The Christian Science Monitor, a U.S.-based international news publication, recently profiled Endeavor CEO Linda Rottenberg and the story of Endeavor, spotlighting the organization’s journey and its rapidly growing global impact. In particular, the article calls […]
As Endeavor seeks board members for our first U.S.-based affiliate office in Miami, Endeavor’s profile rose this week with a visit by President Fernando Fabre and a Miami Herald radio interview with co-founder, Peter Kellner. […]
Ashay Shah is an MBA student at INSEAD and is spending his summer as an eMBA working with Pozitron in Istanbul, Turkey.
I just completed two weeks at Pozitron, a mobile software company in Turkey. The INSEAD summer break only begins in the first week of July, so we have a bit of a late start compared to the US schools. Landed here smack in the middle of the hottest week of the summer, but the beautiful Bosphorus and the veritable buzz of this city makes you forget all about the heat.
The Endeavor Entrepreneurs, Fatih and Firat Isbecer, have been incredibly helpful and their generosity and attention towards all the company’s employees have clearly been a crucial factor in Pozitron’s successful journey so far. In many ways, my project here (to help find strategic and financial partnerships) has become much easier because of the company’s reputation!
Meanwhile, one of the most enlightening experiences for me has been learning about the Turks and their culture. Istanbul is geographically where the East meets the West, but what is more interesting is that it is culturally so as well. Doing business here requires a keen sense of local manners. And much the same as in India, every meeting here entails sipping 1-2 cups of tea or coffee (as it would be impolite to refuse), which means you are quite wired by the time you are done in the evening!
Overall, my experience so far has certainly exceeded (already high) expectations, and I hope it continues to do so. Skimming through other eMBA blog entries, clearly this is not a unique feeling.
At last month’s Endeavor Entrepreneur Summit in San Francisco, Scott McNealy, Co-Founder and former CEO of Sun Microsystems shared his entrepreneurial wisdom in the welcome keynote. In addition to telling the story of the company’s beginning and reflecting on lessons learned since, he also talked about his newest venture, a non-profit called Curriki.org. Curriki is the leading K-12 global online community for teachers, students and parents to create, share, and find open learning resources that improve teacher effectiveness and student outcomes. The site, which is summarized in this PowerPoint and PDF, is also highlighted in two case studies (case 1 / case 2).
You can watch McNealy’s speech or read the transcript below:
Sun Microsystems’ Beginnings
I asked everyone at Endeavor what everybody wants to hear, and everyone said how we got started. I’m not sure that’s a terribly great story. It was four 27 year olds back in the olden days. We got to follow in the footsteps of Steve Jobs who was the first inexperienced, semi-ignorant, young, non-credentialed CEO to go found a company and really lay the groundwork. So when there were four 27 year olds who in 1982 went to get VC money, nobody batted an eye, even though I had three years business experience which was more than the other three founders combined. And we raised $4.5 million the first year. We started on February 24, we were profitable in May, we did $8.5 million in our first year, $39 million the second, $115 million the third, $250 million the next year, then it went to $510 million, and then $1 billion dollars, so that was kind of our growth ramp—I might have a couple dollars off.
Now how did it all happen? It was a Stanford and Berkeley University startup. Andy Bechtolsheim had invented the Stanford University Network Workstation under a grant while a PhD student at Stanford, and so it was the SUN network, so that’s how we got our name, on the Stanford University Workstation. And Andy was looking to get people to build his computer, his desktop workstation, but they weren’t really doing a good job; he was licensing it out to different people. And Vinod Khosla, my classmate from Stanford Business School, who I got to know mainly because he always seemed to be the last guy at every business school party–he found Andy and said to me, quit your job, let’s go start this company. And then we went to Berkeley and found the top software engineer for Unix from Berkeley named Bill Joy and the four of us started this. It was a nice combination of hardware, and software, and business school, somebody who had done it before and somebody who was inexperienced when we got started (that’s a joke). And the good thing about it is we didn’t know any better. Ignorance is bliss. That’s an important thing to remember. If you actually knew how hard it is you probably wouldn’t do it, so don’t worry about that.
