at the economic level they want to deliver. And so these three things need to be alignment from day one, in addition to there’s one other important aspect you know, as as an angel investor, and I’ve worked as a venture capitalist before And I’ve done a lot of acquisitions and looked at 1000s of companies for acquisition. It’s really clear that startups are made by a group of people and very rarely made by an individual. And so most investors won’t invest in single founder businesses. For a variety of reasons, you know, first, it’s about the gestalt of the team that when you have three founders, one on one, one plus one equals 10, when you have one founder, the second problem is you’ve got vulnerability of the single owner being at risk, they get hit by a bus, they get, you know, run over by a moped. Or they get, you know, whatever, you’re putting the whole business at risk. So most investors, whether they’re angels, or VCs or institutional PE, firms won’t invest in single founder LED. So I think it’s helpful to see if you can partner up, and especially partner up around the three functional pillars that I talked about earlier, somebody that if you’re on the technology side, somebody that understands the customers really well, and how to get to the market, or, and somebody else who might understand the business economics. And you know, the difference in cost of prototype versus an engineering prototype, which really tells you, what your cost of goods sold is going to be like, is a completely larger gap than getting from a concept to a prototype. And so, getting through all those stages requires nimbleness. And it requires it really the best thing is to have an A team. And that a team should be coachable that those founders should be, you know, not not listening to everyone because it’s, it’s funny. In most situations, there’s a lot of mentors who want to give back and want to help entrepreneurs and startups get off the ground. And I think one of the greatest challenges that I’ve seen for those entrepreneurs, and founders is not knowing how to filter out the what they’re hearing from the various mentors that they have giving them their advice. And so they end up trying to appease them all, they’ll die, because many of them are polar opposites in their, in their advice. Because it depends upon something else that wasn’t considered. So it’s really important that you learn how to value input coming in, but but validated against the focus that you’re heading in, and the direction that you’re heading in, and take the best of what you’re hearing and filter out the rest. I think, you know, if you have a well thought out customer perspective on the value and the size of the market, and focus in on your product, customer fit. And you have a very clear understanding of what it takes to get to market, your value and your ability to raise capital or to raise customers goes up dramatically.


Mark Bayer  43:26

I really liked how you talked about, you know, not having enough time to really validate with the customer, because you are building out the product. And, you know, it just reminds me of something I talk a lot about in my work, which is the need really to connect before you communicate. And not viewing those two activities as separate NCS. And sequential really, you know, being with your customer is going to help you understand how the customer, you know uses what the customer needs, all things that really are going to inform and make more efficient. The development process. Just like connecting before you communicate is going to make your communication on target and probably allow you to get to the messaging part of this much quicker because you’re going to understand what moves you’re your customer, your stakeholder as a result of you doing that upfront connection.


David Rosen  44:28

Mark. I’m not an engineer, but my mind works in very physical ways to think about things and so start playdate was basically a ball that you can play with your dog remotely from any location. You know, it’s a great productivity gainer in the office to play with your dog while they’re at home. But it’s got a camera microphone and speaker built in. And so the development team that founded it, pre sold it on Indiegogo was one of The highest sold products for pets on Indiegogo. And at the beginning, one of my partners and I who invested in the business basically suggested that they focus on the physical aspects and just do some stress testing. Because if you have a Great Dane, chopping down on this five inch ball, you know, that could put a lot of pressure. And so while you’re, while you’re working on the cool and interesting stuff, like the camera technology, and the software, and the and the TAT and the tablet software, you need to think about the physical things. Well, the development team had a bias towards developing the software and technology first. And so what happened was the just the long story short, the plastic that they first developed, after they were done developing the electronics and firmware, and the, and the molds for the pieces, the plastic what couldn’t see through. So how do you have a camera working inside of something you can’t see through, then the plastic was too brittle. And then because of the bad timing around Chinese New Years, and then bad timing around the fact that their supplier had their product, their production facility taken over by their best customer for eight months, it came out with a two year delay based upon leaving these physical issues of stress testing to the last minute, as opposed to realizing that that was an important part of the critical path to get your product to market. And so I’m not, I’m not trying to point fingers, but I’m just saying these are the things that happen and and require nimbleness and require an understanding of priorities. And sometimes you don’t do that when you’re in a startup because you’re you fired and you and then you’re going to aim.


Mark Bayer  47:02

David, this has been such a fantastic discussion. And I know our listeners really benefit from your broad experience, cross industries, various leadership roles, looking at businesses from various levels, various perspectives, and really bring it all together into principles and approaches that can benefit. You know, anyone who is trying to make an organization perform better. It’s it’s just been a fantastic opportunity. And again, I really thank you for taking the time out of your schedule to join us.


David Rosen  47:41

Well, well, thank you, Mark, I really have enjoyed getting to know you. And I really think that what you’re working on is, is critically important because I’m kind of a technical person, but not an engineer. And I think communications and and, and establishing better pragmatic perspectives is really important to technical people, because it’s really the backbone of anything we do. It’s just a matter of the balance with the understanding of the market and the business economics where success comes from. And I think you’re doing a great job to share that with with your audience. So thank you for having me. I’ve really enjoyed this day.


Mark Bayer  48:22

Great. And thanks for those kind words, David, and listeners. Thank you so much for being here on this episode of when science speaks. And I hope you’ll be back next time for the next episode of when science speaks.



This is when science speaks a new web series profiling innovative and interesting people working in science and technical fields. from academia to industry to the nonprofit world. We explore how to be a powerhouse advocate for science and your research, how to advance your career in meaningful ways that make you happy, and how to push back on the ongoing assault on science and other related issues of interest happening in the world.


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David A. Rosen

David A. Rosen


CEO, Founder, Acrelic Group. Investor, Board Director, Entrepreneur, Strategist, Mentor and Tech Industry Business Executive. Available for Speaking Engagements, M&A Advisory, Skills: Strategic Business, Market, and Product Plan to Execution. Transformation Advisor in Incremental through Transformative Change.