"At the end of the day it's whether the people you're betting on have a huge desire to win," Mr. Chao adds. "Frank is one of the most competitive people I know. Most competitive people tend to figure out a way to win." A trait dramatized during Mr. Huerta's squash days at Harvard, when he was part of a national championship team in 1988 and was co-captain of the Ivy League university's squash team in 1989. The same sort of leadership and teamwork helped fuel the success of Recourse.
Lot of Fear, Lot of Pressure
Smart growth was the name of the game for this technology start-up, says Recourse co-founder Mr. Lyle. "We started building our company at the peak of the dot-com boom in 1999, when cost structures were ridiculous and capital was cheap but employees were very expensive. We were looking at office space that was $10 per square foot per month. We were selling software into a market that had bottomed out. But the security sector was very resilient. There was a problem that needed to be solved, and budgets could be found for security, which certainly worked in our favor."
For those young tech entrepreneurs who have stars in their eyes, Mr. Lyle wants to inject some reality into visions of the exuberant dot-com boom days. He says Recourse achieved fast growth by limiting its marketing budget and even sending engineers out on sales calls so they could understand customer requirements.
"It's a roller coaster ride," Mr. Lyle says. "You never know what things are going to be like three months later when you're doubling in size every six months and you have to raise capital more than once a year. There's a lot of fear. There are a lot of pressures to build the right team, the right set of executives. You give away product for free just to get people to use it and then you try to build some buzz around that product."
Once Recourse created that buzz, recruited the right people, and began building critical mass, the path to success became a little smoother. Having Mr. Huerta at the helm certainly helped, Mr. Lyle says. "Frank was instrumental in keeping everyone on the same page, and he understood the company's business objectives and prevented things from falling apart," he recalls.
Recourse grew rapidly (up to 115 employees in three years) as Internet security became the hot topic. The company began gaining more attention in 2000 when it was instrumental in providing information that caught the hacker known as "Mafia Boy," who attacked CNN.com, Yahoo!, and eBay. Two years later, Internet security giant Symantec came knocking on Recourse's door. Mr. Huerta, who hadn't planned on selling his company, had a decision to make. At the time, his bankers told him that no company at this stage would think of going public for at least 18 to 24 more months (it was during what they called the telecommunications industry's "Nuclear Winter").
"We had to decide, do we put more money in or do we get taken out by a good partner?" Mr. Huerta says.
Recourse had had strong revenue growth over three years, but in 2002 the market was pretty bad and the company even had a couple of its customers go bankrupt. Selling to Symantec was "the best thing for the company, for the shareholders, and for our employees," Mr. Huerta says.
Where Inventions Are Needed
Mr. Huerta stayed with Symantec for a little more than a year. But once an entrepreneur, always an entrepreneur. This time, however, he would delve into the biomedical engineering field. Doctors told Mr. Huerta, who had injured his hip playing basketball a few years ago, that he'd need a hip replacement. But the surgery would have prevented him from playing competitive sports, so he set out to find a better solution for his pain.
During his research on cartilage repair, Mr. Huerta came across Jennifer Elisseeff, a biomedical engineering professor and researcher at Johns Hopkins University. In 2004, together with an orthopedic surgeon named Norman Marcus, the three launched Cartilix, which is working on commercializing novel biomaterials to repair damaged tissue in articular joints. The company may also develop its biomaterials for use in the spine and eye, and reconstructive plastic surgery. Cartilix just closed its second round of funding in March 2006, led by De Novo Ventures.
No matter what the industry, Mr. Huerta concludes, entrepreneurs need two key tools to be successful: money and good people who know what they are doing. "I'm a firm believer in the entrepreneurial process," he says. "If you can take that risk, and put the right team together, and figure out the most efficient way to get a solution to the market, then you'll be successful."
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