Have a Controversial Strategy
I’d like to give you some suggestions, some quick ideas and thoughts to think about. Linda Rottenberg [Endeavor Co-founder and CEO] touched on the one I think is the most important and that’s the crazy thing. I’ve said for many, many years, you have to have a controversial strategy. It must be controversial. In fact, the more controversial, the better chance you have of making a lot of money. If everybody thinks what you’re doing is the right thing to do, everybody’s going to do it. Everybody does it, there’s no differentiation. If there’s no differentiation, there’s no pricing power. No pricing power, you’re not going to get a profit. No profit and you’re not going to be able to hire anybody, and you’re not going to make any money. It’s like walking into an interview and they say, “Why should we hire you?” And you say, “I breathe.” Fogging a mirror is not going to differentiate you at all. [hide-this-part morelink="Click here to show the rest"]
The real hard part about a controversial strategy is that it’s actually pretty easy to come up with a controversial strategy, but it has to be correct. Because a controversial strategy that is wrong, is just plain stupid! So, I can’t help you with that one, but don’t be alarmed if it’s controversial.
And our controversial strategy was to share. We used open interfaces, open technologies, open components, and really were able to, as we called it, build a Ferrari out of spare parts. It got us to market quickly, we had the whole world doing R&D for and with us…and against us, but it was a better strategy than trying to beat IBM, with their own mainframe technology which wasn’t possible.
Be Quotable, Be Memorable
The next point I would share with you besides being controversial is you’ve got to pick one of two strategies, and my suggestion is to be quotable. And to be loud and noisy and pick a fight. We always tried to pick a fight with the number one and number two company and say we were number three. And then we would make lots of noise.
And we used the media. And I would explain to the media, “Hey, I’m going to give you lots of good quotes; treat me right and I’ll bring you more.” And we had a little deal. And I said just make sure we’re on the front page, spell our names correctly, and I’ll give you lots of outrageous quotes. Because we couldn’t afford advertising. So people think I don’t like Bill Gates, but it was theater, really, truly. [Microsoft CEO Steve] Ballmer and I went to school together, as did Gates and I. It was all theater, and you know quotes are how you get remembered and why I’m up here today.
People remember me for a quote a long time ago: “the network is the computer.” By the way, people are still figuring that out. I would encourage you to think about that because that should be part of your new entrepreneurial strategy. They call it “cloud” computing. Why didn’t I think of cloud in the 1980s? But, that is a big one.
Another one that is all the rage is a statement I made quite a while ago, which is: “You have no privacy; get over it.” And my Chief Privacy Officer just went crazy on me, because she thought it was the worst thing I could possibly say, but it’s obviously true. You have no privacy.
And interestingly enough, most of the new startups here in the Valley are all about invading your privacy. Figuring out how to profile you even more precisely than even you know. So using the cloud to invade your privacy tends to be the number one venture startup, other than using Obama’s stimulus money to do something green, which tends to be the other way people get things started.
Use Other People’s Money
If you’re going to go start a company and it’s your first one and your net worth isn’t really terribly high, my suggestion is use somebody else’s money. There’s a bunch of folks who are going to get up on this stage; use theirs. Practice starting up companies on somebody else’s money. Once you get good at it and you’ve won a couple of times and you have your own money, then you might want to use your own. But there’s no reason not to use someone else’s money. I know it’s harder in other geographies, but you know what? The VCs from the US are starting to go out in other places because there are some more friendly economic environments than the US to invest money. And as your economies develop and people are saving a bit more money, there will be a better opportunity. And it doesn’t necessarily hurt to give away some of your company now to get that capital in, because money does help you fight that battle.
Your Business Plan is Never Static
Another piece of advice is everybody has a mission. If you’ve gone to business school, you learn gotta have a mission, gotta have a vision, gotta have strategies, gotta have objectives, and tactics. And you write this all up and it’s called a business plan. And that’s a necessary component of what you’re doing. Now the problem is, you shouldn’t do it in hardcopy; you should do it online because it’s going to change. And I tell everybody who comes into any startup that I’m involved in, things are going to change above, below, and around you faster than any other place you’ve ever been. And be prepared for that, and to accept change. You know, I don’t think that Apple knew that word processing was going to be their number one market, I don’t think IBM realized that Lotus 123 would be the reason people bought their computer at the start, I don’t think that eBay knew that Beanie Babies was going to be the thing that happened, and I don’t think that Google got started knowing that Page Rank search, selling words to the highest bidder every day was going to be their business model. So you gotta be prepared to get lucky, to be opportunistic, and have that plan.
