Taking a Punch: David Karandish

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I don’t like to encourage people to fail, but I encourage people to lower the cost of failure.

Overview

David Karandish’s Answers.com was a whopping success, but he was on the ropes 90 days after he began running it. How did his earlier startups teach him to take a punch?.

Summary

David Karandish is, by any standard, a massively successful entrepreneur. His most noteworthy transaction is the sale of Answers.com for $960 million—a “rounded unicorn,” he says, using startup shorthand for a billion-dollar deal.

But that success was hard-fought and made possible by a litany of failures and one unexpected disaster. Meanwhile, those failures—and that one big success—paved the way for what already promises to be another massive hit for Karandish, BSCS ’05. Capacity, his AI-driven customer support platform has been on a tear.

Our story hinges on a two-hour period in 2011, 90 days after David—at age 26—and his partners had engineered the merger of their company with Answers.com, taking the once-public Answers private. That day, David’s team watched the traffic drain from their site in the wake of a change in Google’s search algorithms. “Our $127 million acquisition went unprofitable in about two hours,” he said.

This is the story of what led to that moment, how David and his team responded, what in his history informed that response and how he’s carried those lessons into his next chapter with Capacity.

Along the way, we learn something about the difficulty of thinking in terms of failure—though failure was the fate of his first six startups. We learn about the danger of taking customer acquisition for granted. We learn how a successful entrepreneur can roll up the lessons into one more big win.

And we begin to understand why it’s so important to learn how to take a punch.

Other Related Links

• Capacity, Karandish’s AI-power support automation platform.
• “How do you build a tech giant?” from The Source at Washington University in St. Louis, September 9, 2016.
• “Olin alum, serial startup founder fills faculty entrepreneurship post,” WashU Olin blog, July 18, 2019
• “Olin entrepreneurship chief sells company he co-founded in 2007 for $30M,” WashU Olin blog, January 20, 2021

Credits

This podcast is a production of Washington University in St. Louis’s Olin Business School. Contributors include:

• Katie Wools, Cathy Myrick and Judy Milanovits, creative assistance
• Jill Young Miller, fact checking and creative assistance
• Hayden Molinarolo, original music, sound design and editing
• Nate Sprehe, creative direction, production and editing
• Angie Winschel, production assistance and project management
• Lexie O'Brien and Erik Buschardt, website support
• Mark P. Taylor, strategic support
• Paula Crews, creative vision and strategic support

Special thanks to Ray Irving and his team at WashU Olin’s Center for Digital Education, including our audio engineer, Austin Alred.

Additional information
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Download the podcast transcript (PDF)