NFQ !!

I founded Castek almost two decades ago, on a couple of credit cards and a dream (at the time, we referred to it as a "wing and a prayer" ... now we prefer to remember it as a "vision for global leadership" *lol*). After 2 economic cycles, 3 major rounds of financing, 3 business model changes, and 2 “perfect storms”, I have reached the conclusion that "success" and "failure" are simply different points along the same continuum, and that every human being and business will eventually encounter both (probably many times!!).

In retrospect, getting through all of these inevitable cycles wasn't just about foresight, strategic vision, competitive strategy, customer relationship management, innovation, time to market or any of a number of factors that most business pundits focus on. Yes, all of these factors were important -- but the one consistent ingredient required to survive and thrive, was to face each challenge with an "act of will", and to rapidly adapt to anything that was thrown at us.

Winston Churchill probably said it best: "Success is not final, failure is not fatal. It is the courage to continue that counts ...".

Look, everyone will applaud, remark upon and celebrate your brilliance when things are going your way. I propose, however, that you are defined by how you react when times are tough, when you don't have momentum on your side, and when you wake up to a daily, weekly, monthly diet of adversity (which every company and every person will eventually encounter). Do you exhibit grace under fire? What does your leadership look like when things aren't going your way? Do your people continue to follow you when you have to climb uphill? What about when the bullets start flying? Are you able to take decisive, tough actions while continuing to hold the hearts and minds of your team? How do you keep all of your stakeholders informed and aligned to a common purpose, when all of the external forces are working to splinter your coalition?

The single biggest challenge for my company occurred shortly after we had just raised our third and last major round of financing in June, 2002 -- the single largest private financing round for the tech sector in Canada after the tech bust. At the time we were almost 400 employees, growing annually at 50%, and 6 months away from an IPO – in other words, we were feeling pretty good about ourselves. Two months later, the impact of 9/11 hit our customers hard, and the entire NA insurance sector (our primary customer base) went into a tail spin, going through the worst time in their history. Major IT programs were the first initiatives to get cut by our customers and prospects, as the insurance sector tried to conserve cash and reduce all discretionary expenditures, and we went from a market where we were winning 60% of the deal flow in our target market, to having no deal flow available in the market for the next 24 months. Instead of preparing for an IPO, we ended up facing a sudden major downturn in our business. Bad markets trump good management and great products ... we took immediate action to conserve cash, restructure the company and “hunker-down” to ride out the market cycle and survive nuclear winter in our space. We undertook the toughest and most painful actions of my entire entrepreneurial career, exiting every major long term obligation, shutting down all non-core operations, slashing expenses down to “life support” and dismantling over 90% of the company that I had carefully built up over 15 years.

We were fortunate – in spite of all of the pain that shareholders, customers and employees collectively shared, I and my management team received complete and continued backing through all of the tough actions that we needed to undertake. We outlasted the market cycle with our intellectual property and a small core team intact. We rebuilt the company from substantially the same top notch employees whom we were forced to release during the downturn. The tough actions that we had taken, resulted in a very lean, efficient operating model, and a vastly simplified equity structure and balance sheet. This allowed us to reposition the team and the intellectual property for global leadership in our space, leading eventually to the recent, very successful sale of the company to Oracle, the world’s largest enterprise software company.

Bottom line ... you do your best in the situations that you control, and you make the best of the ones where you don't, by making the best decisions given the data you have, being decisive and action oriented, and honoring your obligations to your stakeholders. My main premise is that the key to sustainable successful business performance, is a determination to never quit, and an ability to constantly adapt. Having the tenacity to keep continuing on, is the one thing that is within our ability to decide, and by doing so, you give yourself the opportunity to choose the nature and timing of the "Kodak moments" within the continuum, that determine your own so-called, "overnight successes".

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Dying professor's words to live by ...

I'm just back from dinner with three very close friends, KenP, PeterT and PeterC, in a sort of "guys night out" evening. Over drinks, we started talking about various inspiring experiences that might be relevant to entrepreneurs who are out there, fighting the good fight, and they pointed me towards this "last lecture" by Dr. Randy Pausch, a Professor of Computer Science at Carnegie-Mellon, who is dying of pancreatic cancer.

