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Adam Carte: the Crossover CEO

Some would call Adam Carte’s career path unusual. After spending the first 10 years in the energy industry, Carte crossed over into manufacturing. That was followed by a foray into mining and then, most recently, a segue into the world of AI technology.

That zigzagging route could suggest a tendency toward professional wanderlust. But Carte says it isn’t the lure of new industries that draws him, but the irresistible pull of a new challenge. “From the time I was a young boy, that’s just been part of my personality,” he says. “I also have a hard time saying no when people ask me to do things.” He identifies with an answer that the actor Christopher Walken gave in an interview when asked if he had anticipated the arc of his career. “He said that his only problem is that he’s always had a hard time saying no,” recalls Carte. “That really resonated with me.”

Carte couldn’t refuse the opportunity to grow Luminoso, an AI-based text analytics software company that helps companies quickly analyze and act on customer feedback. The biggest challenge, he says, will be “keeping all of our team-members in sync as we shift from a science/tech-focused start-up to a customer-driven organization.” That will necessitate hiring for new skills “while preserving the chemistry that built the technology that powers everything we sell.”

That transition is a tough one, as dozens of CEOs of now defunct software startups can attest. But Carte is no stranger to challenges: as COO of Niotan, he increased revenues by 30% and led the sale of the company to a strategic buyer, and as CEO of Cadre Proppants, he doubled EBITDA and sold the company for a cool $100 million. And while he hasn’t been in this exact spot before, he has a great deal of applicable experience to draw on because, as he points out in the following interview, the most important CEO skills absolutely cross industry lines. 

What lessons from your early days in energy still inform your leadership?

So I spent the first 10 years of my life in the rapidly changing, deregulating power industry. During that time, we took a very small company to an IPO with about a $2 billion valuation. Then, of course, Enron happened and we went bankrupt. So living through that, I saw how there are things that you can’t control—things in the market that just are going to happen—but there are a lot of things inside an organization that you can control. For me, it’s about going in and doing everything you can to minimize the unforced errors because business is hard enough without shooting oneself in the foot. So I’ve always enjoyed getting into organizations and helping to minimize that risk, those unforced errors, so that you can maximize your chances against those things that you can’t control.

What are some of the specific leadership or management skills that cross over from, say, a mining company to a technology company?

It comes down to people at the beginning, right? Sitting in the CEO seat, you end up spending 80% of your time on HR-related issues, one way or another, so it’s finding the right people—and I think too often people think about it as getting “just the right person,” as if there’s all sorts of bad people out there. I mean, obviously there are people who are more qualified than others, but often it’s just getting the right person at the right time with the right perspective.

At Luminoso, we knew we had this fantastic technology, but we needed it to be easier to use. We needed to have a product that you didn’t have to be a programmer, an expert or a data scientist to use. So bringing in Ying Chen [as chief product and marketing officer] who had that background and that energy has been a transformative event for us.

At the mining company, they had a team that was very technical and focused on the engineering side, which of course one needs, but had lost track of what the customers were saying to them. So when I came in, there was actually an existing executive there that I was able to promote into a position of larger leadership and running the sales organization and that allowed us to hear from customers, and we introduced a new product line. I think we grew revenues from $32 million to $45 million in about 12 months.

What other early lessons do you live by today?

One needs to recognize the difference between what one wants to happen and what is actually happening. I’m a very data driven person—probably to a fault—so I want to know what’s actually happening, even if we all agree that we really want other, different things to happen. One of the challenges of being in the CEO spot is that so much of the information I get is second hand. I  try to overcome that by getting out and talking to customers—I actually just got back from Japan where I met with some of our important customers there—but still, the CEO gets a lot of information second hand. So I don’t care if it’s software or it’s mining or power or whatever industry, having somebody who I trust, who is capable of separating objectively what is from what one wants and can relay that accurately to me so we can make decisions based on that—that is super helpful.

Does that mean no messengers are shot on your watch?

No, no. I like them. I mean, I don’t like bad news—but I feel more confident when I’m hearing things that are even spun sometimes a bit pessimistically because I’d rather know the downside risks than be surprised.

In what ways has your finance background prepared you for the CEO role?

Well, look, everything ultimately comes down to making money for shareholders, right? I mean, that’s what we’re in business for. My finance background helps me because I can speak the language to the board and to the investors and translate the messiness of company operations into language that instills confidence with investors that the decision-making is right and that everybody is aligned with one another. But I think any CEO, whether they come from finance or marketing or legal or sales or wherever, has to have enough crossover skills to understand the whole business.

What attracted you to Luminoso?

Before Luminoso, I had spent some time as CEO of an AI-driven machine vision technology startup called Nirenberg Neuroscience, so one of the things that attracted me to Luminoso was the similarity to that. This is the next evolution of artificial intelligence, where you’re getting away from tagging and training millions of data points to come up with static solutions that don’t generalize. That’s a great tool—but what we really need is these generalizable solutions. So Luminoso has technology that, because it has this very rich background space, it can solve questions generalizably so that anybody can use it, and your model is not going to break if you move from one use case to another or one industry to another.

What is your process for learning a new industry?

There are things about any business that are transferrable and there are things that aren’t. The things that aren’t are [things like] how do decisions get made? How do contracts get negotiated in that particular ecosystem? What is the perspective of that industry’s risk and reward and so forth. So any time that I get involved in a new industry, the beginning stages are about spending a lot of time outside of the company talking to customers, talking to suppliers, talking to bankers that support that industry to just learn.

How much time would you say you spend on that initial phase of getting up to speed?

It never entirely stops, but there’s the first three months or so of really intensive talking to everybody. Everybody has their own perspective and it’s not like anybody’s wrong or lying to you, but you need to get multiple vantage points in order to really synthesize and get an understanding. So it takes at least three months to really get up to speed and then you just have to keep asking questions going forward.

You’ve taken the last few companies you’ve headed through to a sale. Is that the goal with Luminoso ultimately?

That’s the most common exit you see, but I think that it really depends on what your investor’s risk profile is. My job is to create as much value as I can inside the company so that we have as many options as possible. At my very first company—and I wasn’t CEO of that—we went public before we went bankrupt. So I have the experience of taking a company public, I know what’s involved with that. That’s certainly not off the table in any situation and I think any investor group would see that as a potential win. But in the real world, most companies exit through acquisition. I don’t focus on a particular exit, but on creating value and optionality. The more valuable you are, the more options you have. One of the things that’s so attractive about Luminoso is that it’s unlike a mining company where there’s a ceiling to how big it can grow—there’s only so much you’re going to get out of any given mine so you would have to go and acquire other mines. There’s no limit to what we can do at Luminoso. We have a technology that nobody else has. And once you hit that stride of repeatable sales, we can have our revenues double or triple very, very quickly.

Hypothetical question, since you’re still right in the middle of this challenge, but assuming you achieve the perfect exit, are there any other industries you’ve secretly been wanting to try your hand at?

I think I’ll fall back on the Christopher Walken quote. It’s more about what’s exciting and I’m probably gonna have a hard time saying no to something that looks interesting. It’s hard for me to think beyond what I’m immersed in now, though. I get very in depth into what I’m doing and it becomes literally what I’m living and breathing day and night. But I’m reasonably confident that whatever comes next will be fun.


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