## Qualities of a Successful Entrepreneur – Resilience (4/11)

I often say, “Being an entrepreneur is truly awesome… for those who have never tried it.” The reality is that entrepreneurship involves loneliness, hard work, external pressures, and a lot of routine. To survive, you have to endure all of this. The system is such that no matter how hard you hustle, even if you make it to a stage like TechCrunch50, deep down, people don’t really care. The next round of investments will be tough. Securing contracts from clients is harder than you’d like. Journalists just published a critical article. Competitors announced their success. You have money left for only eight weeks, and one of your employees just asked you to fill out the necessary paperwork to secure a mortgage on a house.

Every day you return home feeling uncertain about yourself, but in the morning, you need to come back stronger. Your employees look to you for signs of strength and confidence. They believe in you and draw strength from you. You must be able to leave a fruitless meeting with venture capitalists, straighten your socks, and head to the next one. You need to perceive losing clients as a lesson and look for areas to improve for next time. You must identify the weaknesses in your product and strengthen them. You will need to listen to all the doubters because the world is FILLED with skeptical people, and yet you must not give up. You need to look your employees straight in the eyes day after day and convince them not to worry. You’ll have to network with competitors and maintain your motivation.

Perseverance is the continuous effort to move forward in a defined direction despite resistance, while resilience is the ability to take daily hits and not fall under their weight.

Resilience is one of those qualities that reveals an entrepreneur. If I, as a venture capitalist, see that you’ve been through tough times but don’t look beaten down, it’s a huge plus. One of the most famous examples of resilience in U.S. history is Abraham Lincoln.

Here’s a brief quote from Sir Winston Churchill: “Success is the ability to go from one failure to another without losing enthusiasm.” (Quote by David Fishman).

# My Personal Story on Resilience

The only time in my entire career I actually thought I would go bankrupt was when we were working on merging BuildOnline with a competitor, iScraper. We had strong positions in the UK, while they were strong in Germany and Israel (where they conducted development). I built good relationships with their CEO, whom I still admire today (he left the position many years ago). The agreement was as follows: both sets of investors would invest in the merged venture, we would reduce overlapping costs, and become a healthier company. This was shortly after the dot-com bubble burst—in early 2001.

The terms of the deal were agreed upon, combined business plans were prepared, and both sets of investors verbally approved the deal. Phew! It seemed like we were going to avoid the unpleasant fate that awaited many dot-coms.

Then, a few unpleasant phone calls came in. The first was from the CEO of iScraper, who informed us that they couldn’t complete the deal because one of their investors, Apax Partners, changed their mind despite the verbal agreement. On our side, BuildOnline had attracted a new investor, ETF Group (Switzerland/New York). My contact at ETF informed me that Apax had called them and said they wanted to invest in iScraper independently, without the merger, and that ETF should support their deal, not ours. I was furious because ETF was involved thanks to us. The ethics of some investors (or lack thereof) became clear.

So, Apax went their own way and invested in iScraper without us. Their calculation was that we would go bankrupt and they could acquire our assets that way. We had only three weeks’ worth of money left in our bank account, so the situation was dire. I called the top management of BuildOnline and organized a meeting at the nearest pub (since we were in England), where I shared the news. We started brainstorming action plans: what to do to properly liquidate the company. We spent a couple of hours on this task (and had a couple of pints of beer).

Then, my leading investor called me (by chance, it was GRP Partners, where I am currently a partner), and they convinced me not to lose confidence. They said they wouldn’t tolerate Apax’s antics and continued to believe in us. I contacted ETF Group, who responded that they wouldn’t abandon us provided we made changes to the plan that suited them. Then I called Goldman Sachs (another investor), who literally replied: “If those sh*ts from Apax think they can get away with this, they’re wrong.”

That’s when the rally began. I flew to New York for a day to meet with the head of investments at ETF. I presented a revised plan that my team and I prepared within 24 hours. Then, I flew from London to Los Angeles to meet with partners at GRP. The flight lasted 12 hours, I jumped out of the plane, took a shower at the hotel, and headed straight to their office for a presentation. The next morning, I flew home. We committed to focusing on reducing costs, implementing the product, and achieving our planned metrics. We agreed to operate with much less capital than initially planned. Their agreement was secured, and our existing investors supported us financially while we completed the new financing stage. In a day, we reduced our staff from 92 to 38, and immediately after—from 38 to 33 (yes, it probably should have been done all at once).

The good news was that Apax only gave iScraper $1.5 million to see how things would unfold. The money quickly ran out, and within a few months, they went bankrupt. We hired their managerial staff in Germany without spending a dime. We studied the signed contracts, flew to Germany, and met with all their clients. We agreed to transfer client data to us for free in exchange for securing long-term contracts. Over two years, we closed deals worth $1.2 million, making our company profitable in Germany from day one. As for those clients who didn’t agree to long-term contracts, we didn’t sign anything with them. Throughout this process, we didn’t pay any money, and there was no weakening of our positions (the Israeli branch of iScraper closed, and their assets in the UK were scooped up by another competitor).

That was our first year in sales. It was the worst year ever for enterprise software sales, and we were additionally selling Software as a Service (SaaS), which at the time was still considered experimental by buyers. Nevertheless, we collected $2.1 million in recurring revenue, of which $600k came from Germany. The next year, our revenue reached $5.9 million, with Germany contributing $1.8 million. We were on our way to building a real business.

I felt my own resilience. Aside from a couple of hours at the pub one day, I never let my stress show. I didn’t give my team a chance to absorb any of the uncertainty I faced daily.

Such stories are not uncommon. The best entrepreneurs have a survival instinct.

If you’re an aspiring entrepreneur looking to connect with top-tier venture capital firms, angel investors, or explore investment opportunities near you, Co-Founder Ai can help you navigate the startup ecosystem and connect with the right private equity companies to fuel your venture’s growth.