President and CEO of global leader in scaling mission-critical systems Grid Dynamics, Victoria Livschitz, was kind enough to take the time to answer a few questions about her company, and about the challenges faced by women entrepreneurs in the technology industry.
Thanks to Victoria Livschitz for her time, and for her comprehensive and informative responses. They are greatly appreciated.
When you founded your company, you noticed that some of the problems that had confronted large companies were becoming a problem for Web 2.0 companies as well. What were those challenges that online companies faced?
Victoria Livschitz: I read recently a study from IBM that stated by end of 2010 the total amount of digital information in the world doubled every 11 hours. I did not know this statistic before but it did not surprise me in the least. Five years ago when I founded the company, the trend towards the explosion of data and the enormous aggregation of processing via the Internet was crystal clear for me. What we thought about the scalability problem 10 years ago is child’s play in today’s terms.
The challenges and the opportunities I saw five years ago were: how one can design and deliver a system, which is scalable and elastic, without paying a huge engineering price? Why is it a challenge—because everybody needs it, because it has to be pervasively available, and because a simple application written overnight by a college dropout with the next great idea about web service should be very rapidly developed and deployed and work successfully to support their business model. Delivery of transparent scalability and elasticity is what the world needs badly and has no fixed recipes for. That was the reason I founded Grid Dynamics, to be a part of this quest.
How did handling peak user and processor loads become such a widespread problem?
Victoria Livschitz: I believe the computing is intrinsically elastic, meaning the amount of hardware needed to process a piece of software changes from a function call to a function call, from one input parameter to another, and also depends on the state of the environment where and when the processing occurred. The first 50-60 years of computing did not produce a technological and economical answer of how to let bursting software to consume required hardware resources in a sensible way. Of course in the world of intense Internet traffic patterns we have extreme cases of bursting.
There is always an event which causes an enormous response in the amount of Internet searches, in the amount of twittering, or number of buyers interesting in procuring the next iPod in the next few minutes. The technology services became global and they became a social phenomenon when a little local news can generate a huge spike in demand. Spikes that affect millions or sometimes billions of people mean that in computing we need to manage peaks of unprecedented magnitude.
Victoria Livschitz (photo left)
The Study of Entrepreneurship has found that between 2004-2007 women founded only 1 % off high tech companies in the US. What challenges have you faced as a woman entrepreneur in a high tech field?
Victoria Livschitz: I have to say that entrepreneurship is hard – period. I would say that 90 percent of the challenges facing entrepreneurs are common to both men and women. There are still a few which put us apart. Entrepreneurship is a very time and life consuming activity. It is more like an obsession, especially when you are in a very high-tech business. Theoretically, if a start-up founder is a college-aged kid who has not much social responsibility such as a family, I do not see a lot of difference in patterns for men or women. However, many successful companies are not started by such young people in the greater scheme of things.
Most start-ups are launched by seasoned professionals; people who have reached a higher lever of maturity; or, the pinnacle of their corporate careers. They learned a lot about technology creation and can apply their wisdom and connections to building their own companies. They are mainly middle aged and that means that there are a lot of social and family responsibilities on their shoulders. This does make a difference between men and women. For a woman in her 30’s or 40’s to part with a job and dedicate herself entirely to the new business means that her domestic responsibility will unquestionable suffer. If she has a husband and children, it will have a profound effect on the family.
But it is also a kind of double jeopardy. Not only as a wife and mother are you not able to do what you did before for your family, but another part of the family (the husband and children) has to do more than they did before. It is not easy. Not easy on a woman, not easy on her family. There is another part of the problem. Entrepreneurship is such an intense and high stress activity that in order to sustain the consistent and permanent stress, to perform at your peak every day, every hour, you have to have some place where you can come to decompress, a place where your family and friends give you unconditional love and support.
You can say that a man with family and kids is going into such a business facing similar problems, but again the barrier is higher and implications are tougher for a women entrepreneur.
Many start-up entrepreneurial ventures struggle with achieving profitability, yet your company was profitable from day one. How did you become profitable so quickly?
Victoria Livschitz: Grid Dynamics is a service business. In my opinion, service companies should be profitable quickly, as they don’t have long non-revenue generating start-up periods such as product companies or expensive manufacturing facilities. I started the company with $15,000 of start-up capital, and then looked for creative ways to bootstrap operations without cash. For example, I contracted with one offshore development company that was willing to take stock options instead of cash for their engineering services for the first 6 months of development and another that was willing to give me a long period of time – up to six months – on paying their services fees, so that I could bill my client and get the money long after the engineers were paid their salaries.
I was also very lean with overhead, doing everything myself, including sales, marketing, account management, technical design, operational management, even accounting. Since I started without venture money, and until I raised the first capital years later, we had to be profitable always, or die.
You left the corporate world to start your own company. That bold step is one that you must not have made lightly. What caused you to become an entrepreneur, rather than remain in with Fortune 500 employers?
Victoria Livschitz: Well, for me entrepreneurship was not a question of “if”, but a question of “when”. I got my first taste of the entrepreneurship within a few months after immigrating to the U.S. when I set up a professional chess academy with my husband…basically a private chess school. It was our first business, which allowed us to support the family and put ourselves through college. When I became a high tech professional I began thinking about a number of business ideas. Understanding the work-life balance challenges for women, I did not start my company sooner because those years were dedicated to my family. I have three children and it was not until my youngest turned six years old that I could seriously consider the possibility of leaving my job at a Fortune 500 company and start my own business.
Ultimately, a big part of my decision was a matter of the right timing. I saw a business opportunity as the industry was going through gigantic paradigm shifts, which lead to many fresh ideas and entrepreneurial opportunities.
What advice would you give for entrepreneurs seeking to start a company in the high tech world?
Victoria Livschitz: Well, the biggest advice is for entrepreneurs to stop procrastinating, making excuses and do it! If your dream is big, if you think that you have what it takes to change the world then go try it! You might be successful, and you might not. Actually, I doubt you’ll be unsuccessful in a true sense of this word no matter what happens with your venture. You may not become a millionaire, but you will experience life in a way you never anticipated. It will be a journey, a quest, which will take you places that you would never have gone to otherwise. So, go ahead…try it.
Do you have some additional insights and advice for women entrepreneurs in technology fields?
Victoria Livschitz: Figuring out the work-life balance is the key for success for any entrepreneur. It’s important to have this balance to stay grounded and to take enjoyment out of both your professional and personal life.
What is the first step a person should take toward living their dream of entrepreneurship?
Victoria Livschitz: The first one is to conceive the idea, then try to understand what it means for you and your industry. The entrepreneurs coming from the technology world are mainly former engineers and some have very naive and idealistic images of the world of venture capital, of the world of start-ups, of the world of business management. A lot of things are counter-intuitive to the engineers who turn into entrepreneurs. You have to take time to educate yourself, to speak with people who have done it before. Start getting involved in local organizations, which exist in most places to help you with information, resources, and connections. Find out as much as you can about what you are planning to do, and then learn the rest on the job.
What is next for Victoria Livschitz and Grid Dynamics?
Victoria Livschitz: This is a tough question. I honestly don’t know what the future holds! I know that we have a company to run, to grow, and to take to the next level. I know that we have new and interesting solutions to bring to the market.
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