Russ: This is the BusinessMakers Show heard here and seen online at TheBusinessMakers.com. It's guest time and this is that show that recognizes those that work for the company but features those that make the company work. I've got to tell you, man, I'm surrounded by some senior, very experienced executives who know how to make the company work because I'm in Austin, Texas at an event put together by Bill Arend, Regional Manager for Oracle. Describe this event Bill.

Bill: Thanks Russ. We wanted to put together an opportunity to share nuggets of wisdom with companies who have had growth in this down economy and we wanted to get it from a variety of perspectives. So we went out and wanted to get a public company that was on high growth. That's where Kevin Thompson comes in and we got from an investment perspective Ivan Brockman who came in from the Blackstone Group to talk a little bit about his perch and his experience touching a lot of companies. Then from an entrepreneurial start up perspective Mark Wabschall who's the CFO of KLD Energy which is an early stage start up in the clean tech space. Then to tie it all together we got Newt Hamlin who's been a serial entrepreneur, who's been there, done that and is working as a chairman of a company that was commercialized out of Texas Tech.

Russ: Well I heard the only thing he ever failed at was retirement. Do I have that right?

Newton: You got that right. I also take exception to you using words like senior and experienced.

Russ: That's okay. That's okay. Well I tell you what. Growing a company in a tough time I don't think there's a better example of that right now than Oracle. My goodness, you guys look like you're trying to take over the world.

Kevin: We're having fun. We're having fun.

Russ: It's really exciting. Well we got to talk earlier today and I got the perspective from several of these guys about what they are doing in this tough economy and what they recommend others do. In fact Mark, why don't you start? I mean your company I've heard of it before. I heard of it in an elevator pitch recently in a contest, KLD Energies. Tell us about that a little bit.

Mark: Well it's amazing you mentioned elevators. One of our applications is electric motors for elevators.

Russ: There you go.

Mark: KLD Energy has developed a revolutionary new electric motor system and we're targeting initially is the motor scooter, motorcycle industry of China but we also have other applications in the wind turbine, air conditions, forklifts, electric four wheel vehicles and other applications. So we're kind of an interesting company is that we've developed the R&D and rather than being the manufacturer of motorcycles or elevators we're licensing our technology to others. So our stage of the company is to prove the technology, take it out of the lab, develop prototypes and then go ahead and license that technology.

Russ: Okay. As I understand it you're kind of like a start up in the midst of this tough economy and have been raising money, a lot from angel investors, right?

Mark: Yeah. Very fortunate that we are based here in Austin, Texas because it is a very entrepreneurial city and there is a large amount of angel investors. We've raised $13 million, 100 percent from angel investors. We are preparing ourselves though to talk to institutions such a Blackstone and others to help us raise money at that next level when we actually launch commercialization of our product.

Russ: Okay, well that's interesting that you mention Blackstone with Ivan Brockman here who is a senior managing director there. I thought something interesting that I heard you say earlier today was all about what companies need right now is strategic creativity. Tell us what you mean by that.

Ivan: Sure. Well when it comes to strategic transactions the common parlance that's used in my business for M&A but it not necessarily be that mergers and acquisitions are the right strategy for a particular company. It may mean that a creative partnership is the best solution. It may mean that the way to tap into an emerging market isn't by hiring a bunch of people and tackling the opportunity but by partnering with a local provider of services that can help. So part of what we do when we sit down with companies is try to figure out the best way to tackle the ultimate end game. So I guess what I meant by strategic creativity is not closing your minds to the availability of options and not just assuming it's one path or the other but there are a multitude of options that you can pursue.

Russ: Okay, but in this economy there are M&A opportunities unlike there's been probably in the last decade, right?

Ivan: Absolutely. There are a lot of companies that are doing quite well that can take advantage of their relative strength to acquire competitors for products, for customers, for distribution, whatever the particular reason is. We're seeing quite a lot of activity these days and some are very large and very public and others are a little bit smaller and less in the news but there's a lot of activity going on right now.

Russ: Okay. Well Kevin, now I heard you talk a lot about focusing on ROI on almost every business decision that you're making these days that particularly a small company would be making to make sure that they're using their funds properly. Expand upon that a bit.

