A defining characteristic of entrepreneurs, says Parallel Wireless co-founder and CEO Steve Papa, is that they seek out their own challenges to address, instead of hitching their careers to someone else’s vision. “I have this view that you can always create opportunity,” Papa told Venrock partner Bryan Roberts. “It’s really that simple. You can call it arrogance, but I call it optimism — the idea that there is always a problem to solve at scale.”
Endeca, a software company founded by Papa that played a key role in the early days of e-commerce, was one of Papa’s first experiences in identifying an opportunity — or as Papa calls it, a discontinuity. “The inspiration was the merchandise retail experience,” Papa says of Endeca’s 1999 founding — the problem being that most shoppers, online or offline, only bought goods that were most prominently displayed. Through its innovative search technology, Endeca made it easier for consumers to find and buy goods.
“People didn’t understand this online at the time,” Papa says. “The idea of making it easier to buy things was not intuitive to people. But when we built a proof of concept, we’d improve [customer] website revenue by 30 percent.”
Of course, coming up with a problem to solve is only one of the first steps on the entrepreneurial journey, Papa explains — then the hard work begins. With only one customer signed up, Endeca sought to attract more customers and gain financing, only to be thwarted by the bursting tech bubble in 2001. “Who wanted to be customer number two of a venture-backed software company that’s going to run out of cash in six weeks?” Papa recalls. Against the odds, Endeca closed financing the week after the September 11 attacks, closed $2 million in business by Q4 2001, and down the road, was bought by Oracle in 2011 for $1 billion.
Determination is another key characteristic of entrepreneurs, says Papa — one that’s needed when times are tough. Entrepreneurs should make it a goal to nurture others with this quality, as he did at Endeca. “We willed Endeca to success, and it wasn’t easy,” Papa says, noting that the people who wanted to see the company succeed against tough odds became the people who founded their own companies down the road.
At Endeca, “we created a team called Special Operations, which reported directly to me,” Papa explains. The pitch to new graduates was that Special Operations team members would get to work closely with Papa and learn the nuts and bolts of running a company. “This team had 25 people go through it,” Papa says, “and subsequently, two-thirds of those people became venture-backed CEOs or founders — so it was a pretty good hit rate.”
