If At First You Don't Succeed...
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[Tel Aviv, ISRAEL] Don't let failure get you down, even when the money's gone, the Nasdaq is plummeting and you have to fire everyone, said speakers at Wednesday's "Learning From Failure" conference at Tel Aviv University. Just get back on the horse.
"Even though the title of this is 'learning from failure,' this doesn't imply that it is necessary to fail before you succeed, but that it is possible to succeed after you fail," said conference moderator Ed Mlavsky, chairman and founder of Gemini Israel Fund. The conference was organized by the local chapter of the MIT Enterprise Forum.
The most striking illustration of this was leadoff speaker Bob Rosenschein, founder of Atomica (formerly GuruNet) who spoke candidly about the rise and fall of his first company, multilingual software company Accent.
"I had no gray hair when I first went into business," said Rosenschein, who graduated from MIT in the late 1970s and moved to Israel in 1983. After being present at a Microsoft demonstration of Windows in 1984, he became Israel's first Windows developer, unveiling the first Hebrew word processor for English windows, Dagesh.
By 1996, after an initial public offering on Nasdaq, Accent, which branched out from Hebrew to multilingual word processing, had 155 employees and the stock price was shooting skywards.
However, despite much media hype, a Prime Minister's Award and a request from Microsoft to help with support for Hebrew and Arabic, Accent's business model failed.
"It seemed so exciting, but what was wrong with the picture?" said Rosenschein. This was the time Netscape was released - for free.
"We were selling software in an Internet age. It didn't work," he said.
The end came in 1998. The boxes weren't moving off the shelves, a planned secondary public offering was canceled and the stock price began to sink. The Israel office doors were permanently closed in November 1998.
"It was a bloodbath, carnage. It is hard for me to talk about it. It was very painful," said Rosenschein.
However, he emerged to establish a second startup, Atomica, which, thanks to (free) advice from Mirabilis/ICQ founder Yossi Vardi, put a new spin on one of Accent's technologies.
In June 2000, Atomica completed a $28.5 million round of financing. The company has hired 45 people in the last six months and is "still growing, carefully," said Rosenschein.
"The conclusion is very simple," he said. "Embrace change. Business is tough but you have to be optimistic. Don't make old mistakes, make new ones."
David Teten, an American in his late 20's with an MBA from Harvard Business School, learned different lessons.
His startup, GoldNames, an "investment bank" for trading domain names, rose and fell in the space of nine months but is still operating with 1 1/2 employees. Five startups have been formed by former GoldNames staffers, Teten told the conference.
"We had 34 angel investors," he said. "The problem with angels is that they were 'spray and pray' investors.'" Had GoldNames raised the $2.25 million from "one or two committed investors who really cared, they would have paid more attention to us."
Teten also had a few words to say about the hiring process. Apart from his intention to be less impressed by glowing resumes and to check references more carefully, Teten has decided that next time, he will "pay people with the future an