Start-manage-exit: What’s the best option for CEOs?

CEO Forum was held today at the ongoing Display Week 2021. The participants were Ian Jenks, Chairman and CEO, SmartKem, Ms. Jill Wittels, President and COO, Nexteon Technologies Inc., and Ms. Maria Jokelainen, Co-founder and Board Director, Kuori Oy. Bob Raikes, Principal and Managing Editor, Meko Ltd, was the moderator.

SmartKem is the global leader of application specific organic materials for organic thin-film transistors (OTFT) backplanes compatible with industry-standard production. Kuori produces Yetitablet, an assistive technology that provides therapeutic recreation activities for seniors, people with disabilities, autism, and cerebral palsy. Nexteon is an evolving, software development and design company, with a team of ardent artists and amazing developers.

Ian Jenks said SmartKen went public last month in the USA. They had earlier introduced two technologies. We are introducing a third, organic thin-film transistors. They will change the world of electronics.

Ms. Jill Wittels added she spent years designing infrared sensors for use in displays. She was also the CTO of a large defense company. She became an angel investor and advisor. Nexteon is in the aviation industry.

Ms. Jokelainen said they are doing huge Android tablets. You can stretch those tablets to large size. Its mainly about schools and meeting rooms. Displays are also used in healthcare. We have a dynamic screen that can be stretched. Even self-service kiosks are growing.

Ms. Maria Jokelainen had been on the IT industry, and moved to display industry 5-6 years ago. The benefit of tablets is not lost on children. You can interact with others over the tablet. We are making smart technology available to everyone. Besides healthcare, we are also providing solutions for harsh environments.

Interesting people, interesting things
Jenks said they always looked for interesting people who can do interesting things. We were funded by European VCs. We have the chemistry for next-gen transistors. In the US, we found the VCs are a bit reluctant to invest in regions away from their geography. We went public and raised $30 million in 90 days. You have to think outside-the-box. You have to be prepared to look to borrow money from elsewhere.

Ms. Wittels said they have a large portfolio of companies to look at. There are few lead investors available. Many companies are struggling with closing rounds. There is plenty of money available, if you can have the right plan. We look for market pull. Investors look at few other things. The determination of Kuori has been remarkable. You need to have market pull for your product. Having the right team is very critical.

Ms. Jokelainen said there are 22 people in her company. The core team has lot of value. It is a matter of what people can do together. Jenks added that it depends on the size of the business. It is a test for the person who talk about what they do. It means that they are pretty passionate.

Ms. Wittels said that it is correct to show passion. Startups are lead by many young people. Her startup’s average is between 60-65. They are seasoned people who have come together to do something for the planet. They have a tremendous breadth of experience. Bad assumptions need to be thrown out when assessing the team. Jenks added the passionate is immense. More so, in the technology world.

Good team
Display industry is very much a global industry. Recruiting a good team can be challenging in Covid-19 times. Ms. Wittels said there are lot of people invested in displays. Those people are passionate about bringing dramatic improvement to the micro-display industry. Their company was in remote from day one. Covid-19 meant that we could not meet customers.

Ms. Jokelainen added there is a problem of finding the best people in this difficult environment. Startups do undermine the HR experience. In Finland, salaries are high, but not that high. We also enabled people to work remotely. That was also a reason how they got the senior programmers.

Jenks added it is a total nightmare. You have to fundametally change the way you organize yourself. The next tier could be in the Far East. We have senior people to handle problems in the Far East. It is also high risk. You can have more formal interviews, meetings, etc., in person. You now have to get through short periods of interactions. Evaluating them miles away can also be a nightmare.

Ms. Wittels said it is hard to hire when you are working in cutting-edge technology. You want people who are creative, and mindful of manufacturing what you are creating. There are people who want to get into the manufacturing line. We are still recruiting in a traditional way. People have to be where the business is. We have to overcome that with our teaming relationships. We also automatically had a software team. We are working with a Ukraine-ian software development company. This is a route too often overlooked by startups. You bolster your team partly by hiring and partly by getting them to do the right thing.

Ms. Jokelainen added it is a bit difficult to hire people. You can get this from the software development teams. You can hire via recommendations. Jenks noted that people who have the innovation, and people who know how to get stuff made, are absolutely critical. We thought that we were going to get into manufacturing five years ago. The first process tried had nothing on it. We got back to the drawing board. We got in lot of manufacturing people in. We sorted them out, and got the right level of innovation.

Ms. Wittels added there are different human beings. MIT people are smart, but they also got bored very quickly. We got some people from the other engineering schools in Boston. You learn, as you manage a team.

Managing people
When you are a CEO, you are a generalist. Ms. Wittels said there are lot of things to learn on the job. How do you teach people to be supervisors? For me, the single-most thing was: how do you make people happy. Most of the time should be spent to enable your people to get things done. Can you take joy out of what your team did, rather than yourself? The extension is to learn to manage people who are experts, and not getting intimidated by that. That’s how you can learn to manage people. You need to also have skills that are not your specialty.

Jenks noted that it is about hiring the right people. You should also know what you are not good at. He realized he was not good at hiring procurement people. Having the right HR people early on, and who are involved with the management team is key. They see the world differently.

Ms. Wittels said they are buying a company in Germany. That company has technology that we don’t have. We can get the juices flowing. We are growing organically. It is about making right decisions about the product and the market.

She added that you need to decide: if you have found somebody, will it help you get to the market faster? You can also team with them. The combined business is more competitive in the marketplace. It is all about the speed-to-market. It is also about the resources that they bring.

Jenks felt that sooner or later, you end up facing the laws of big numbers. It can start to get difficult to do that organically. You should find companies with some synergetic product. The growth you devised, could get scary in no time. It gets unrelenting, quarter over quarter. Ms. Wittels added there should be pieces that can present shareholders payback. The bigger the acquisitions, the harder they get to integrate.

She added that you generally buy a business for the leadership team. There is a delicate balance between keeping the organization that you bought and cutting costs. You have to create more value. Jenks noted that we need to look at how things are going to look in practice.