Isabel Maxwell, daughter of the late British tycoon Robert Maxwell, was in Israel this week to deliver a lecture entitled “Creativity or Death” at the Israel Center for Management (MIL) high-tech CEO forum.
In addition to her family connection, Maxwell’s resume is impressive in its own right; she definitely qualifies as a serial entrepreneur. In 1992, after a career in television and cinema, Maxwell founded The McKinley Group, together with her sister Christine. McKinley developed Magellan, the world’s first Internet search engine, which was sold to Excite in 1996. Maxwell was president of Commtouch Software Ltd. (Nasdaq: CTCH), CEO of Israeli start-up iCognito Technologies (now named PureSight), and an advisor to venture capital funds Jerusalem Venture Partners and Apax Partners.
Maxwell has several current activities. She is a partner in The York Group, a Boston-based company that provides business development consultancy for companies. She operates the Israel Venture Network (IVN), an organization that promotes community initiatives. Among other things, IVN is financing StartUp Jerusalem and educational support programs. She is also chairperson of Israel Social Entrepreneurship Program (ISEP), IVN’s program to encourage entrepreneurship. She is slated to represent one of the largest service companies in Silicon Valley, and hopes to help Israeli companies in business development as part of this job.
”I’ve been a regular visitor to Israel since 1997, when I was appointed president of Commtouch” Maxwell says. “That was after The McKinley Group was sold to Excite. After the acquisition, I managed the transfer to Excite, then left. Headhunters contacted me, and recruited me for Commtouch.”
"Globes": That means that you experienced the cycle from its beginning, through what looks like the beginning of a new global high-tech cycle.
Maxwell: ”Nasdaq lost 95% of its value. You don’t have to say any more than that. The principal victims were companies from the US and Israel, because companies from Europe entered the game much later, if at all. Everything is much more reasonable now, but I must admit that I feel that many babies were thrown out with the bathwater in the crisis. Many companies that had good businesses disappeared, because they couldn’t get financing. Those that managed to survive were not always the ones with the best ideas. Sometimes they survived because they had enough money, or because they were able to raise money during the tough years.”
Maxwell believes that the high-tech crisis, like the boom that preceded it, has affected the entire economy. “I’m not one of the those who believes that high tech is an ivory tower. Companies grew quickly, and caused the growth of non-technology businesses, such as vehicle fleet and real estate companies.”
Like a restaurant without a menu
What is your formula for a good entrepreneur?
”I think that entrepreneurship is the ability to move and change, to know how to reinvent yourself constantly. Timing is no less important, to see the market, and in which direction it’s developing. And, of course, you need a little luck. It’s not enough to come up with a great idea. I believe that a good idea is one that meets a real need in the market, not one that is looking for a purpose. For me, that’s like being perpetually pregnant, without giving birth. I think that’s true about entrepreneurs in general, and in Israel, too. Regardless of how creative and brilliant an idea is, if business doesn’t happen, and there’s no market for it, the idea is pointless.
”Some other factors that entrepreneurs don’t like to hear about are discipline and having both feet on the ground. It’s not wise to jump from one creative idea to another. In Israel especially, there’s a lot of fantastic technology, but in my opinion, companies based on an idea looking for a market are far more likely to fail. You need an idea that is connected to needs in the market, and then you can look for financing for it. You have to be sensitive to rapidly changing markets. It may not sound like fun, but that’s the way it works.
”Furthermore, you also need an especially strong belief in what you’re doing, and elegant stubbornness. You have to be focused, and understand exactly what you’re doing, and what you’re aiming at. Perhaps most importantly, you’ve got to listen. Unfortunately, not only in my field, people like talking themselves, and don’t always stop to listen.”
Maxwell has been there. She also was a partner in founding a company from scratch. “I did it in 1992, when the Internet was only starting to develop for people outside universities and defense institutions. They were closed worlds, which never communicated with each other. I was working with my twin sister, Christine, at a market research company, and the idea originated with a need that we had for a tool that would find and organize information in such a way that it would be readily available and of high-quality,” Maxwell recalls.
