Chris Mailander
Companies are bought, not sold. So talk me through that mindset on the acquirer side.

Eli Portnoy
At the earlier stage, what basically these companies are doing is they’re identifying a gap in the market that they think needs to be filled. And they’re opportunistically saying, “I am going to have a better time going after this part of the market with this company in my sort of purview than if they’re independent.” And that really needs to happen through just a lot of thinking and internal work.
You’re buying promise and potential, and you don’t really want to do that with someone you don’t know.

Chris Mailander
My guest today is a serial entrepreneur based in Los Angeles, and he has done something which is quite unusual. It’s hard to do, which is that he’s taken two companies that he has founded all the way through to a successful exit. The first being ThinkNear, which he sold for $22.5 million, and the second being Sense360, which he ended up selling for $44 million. This is hard to do.
The dream of an entrepreneur to be able to start with a blank sheet of paper and create something and see that through to the successful exit and the potential of life-changing money is extremely difficult to do. It’s a Darwinistic process as you go through it. Eli has done it twice, and I wanted to have a conversation with him today to learn more about his journey, his experiences, and for him to share as an insider with a bit of a playbook on this—how he does it and how he creates such significant value on this journey and does it over and over again.
He has founded and is currently the CEO of Back Engine AI, which is a startup that he started in 2023. And we’ll talk about that as well. Eli Portnoy, welcome.

Eli Portnoy
Thank you so much. I’m so excited to be here.

Chris Mailander
That’s awesome. Congrats on the success that you’ve had. And I want to get right into it. Start me at the end of the journey—show me where the trophy is—and how do you, how is it that you’re creating these companies that are very acquirable by the end of the process? Start there. You seem to have a playbook for this, so I want to know what it is.

Eli Portnoy
Yeah. I mean, I think of exits as basically being two different parts to the same story. The first part is you have to build a company that is valuable, that does something interesting, that is operating at a high level, that sells a product that people want. That’s sort of like the baseline. Without that, it’s just really hard to sell a company. But there’s lots and lots of people who build really great companies that don’t get bought.
I think the second part of the playbook is the one that I think is more interesting, which is: how do you then make sure that your company that you built that’s valuable actually gets bought?

And the thing about startups specifically is that they’re the opposite of a perfect market. There’s no liquidity in startups. It is very hard to get bought because there are few acquirers, and those acquirers are buying at different moments. And it’s very contingent on what they’re thinking and what they’re doing and what their priorities are. It’s flaky.

And so, to actually sell a company, you have to, in my opinion, do a few things.
The first is you need to know who your potential acquirers are—and not just when you’re ready to sell—because companies aren’t sold, they are bought. And that means that you need to make sure you know all of the people in the potential acquiring space well before you think about selling. Way before you bring on a banker, you need to really be talking to them. You need to know them. You need to build relationships with them. I think that’s first and foremost, because when that company decides to buy, you need to make sure that you’re in the consideration set. It’s not when you decide to sell that you want to be in the consideration set. It’s when they decide to buy. That’s the first thing that I think people get wrong.

The second thing that I think is really important is, beyond getting to know them in a relationship manner and being part of their orbit, it’s really helpful to find ways of creating partnerships with them—exploring with them. Big companies are always looking to do partnerships with startups. They want to learn from them. There’s like this magic in startups that they don’t have. At the end of the day, companies are a collection of people, and the people in the big company want to be part of the startup magic. So they get excited about these deals.

And putting these deals together is a really great opportunity to get to know them, but also to start stress-testing where there might be acquisition opportunities. Both companies that I sold started with partnership discussions that led to being something more. And both of them were potential acquirers that I had been talking to for years and years.

I mean, ThinkNear—the entire company was around for a year and eight months before we were acquired, and I knew the acquirer for about a year of that. And at Sense360, I knew Medallia maybe four years before, and I had been in continuous conversation. And the point wasn’t that we were trying to sell.

Just like the advice around fundraising is “always be fundraising,” always know who the investors are, always make sure that as a CEO, you’re building that network of investors—it’s the same thing with acquirers. And so as long as you’re building a great company—a valuable company—you get to know the acquirers and you start building partnerships, good things tend to happen. There’s a lot more that we can go into, but as a starting point, I think that’s the basics of the playbook.

Chris Mailander
That’s awesome. So you know who you’re going to sell to at some point in time, you’re developing those relationships, you’re having those conversations early. So you’re mapping out the ecosystem.

