Billionaire Aubrey Chernick read plenty of books about handling competition before starting his business, but he didn’t realize how tricky it would be until he launched software company Candle Corp. almost 40 years ago.
“I read a book on product differentiation and how any company can differentiate its product in the face of competition,” Chernick said. “They said if Charmin toilet paper can be differentiated from their competition, then any company can do this.”
But when the tech entrepreneur found himself competing with IBM almost two years into his business, he wasn’t so sure.
Chernick had created a product that could produce real-time displays of a computer’s performance and was set to pitch his technology to Southern California Edison Co.
The day before his big meeting, IBM announced that it had created a similar product and would be offering the service to its existing customers for free.
“I felt like they were taking a bull’s-eye to me,” he said. “I called up the people at SoCal Edison to see if they still wanted to see me and they said yes.”
And to his surprise, Edison agreed to a deal with Candle.
“It absolutely shocked me,” he said, and does to this day since he never got an explanation. “Then three or four years later it turned out that IBM, even though they had their own product that they developed internally, started to buy my product (and) they became my largest customer.”
He eventually sold the business in 2004 to IBM for $641 million. Chernick is now worth an estimated $1.29 billion thanks to his earnings from that sale and holdings in El Segundo software firm National Center for Crisis and Continuity Coordination, or NC4. That put him at No. 43 on the Business Journal’s Wealthiest Angelenos list in May.
The challenges of standing out in a sector as saturated as tech still exist, and now Chernick is hoping to help startups and consumers with his latest venture, NextGeneration Crowdfunding.
The El Segundo company launched two months ago and aims to be a resource for consumers and startups navigating new Securities and Exchange Commission rules regarding crowdfunding that allow nonaccredited investors to own equity in companies.
“There’s lots of little questions and angles and deeper questions that many people will want to know about, whether it’s investors or a startup company,” Chernick said. “We’re going to be providing a series of informational content and we have amazing experts that we have helping us out.”