The book “Startup Nation” by Dan Senor and Saul Singer did more than out Israel’s high-tech accomplishments to the rest of the world — it inaugurated a new genre of Israeli literature in which high-tech moguls tell all about their experiences in the business world. Included in this category, and appearing almost exclusively in Hebrew, are works of both fact and fiction with titles like “God Loves Me: A Novel of Love, Ideas and High-Tech Bubbles” by Amos Tal-Shir, and “Confessions of a High-Tech Widow” by Michal Hartstein.
Now, one example of this genre, called “Nordau to Nasdaq,” has been translated into English. The book, by Israeli high-tech pioneer Roni Einav (co-authored with Miriam Yahil-Wax), tells the story of Einav’s leadership of New Dimension Software, one of Israel’s first high-tech giants, and in 1999 one of the first to be bought out by a big multinational (in New Dimension’s case, US-based BMC Software, itself now said to be a candidate for a buyout). Einav’s, and New Dimension’s, story is one of ups and downs, intrigue, tense negotiations, family joys and tragedies — and lots of money (BMC paid a whopping $675 million for New Dimension, eclipsing the $400 million deal with which AOL acquired Israel’s ICQ a year earlier).
The title refers to the neighborhood Einav grew up in in the early and mid-1960s, when he lived with his family on Nordau Boulevard in Tel Aviv; the Nasdaq part came after New Dimension acquired a listing on the exchange in 1993.
Einav and several partners started New Dimension in 1993, with the company specializing in management software, including security administration, document management and multi-platform job scheduling. It was one of no fewer than 30 companies he was involved in. Einav had previously designed weapons for the IDF as a member of an elite tech squad (the first in the army’s history) that used technology to design a better way for the army to use tanks in battlefield conditions, a system that was so successful that versions of it were sold to foreign armies, who are still using it. Einav also worked in Iran during the era of the Shah, designing neighborhoods and whole urban areas from scratch in Iranian seaport cities. What, one wonders, would residents of Kharg Island or Bandar Abbas say if they knew that an Israeli company had been instrumental in the construction of their homes and neighborhoods?
Einav is a born entrepreneur, and the plethora of businesses and companies he was involved in can be dizzying. But it’s not the details that are important, Einav told The Times of Israel in an interview. “A high-tech entrepreneurial adventure is just that, and you can’t get hung up on the details,” Einav said. If something – an idea, brand, product, or whole company – doesn’t work, you can’t be afraid to disengage, retool, and restart, if necessary.
“You have to be prepared to work very hard, and you cannot work expecting specific results for specific actions,” Einav said, addressing potential high-tech entrepreneurs. “In fact, expect to struggle about 70 percent of the time. The times that you will truly be happy at what is happening are very limited. It could take five, seven, ten, or even more years to truly establish yourself. And the prospects of success, based on the odds, are very small.”
But Einav would do it all over again – undergoing many ups and downs, like the time Tadiran subsidiary ATL backed out on a deal with Einav because of security issues, or the time a former backer tried to sue for a piece of the company. “For many people like me and other entrepreneurs, dreaming is the essence of life, but it’s worth it if we can bring about change and do something important,” he added.
Readers of Startup Nation may not have gotten the sense of entrepreneurial tension Einav describes in his book, but Einav believes the two works complement each other. “Nordau to Nasdaq is not the ‘bad news’ antithesis of ‘Startup Nation,’ but more like a sequel, telling you what things are like on the ground for entrepreneurs just starting out,” said Einav. “It’s a document that tells what happened, and as such, it doesn’t try to set rules, like ‘Startup Nation.’ But it does have many lessons, for entrepreneurs, investors, and workers in the high-tech industry.”
With such a high valuation even in the early days of the first high-tech bubble, it’s clear now that had New Dimension remained independent, it could have become a multi-billion dollar enterprise. In fact, some in the high-tech business decry the decision by many Israeli start-ups to sell out. While Israeli technology powers high-tech companies all over the world, there aren’t many true tech giants in Israel, since the vast majority of them accept buyout offers, as Einav did. Israel’s economy, say these critics, would be much better served if Israeli start-ups did not “rush for the exits” and accept buyout tenders from multinationals.
“I can understand that criticism, but there’s a flip side,” said Einav. “But often the buyout offer is just something that happens. Running a company in the hope of getting bought out is a big mistake, and will often lead to failure. You have to plan for the long-term, and then decide whether it’s worth it to take an offer.”
And there are good reasons to take an offer, Einav said; there is safety in numbers, or at least size. “I have analyzed this issue thoroughly and decided that merging a small company into a big one is good for both sides. Big companies can more easily sell your technology, and small companies, and the jobs it provides, are more likely to survive.”
His tip to entrepreneurs: “Find a market where there isn’t too much competition, and work like crazy.” Such markets exist; New Dimension only had a few competitors in the space in which it was working, all large, established corporations (BMC, IBM, CA), but it developed products and technology that put it far ahead of the competition, to the point where the only way for BMC to stop Einav and his team form totally dominating markets was to buy New Dimension out.
“There are 1,000 small things you have to do in order to success, and they all have to be done,” Einav adds. “Hopefully most of them will be correct, but for sure some won’t be. The key is to keep plugging away and improving your game, until the hopefully inevitable success comes your way.”