OnSSI Co-Founders Are Out

OnSSI's co-founders, Gadi Piran [link no longer available] and Mulli Diamant [link no longer available], are out of the company just a week after they were acquired by Qognify.

This breaks the common pattern of founders being incentivized to stay on, smooth the transition and maximize performance for the first few years after the sale.

Why were OnSSI co-founders out so quickly? An OnSSI co-founder explains to IPVM why and we look at the implication and the challenges faced.

Company Statement

While the companies have made no public announcement, they have provided limited feedback to IPVM. OnSSI confirmed that on Dec. 29, 2018 the two co-founders exited the company. This occurred just a week after the Dec. 22, 2018 acquisition announcement.

Qognify provided us this statement:

We can confirm that Gadi and Mulli are no longer part of OnSSI. We are very grateful for the founder stewardship that Gadi and Mulli provided for OnSSI. They have given Ocularis a strong architectural foundation upon which, as part of the broader Qognify family, we can now expand to support our customers and suppliers.

And OnSSI noted to us that "They have left the organization to pursue other opportunities."

Co-Founder Statement - Their Choice

[link no longer available]

Diamant [link no longer available] said that they choose to leave, telling IPVM:

One of the conditions we put forward to the buyer was to allow us to move on immediately and not condition a 2 year work or earn-out period. They accepted. We both are looking to be part of a new leading edge technology venture. Anything else are just rumors.

Rumors - Forced Out

Speaking of 'rumors', sources close to the company said the co-founders were forced out by Qognify, though, as noted above, Diamant says this is false. While Qognify provided the general statement above, when we asked about whether Qognify had made the decision for the co-founders to exit, Qognify declined to comment, saying that "there is no further information to share at this stage."

Problematic Handling

Whosever choice this was, it risks problems. There have been no typical farewell PR announcements thanking the co-founders for 16 years and ensuring customers that all is well, which might help publicly as well as reinforce that this was their choice. And, even if there was, the acquisition just happened, a typically sensitive period where employees and partners are often nervous about staying. Having the co-founders quietly and quickly exit may encourage more defections.

Moreover, Qognify's CEO is new to the video surveillance industry, so arguably the OnSSI Co-founders could have been useful for industry knowledge and connections.

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Co-Founder Explanation Email

Separately from his comments to IPVM, Diamant sent an exit email to partners, which he started by explaining their mission and initial challenges:

OnSSI was founded 16 years ago with a mission to transform the Security industry from Analog in to IP... Back in the early 2000’s, the resistance to this change was huge. People thought we are completely crazy, that this “Internet thing” will never work. They were wrong. We had a very clear vision, and we were 100% sure that nothing will stop this revolution. We knew this change would happen and it did.

The email shares their rationale for the timing of the sale.

The industry is now maturing. The need to consolidate has been clear for some time. We believe the acquisition by Qognify, backed by Battery Ventures, is the right move for OnSSI as a company. It is the right change to best support our customers and our employees

Diamant concludes by saying that it was his decision and that now Ken LaMarca [link no longer available] is in charge:

After much thinking, I have decided that after more than 16 years at OnSSI, it is time for me to explore other adventures.

With your help, OnSSI will continue and grow even further that it is today. I will leave you at the most capable hands of Ken LaMarca, our VP Sales and Marketing and his capable team.

Never Fully Recovered From Milestone Breakup

It is our view that OnSSI never really was able to overcome its Milestone OEMing origin. OnSSI was very strong in the 2000s, but as Milestone started to compete against them in North America and as the industry began to realize that OnSSI was basically rebranded Milestone, OnSSI struggled to become their own internally developed software solution, best emphasized in 2010 when OnSSI went on the offensive, in a classic video where they compared Milestone to a 'spacebar' on their 'typewriter' and said recorders like Milestone were a 'dime a dozen':

Qognify Outlook

Even with the problems OnSSI has had over the past few years, it is hard to view the co-founders leaving so quickly as a positive for Qognify nor OnSSI's customers and partners. A fresh perspective may certainly help OnSSI but Qognify management lacks industry expertise with a seasoned, but new to the industry CEO, and a management team that turned over almost entirely last year.

It does set up an interesting 2019 for Qognify with 5 VMSes, and 2 just added with the 2 co-founders of the acquired company immediately gone.