The Importance of “Why?”
But once you get rolling, and you settle in on what you’re going to be doing and as you’re growing, hopefully you’ll get to the point where you need to think a little about having a cause. And we didn’t really. We weren’t very explicit about our cause at Sun Microsystems for quite a while although everybody sort of knew what it was, and that was we wanted to get everyone connected to the network while doing no harm to the planet. So, that was our cause and we actually articulated it in kind of the second half of our existence. But a lot of people liked that; it was sharing, getting people connected, and being much more eco in terms of the amount of energy we used to go deliver our computing power.
So very powerful in the sense that that made a lot of people want to buy from us, sell to us, work with us, and work for us, and stay with us. People have basic needs—food, shelter, water, all those sorts of things—but they also have a higher-order bit. Some psychic income as I call it, and there’s nothing wrong with stating what that higher order cause is for your organization.
I kind of cornered Linda Rottenberg in the speakers’ room, and I said, “Why do you do this?” I didn’t want to know what she was doing, I said, “Why are you doing this?”Cause I wanted to know what here cause was, what her reason was. And she had a very powerful one. She said she wanted to share the ideas of entrepreneurship—which have been so strong here in the US—with all these other countries and cultures around the world. So she has a very strong cause. And you can see that in the passion and the energy she has in leading this organization. You need to have the same passion and energy wrapped around a cause that Linda has for Endeavor, or people won’t want to follow you, people won’t want to affiliate with you.
Picking the Right Board of Directors
The next thing I would share with you is if you’re going to use somebody else’s money, you’re going to have to have a board of directors, because they’re going to want to have oversight, they’re going to want to have governance. And you will hate that word “governance.” It’s like the worst babysitter you had growing up. So, you have an opportunity most of the time, you know the big money folks are going to put their own people in there, but when you have a chance to put somebody on your board of directors, choose wisely. Companies do fail because of weak boards. And almost always, a weak board is a contributor to the failure of a company.
So, do not underestimate how important it is to have somebody who has hopefully been there. And that means they have been in the piñata. And if you’re the CEO, you understand you’re in a piñata. You can’t see anything and people from random directions are taking 2x4s and hitting you, and as soon as you protect yourself from that flank, somebody’s hitting you from another blind side. And life in the piñata means you need people on the board who understand that, who have been there, and when you stumble they don’t walk in and say you, “Bozo, what is wrong with you?” Because anybody who’s been a CEO has made a ton of mistakes, way more mistakes than anybody else. You know what the problem is with being a CEO? They solve the easy problems down below, and they only bring you the unsolvable problems. That’s the worst part about being a CEO’ you never get to fix anything because they only bring you the unfixables. Do you want to lose your left arm or your right leg? By the time it gets to you, those are the choices you have.
I can remember many times going home to my wife Susan and saying, I didn’t do anything good today. And that’s the way you feel. You need a board who understands that, who can support you, who helps attenuate rather than amplify the bad news, and lets you enjoy the good news. Because you know what, you don’t have any peers in your company and really the board is as close as you’re going to get. And if they haven’t been in the saddle, if they’ve just been a VC their whole life, for instance, or if they’re a banker, or if they’re a politician or a lawyer, or some other thing, they don’t know. It’s a different job. I remember getting a job was a big change, and then I remember becoming a manager was a big change, and then becoming a second-level manager where I managed managers was a big change, and then I became CEO. And that was like going light-speed, you know that was a Star Wars moment where you went *poof* and the whole world just changed. And so try to build a board that has former CEOs on it. Not current. Current CEOs are too busy [ducking blows] so you want to try and get some former CEOs.
Make/Buy and Share/Protect Decisions
Some of the biggest decisions you will make when you get started are make/buy and share/protect. And make/buy I think everybody understands: What do I make versus what do I buy? And that’s a huge question. That is the most strategic decision you will make. And everybody wants to know, what should I make versus what should I buy?