When you are developing the company and creating that value, are you intentionally looking at prospective acquirers and figuring out what it is that they don’t do or where they should be in a couple of years from now? Are you skating to where the puck is that you think it should be in two to three years whenever you’re going to seek that exit opportunity? Is that a dimension of it as well—as forecasting where you need to be and creating that value so it’s unique value for those potential acquirers?

Eli Portnoy
I think that’s a dangerous strategy, only because these businesses tend to be very fickle. They change their minds a lot—where they think they want to go, or where their space is. It’s not always clear where they’re going. And as a startup, you just have such a constrained set of resources that I’ve found it to be more helpful to just focus on where do I think I can create the most value? Because remember, the first part of selling a business is you have to actually build something that’s valuable.

So I tend to start from an internal look at the market and say, “What do I want to build? And if I never get acquired, what’s the best business that I can build?”
But what I do—and this is actually a really big part of the playbook, sort of like a subsection of the playbook, but a really important one—is you need to evangelize your view of the world, of where the puck is going, to those acquirers. Because most of the time, especially at senior leadership, they’re trying to formulate their view of where things are going, but they’re constrained by this massive company that they’re running. And so they’ve got all this legacy. Even in their thinking, it’s baggage. And you’re the startup with zero baggage.

You can come up with the ideas. You can say, “AI is going to do this and this,” and you can think through it and come up with a really beautiful hypothesis, and you can start building towards that because it’s going to drive value.
And then what you need to do is, those relationships you’ve built with those acquirers—go talk to them about that. Make sure that they see it. Evangelize that vision for them. Because then, once they have that vision internally, they’re going to start saying, “That’s where the puck is going. That’s where I need to go.” And then they’re going to start a conversation around, “Well, who do we acquire to get there?” And they’re back to you.
So rather than trying to figure out what they’re thinking, I find it better to influence what they’re thinking so it aligns with your view—which is then better aligned with what you think you can do to drive value.

Chris Mailander
Let’s push into an important inflection point or dichotomy that you mentioned early in the playbook, which is that companies are bought, not sold. So talk me through that mindset on the acquirer side, which is that they end up coming to a realization that I need to go buy something, I need to buy this company because it’s adding some sort of unique value to my overall strategy—rather than perhaps the typical mentality, which is I’m going to create a valuable company and then I’m going to go to market, and I’m intentionally going to try to sell it.

Eli Portnoy
Yeah. And I should be very clear that I’m talking about Series A through C startups where a strategic acquirer is buying you because they think that there’s a gap in their product, or there’s a big market opportunity, or there’s a technology that they’re missing. I’m not talking about a PE type of acquisition where they’re basically just buying for the financials. And I’m not talking about Series D, E, F, like public companies, where it’s a whole different set of considerations.

But at the earlier stage, what basically these companies are doing is they’re identifying a gap in the market that they think needs to be filled. And they’re opportunistically saying, “I am going to have a better time going after this part of the market with this company in my sort of purview than if they’re independent.” And that really needs to happen through just a lot of thinking and internal work.

A company has to come to a consensus that this is something that they really, really care about. That’s almost impossible to do in a sale process. Like a typical sale process would be you hire a banker, the banker puts together a deck, you present it to the management team, and the management team then has a little bit of time to ask some questions and do some light diligence, and then they have to put in a bid. That’s never enough time to develop the type of conviction that you need to come up with a strategy.

Almost always, that works if you’re selling something financial or if it’s like a really big thing that you can tack on. But for the stuff that we’re talking about, it’s just not going to work. I’ve almost never seen it happen unless there was already either internal alignment that this was something that they wanted to go do, and it just happens to be that they get super lucky and a banker or a founder comes in and says, “Hey, you should buy us.” And even then, you’re buying promise and potential, and you don’t really want to do that with someone you don’t know.
More often, they develop this whole hypothesis, this whole strategy, and now they’re looking for someone to acquire, and they come and they buy you. That’s something that I think happens way more often. So again, no rule is true 100% of the time. But my sense is that at this stage of the market, companies are bought.