”I didn’t have a technological background. Up until then, I dealt with communications, television, movies, and law. But we realized that the platform had become accessible to more and more people. The information was available 24 hours a day, but the Internet was like a restaurant with a menu that only had “meat” and “fish” written on it. No one had any idea what sauce they had been cooked in. We wanted to organize the information in Boolean form, and display it in a way that would show the searcher something about the information collected.”
How did you begin?
”It wasn’t simple. There was no written material then, except for books written by technology nerds for the community of technology nerds. The search engines of the time, Lycos and Yahoo, produced unsorted information that was hard to navigate.”
Thus was born Magellan, the first Internet search engine. Maxwell relates that the company was financed mostly by private investors. The only investment institution was Netcom, the first Internet company to go public. Four years after they founded the company, they sold it to Excite for $18 million. “That was a nice exit in those days,” Maxwell remembers.
Do you regret selling the company before the boom?
”In general, I’m not inclined to regret things. Before we sold the company, we considered floating it on the stock exchange, but we eventually decided to sell. The boom years, 1998-2000, were not connected to reality. It was one party after another, with everyone trying to hold a more splendid party, with more big names. Entrepreneurs, employees, and investors lost touch with reality.”
Beginning to learn Hebrew
Maxwell also has experience in managing an Israeli start-up. She managed iCognito for seven months in 2003. “I visited Israel from the company headquarters in San Francisco every two weeks. I suffered from chronic jetlag. I think that every Israeli high-tech executive does. I felt that they also needed me here,” she explains. Maxwell gained insights from managing an Israelis start-up: “Do what you know. In all other areas, hire good people whom you can trust, and let them do what they know how to do best. I believe that as manager of a company, I shouldn’t have to do everything, but rather to connect people, and to find good people to fill various jobs who will put my management vision into practice.”
Why did you leave?
”After seven months, we built a new management. The company made progress, and we found another CEO to carry on from there.”
Do you think you’ll go back to managing a start-up?
”It’s a great temptation for me, but I think that right now, I prefer to work more horizontally than vertically in consultancy, support, and community service, of course. I’m starting to learn Hebrew.”
Maxwell spends most of her time in Israel, and lives in Tel Aviv. About The York Group, she says, “It consists of 40 partners around the world. Its main expertise is in developing sales channels. We also work with Israeli companies. The company’s business model consists of a relatively small basic payment. If more deals come up, we take a share of the company’s revenue.
”The group also specializes in telecommunications. We help more mature companies reach new markets in the field.”
Maxwell mentions the new markets in India and China, among others. “A lot of foreign money is coming to Israel, and we’re seeing a stream of financing for companies in India and China. I think that there’s still a great belief in Israeli industry, but the East Asian markets can certainly provide competition, as they already have in the US. Israel does have several advantages. The political situation has improved a little, and that’s encouraging many people to worry less about visiting here. On the other hand, foreign R&D in Israel is fragile, just like in the US. It’s clear that all senior company executives will have to think more than twice about whether they can develop and manufacture in other locations at lower cost. The cut in the Chief Scientist’s budget definitely doesn’t help.”
Maxwell’s pet project is her activity in IVN, together with such well known figures as Eric Benhamou and Shlomo Dovrat. “The world is much more complicated today. I think that today’s entrepreneurs, more than ever, should take into account the environment that they live in. You can’t be isolated from society. If you want to live in a high-quality place, you have to be involved in the community, and contribute to it, and I’m not talking about doing things just to discharge an obligation,” she declares. Maxwell not only talks the talk, she also walks the walk. She is very active in IVN, and for many years has donated to, and been active in, American Friends of Soroka Medical Center.
“What ISEP does is to systematically develop social entrepreneurship in Israel. IVN operates an educational program in Tiberias, and is bringing top-notch professionals to help children in the area. The second program involves finding social entrepreneurs with ideas, not necessarily in technology, which will contribute to the community, particularly by creating future jobs.
”This is an incubator for entrepreneurs. We help them put their ideas into practice. I call on people from all over Israel to contact us with ideas.” Maxwell also means non-Jews. “People sometimes forget that 20% of the population in the country are Arabs,” she says. The fund has supported two projects so far, and is planning to expand its activity soon.
Published by Globes [online] - www.globes.co.il - on January 27, 2005