Well it’s very simple. If you know who your customer base is bring ‘em in and listen to the questions they ask. And that will tell you who you need to hire. You need to hire people who can answer the questions they ask. If they come in and say, you know, what do you put in your hamburgers, then you’re probably a restaurant and you ought to hire a chef. But if they don’t ask that question, you probably ought to outsource the lunch room and buy your burgers. I’m trying to give you a simple answer, but it’s very very simple. If you talk to your customers, listen to the questions they ask, that will be the clues as to who you need to hire. Everybody else, you ought to outsource. As much of the rest of it as you can. Why? Because your business is going to change above, below, and around you, and your direction is going to change so fast it’ll to make your head spin. The worst thing we ever did at Sun was sign leases longer than two years. We could have saved Sun billions of dollars if we had always bought on the spot market for facilities. So buy on the spot market wherever you can. Going long, you’ll guess wrong—hey, that’s good. Going long, you’re going to guess wrong. I’m a poet.
And the other decision you have to make strategically, is what do you share versus what do you protect from an intellectual property perspective. We had a different strategy, Steve’s [Jobs] was more successful. But Steve didn’t go out and be quotable, Steve Jobs understands the power of the secret. And that’s another way to go, but I don’t recommend that because none of you are big enough to be a secret. Apple can afford the power of a secret. And it’s very, very powerful. Apple’s also big and strong enough that they can afford the power of proprietary technology. So any of you who use Apple stuff, will know it doesn’t work with anything else. It’s very closed: you have to buy an iPod, you have to buy an iPad, and iTouch, you have to buy the Mac, and then you have to use MobileMe. You’re stuck. He’s the new Microsoft…just with better graphics. Just as many bugs, just as much administration, but it looks prettier.
So Steve has chosen to not share anything and go proprietary. You might not be able to do that. You might need more community support, more people helping to innovate and integrate to whatever technologies you have. But that’s a big strategic decision. Sun made the decision to share a lot of our intellectual property and our APIs, and in the later stages I think we overshared and we got bought. And then Larry Ellison shut down all that sharing stuff. You know you can’t win the Americas Cup boat race by sharing.
Never Give Up on a Sale
So, another suggestion: never give up on a sale. Never assume you’ve lost a deal. I always say, a deal’s never lost, it’s only postponed. And you just have to have that attitude. Selling is very easy. For those of you who went to business school, I can teach selling in about two minutes. You walk in and say to the customer, here’s my product, can I have the order? They’ll say no. You say why, they’ll explain it. You go away and fix it. You come back and say, I fixed it, can I have the order? They’ll say no, you say why? You get the point. After about 15 times they’ll say, OK, here’s the order – get out of my face.
Just remember that. No is a key to yet another feature for your product or service. That’s all it is. Too many people think no means get out of my face. No. Just “why?” is a very powerful question. You say, I’ll be back. You don’t even ask, you just say I’ll be back. Don’t bother ‘em and try to oversell. Just go back and fix their problem. Don’t argue with them. Go back and fix it. Even if you don’t do anything different, come back with a different pitch. But so many people want to go argue, and that’s just not the right way to do it, just keep going back.
I’ll never forget, when we were starting we had Sun workstations and there were four major software CAD (computer assisted design) applications that ran and Apollo was the other startup that we were competing against. The three big ones had moved over to Apollo and none were running on the Sun workstation, but Computervision was the biggest of all; it had 40-50% market share maybe even more and so we had to win the computer vision deal or we were out of business—this was two years into it. And we went and we sold like crazy, and we were doing everything that we could. And all of a sudden, Vinod Khosla was our CEO at the time. He got a phone call, I was in his office I remember, it was about two in the afternoon, closing time in Boston and Computervision called up—the purchasing guy—and said we are formally advising you we have chosen your competitor and we are commencing negotiations to close the contract and we are formally shutting down all conversation with Sun Microsystems, thank you very much. And Vinod went pale. And if you’ve met Vinod that’s hard to do. And he hung up the phone and I said what’s wrong? And he said CV just told us we lost. And I went pale, and I said what do we do now? And I’ll give Vinod an enormous amount of credit, he said, let’s launch a proposal that they can’t refuse.