Chris Mailander
Tell me about that conversation and how it unfolds. So you’re going out and identifying people that might be interested in your company, your service you’re offering. You’re starting to develop the conversation. You mentioned that partnerships is a very effective way to develop the relationship with a strategic acquirer, particularly for that earlier-stage company that might be in the Series A to C time span, et cetera.
Give me a sense of that progression and how deep that partnership is. Because sometimes partnership is code for: we’ll talk a bunch, but we won’t do a lot together. Partnerships sometimes is: we will actually be a sales channel for you, for the startup. We will put your services within the bag of our sales team and really get to know each other and see if the market resonates, and our buyer set is willing to acquire your products or services through our channel, et cetera.
So what I’m looking for is what’s the texture of the conversation all the way through to what does partnership mean, and where have you had the greatest success?

Eli Portnoy
Yeah. So partnerships are a super tricky thing as a startup because there’s just a natural misalignment between a big company and a small company. What I want and what they want are almost never the same. And so figuring out how to structure a partnership is actually really hard.
What I like to do is I like to have the conversations because I find that I get to do two things. One is I get to learn a lot about the market, the industry, the way they think—just like they get to learn from me because I’m working on stuff that they’re not.
I also get to know the people, which I think is really interesting. And the people I’ve met through partnerships have gone on to become the biggest cheerleaders for us and have helped in lots of ways beyond the partnership. They go to other companies, they introduce us to people they know, they’ve been great facilitators of stuff for us.
But also it’s a way to evangelize what it is that you are doing to that big company. So even if the conversation goes absolutely nowhere—and you’ve got to be time-boxed and you can’t spend all of your time on it—if you recognize what this partnership is meant to do from that perspective, which is: get to know them, learn and explore if there are opportunities, and evangelize what you’re doing, and you’re allocating an appropriate amount of time for those goals, then it’s incredibly valuable.
And in some cases, those partnership discussions do actually materialize into an actual partnership. But to me, that’s not the reason you have those partnership conversations. It’s the gravy on top of the mashed potatoes.
And I’ve had partnerships—there was one partnership at ThinkNear that represented something like 35% of our revenue. It was massive. And it started the exact same way. It was just conversations that we figured out the incentives were aligned, and it worked.
I’ve had other partnerships where we tried and tried and tried and actually put real effort into it—we got conviction around it—and it went nowhere. We got zero revenue from it.
So I’m very skeptical of partnerships. It’s not why I approach them. I do it for the other reasons, and then I get pleasantly surprised every now and then when they do materialize.
But when they do, they’re amazing.

Chris Mailander
Yeah. And when you had that success, are those the partnerships where money has flown through it? Or is that not as important as that personal relationship? It seems like the personal relationship is extremely important to you and to the success that you had. Is it everybody getting to know each other and saying, “There’s alignment here. And we get it. And we’re the right kind of people to work together to unlock the value associated with it”?
Or do you need to get money to work through that partnership in order to actually get the management buy-in and it’s the greatest litmus test for determining, does this work—somebody willing to pay something for it?

Eli Portnoy
So the ironic thing—the counterintuitive thing—is both times that we were acquired, the partnerships didn’t really play out.
The reason for that is because if the partnership works and all of a sudden there’s enough alignment where you now have this channel partnership and they’re selling you, there’s less incentive to actually make an acquisition happen. It’s where the incentives are misaligned, or where you need deeper integration, or where you can’t get the BD deal done because it just makes more strategic sense for the two companies to be one—where the acquisition actually happens.
And I think that’s what we saw with Medallia as an example. We were working through that partnership. We thought that was an opportunity. The visions aligned really well, but it was very hard to make that happen without actually being part of them. And that’s what spurred it to be a conversation.
So yeah, I don’t think money actually needs to flow. I think it’s the relationship, the alignment, evangelizing where you think the market is going and why they need to see it that way, and then coming to that conclusion and realizing this is where the world is going. Clearly these guys know it, and they’re in a better position to get there than we are. We need to make them be part of the broader organization.

Chris Mailander
How important is timing and what’s going on in the marketplace at any particular point in time? You mentioned in the early part of your remarks that these are illiquid markets. There’s not necessarily a market for them. It’s finding the right opportunity. And a dimension of that is being in the right place at the right time when it makes sense for all the parties to make it happen.
Talk to me a little bit about your experiences and what timing looks like, and what are optimal times to be able to sell and create the right conditions versus when it’s not.

