This is a guest blog post from Michael Eisenberg, a member of Gigya’s board of directors and a partner in the venture capital firm Aleph.
Over 11 years ago, I asked Gigya Founders Eyal (Magen), Rooly (Eliezerov) and Eran (Kutner) if they were in the media business or the communications business. We joke about the question a lot, so I remember the question but I do not recall what they answered. What I do know is that was the start of an 11-plus year wonderful set of relationships and roller coaster ride that reached a Milestone when SAP agreed to buy Gigya on Sept. 24.
Today, Gigya is neither a communications nor a media business. Instead it manages over a billion profiles on the internet. It is the global leader in CIAM (Consumer Identity and Access Management), the world’s leading platform for where consumer-facing companies manage their customers’ identity. CIAM was not even an acronym or possible when we invested in Gigya. How Gigya got there could fill a book, moving from “Myspace email,” to widget distribution, to social login and ultimately to becoming the leading identity platform. However, I think it is worth pointing to a few lessons:
The founders stayed with the company… 11 years. 11 long years. All three founders stayed. One founder went down to part-time to pursue a passion but they all stayed. The stayed engaged. FOR 11 YEARS. They were the vision and the passion. They were the heart and technological authorities. As I wrote a few years back, resilience and optimism are the hallmarks of great entrepreneurs and of Israel. These three founders had, and have, it in spades.
CEO transitions matter. Early hires are critical: Speaking of resilience… Our first hired CEO quit just after transitioning the company from an ad-driven model to a SaaS model. That pivot (suggested by our co-investor from Mayfield Navin Chaddha) was prescient and saved the business, but then the CEO called Navin and myself into a room and announced he was leaving. Stunned, we notified the founders and immediately, we all agreed that Patrick Salyer should become the CEO. Patrick was actually the second hire the company made in Silicon Valley. He came in as a junior product manager. But he was all heart, soul and brains and could really sell. He was almost a co-founder. He had never been a CEO before but he had the trust of the team. When in doubt and when you are pre-scale, go with chemistry over resume. Go with resilience over experience. The founders got off the ropes to make the CEO switch with us. The team bonded and Patrick led this company through many ups, downs and ups. Many. Valiantly. Successfully.
Outside board members are critical to your success: Too few entrepreneurs bring on outside board members. However, they are critical for pushing your CEO, pushing your venture capitalists and asking really hard questions. They also provide a sounding board for your CEO that is not an investor. We were very fortunate at Gigya to have Jake Winebaum and Phil Fernandez as outside board members. They helped us manage through tricky strategic and personnel issues. We could not have done it without them. If you are a CEO or entrepreneur, get wise people who have been executives to come to your board table. Have them challenge you. It pays off.
Myspace is not around anymore. Widgets are no longer a craze. Social login is a commodity. But Rooly, Eran, Eyal and Patrick are not only still standing. They are winners. And, Consumer Identity Access and Management is a helluva business.
I am honored to have been along for the wild ride with this optimistic and resilient bunch. And after 11 years, that other question I asked them in that meeting 11 years ago still hangs in the air: “What’s a Gigya?”
By Michael Eisenberg