Kevin: One of the things that in the kind of environment we've been in over the last 18 months is to make sure you understand where you're making an investment and to make sure you understand what is the return on that investment over what period of time. If you're able to do that you can be a lot more intelligent about where you place your bets and that's really the key is to place your bets in the right place and be successful more often than you're not. The only way you can do that is with measurements. So we have spent a tremendous amount of time making sure we've instrumented really every aspect of our business so that we can look at performance on literally a daily, weekly basis and make adjustments in execution very, very quickly.

Russ: Okay. Now I also heard you talk about your team and that you felt like in this environment it was of utmost importance to be open, honest and transparent. Right?

Kevin: Correct. I think when you're in a period of time where - we've been very fortunate we're growing very, very quickly in a very bad economy but at the same time we've had to make more adjustments in our business over the last 24 months than we had to make in the 24 months prior to that to make sure we continue to grow. We've also had to make sure we've set expectations for our employees that this is the environment we're in; these are the expectations we have. Here's the things we have to do to really be able to reach those goals. I think in order to keep your employees bought in and really working hard when that hard work may not translate into quite as much output as it did before you've got to be open with them about the opportunity, about the risk, about what you need from them and ultimately about what that means to them and what it means to the company.

Russ: Okay. I've been in that situation before in prior recessions and it was tough to be open. I had a debate with the owners for quite some time about how open we should be because if you tell them you're really doing great I think they all think, "I'm not being paid enough," and then on the other hand if you're having a bad quarter and you open the books there they go, "My goodness, I better get out of here." Have you ever been in that range of openness?

Kevin: It's a tough balance. We've been - our employees have has the very, very good fortune to be in a company that's been growing in a difficult environment. Their pay has been going up. They've been getting paid bonuses. We've actually added benefits, not taking away benefits. So many companies have had to reduce benefits in order to control costs. So it is though making sure they really understand and appreciate what you're able to do and when you're able to do it and they understand why. If they understand the why you're able to provide all the things you provide then if there's a circumstance where, "Okay, I've got to pull some of that back," then they understand it a lot better.

Russ: Well there is no question that volatility creates opportunity. I heard you talk about that Newton. You were talking about the quality of deals that you see from an investment perspective are higher than ever perhaps.

Newton: Yeah. No question. I think that what you have is you've got a business environment that can reward good ideas, good products and services that quickly dis-rewards anything that's not superior. The companies we're dealing with primarily companies that were spun out of university technology which is a passion I have one is the first tool and the only tool in the world that automatically parallels software so that it can be spread to multi-core chips with mini-core chips which are going to be in Oracle, just announced by 2015 that their systems are going to have 15,100 cores. So you have to be able to write software that parallels. Now there are two ways to do that. One is to manually parallel it. The other is to use our tool which automatically parallels it. A large global 1,000 company just brought a predictive maintenance product to us that took them four hours to run an iteration. They sell this in the big oil and gas plants around the world. We wrote four lines of code and we did it in three minutes which saves time, energy and development costs.

Russ: And money for sure. That's real cool.

Newton: So these kind of ideas and these come from universities which they could - all of their inventions are wonderfully. We think 1 to 3 percent of them are commercializable and that's the ones we work with.

Russ: Well I know you're fairly diverse, too. I hear you talk about this Windecker Eagle. It's kind of a resurrection, the rise of the Phoenix. Talk about that a little bit.

Newton: The Windecker Eagle. Yeah, it got its FAA certification in the late '60s. It came from an inventor who was with Dow Chemical and it was the first the composite airplane which meant it was the first stealth airplane and several of the planes were bought by some government agencies which used them about 20 years. It went out of business during a bad economy like we have now because it was underfunded. So we're raising $35 million and are going to resurrect this and we'll have our first planes in the air sometime late next year.

Russ: Real cool. All right, now Bill, this is pretty cool that you guys hold this event. You call it Smart Strategies to Keep Your Business Growing and this isn't the only place Austin, Texas that Oracle's doing this. Right?