Eli Portnoy
So I actually think timing plays a massive, massive, massive role because a company might think that that strategic synergy is all there and they need to do it, and then it doesn’t even have to be a strategy shift. Someone on the leadership team can leave and all of a sudden it’s derailed. They can have a budget cut. There are so many things that can derail this stuff.
So that’s why a lot of times when founders ask me, “I have this offer—should I take it?” my point to them is: there are obviously so many considerations, you have to think through all of it, but don’t feel like just because you got this one, there’s another one six months away, or a year away. These things are rare, and you need to treat them with the level of respect they deserve because they just don’t come around very often, and they are really finicky.
I know my very first startup, before ThinkNear, I had started a small little tiny thing. I bootstrapped it, and there was a public company where everything aligned and they made an offer to acquire us. And because of hubris and lack of experience, I turned them down thinking, “Okay, I’m just going to grow this a little bit more.”
And no other offer ever came. And that was one of the most painful but important lessons I’ve ever learned, which is: these things don’t happen very often. A lot of stars need to align. And just because I have one doesn’t mean I’m going to have another. And it doesn’t mean I can go back to those people either. I remember trying to go back to them and saying, “Wait, wait, wait—come back,” and them saying, “No, that’s it. We shifted.”
So things change, and I think the market—the broader macro stuff—is definitely a factor. We actually had one deal for one of my companies that fell apart because of COVID. We were working through it, we were at the ROI stage, and then COVID happened and they had to pull it.
So yeah, it absolutely is a massive factor. Things that are fragile can get broken in lots of different ways.

Chris Mailander
Tell me also, since you’re working in this A to C range, talk to me a little bit also about valuations and how that works at this stage of the process. And one of my experiences is typically that entrepreneurs will come in and they use a typical old litmus test of saying, “Hey, we think that we’re worth 10x revenue.”
But if you actually look at a scatter diagram of companies that transact over a period of time in that particular space, in that particular market segment, et cetera, you’ll see that valuation metrics are all over the board, from 2x to 50x and everything in between—which is a product, I believe, of it’s not just about the financial valuation. These are not PE deals where they’re looking at revenue and EBITDA and free cash flow and other kinds of metrics to create a financially validated valuation metric. You’re working with something different here.
Talk to me about your experience in creating valuation, which is not only financial, but strategic value.

Eli Portnoy
Yeah. I mean, it goes back to what we talked about at the very beginning, which is that these are very illiquid markets. If it was a very liquid market, I think you’d be able to look at a couple of metrics and come up with a valuation. But in an illiquid market, it really comes down to how badly do they want you and how badly do you want to be sold? And there’s some intersection of that where you really, really want—if you can get X amount—you’re going to sell, and the company kind of wants you but doesn’t want you that much, and then it’s not going to happen.
And if there’s some meeting ground between the two, it happens. So it’s a lot more art than science, and a lot more understanding the internal dynamics of your company: what are you willing to sell for? What is your board willing to accept? What are the different investors and stakeholders? What is the team like? All of that has to align.
And there is a number at which point you’re either a buyer or you’re a seller. And the same thing is true on the acquirer side.
So if you can really generate that excitement and that vision and evangelize and get to know them and they know they need you, you’re probably going to get a better multiple. If it’s something that they’re kind of leaning into because they’re kind of interested but they don’t know, it’s going to be lower. And then it depends on where you and your company sit.
So yeah, I think looking at “I’m worth this…” is probably not the right way to look at it because it has no bearing on what other companies have sold for, and it’s such an illiquid market where you might have one or two acquirers making an acquisition offer once every couple of years. Who cares?
The question is: is it enough where you become a seller, and have you built enough excitement where the buyer is a buyer, and you can find that middle ground?

Chris Mailander
What’s the dance been, when you have sold these companies, in terms of finding where that optimal zone is? You have lots of constituencies: you have yourself as a founder, you have investors who have come in, you might have others on your board, and then the company itself, the prospective acquirer.
There is a dance that takes place to find out what that number is. And everyone’s always a little bit apprehensive about venturing out a number first because it might be off or deviate significantly from the expectations of others. What has been your experience in these two companies?

