Exceptional magazine: Americas edition, July 2013
Avinoam Nowogrodski, CEO of cloud-based project management company Clarizen, has come out on top despite odds. Now, he’s eyeing up the competition.
Avinoam Nowogrodski is not afraid of saying his goal is to take on Microsoft. As the founder and CEO of Clarizen, an online project management software company, his biggest competitor is Microsoft Project, which has an annual turnover of US$1b.
Challenging the world’s largest software maker is “an aggressive approach,” he concedes, but, like a proud father, Nowogrodski is confident of his product and is convinced it will improve the way companies manage their operations and personnel.
Helping companies simplify project management, Clarizen provides a virtual environment in which businesses can track and manage their operations, tasks, resources, budgets and communications. Alerts are sent whenever a deadline is looming, and every aspect of the project can be supervised using the software.
Collaborating to achieve
“Collaboration” is the word the Israeli entrepreneur repeatedly stresses, because the act of people working together has always captured his imagination. He says he is fascinated by “how work gets done.” This may sound prosaic, but when Nowogrodski warms to this theme, he speaks with the kind of spiritual zeal that transcends an interest in seemingly mundane procedural matters.
“The process of how work gets done is only one aspect, but collaboration is important because collaboration is what makes work happen,” he says. He explains that several decades of experience in the high-tech industry in both Israel and Europe drew his attention to “the low level of participation of workers in the decision-making process and in the overall function of companies.”
“The process of how work gets done is only one aspect, but collaboration is important because collaboration is what makes work happen.”
If anyone understands the concept of collaboration being easier to talk about than to achieve, it is Nowogrodski. He has four children and runs a company employing 120 workers between its Israeli headquarters in Hod HaSharon, near Tel Aviv, and eight other offices across the world, including one in San Mateo, California. But to the 53-year-old CEO, the idea of many people cooperating is not a lofty ideal.
Because Clarizen is a private company, Nowogrodski will only give an estimate of its sales — tens of millions of US dollars annually. While 60% of its customers are in the United States, and the nation remains the most lucrative sales destination, Clarizen’s customer base spans 67 countries.
Nowogrodski started Clarizen in 2006 with just four workers and raised US$50m from Israeli and American investors in a competitive market for cloud-based businesses.
His love affair with technology started in the 1980s, when he studied electrical engineering by day and worked as a security guard at night. His ambition was kindled while working near the offices of a high-tech company, where the modern aesthetic caught his eye.
“I said to myself, ‘One day, when I grow up, I want to have something like this,’” he recalls. At global electronics firm Orbotech, where he was employed as a field service engineer, Nowogrodski discovered he enjoyed improving technology. The job took him to Germany, where he moved into sales before starting his own company in 1995.
“People in Israel have the confidence to learn and the guts to be open.”
He created SmarTeam Corporation, a leading provider of collaborative product life-cycle management (PLM) solutions that enable clients to collaborate on product information. After 10 years — during which time Nowogrodski held the role of CEO — SmarTeam was sold to the French giant Dassault.
He could have taken a management position in the larger technology company, but he went back to square one and started a new business — a career move not uncommon in Israel’s lively start-up community.
“People in Israel have the confidence to learn and the guts to be open,” he says. “It’s something to do with the history of the country. Israelis have been required to think outside the box.”
Nowogrodski had to rely on his guts and his heart as an innovator when Clarizen ran into problems in 2008. The company stumbled by failing to reach critical mass in terms of reputation and customer growth. Unable to raise funds, Clarizen almost went under.
Nowogrodski cut 50% of the company, reduced salaries by 20%, and management worked six months without salary to turn the business around.
“The ability to manage uncertainty is the key to a great entrepreneur,” says Nowogrodski. “When there is a crisis, I don’t give people attitude; I try to be measured. Don’t just ask yourself what you can do, ask what you can stop doing and what you can give up.”
Having survived the crisis, he knew he had to make an audacious move: take on the main player in the market. In 2008, Clarizen offered discounts to customers who made the switch from Microsoft.
Clarizen has since developed a reputation as a young gun in the marketplace. The company now boasts more than 2,000 corporate customers. It receives praise from tech commentators for its early recognition of the importance of integrating a mobile feature into its software.
Revenue doubled between 2011 and 2012. Nowogrodski says 250 companies start new trials every day, and 150 are translated into paying customers every month.
That Clarizen has overcome its troubles and since expanded speaks volumes about Nowogrodski’s tenacity and ambition. In the coming years, he intends to take Clarizen through an IPO while strengthening its leadership ranks.
“It’s not about getting rich quickly,” he says. “There’s nothing wrong with that, of course. But the real drive is to make a difference to people’s lives.”