Take a few minutes to look at this video segment. It's worth it. His topic is about achieving your childhood dreams, but the words of wisdom that he imparts are essentially about how to live life, how to overcome adversity and how to take every opportunity to make choices and live the right way.



He brings out a couple of major themes in his lecture. It struck me that these are as good a set of principles as any that I've seen, to build a great company culture around ...

• "Experience is what you get, when you don't get what you want."
• "Brick walls that are in our way, are there for a reason. They are not there to keep us out .. they are there to give us a way to show, how much we want it. "

• "Choose to have fun and a sense of wonderment, all the time ... "
• "People are always more important than Things."
• "Live with integrity ... simple advice that is hard to follow -- just tell the truth. When you screw up, just apologize, with sincerity. "I'm sorry, It was my fault, How do I make it right?". "
• "Sooner or later, you will encounter people that you don't like, or you have a bad experience with. No one is pure evil. If you wait long enough, they will show you their good side. Be patient, and seek it out. "
• "Show gratitude. It's a simple thing -- and a very powerful thing. "
• "Complaining and whining does not solve anything. You can choose how you spend finite time, energy and effort. By complaining and wallowing, or by choosing to play the game hard. It's your choice. Make the choice. "
• "If you lead your life the right way, the karma will take care of itself. The dreams will come to you. "

Like many real wisdoms in life, they can be applied universally to business, family, relationships and yourself, and remain equally relevant and valuable.

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An Open Letter to Castek'ers ...

Dear Friends,

18 years after founding Castek, I will be moving on to new pursuits. From the very first experience of starting the company in 1990 with my founding business partners, Fay Wu and Dragan Kopunovic, bootstrapping its growth through our credit cards, and all of the thrills, chills and spills of an incredible journey through the most exciting times in history for our industry, the birthing of this company and the opportunity to work with each of you have been amongst the most important, formative experiences of my life.

Together, we have been able to make a difference in our industry, and in each other's lives. We have invented the future together ... we have grown up together ... we have built a foundation and won many hard-fought campaigns together -- these are the ties that bind.

It has been a privilege and an honor to have served as your CEO, and I am grateful for all of the support that employees, customers, partners and shareholders have provided me and the company through the past 18 years. As they say, all good things come to an end, but each ending is also a new beginning. Castek is not my first company, nor will it be my last -- as all of you know or suspect, I have always been a far better entrepreneur than an employee :-). That being said, we built Camelot when we built Castek, and this company and the people that built it with me will always hold an honored place in my memories.

I wish each of you all the best, as you go forward within Oracle. This is a wonderful final chapter in the Castek story, to see our collective dreams of achieving global leadership in our space realized, and I will be very excited to follow your future progress.

My very best wishes for much continued success !!
Yung Wu.

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The fallacy of the BIG IDEA ...

On many occasions, I've been approached by friends, associates, acquaintances, who want to know what the "secret sauce" is for building a great business. Most of the time, the questions center around "how do I come up with the one, big idea?". I've come to the conclusion that most people who think that they would like to become entrepreneurs, don't end up doing so because they waste so much of their energy obsessing about finding that single, elusive, once-in-a-lifetime, idea that can make them billions and billions of dollars, overnight !!!

From one entrepreneur's point of view, this is a bunch of bunk. For every so-called "great idea" that has never taken flight, I've seen 100 "average ideas" achieve incredible success in the market. Can you imagine investors being approached with a proposal to fund yet another lifestyle concept coffee shop franchise ... eventually becoming Starbucks? Or how about the guys that had the brilliant idea to develop a better web-based search engine, after Yahoo, AltaVista, Excite and Inktomi had a chokehold on the space ... I think that most of us would recognize that company today as Google :-).

The point here is, that you don't have to be brilliant, original, or even first to market. Sometimes the best "ideas" come from an improved version of someone else's idea, especially after the pioneers have made all of the mistakes. What's the real difference? The determination of the entrepreneur to make it work -- almost regardless of the idea. In fact, there is no doubt that this is what seperates the successful entrepreneurs from the dreamers. That old phrase of 10% inspiration, and 90% perspiration really does apply, because an idea without action is just a fantasy.

