IVCA Profile Q & A: Armando Pauker, General Partner at Apex Venture Partners

IVCA Profile Q & A: Armando Pauker, General Partner at Apex Venture Partners

March 17, 2010

Besides his General Partner status at Apex Venture Partners, Mr. Pauker is an expert in enterprise infrastructure - “ hardware, software and security - “ and had served on the board at Initiate Systems. He spoke about the background of the acquisition and the issues behind it.


IVCA: What was the genesis of interest from IBM that began the Initiate acquisition? Was the lure the product or the process of management surrounding the product?


Armando Pauker: Initiate Systems is a leader in Master Data Management space. This is a valuable layer in data management and data quality that allows customers to share correct and updated information across multiple applications. Initiate has a dominant footprint in healthcare and government sectors and is very strong in commercial ones.


IVCA: This medical history database seems to be the cornerstone regarding the future of healthcare in America. How will a system like this, completely in place, change the way that the healthcare business is conducted?


AP: The goal is for everyone in the healthcare ecosystem - “ patients, payers, and providers - “ to have all the latest, real-time information around a patient always available seamlessly across any application. This data should be secure and accurate.


IVCA: If everything goes well and in good order, how many years do you think it will take to establish a valid and workable medical history database and what are the looming obstacles against this technology?


AP: The number of data sources and the scale of the data itself required to create the single database in question is monumental. It is unlikely that there will ever be a single entity that can be identified as - œthe-  medical database. A single entity leads to issues of structure, policy and control - “ both political and technical - “ plus budget, and management. Instead, it is likely that data will be federated and available at the point of use by applications. The idea - “ as Initiate demonstrated - “ is to have accurate data for the applications to consume without having to build a single master database.


IVCA: How will the backing of IBM allow the process of establishing the medical history database that much easier?


AP: Initiate will enable the availability of secure, accurate and real-time data. Initiate has proven that it is highly scalable across billions of records. This functionality is required in order to have a reliable and trusted nationwide system.


IVCA: The healthcare debate is still raging and the issues that seem most sensitive are ones of dollars and cents. How can the private commerce sector contribute to the debate and modify costs?


AP: Many start ups are delivering novel solutions to the healthcare marketplace that aim to reduce the costs of doing business. Entrepreneurs are aware that much efficiency can be wrung out of the system. They are focusing their energy there.


IVCA: As a technology expert, you've been riding the wave of what these marvelous machines and software has been doing to both improve and change our lives. Is there a backlash and limitation to what technology can do for humans, or do you feel that as the tech sector evolves it will only contribute more?


AP: Clearly, I believe that technology is driving innovations that are useful for all of us. The past 20 to 30 years have seen innovations in IT, software and biotech. We are at the beginning of cleantech and genetic engineering innovation cycles that will play out over the next 20 to 30 years.


IVCA: What studies should the forward thinking entrepreneur be reading to best gauge where investments in biotech, cleantech and genetic engineering should be focused?


AP: Entrepreneurs are very smart and creative. They are also brave to go out on their own to build their own companies. Successful entrepreneurs see opportunities in markets due to their own insight or familiarity with a specific set of technologies, products, or customers. They do not typically rely on studies because that data will be common knowledge by the time it gets published. Studies often analyze the past or paint a broad picture of the future which is not particularly helpful for building a company that addresses a particular customer need. Investments follow the key entrepreneur or researcher who has found and articulated the customer opportunity, rather than the other way around.


IVCA: You've expressed that you often listen to tech pitches that has a product, but no business model. How can a young or beginning product developer acquire the basic business modeling skills to successfully integrate that system into their product?


AP: This is a complex and rich topic. The short answer is that entrepreneurs have to be flexible in their business model approaches. If something doesn- ™t work, then keep experimenting. Tech entrepreneurs do this routinely on the product side, but forget that they can do this on the business model side too. Innovation on the business model is often as important as product innovation.