So we put all of our technology in escrow, we offered free manufacturing rights, we offered super aggressive pricing, we invented a product we didn’t have and wrote the spec down and at 5pm, three hours later, we FedExed to the 12 people we knew this new proposal and then Vinod and two of our engineers got on a redeye and showed up in Computervision Boston headquarters the next morning and started calling people and saying will you come talk to us? Did you see our proposal? Nobody would come near us. We were radioactive. So finally, about 11 o’clock in the morning, one of the engineering VPs came down into the lobby and said listen, your proposal is interesting, but go away. You can’t be seen here, just go away and stay tuned. Sure enough, Apollo got real arrogant in their negotiations. Thursday we got a phone call and they said meet us in Chicago with a word processer and a printer and a lawyer and we’ll do a deal. We got there Friday, worked through Saturday, announced the deal on Monday, and blew away Apollo.
That’s just a story of don’t take no for an answer, but don’t argue. Just give them something better.
Some Personal Advice
Now I’m going to give you a personal suggestion, go start your company before you get encumbered financially and with kids, because you’re going to work a bazillion hours. Next suggestion, the most important strategic decision you make in your business career—this might surprise you—is who you choose to have babies with. I chose very well, I got lucky. I waited til I was 39 and through most of the entrepreneurial phase of my life. But I guarantee you, whoever you have children with, is going to be a big part of your life and if you pick the right person it will make you a better leader, a more focused leader, and a leader who can spend more time on your business without feeling bad about leaving your kids home alone. So, very, very important.
And I will tell you that very few people interview and check references on who they marry as much as they will the VP of Finance. Think about it. Go meet the parents. Go meet the siblings. Go meet the crazy uncles. Meet everybody. Genetics matter. They are in there and if they aren’t there in your wife, they’ll show up in your kids. So check it out. And, by the way, if they were formerly married, you have to interview the ex. Would you ever hire somebody who got fired from a previous company without talking to somebody from the previous company? And we don’t do it!
I’m over time now, so have fun, make it fun. We always have a saying—kick butt—which win and have fun. You’re the leader, make it ok to have fun. Have fun, let them have fun, because they’re all gonna work a million hours. The next suggestion, lean Mandarin.
Scott’s Non-Profit, Curriki.org
Finally, I want to share with you one other thing that’s near and dear to me. I started a dot org, a non-profit, sort of like Endeavor, only tackling a different problem and that’s education, and a piece of education. And it’s called curriki.org. It’s a K-12 educational website that is hosting nearly 50,000 learning assets that are free and open source, in multiple languages around the world. What I would like you all to do is evangelize in your home country, your home school districts, any teachers, parents, or students that you know. And get people to donate to the website, use the website, share. We spend $15 billion a year in the U.S. every year once a year annually on curriculum and you know what, 10 plus 10 was,vis, and will be 20, for a long time. And we spend $130 on a third grade math text book when the one I learned on worked just fine. And I think we can change the world and improve everybody’s lot with free, open-source, self-paced, on-demand, real-time scored, multi-media, web-enabled curricula, as opposed to stupid textbooks. So please check it out. If you get really, really successful and go public, donate and make it happen.
Anyhow, thank you all good luck. Have fun. Go for it. There is no risk if you’re using their money. Thank you everybody. [/hide-this-part]
Endeavor Global Board member and Endeavor Investor Network member Michael Ahearn announced on July 18 the launch of his new $300 million greentech venture capital company, True North Venture Partners. In the release, True North said it would focus on early-stage firms in the energy, water, agriculture, and waste sectors, with investments in the $100,000 to $25 million range.
Michael is also the Chairman of the Board of First Solar, which he co-founded and where he served as CEO from 2000 to 2009. During his tenure, he grew the company from start-up to a solar industry leading S&P 500 company.
In addition to his role on Endeavor’s Board and as a member of the Investor Network, Michael is very involved mentoring Endeavor Entrepreneurs and was recently recognized as one of the top mentors in the global network.
Endeavor is pleased to make public the following video and summary of a presentation at the 2011 Endeavor Entrepreneur Summit in San Francisco. The event, which assembled over 450 entrepreneurs and global business leaders, featured dozens of entrepreneurship-related presentations by top CEOs and industry experts.
Bio: Mr. Welch is an engineer at IBM’s Almaden Research Center and corporate strategy expert with over twenty years of experience.
Summary of presentation:
In mid-February of this year, NBC broke its ratings record as millions of American viewers tuned in to a see a game of Jeopardy! The impressive turnout wasn’t due to a collective bout of nostalgia, but interest in a particular unique contestant. Watson, a super-computer engineered by a team of 24 researchers at IBM, made history as the first non-human contestant to compete on the game show and beat the defending champion, effectively earning a one million dollar prize and awakening the world to a new brand of artificial intelligence.
