OwlSpark | Rice University Startup Accelerator | PeopleWise: Keith Kreuer
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PeopleWise: Keith Kreuer

Keith Kreuer, Principal at RedHouse Associates and serial entrepreneur, has spent nearly three decades leading startups in the Houston area. After graduating from Iowa State, he moved to Texas and launched his career with Exxon. Later, he had a brief stint at Arthur Young as it transitioned to Ernst and Young, and began his startup career with a joint venture called Generator Systems. This venture eventually fizzled, and Keith and a few of his friends decided to try their luck in startups a second time, building Penta, a software and consulting firm. In 1991, very few commercial software companies existed, and Penta filled the market’s need for custom solutions. Later, along with Mike Clark and Doug Erwin, Keith launched PentaSafe, a spin-off of their firm which handled exclusively security software. Keith and his partners worked hard to grow both companies until they were acquired by VeriCenter and NetIQ.

After NetIQ acquired PentaSafe, Keith stayed with the company a short while, and found himself without a job or project to work on during the summer of 2003. He took a much deserved break and family vacation during the month of July, and when the summer ended Keith assumed he would be content not working. But it did not last long, and in August on his daughter’s first day of school, Keith decided his “retirement” was over and it was time to get back to work. Very quickly thereafter, Keith began working with Doug Erwin at RLX Technologies. Keith joined Mike Clark at the end of the year with a plan to start a new venture, which later became IDERA Software. Nowadays, Keith still wakes up at five in the morning, goes to work with enjoyable, hard-working people, and mentors startups that RedHouse Associates has invested in. There, he and his partners advise startups in achieving fast growth and avoiding rookie mistakes.

Over the years, Keith has gathered quite a bit of experience. He shared a few bits of valuable advice for fledgling entrepreneurs.

#1: Start in an area in which you’re an expert.

I see a lot of people that like the idea of starting something, but aren’t an expert in that field, and don’t always know what’s really going on. If you work in a certain area, you see the holes and pain points that exist, and if you can create a solution it will be better than anything else out there because you’re in the problem,” Keith said. “It also gives you a much greater chance of success, and who doesn’t want that? The next step is to build out a great team. When I started I had friends that I was working with, which worked out well for us. You’d be surprised how many deals I see where people have no experience, no team around them, and it really lowers the chance that they’ll be able to accomplish what they set out to do.

#2: Examine the scope of your business.

Don’t lose your way by going too broad too quickly. Instead, you need to find your niche, be the best you can be in that area first, and then you may have the opportunity to grow or exit. At RedHouse, we’re big on the concept of land and expand, where a company grows its business with the same client or acquires new clients modeled after the first client. However, this growth requires a successful launch with your beachhead market.

#3: Bring the right attitude.

Successful entrepreneurs are tenacious, persevering, and enterprising. We have a lot of tough conversations with early-stage entrepreneurs about their projects. Everyone has this idea that they love–it’s their baby–but sometimes we have to poke holes in the idea when we see issues that could affect its success. At that point too, seeing how someone reacts to feedback can sometimes show us whether they’ll have what it takes to cut it in the startup world.


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