Eli Portnoy
That’s a great question. And I think there are two parts to this. So the first is, how do you figure out your number? Because we talked about there being a lot of different stakeholders. And then, how do you find out the buyer’s number and how do you navigate that?
I’m probably better positioned to talk about how to do it internally than I am externally, only because I’ve done it twice. It’s not enough data points to say I’m an expert negotiator. I can tell you exactly how to get the maximum value—although I can share some thoughts.
But internally, I think it really comes down to understanding your different stakeholders, what their motivations are, and having really honest conversations with them. There doesn’t need to be nearly as much of a song and dance because you’re all on the same team and you’re trying to figure out, is there a number at which we get comfortable?
And there are some folks where you need their buy-in and other folks where you want their buy-in. And that’s an important thing to know, too.
So what I’ve done is I’ve been very transparent with the stakeholders along the way. I’ve tried to really bring them in. I’ve given them my opinion. I’ve given them the facts. I’ve tried to bring in as much other data as I could in terms of: okay, if we don’t do this, what does the vision look like? What is this?
And then I try to be transparent about what is my CEO fiduciary take on the situation, and also what are my personal motivations, because we all have them and it’s important to be upfront about them.
And I find that it’s not always easy, and there are definitely cases where there’s misalignment. It could be life-changing money for a founder and be a pretty insignificant event for a venture fund. And so there is a lot to navigate. But I think being open and transparent and communicating is the way to get there.
And ultimately, you can find out: is there a number at which we want to do this or not? And once you do, you’re in a much better position to then go to the second phase, which is trying to figure out, can we get that number, and can we get even more than that number?

Chris Mailander
Right, right. Let’s shift gears just a little bit. I know that you are a proponent of founder-led sales. And I think it’s probably doing several things for you. One of which is obviously the quest for sales, for revenue, being able to prove a concept, being able to then scale the numbers and grow accordingly.
My guess is also that you learn so much about the product and the fit and what the customers are looking for, et cetera. Take me into that journey, because I know that this is really important to your leadership style with these earlier-stage ventures.

Eli Portnoy
Yeah, I mean, sales is like the most incredible thing in the world because it’s very uncomfortable. It’s not natural to a lot of people. It’s definitely not easy. But it’s also an extremely privileged position to be in. You are the tip of the spear. You are the person talking to customers and understanding what is their pain, what is not their pain, what would they pay for, how would they buy it.
And as a founder, I gravitate towards that because it makes me so much better at everything else that I do. If I can’t figure out what customers want—what those prospects want—there’s no way I’m going to be able to then build a company around it that ends up being valuable.
I think a CEO should always be in sales, should always have their hand in sales for the entirety of the journey that that company goes through. But in the beginning, you have to be the lead seller. You have to be the person in every conversation. You have to do the hard work of prospecting and getting tons and tons and tons of rejection, and using every single one of them as an opportunity to understand what is it that resonates, and how should I talk about it, and how do I think about it? And what features actually matter? What features don’t matter? What marketing is going to resonate?
As a CEO, you’re basically the conductor of this whole operation. And how could you be a conductor if you don’t know how to play the music? So you’ve got to be out there.
And the other benefit of it is it lets you figure out how to sell this thing, which then means that you can hire someone who is going to then sell it—which is typically a very different skill set. The founder “let me figure it out” skill set is extremely different from the seller who is really, really good at taking a problem and then solving it through a series of solutions that you have. They’re just two different skill sets. And you’ll never be able to get a great seller to come in and then have to figure everything out. They’re just not going to want to do that. So you have to figure it out for them. And the best way to do that is founder-led sales.

Chris Mailander
What’s been your experience when it is time to scale the sales effort? You need to be able to diversify and create some more capacity on the sales front, so you do need to bring in somebody to help on sales. What are some of the characteristics of that moment when you’re like, “I need to scale this,” and here’s what I’m looking for?

Eli Portnoy
This is the place where I think most startups really, really struggle, including every one of my startups. It’s a very hard transition to get right. It’s a very hard transition for a couple of reasons.
One is, a CEO-founder has some superpowers that they get to bring into those sales conversations that mask a lot of potential issues that a seller doesn’t have. So as a CEO and founder, I can go into a sales meeting and if I hear something is really important to that prospect, I can commit to it and then go back to the team and say, “Let’s go build that and reshuffle our entire priorities to make it work.” A seller can’t do that.
And there are tons of other things that I can do. I can use my title to get into C-level executives. I can lean on my board to help me get introductions. I can do all these things that, by nature of the title—not for any other reason—I can do. A seller can’t.
And sometimes what ends up happening is either I misunderstand the difference in how I’m going to sell versus how they are. And I don’t know who to look for—who can do it in the way that it needs to be done. Or I don’t give them enough space to do it the way they need to do it, and I try to force them to do it my way.
Or I don’t recognize that the reason I was selling isn’t necessarily because we have a product that solves a real need that is ready to be repeatably sold. I just think it can, but it’s really just because I have all these superpowers, and someone without those superpowers isn’t going to be able to do it.
So those are the three primary reasons I’ve seen people have a really hard time with that transition, including myself, by the way. Every single time. It’s a really hard transition to go through.