Steve Welch, a Distinguished Engineer and Manager of Health Informatics for IBM and a member of the team that worked on Watson, spoke at the Endeavor Summit this summer about the engineering behind Watson’s development and the implications of this innovative technology for the world.
The biggest hurdle in developing Watson, Welch said, was getting a computer to understand natural human language. Unlike computer code, equations, or the key search terms we usually use to ‘talk’ with our computers, human language is nuanced, ambiguous and contextual. Years of experience and cognitive processes go into any form of verbal human communication, making it virtually impossible for a computer to decode. The breakthrough came in the form of a new paradigm that was created by an IBM summer student. His system reconfigured the way computers process language and provided IBM with the framework that would eventually define the super-computer’s consciousness.
Watson’s ‘brain’ is composed of seven banks of processors and 2,800 cores. The team of engineers and researchers behind his development spent years inputting thousands of pages of data into Watson’s knowledge base that could be called upon when answering questions on Jeopardy (Watson was not connected to the Internet during the game). Unlike traditional search engines, Watson weighs supporting evidence for a number of different answers before producing a response. When he reports his answer, he can also provide the evidence that led him to it and his level of confidence in the findings. Just like a real human, Watson learns to trust different sources of information based on past experience.
Watson’s development marks not only an innovative leap for technology, but also for art. IBM went to great lengths to develop Watson’s humanity, bringing in a voice actor to record thousands of lines and sounds as the basis of Watson’s ‘voice,’ and hiring a generative artist to design Watson’s face. The image he created is a swarming globe that has 27 different states to illustrate Watson’s various moods – when he is very confident in is answer, the globe will swarm towards the top of the screen and glow green.
A member of the audience asked Welch where Watson was now: has he retired on his earnings to a life of leisure? Of course not. For now, Watson is an IBM employee working in healthcare and finance, two industries where there is an influx of information to be processed and analyzed. In the future, IBM hopes to develop practical applications for the Watson technology that will create benefits in many different facets of society.
The following profile of Endeavor Entrepreneur Yossi Hasson is reprinted with permission from TechCentral (original article here). Yossi cofounded Synaq, one of South Africa’s leaders in hosted email and internet security services, with fellow Endeavor Entrepreneur David Jacobson.
Yossi Hasson, MD of open-source software specialist Synaq, is tall, dark, handsome and gifted. Which means my first instinct is to dislike him. However, Hasson proves to be as friendly as he is talented when I meet with him on a cold weekday afternoon in a Sandton coffee shop.
“From a very young age I knew I wanted to be an entrepreneur or a business owner,” Hasson says when I ask how he got started in the technology industry. “I thought that was the best thing you could do — never mind being a doctor or a firemen or anything else.”
Hasson says he taught himself how to sell stuff when he was young. His father was self-employed, and Hasson saw entrepreneurship as the best way “to control my destiny and make money.”
When he was 11, Hasson started washing cars for money and doing other odd jobs. From there, he roped in his sister and her friends to make key rings for sale in Plettenberg Bay during school holidays. By 15, he was selling medical sports equipment to schools.
“I got my first computer when I was 14, a red Stallion XT. I fell in love with computers and the tech world and the infinite possibilities they presented. I took the machine apart the day I got it, and couldn’t put it back together, but eventually I learnt how to. I got entrenched in technology from there.”
In his matric year in 2000, Hasson launched a social network for matriculants to post pictures and message one another. At its peak, Matric 2000 had almost 3 000 users. Hasson says that was the turning point for him and he decided that, rather than study, he wanted to get involved in the business world immediately.
Hasson’s business partner, David Jacobson, was a hacker who managed to get his computer confiscated by the police when he was 17, and found himself banned from being online for a year. “I saw him as a guy I needed to get involved with because I wanted the best people. We started chatting after school, but at first nothing came of it.”[hide-this-part morelink="Click here to show the rest"]
After finishing matric, Hasson started a business importing second-hand cellphone parts. After two-and-a-half years he sold the company and became a fundraiser for Habonim Dror, a Jewish community charity organisation, for a year.
