Grid Dynamics’ Livschitz defies conventional wisdom to blaze a profitable trail to success.

Livschitz shares lessons from her 3-year journey in founding Grid Dynamics and making it profitable.

Victoria Livschitz Grid Dynamics
I spent an afternoon with Victoria Livschitz, CEO of Grid Dynamics and a chess master, at the offices of Mirantis, a company Grid Dynamics recently merged with. Livschitz, a confident, tell-it-like-it-is woman has studied mathematics, computer science, and electrical engineering, and has worked at Ford Motor Company and Sun Microsystems. At Sun she spent 10 years, finally as product architect for the Sun Grid.

So, one of my first questions of Livschitz was about her decision to start a services company versus a product company. With deep knowledge of the Sun Grid, and with competition in 2006 from only a few players such as Amazon Web Services, why not found a product company? After all, many of tech’s stars are product companies. Livschitz’ response came from her realism: her groundedness in realizing the challenges of building a product-business versus the strengths she brought to the table. It was a simple SWOT analyses. Livschitz believed there would be great product companies. However, this was not her sweet spot. The opportunity for her instead was in services. Companies would need expertise to implement these large scalable systems. And Livschitz could stake out a profitable position from early on, if she met this need.

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With only $15,000 in startup capital, Livschitz’ big ‘aha’ was, “Don’t bite off more than you can chew.”

Don't invest too early in sales, marketing & operations: Livschitz recalls she “nearly killed the company” by hiring executives to help her 9-month-old company go to the next level. She realized she was her company’s best sales-person and at that time, her business was still not at the scale to support this investment. Sadly, she had to let them go. Finally, now, 3-years later, she is ready to make the investment again.

Don't invest too early in partnerships with large companies: Livschitz was very excited when she formed partnerships early-on with prominent companies. However, very quickly she learned that her business was still not mature enough to provide value to the large companies, and hence did not get enough of their attention, despite the partnership agreements. So, Livschitz dialed-back and started partnering with companies in the smaller tiers, before re-approaching large companies.

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Be willing to pay more for higher quality talent or faster time to market in critical areas: Livschitz made the decision to use an out-staffing company to jump-start her engineering organization, paying the extra percentage in management fees. This not only freed her up to concentrate on sales, but as luck would have it, the off-shore out-staffing company, Mirantis, turned out to be a diamond in the rough. With top graduates from Saratov State University, these engineers were from the ranks of champion, world-class programmers, who had been winning computing tournaments since high school. Mirantis is the very company Grid Dynamics recently merged with to extend its services into the out-staffing business.

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These learnings have paid off. Livschitz’ three-year old startup, Grid Dynamics, is already profitable and growing. And she is looking to hire in sales, marketing and engineering.

Grid Dynamics Team

Here's a few more details about Grid Dynamics. They help enterprises architect, design and deliver business systems that handle peak loads, scale on demand and always stay up. Using the latest advances in grid and cloud computing, they help their customers turn monolithic applications into scalable services and underutilized server clusters into virtualized compute clouds. The results: better performance, higher availability, faster time-to-market and lower operational costs.

Some of the complex technical challenges they have solved include architecting an industry-first commercial "utility computing" offering, pioneering the use of transactional grids for real-time fraud detection, applying semantic web technologies to develop a rule-based grid configuration management system for a 22,000-node grid, and developing industry-first best practices for building data-aware enterprise grids.

But what of the chess, I asked Livschitz? Grid Dynamics is great, but the world needs a woman to give Big Blue a run for its money! This will have to be a follow-up story: the story of Livschitz Chess Academy, the first professional chess academy in the mid-west, and Livschitz’ first entrepreneurial venture.

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Copyright © 2009 IDG Communications, Inc.

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