From fighter pilot to entrepreneur

Israel’s serial entrepreneur Arik Czerniak likes to share his experience with upcoming start-ups.Is being a fighter pilot good training for a CEO? Israeli Arik Czerniak seems to think so. “In the Air Force, we used to say that experience is …

Israel’s serial entrepreneur Arik Czerniak likes to share his experience with upcoming start-ups.Is being a fighter pilot good training for a CEO? Israeli Arik Czerniak seems to think so. “In the Air Force, we used to say that experience is 90 percent of the job, and the rest comes with time,” says Czerniak, the former CEO of Palo Alto-based Metacafe – one of the largest (40 million unique visitors a month), user-generated video sites.

Czerniak, who lives in Israel, sold Metacafe a year ago, but he hasn’t given up any of his entrepreneurial spirit. He now advises entrepreneurs, and is mentoring two new startups of his own, Jag.ag and Clear Applications.com.

It’s not surprising that Czerniak is such a high-tech whizz kid. His CV shows that he was a graduate of Talpiot, the elite Israel army program for gifted candidates, majoring in math, physics, and computer science. Talpiot is a rich lode – a major resource for Israel’s future R&D development. It’s a three-year program that includes an officer-training course. “I was the second fighter pilot from the program,” he says.

Originally Czerniak was planning to study an MBA in business at a prestigious school in the US, but he wanted a bigger challenge and decided to forgo school to set up a start-up of his own.

He founded Metacafe in 2003 with “a handful of people with a vague idea: let’s help people find the best content on the Internet,” Czerniak tells ISRAEL21c.

From start-up to $45m. company

The concept of the company was a novel Internet entertainment site that not only gave talented video creators an incentive to reach an audience and get valuable peer feedback, but also to win Producer Awards and earn revenue. Leading Metacafe from a startup to a multi-million dollar company that raised $45 million while swinging between continents, was like being on an emotional roller coaster, according to Czerniak.

In March, 2007, Czerniak and another founder, Ofer Adler, cashed out, selling their shares. According to TechCrunch, each took away $2.5 million.

In the wake of the sale, Czerniak returned to Israel and set up two new start-ups. Jag.ag, formed in March 2008, brings self-expression to mobile phones. “All the concepts that have been proven on the Internet will extend to mobile,” says Czerniak. Jag.ag is a free web host that makes it easy to create a mobile site, mobile greetings, and mobile invitations.

“Anyone can create a site in three easy steps, five minutes on any mobile phone,” says CEO Lior Netzer. Besides its simple interface, Jag.ag also offers easy hook up to SMS. The Home Page may look simple, but behind it is a very sophisticated engine, says its mentor. It has a WYSIWYG (what you see is what you get) interface. Jag.ag’s web grabber interfaces with FaceBook, Linked In, My Space, Google, letting you “drag and drop” from those sites.

Yes, you can get Google Maps on your cell phone. “It is the best site out there for rich messages,” says Netzer, a feature that is being enhanced with new in-house created graphics, animation, and licensed graphics. Premium packages with premium content will also be on offer. A lure for the subscriber is 30 free SMS messages.

Targeting the 12 to 30-year-old market, Jag.ag expects to have 100,000 active sites in the next few months. “Over 20% of the people who come to the site, use it to create their personal mobile website,” says Czerniak.

Entering on the basement floor

“It is cool to own a 3-G mobile phone. By 2009, most mobile phones will be data enabled for browsing on the Internet,” he adds. In some countries, the only access to the Internet is through mobile phones. He predicts a huge market in three or four years. “We are entering on the basement floor,” he says.

Jag. ag, staying lean with four employees, has solid backing. Logia, a leading provider of mobile and Internet technology solutions, is a strategic partner. The Recanati family is a major investor, and two very large telecom software vendors are working with them. The start up is in the midst of negotiations with large portals. Cellular service companies are also interested in using the technology to increase their sales.

Clear Applications, an on-line job recruiting service, grew out of a need the CEO experienced himself. “I was bugged by the problem and realized that it was a niche,” says Czerniak. “I was constantly recruiting people. I had a strict policy that every candidate should be evaluated by psychometric and professional testing. That meant sending them to evaluation centers. It was costly, and time consuming. If you have a strong candidate, you can’t afford to wait a week. The one time that I strayed from my own rule and agreed to hire a “great guy,” the mistake was costly.”

“I sat with a couple of other pilots that worked with me as managers at Metacafe and we talked about creating a website providing psychometric, psychological and professional testing to filter out the best candidates for a job, to see who stands out, to make quick effective decisions on whom to invite for an interview,” says Czerniak. “We decided to go for it.”

The web recruitment tool provides several rounds of tests, the first one no more than 45 minutes. Comprised of cognitive, personality, and professional skills tests, they can be customized for a particular company. An applicant can take the test at his/her own home, or office.

Implementing everything they learned from building an Internet start-up, the founders took the product to five major companies who interview hundreds every day. “Many are already paying for the product, and over 20 companies in Israel are doing pilot projects,” comments Czerniak. “This is not an ad revenue model, it is a pure software as a service model.”

Helping recruitment at Survivor

Among its fans – the popular TV program Survivor which used the system to filter over 100,000 candidates. The company expects to break even in 2009.

During the past year, Czerniak also co-founded Accelerate, a group of veteran Internet founders with a lot of operational experience that meets often to talk about new ideas and meet entrepreneurs.

Sometimes the idea is an evolution of an existing product, but to do it much better and to be more scaleable. “The kind of Internet venture I love, is one that develops a prototype and can see within six months if it can work.”

At a time when investors are less likely to invest in seed and pre-revenue startups, especially inexperienced entrepreneurs, Czerniak advices them to reduce burn to a minimum, to button down to survive the next 12 months.

“I really love helping (Internet) startups – over a cup of coffee, on the phone, the Internet, he says. “Lots of people have unrealistic expectations about raising money. They have to analyze their assets – what they are bringing to the table, technological experience, leadership and management (a CEO is constantly bombarded with tough decisions), a good technologist to be sure that they can build and make a great product.

“What it boils down to is the ability to see the problems and potential of the current market, and the faith and resolution to hang in.”