“I was still involved in programming, website design and that sort of thing, and I was obsessed with Linux and open-source software,” says Hasson. When Jacobson returned from an extended stay in London in 2004, the two mates began talking about business ventures again.
“Dave had built an anti-spam solution for an Internet service provider in SA,” says Hasson. “It was killing expensive proprietary solutions, and it was open source.” Shortly thereafter, the two decided to start Synaq — at the time intended as a managed Linux service company offering open-source solutions.
Synaq launched on 1 September of that year, with Hasson and Jacobson having raised R1m to start the business. Hasson had been working for an online retailer and had other lucrative offers, but decided he wanted his own business.
Synaq grew as a managed Linux services company, and went on to launch products like Pinpoint SecureMail, the first hosted, cloud-based anti-spam service in SA.
Fast forward to 2011, and Synaq is primarily a cloud service provider. It remains Linux-based, but is no longer a custom Linux support provider. “We changed our strategy to be cloud-focused. That’s where we saw the future, particularly with bandwidth costs coming down, more affordable infrastructure, and a skills set that allows us to build scalable systems,” says Hasson.
Hasson says the change of strategy took 18 months to implement fully, but that it proved to be a good move. “We’ve launched a software development division that’s building global cloud services now, rather than only local ones.”
Synaq is launching another new product soon. “It’s called BrandFu, an e-mail branding and e-mail signature management system. It allows for centralised management with integration into Google Apps,” says Hasson. Synaq plans to market BrandFu globally when it launches in August.
Though this may sound ambitious, Synaq is already home to a number of sizeable clients. Hasson says most of Synaq’s customers are small and medium-sized businesses, but bigger clients include MTN.
“All of their e-mail goes through our servers, it’s checked for spam, we make sure the reputation is good, and so on,” Hasson says. MTN alone accounts for 500m e-mails a month on Synaq’s platform.
Synaq has clearly attracted the right sort of attention. In May, Dimension Data’s Internet Solutions (IS) acquired 50,1% of Synaq. Hasson says that although a controlling stake was one of the conditions of the acquisition “we retain full management control.”
“IS is a very good partner,” says Hasson. “They believe in the management team and what Synaq have done to date. The deal with IS gives us leverage, and in turn we’re seeing where we can help them.”
Hasson says IS has little by way of an open-source competency and that Synaq is helping rectify that. IS, meanwhile, will provide Synaq with the necessary capital to expand its operations.
Despite having foregone tertiary education after school, Hasson now holds an MBA from the Gordon Institute of Business Science. “I was 26 when I applied and had no degree. I got rejected. I appealed the rejection, and sent them a list of the business books I’d read and a proposal based on their curriculum. I also met with the academic director, and managed to get a three-month probation,” says Hasson.
He has no regrets about studying later in life because four years of running Synaq “made the MBA classes more applicable, and I was more keen and more active.”
“I don’t think people should go straight from school to varsity. Going against the mould is probably something shared by most successful people across all industries,” says Hasson. “They went for what they were passionate about and their perseverance made it work. I recommend working for a company for a few years.”
Having been an avowed capitalist since his youth, Hasson says the notion of a community developing software for free, as in the open-source world, intrigued him. “They were so passionate and, even though they worked for free, they could create better software than companies were making. I also saw the business potential of having access to amazing software for free.”
Asked what the largest challenges are for the local IT industry, Hasson says it’s the shortage of skills, of developers in particular. “We need more Shuttleworths, more rock star geeks. Maybe we just need more role models”.
Another problem is a lack of vision by local entrepreneurs. “US start-ups think about global domination, raise funding to do it and aren’t scared to chase a good opportunity, even if they sometimes get it wrong.”
SA start-ups often fail to aim for global success, says Hasson. “Synaq was no exception. At first we thought too small, too local, and about small problems. We’ve learnt the importance of changing that way of thinking.”
Hasson says that for the local IT industry to flourish, South Africans need access to reliable, affordable infrastructure. By way of example, he says Synaq used to host its servers in the UK and that moving their hosting to SA “increased our expenses 400%. There’s no reason that should be the case – for a start-up that’s a massive increase.”