Chris Mailander
Right, I understand.
So Eli, tell me a little bit about as you go through this journey and the founder-led sales and being very close to the customer and understanding what features are working, what isn’t—you’ve had to execute several pivots, which is not an uncommon journey for a lot of startups and entrepreneurs.
Several things happen with pivots: one of which is that they fade away, or they go well, or it launches them into the next ether and to do something really special. So talk to me a little bit about your journey with pivoting the organization as you learn more about where your service fit and how customers were receiving it.

Eli Portnoy
Yeah, the idea around pivoting is that something about the business isn’t working and you want to find better, greener pastures. And I think that’s a traditional conception of what a pivot is.
In my opinion, I think of pivoting a little bit differently, which is: the idea is a starting point, and my job is to collect as much feedback as I possibly can to iterate the idea until we ultimately find something that’s amazing.
And I think maybe the misconception comes from this notion that entrepreneurs have these light-bulb moments where they’re in the shower and all of a sudden they have this crazy, great idea, and now the next 10 years of their life are dedicated to executing on that idea. And that’s just not been my experience at all. I’ve never had a light-bulb moment.
Instead, I’ve had some really, really bad ideas, and I’ve known they were bad ideas. And my job was then to use them as a starting point, listen as closely as I possibly could, get as much feedback as I possibly could, refine them and refine them and refine them until we actually build something of value.
And because of that, I’ve always been very comfortable with the idea of pivots. I’ve had small iterative pivots—I probably have thousands of them—where we’re pivoting how we talk about it, we pivot our pricing, we pivot.
But then I’ve had some really, really hard ones where I got a lot of feedback, I refined something, I thought I had the right product, went to market for real this time, and then found that I was wrong, but learned a bunch of things along the way, and then shifted.
So I’ve had probably two major, major pivots and thousands of little pivots.

Chris Mailander
It takes a tremendous amount of resilience as an entrepreneur, as a founder, because there’s the rejection on the sales front. There’s the rejection of the features and functionality. There is the need to make a thousand small pivots and a couple of large pivots, et cetera. This is an endurance race, it strikes me, in some ways.

Eli Portnoy
It absolutely is. It really, really is.
The thing that every entrepreneur I’ve ever met—and I share in common—is that we all agree that the journey is this massive roller coaster where you have these ups and these downs, ups and these downs, and every single one of these ups and downs just feels incredibly painful, incredibly emotional, incredibly personal.
So add rejection to the mix, which is also really painful and really personal, and it’s hard. It’s not an easy journey. It’s a little bit rewarding. It’s very fun, but it’s not easy.

Chris Mailander
Yeah. And I imagine there’s been some dark times as well when you go through that.

Eli Portnoy
Yes. Yes, there have. You know, we glorify the exit. We glorify the success stories. We glorify when it all works out. But there’s so many moments of just absolute shit where nothing is working.
You have moments where the product isn’t working and the team isn’t the right team and you’re not being your best self, and you’re missing responsibilities at home, and you’re just miserable. And it’s not a job that you can just walk away from. You’re stuck.
Not only are you stuck, your reputation is on the line. And you’re just waking up, and I just have so many vivid memories of being like, “What did I get myself into?” And that’s okay the first time. But then doing it again the second time, getting in the same place and being like, “Why did I do this to myself?”
Now at this point, you know—third time—it’s kind of crazy.

Chris Mailander
And you’re in the midst of it right now as well, right? You’ve got the newest startup and creating it. So what’s the draw? There’s some reason why you keep going back into this.

