Self-Efficacy is a Key Anchor in the Entrepreneurial Journey

Didi Gurfinkel
Co-Founder & CEO of DataRails

"I dropped out of the standard education system, I did it out of a belief and sense of self-efficacy that I can do it alone."

Didi was a child and teenager who spent a lot of time in front of the computer and decided to try to do the matriculation exams alone, which he remembers today as an initial experience of success:

"I think that if there is one thing an entrepreneur needs or that characterizes an entrepreneur it is a sense of personal ability. This is a necessary tool both to take that step and so that others believe you are capable of taking that step."

Many years later, that same sense of self-efficacy led him to choose to be an entrepreneur after a career as a senior manager in hi-tech, in a role he defines as the optimum of economic prosperity and balance - "It came from a very strong feeling that I was missing something here. I'm not missing big money or other experiences, but I believe I am capable of doing something bigger;

"I came into the world with a set of skills and abilities, and something internal is pushing me to actualize them."

He was driven by a deep need to put himself for the first time in front of a real test where there is a good chance he will fail, and precisely there to prove his abilities.

The Entrepreneurial Journey as a Desert Wandering

When Didi and his co-founders founded DataRails in 2015, they came with one broad conception:

"Let's ‘save’ the world from Excel."

They wanted to create technology that knows how to take all the Excel files in an organization and consolidate them into a single data structure, thus solving fundamental problems in the company. He shares that they had five very winding and challenging years in which they tried to find their product-market fit:

"To say it's a roller coaster ride is almost cliché, because on a roller coaster you have big successes, and here it was more like walking in the desert; every time you think you see the next oasis approaching and then realize it's just a mirage, climbing a mountain and thinking you've reached the top but actually discovering there's more. It's a journey of fatigue."

They encountered every possible challenge - in partnerships, in recruiting and then firing employees, and with pivots they had to make every few months when each round people flew off the train, whether by choice or by necessity. 

This experience was challenging for him not only in his professional life, but also in his personal life - as someone who came to prove to himself and the world that he is capable of doing great things, he was frustrated to discover that things did not develop in the direction he wanted and hoped for.

Luckily, from the very beginning of the journey he was surrounded by a supportive environment - their investors who saw beyond the difficult period and gave them enough oxygen to continue their journey, his wife and children who strengthened him along the way, and of course his co-founders at the company, Eyal and Oded, who helped dispel the sense of loneliness that comes with the founder’s role -

“You find yourself between the outside world of investors where you need to project confidence and what works and how everything will be fine, and real life inside the company, where the focus is on finding problems and emphasizing them. It's a huge daily dissonance between rose-colored glasses and the glasses of the critic."

He summarizes that the relationship between co-founders is the basis for the company's resilience.

On Pivots Along the Way

"Doing a pivot is some kind of professional Japanese ‘Hara-kiri’ - after all the speeches I've made so far, all the presentations, proofs, I have to say -

“Guys I was wrong, it’s time for something new."

To get through this difficulty and uncertainty you need a lot of courage and to be very authentic - both with yourself and with your team. After realizing that the direction we went with does not work, we need to move on with a new direction and know that it may not be the final destination either.

Communicating that we were wrong and need to change direction is a move that can deter CEOs and managers at first glance, because as the tip of the spear holding the torch of the company's faith and vision we may think - what does it mean if I was wrong? Will they continue to believe in me and follow me?

These are natural doubts that will stay with us and probably never disappear, but in the end it is important to remember that no one knows the right answer, no matter how smart or experienced they are, and a true leader is someone who knows how to stand in the face of this uncertainty, accept it and still continue to hold the torch. Even in those dark places they went through as a team, Didi shares that he never doubted for a moment that they were capable of finding the right direction:

"I don't think there was ever a moment when I despaired. Yes I had to deal with my own test and leading a team on this journey, which is very challenging because you have to convey this sense of capability."

In this journey it is important to understand that mistakes and changes along the way are unavoidable, and a leader who communicates this earns much greater respect and appreciation than a manager who hides any sign of error or vulnerability. Responsibility is also to admit mistakes, get up and continue leading towards the goal with faith that in the end we will arrive. Faith that comes not from ego, but from a sense of mission - it is the most contagious.

Reaching the Desert Oasis

"At least for us, it took time to understand that this was an oasis. We realized in hindsight that it happened in 2020 when more customers came in, but we were so used to failures that we didn't even get too excited about it. Only after COVID when we returned to the office did we notice that profit and success had become stable, and in retrospect you can draw a straight line of growth from 2020 until now."

Following this, investors supported them in launching another fundraising round, and in the first year they went from zero to $1 million in ARR with one salesperson. The following year they were already at $10M ARR and since then have climbed from there to over $100M.

At that point Didi realized there was no longer any question of whether it would succeed, and they were entering a new phase - now, even the challenges that accompanied them in the early stages were replaced by other challenges of 'growing pains'.

Although the transition to a more advanced stage is positive, it can still cause discomfort and coping, as Didi shares:

"This stage is a very significant operational change - when you realize there is a pivot that has great feasibility, or the opposite - it has not been proven wrong, and then you need to turn off all the mechanisms and sensors you built in order to be in search mode. All the attention and resources of the company you suddenly have to put on one very focused and clear thing, and that's a shift I still haven't been able to fully pass."

Towards the end of the conversation, Didi and I (Gali) came to an interesting disagreement, when I asked him how he looks at where he is now versus his past. He shared honestly:

"I'm very proud of what we've done and how far we've come so far. On the other hand, I always say stories should be told from the end. What the end will be will greatly affect what happens now, just as if we were doing this interview in 2017 it would look very different, and probably talk about survival and how difficult it is." 

From my perspective (Gali) it was important to also emphasize how important the journey itself is and our feelings within it, even when we don't yet know what the ending will be - in the end the road is most of the trip, so in my eyes it's important to celebrate even the small wins.

Within this Didi clarifies -

"When you look for your achievements in the past and rely too much on them, it sounds a bit complacent to me. Who cares what's behind? We still have to build a big company, return a lot of money to our investors who placed tremendous trust in the company and entrepreneurs, the story is in the middle. All the self-congratulations are fine and provide a lot of pride, but I don't use it as a source of energy."

These two perspectives are important and balance each other, and each of us will find the place where we stand between them. It is important that we find what fills our energy reserves and allow ourselves to rejoice even within this complex journey.

In summary, when I ask Didi where DataRails is heading, he replies with a smile:

"We're going to be a huge company. That's why we came together."

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