Bill: That's right. We've got a series of events that we're hosting and the reality is that we serve a lot of companies in a lot of different industries and one of the most important things we can do is to put a venue together that can share wisdom and ideas so that when you talk about innovation, you talk about taking costs out of the business there's a lot of ways to do that. Certainly our portfolio of business applications are in place to help companies and what we're doing with these events is trying to elevate discussions so that we can have intelligent dialogue around what can we do in down economies. What can we do to keep businesses growing? Certainly we'd hope to play a small role in that but the real knowledge is with the folks that are on the panel.

Russ: Cool. Really cool. Well before we wrap this up I want to take advantage of this incredible experience here, not age, experience. I want all of you to imagine that we have sort of a young aspiring business person/entrepreneur that's tuned in, that's watching this right now trying to think, "Well what can I learn from this?" What sort of general advice would you give him or her? Let's start with you Mark.

Mark: I would tell this entrepreneur is to find the product or the idea that's differentiated in the economy or the markets that you're at, is what is your value proposition. Then you've got to get - attract the capital and then the human capital as well. You have to have those in tandem. I think it's to have realistic goals in setting that out and the strategy of going after that. So in our case here we had a technology and was trying to - how do you commercialize it? It's tying into what Newt said is that there's a lot of ideas come out of universities and you're saying 1 to 3 percent is commercialable. So I think that is the key is to find that idea that you can take out there.

Russ: Well I - that's great advice. I couldn't help but think I recently interviewed the founder of the Wolff Center of Entrepreneurship, the University of Houston and a lot of people don't know it but their undergrad program there was ranked number one by Princeton Review and Entrepreneur Magazine, was number two last year, number one the year before. They've really got it together. Then the founder who's an octogenarian he really distinguishes the difference between this idea and then being able to execute a business. Maybe that's sort of the problem in these universities, it's all ideas. But boy, the people that can get in there and drive the bus that's kind of different. Well keep down this path though. Ivan, we've got an aspiring young person that's saying, "My goodness. It's scary economic times. What do I do?"

Ivan: Well you know I think the best advice I can give to a young entrepreneur like that is to find a mentor, to find somebody that - or perhaps a contrary of people but especially one person that they can trust, ask anything to because there's a lot that they don't know. There's a lot that is tough to figure out on their own. They will have hurdles to overcome and having somebody who's been there and done that many times before and is willing to give of their time and expertise and experiences is invaluable if you can find it. So that would be the piece of advice I'd give that person.

Russ: Great advice. I smiled only because I've asked about 500 entrepreneurs this same question. I always thought they were always going to say what I said which all it takes is just unbelievable commitment and determination and just keep going, but I continuously get new ideas and they probably fall in the categories of about ten. They're all interesting and mentors is extremely important. Kevin, what's your answer to the question?

Kevin: I think a couple things. One, there's tremendous opportunity being created right now. For those people that have an entrepreneurial mindset disruption creates opportunity but what I would say is don't go at those opportunities in the same old way. There's so many technologies available to us today in terms of how we build businesses, in terms of how we reach customers. So what I would say is really break your mind free because it doesn't matter how good your idea is. If you can't find a new way to go at the market, to create - opportunity to create interest then you're going to struggle to grow. But if you can then you can build business models that have great leverage, great power and you can do it with very little capital, with very little dilution and do it very, very quickly. So break your mind free. Come up with new ways to accomplish and solve old problems because it doesn't always have to be a brand new problem you're solving. There are a lot of old problems out there are not being solved very well.

Russ: All right. Real cool. That brings us to you Newton. What's your advice?

Newton: I add to what Ivan said. I think a mentor is the most important step. The second step is to so that you clearly understand what the commercial opportunity is you need to get someone to join your management team that has a different skill set than you do. If you're a technologist you need to get a business person or vice versa and that way you have more than one set of eyes and ears to go out and find out if this - if what you're thinking about building can be sold. If you then can find it can be sold then the mentor, getting the money, getting the management team, those are the next steps.

Russ: Okay. Well that can it be sold, I was a salesman. Sales is so important. Well Bill, I really appreciate you gathering this intellect together and sharing it with us and our audience. I appreciate you being on the BusinessMakers Show once again.

Bill: No, I appreciate it. Always a pleasure.

Russ: You bet. You're watching the BusinessMakers Show, heard here and seen online at TheBusinessMakers.com.