Eli Portnoy
Yeah. I ask myself that question a lot. And actually my wife and I talk about it a lot because I am so drawn to it. I love it. I can’t explain it—there is almost nothing outside of spending time with my wife and kids that I would rather do more than building a startup.
And I think there’s something incredibly empowering about the idea that you can conceptualize an idea, you can pull a small team together, and you can execute on it, and you can build something.
My grandfather was an entrepreneur and he spent, I don’t know, 60 years building a business. Fifty years ago, sixty years ago, it took that long to build a business. It was so incremental. It was one customer at a time. It was one widget at a time.
And now because of software and all the technology that we get to take advantage of, and the infrastructure, you can build a great business in a couple of years. And that’s empowering. And I love that.
And by the way, those lows that I talked about—they have a mirror image, which is the highs. And those highs—there’s no adrenaline like landing a customer or figuring out a way to solve an issue. The highs are even higher. And so that’s also really exciting.
But I think, if I’m being very honest with myself, the thing that I love most about startups is that there’s no one to blame but yourself. You are completely empowered as a founder. You can choose the business you build. You can choose the team that you put together. You can choose the changes that you make. Everything is within your control. So there’s no one to point to other than you. And to me, that’s incredibly empowering.
If something is not working and I am in one of those moments where nothing feels like it’s working, I can look internally and say, “It is in my control. I got myself into this. I can get myself out of it. Let’s not wallow in self-pity. Let’s figure out what we’re going to do. What needs to change? I have control to change anything. What am I going to change?”
And to me, that feels a lot better than being in a job where I have a boss who is having a bad day and is shitting all over me, and this other thing isn’t working, and I think I know the right answer, but I don’t have the ability to do it. That to me is much, much less exciting than a startup, even with all those ups and downs.

Chris Mailander
Right. So Eli, you mentioned that your grandfather built a business over a 60-year period of time, and the progress is more incremental, it’s slower, et cetera. It’s difficult and challenging, but it takes time. And then we enter in the technology era and things move much more quickly.
And I think now that AI is mainstreamed and we’re all working on it, including yourself, it feels like to me things are moving even at a greater speed. I mean, we’re moving at light speed in terms of fundamental shifts in the marketplace, trying to understand where you create products and you can create value relative to foundational models and the big companies that are putting hundreds of billions of dollars, trillions of dollars against it.
The biggest concern is how to create enough electricity to power all the compute requirements in this new environment. And yet you have entrepreneurs who are trying to create products and services that add lots of value that may have a lot of value over the next six months or the next six years. But it’s hard to get a pin on it in this environment right now.
I’m interested in your experience around that—what you see happening, how it unfolds, how someone creates value in such a rapidly shifting, misty environment about what the future looks like.

Eli Portnoy
It’s really, really hard. I mean, it’s much harder today than it was five years ago or 10 years ago for my previous two ventures because I just don’t think it’s possible to really anticipate where the puck is heading because that puck is just going so fast. And that’s the downside.
The upside is two things. One is you can create where this goes. It’s not unreasonable to think that you could start a company and actually shape where that goes. And so rather than trying to figure out where it’s going, I try to think to myself, “Where do I want it to go? And how can I help it get there?”
The second thing that I think is really interesting about the world we live in today is: what are my advantages as a startup? Because I have a lot of disadvantages. I’m very self-aware. I look at the big companies—they have a lot more money, they have a lot more people, they have incredible people, they’re able to hire from the best of the best of the best. They have brand, they have reputation, they have all of these things that I don’t have.
I literally have one thing and one thing only going for myself, which is agility. I can be much more agile than them. I don’t have the baggage they do, and so I can move really fast. There’s only one time that that really helps, and that’s when the market is changing a lot. When it’s changing a lot, it’s really easy for me to move with the market. It’s very hard for them.
And so when I think about outcompeting the incumbents, this is exactly the type of dynamic I want in the market: lots of change. And so that’s what I have. And I take a lot of pride in that. I’m excited about it.

Chris Mailander
Do you use other people’s money for your ventures? Do you get angel money or venture money? Or do you do this yourself? Talk me through a little bit about, if you do, what that means in terms of how you make decisions and the obligations and vision and focus, and how you navigate through the tough times.

Eli Portnoy
Yeah. So I do take money for all three ventures. I’ve taken venture money. And in my last one and this one, I put some of my own capital in as well.
The reason I take outside money—the first one I had to. There was no way for me to build that business without doing that. And for the second one and third, I could have self-funded, but I chose not to.
And the reason for that is, first of all, I think it’s actually very helpful to have partners around the table—partners who have real skin in the game, who are really committed to your success. I also think it creates a dynamic where you’re vetting not only your idea, but your strategy and your approach, and you’re accountable. And I think those are important things in business.
Most large privately owned businesses, even though they might be completely privately owned and it might be one family that owns them, they still put together a board. It’s still helpful to have accountability and governance. And I absolutely believe in that.
And I also think it ends up being a good signal. It’s a signal to customers or potential customers, to partners, to team members. And so I think it’s a good thing to raise venture capital.

