Eric Kurtzman ‘92 embraces the philosophy that it is not enough to consider one’s own personal footprint; we must create opportunities for others to consider theirs. At Skywell, a startup with an innovative product that creates pure drinking water from the air, his goal is to inspire others to change their water footprints.
As Co-Founder and Managing Director, Eric oversees financial operations, leasing and operational functions at Skywell. He also played an integral role in the company’s inception as an investor.
Q. Knowing what you know now, what would you have done differently at Cal, or what programs/activities/etc. would you have taken advantage of to prepare for your career in innovation?
As an Asian Studies major, I spent a tremendous amount of time learning Japanese - five days of classes each year for three years, a summer in Japan and countless hours of studying, much of which was rote memorization. Although this was an amazing learning experience and gave me great insight into the Japanese culture (as well as a reference point for US Culture), I missed a lot of Cal opportunities. Looking back, I wish I had been more of a Renaissance Man. I wish I had taken the course on making chocolate and the course on Ancient Greek Philosophers. I wish I had let Cal expand my educational boundaries as much as Cal seemed to want to. I’m not sure what I would remember from the out-of-the-box classes, but I do know that I haven’t used my Japanese in 20 years and I have forgotten most of what I learned, particularly the rote memorization pieces. My advice to students who want to be entrepreneurs, who want to learn to think outside the box, who want to visualize what cannot yet be seen, is to study broadly and take advantage of the diverse brilliance available at Cal.
Q. What tips can you give Cal entrepreneurs to help them successful at the negotiating table?
I have lectured on several occasions about negotiation strategies. I'm happy to share these Ten Tips on Negotiations which includes thoughts I’ve picked up over the years.
Q. What is the hardest thing about your work in a growing company? What keeps you up at night?
Entitlement is one of the greatest enemies of growth. My small company grew very, very quickly. As it did, and as it became surprisingly profitable, my partner and I wanted to share that profit with the staff in terms of generous raises and bonuses. The company continued to grow in part because of very high staff morale and near-zero turnover (for close to a decade the highest position on the org chart to leave was the controller, who left to be a CFO elsewhere). However, profitability was damaged and ultimately morale was damaged because the raises were unsustainable; we could not continue to give staff annual raises of 6-20% each year, particularly as such raises accumulate over the years. In years of lower profitability, we also could not give staff 4-12 week bonuses. Over time the raises fell to 3-8% (not including raises that accompany a promotion) and the bonuses fell to 1-6 weeks, but the staff felt grieved that they no longer received what they had become accustomed to. The fact that our raises and bonuses (and general salaries) were far above the general market and even further above the market in our industry was irrelevant to how the staff felt; the employees were tracking the company against its past, not against the outside world.
Q. What was it like to turn down an offer to purchase our company?
After our first year in business, the largest competitor in the market saw something attractive in our company and offered to purchase it for a life-changing sum, an 8-figure payment to each of my partner and me. We started imagining buying things we had always passed by, hosting dinners for our family and friends, spending days reading magazines at a beach-side coffee shop, etc. It seemed an absurd amount of money. We would be able to live on the interest and never work again if we chose to do so. However, we would have to work for the acquirer for five years to get full payment of the purchase price . . . and the purchasers were . . . well . . . [insert pejorative description]; and although we could quit early and still received the vast majority of our payment, we would have to subject our staff and our amazing culture to the purchasers’ talon-like grip of dark misery.
So we walked away. We dashed all the dreams of new purchases, gifts and dinners, and we put our heads down and back into the business, now with more than just the goal of growing, we took on the goal of toppling our largest competitor. Three years later we were the largest company in our industry, eclipsing the company that had tried to purchase us, and sitting across the table from a potential purchaser at more than twice the previous valuation. We had accomplished what we sought to do, but we had also learned how to walk away when that was the best path; and so we did, again, walk away only to re-engage again three years later and ultimately sell for approximately six times the originally offered sum.
Every offer to purchase our company came with a great inflation - thoughts of wealth coming in, thoughts of things we would buy, gifts we would give, trips we would take. Each time we turned down an offer, we felt an incredible deflation. All of those things went away. Although the end of the story is a great one, those moments of turning away from the deal on the table were incredibly difficult on many levels.