When Hasson isn’t working, he participates in a number of networking groups and events, lectures part-time at the Gordon Institute on entrepreneurship, and plays poker. “I’m also an avid Starcraft player. I’m still a geek at heart. I try and read a lot of nonfiction, too, and I love to travel.” — Craig Wilson, TechCentral[/hide-this-part]
“Socomal, a green agricultural distribution company located in Southern Chile, outlines plan to help 27 Mapuche communities develop and expand their farms to make Mapuche agricultural products accessible to the International market.”
Today, it was reported that Kiñe wun lof Mapu, an Indigenous association comprised of more than 1,500 small Mapuche agricultural producers from 27 different Mapuche communities, signed an agreement with the corporation, Socomal. The agreement included an investment of nearly US$400,000 in helping the Mapuche producers get trained and develop more than 2,400 acres of land for the production of beans and lupins. Ultimately, those goods will be sold at market prices and shipped globally — including to Europe and the Middle East.
Remigio Huenolaf, the spokesperson for Kiñe wun lof Mapu, discussed the steps necessary to reaching this agreement: “We are working in an organized manner and establishing alliances based on the principle of trust between leaders, associations and entrepreneurs.” Huenolaf later added, “Maybe this agreement is a small step, but it is the beginning of a new life for families in this area.”
On the other side of the agreement was Patricia Cuevas, the owner of Socomal and businesswoman from Temuco. She too, expressed her hopes for improving the quality of life in the area. “I started working with the Mapuche communities and we have helped out one another. The most important thing is that they make progress, improve their homes, lands and the quality of life for their families.”
In addition to individuals from Kiñe wun lof Mapu and Socomal, the National Director of CONADI, Jorge Retamal, attended the signing of the agreement as well. He indicated that he was proud of the agreement and indicated, “We are seeing more examples like this one, where the Government, private sector and communities work hand in hand for the welfare of the Mapuche people.”
Endeavor Global Networks director Allen Taylor will be participating in a panel discussing speculation that Latin American economies may be entering a bubble period, Endeavor Global Advisory Board member Juan Pablo Cappello will moderate a panel about how to avoid making common, costly mistakes, and Endeavor Entrepreneur and Global Board member Wences Casares will deliver a keynote speech. Click here for the full agenda.
The conference is a one-of-a-kind opportunity for innovative Latin American entrepreneurs and South Florida investors and other companies interested in Latin American business to connect and share insight and experiences. Select entrepreneurs will have the opportunity to present their venture to these potential investors and partners. Click here to apply to be one of these Top 15 Innovative Ventures. Applications are due August 15.
The essence of Endeavor is the people who make up its global network. What connects these diverse individuals around the world – from the entrepreneurs to the mentors to the eMBAs to the staff and supporters – is a shared vision for high-impact entrepreneurship in emerging markets.
Listen to some of the voices that speak on behalf of this vision and hear what being part of Endeavor means to them, in a simple word or phrase. Special thanks to intern Kristen Collins for compiling these videos, which were aired during the 2011 Endeavor Entrepreneur Summit.
Michael Shoemaker is an MBA student at INSEAD and is spending his summer as an eMBA working with Vialux in Monterrey, Mexico.
The condensed MBA program at INSEAD makes for a short summer internship. And fully aware of the time we wouldn’t have together, Endeavor Entrepreneurs Fernando and Frank, the founders here at Vialux in Monterrey, had me doing my homework prior to arrival.
Perhaps I shouldn’t be surprised, then, that a week into my internship I am putting together a summary of the (admittedly abbreviated) analysis we did of the company’s core processes, capabilities, and differentiators. Those will be key inputs into the design of the international expansion model, which will have to be done by the end of next week, so that we can put together the launch plan prior to the two-week scouting trip to Bogotá planned for the beginning of August. Oh, and in the meantime we are virtually networking and setting up meetings to try to fill those two weeks with productive activity.
The word ridiculous comes to mind when I think about how much we are trying to accomplish in these 6.5 weeks. That’s probably why I love it. Much like the MBA program I’m doing right now, I’m finding that in an fast-growing company like Vialux, you simply cannot learn or work more quickly than the opportunities and challenges allow. For me, this time may be an enjoyable stopover on the way to a less action-packed job. For the founders, it’s just one of many exciting rides that the company has taken them on. I can’t help but be envious!
Of course, the speedy transition has been aided by the incredible work that the whole team at Vialux has done to prepare my stay. The logistics have all been taken care of…all of them. So thus far, an all-around amazing experience.