Chris Mailander
And you’ve experienced a lot of value when you bring them inside your tent—a venture capitalist—they add value, they are useful in your board process. It’s not just about the money, is what I hear you saying.

Eli Portnoy
That’s right. I think everything is nuanced, and venture capital as a class is a big class. There are a lot of different folks and different funds and different philosophies. But on the whole, I have found my investors to be very supportive, very helpful. They bring a lot of pattern-matching.
And again, it depends what your expectations are. If your expectation is that they’re going to teach you how to build a business, they’re not going to do that. If your expectation is that they’re going to come in and in one board meeting once a quarter unlock magic about where the business needs to go, they’re not going to do that.
But if you want a thought partner—board members who know how to ask tough questions and be strategic partners and add governance—you can find venture capitalists who are incredible in that.

Chris Mailander
So Eli, right now you’re working on Back Engine AI, which is focused on gathering all kinds of information from the customer and being able to distribute it throughout teams so that everybody is able to access that information about how a product or a service is working and be able to use it to inform their decisions about how to create the most valuable value possible.
Tell me more about this latest incarnation of a venture and where you’re headed and what your aspirations are for it.

Eli Portnoy
Absolutely. So this has been my favorite company to build. And the reason for that is this is a company that I am building because I am trying to solve a problem that I have personally experienced multiple times.
When I started ThinkNear and Sense360 and we were a tiny little team in our own little garage, we had the superpower that we were all completely informed on exactly what was happening with every single one of our customers. I would sell a customer, I would be the CS manager on that customer. I knew what they liked, what they didn’t like, what they wanted from us, what they didn’t. I had all of this incredible context. And by the way, so did my CTO and so did the other two people on the team.
And as a result, we were able to move really, really quickly to build the experience and the company that we needed to fully satisfy those customers and to be able to find more and more similar customers. And that was a superpower.
But as we started to grow and as we started to add more customers, we had to bring on more team members to help us service those customers. And we had to start building teams, and we started to bring on systems and structure and process. And those were all necessary things to do. But what it did was it created distance between me and my customers. It created distance between my product manager and our customers. It created distance between our CRO and our customers. And that distance was incredibly painful. It meant that we lost that superpower.
It meant that we had all sorts of questions about what they actually wanted and what they were really saying and what we needed to prioritize. It created misalignment internally, created friction, and it meant that we started to slow down.
And to me, not being able to listen to your customers is the absolute worst thing that can happen to an organization. It is rot. And I found that there was no really great solution.
In B2C, you have this concept of voice of the customer, where if you’re at Hilton and you have tens of millions of consumers, you’re going to survey them and you’re going to get that feedback really quickly about what’s going on with each of your hotels—what the cleanliness is like and what’s not—and it’s going to be great.
But in a B2B setting where you literally maybe have 200 customers, you can survey them all you want, but you’re probably going to get a 5% response rate. So you’re talking about a tiny, tiny number of surveys once a quarter, which is not going to help you in any way.
And what we realized was that B2B businesses, even though they might only have 200 or a thousand customers, they’re going to spend a lot of time talking to those customers. They’re going to set up a CSM team and an account management team and a sales team and a support team. And all those people are going to be talking and talking and talking to those customers.
So what we do is we automatically grab all of the things that those customers are saying in those interactions. It’s a super seamless process. We basically plug into email and video calls and support tickets, and we grab all of that. We analyze it using generative AI, and we understand exactly what those customers are saying.
And we flag the things that the different constituents need to see across the company. We make sure that the executive team has a pulse on exactly what’s working, what’s not working, what they need to prioritize, where they potentially have gaps, how the market is shifting. We help the product team understand the product side of things and what features people want and what bugs are there. We help the marketing team identify the detractors and the promoters. We do all of the things that these teams need from the customer data that’s coming in.
And in that way, we make sure that very, very large companies stay close to the customer, and still have that superpower that we had in the early days.

Chris Mailander
Yeah, that’s awesome. And the technology is such now that you can aggregate such dramatically vast amounts of data and be able to consume it and do the pattern recognition and be able to allocate it out through the unique filters for the marketing department or the engineering department, et cetera.
It sounds like a fascinating new venture. So I want to wish you the best of luck in your latest iteration. And I’m sure this playbook is going to be successful one more time. Eli, it’s been a pleasure to talk with you today, and thank you for sharing just a bit of your secret sauce.

Eli Portnoy
Thank you so much, Chris. It’s been a lot of fun. Thanks, Chris.