So, it's simple. Pick an idea, any idea. Then spend the rest of your time and energy making it work. Fight through the issues ... keep learning from every obstacle ... stay focused on continuous refinement of the concept to address what customers really want ... and most of all, never, never, ever give up -- when you encounter an obstacle, find a way through it, over it, under it, or around it ... but just find a way to get to the other side. It really is that simple (and that hard !!). It doesn't happen overnight, and you won't get it right the first time. But by committing to it, and focusing on it, you will have the opportunity to shape that idea into a market offering that customers will want to buy, in a business that top employees will want to join, and that eventually, shareholders will want to invest into.

Bon Chance !!!

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Facebook: Angel or Demon?

Massive Invasion of personal privacy? Or inevitable Portent of the Future?

So Katrina turns me onto this Facebook phenomena several months ago, and my first instinct tells me that this platform is something which will have ramifications of almost biblical proportions (thus the references to angels and demons). The only question ... is it a force for good or evil?

It spreads in a pattern that resembles a pandemic, as the multiplier effect of every participating individual's social network is instantly smashed together with everyone else's. Six degrees just became one-and-a-half degrees ... Just like in the human brain, intelligence is created through the number of connections that exist between brain cells -- not in the actual quantum of brain cells that exist in the brain. If you believe in the power of relationships and connections, and I do, then the facebook platform, and others of its ilk (YouTube, MySpace, etc.) are actively building the synaptic connections between individual people that will exponentially multiply the number of patterns and overall intelligence of the whole.

Then I picked up this interesting little tidbit on YouTube. Potential for pervasive invasion of privacy something to be concerned about? Absolutely. Therefore, we should run and hide from this, stick our heads in the sand, suck on our thumbs and hope that everything will magically resolve itself over time? Absolutely not.

Those who have read my personal profile know that I believe in the power of the "and" -- not the tyranny of the "or". So, I'll do what any self-respecting Libra would do in this situation, and hedge my bets [just because I am mostly right and rarely wrong, shouldn't influence anyone's opinion on this matter :-) ]. facebook is a tool, albeit a massively powerful tool ... it is built in a way which provides incredible value for its rapidly growing universe of users, and in so doing, has become incredibly "sticky" for its supply chain. But make no mistake about it, you and I are not facebook's "customers". We, the general population of users, addicted to our multiple daily hits of "crack-book", simply form facebook's free supply of raw materials, which it ingeniously re-factors into naturally occurring affinity groups, and an incredible source of information that can be used for any purpose whatsoever -- commercial, good, or otherwise.

facebook is an Angel AND it is a Demon. It is a massive invasion of personal privacy AND it is an inevitable portent of the future. The battle over personal privacy has already been lost for each of us. For anyone that owns one or more credit cards, a passport, a driver's license, pays for utilities, subscribes to a magazine, etc. etc. etc. In otherwords, short of adopting a hermit-like existence, and becoming self-sufficient in terms of food, air, water and shelter, and renouncing all sources of modern creature comfort and convenience, there isn't a way to escape being cross-referenced and mined in an infinite combination of ways. In a libertarian society, there must be an assumption that the powers of good outweigh the forces of evil ... otherwise, the machiavellian forces of greed, power, and polarization will easily find ways of manipulating and exploiting the good intentions and assumptions of those that feed off the creature and intellectual comforts that are offered. A little paranoia never hurt anyone, right?

What's the answer? If the battle over personal privacy has already been lost, then I truly believe that the best defense is a great offense. There is no point trying to protect what you have already lost. Embrace the platform, the tools, the community ... get to understand what it is capable of today, and what it will evolve into tomorrow. Become a shepherd, not the sheep. The Chinese characters for 'risk' also describe 'opportunity'. Only by participating, and by being present, do you get a say in what this turns into. And without knowing the "answer", I can only say that the power and potential of what is being created here, will end up being channeled into opportunities, risks and rewards that we are scarcely able to imagine today.

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