Hitting a Home Run
How Alumnus Steve Rothenberg Found Success as a Computational Chemist, Entrepreneur and Investor
By Emily PayneMedia Inquiries
For much of his career, Steve Rothenberg describes himself as being in the right place at the right time. He has been a top computational chemist, founded an international software systems company and been a prominent investor — finding success in these diverse fields was not about luck, but rather a testament to Rothenberg’s talents, his savvy intuition and a whole lot of hard work.
Rothenberg arrived on Carnegie Mellon University’s (then Carnegie Tech) campus in 1958 to study chemistry. He distinctly recalls a speech during first-year orientation where students were told that “while we were all going to graduate in a major, only one in three of us will be actually using that major five years after graduation.”
"Attending Carnegie Mellon took me from being an immature adolescent to a young adult ready to operate in the world."
Though he didn’t know it at the time, Rothenberg eventually would find himself to be one of those students setting out on a path that would take him far away from where he started.
At the Forefront of Computational Chemistry
In the summer of his sophomore year, Rothenberg received a National Science Foundation fellowship, which led him to the research group of Carnegie Mellon computational chemist Bob Parr. Rothenberg describes himself as the gofer for running calculations and programs on new IBM 650 computers in the wee hours of the morning.
“Back then computers ran one program at a time, and you physically had to be at the computers to do it,” Rothenberg said. However, computer programming skills were not yet formally being taught. “I needed to learn everything from scratch that was required to write a computer program,” he said. The combination of math, chemistry and computing was a thrilling challenge that steered Rothenberg to the University of Washington to pursue his doctorate in computational chemistry.
“To me, it was exciting,” he said. “We were basically pioneering the use of computers, solving these complicated equations, discovering why molecules form from atoms.” His research used IBM 709 and 7094 computers to calculate the various excited states of the hydrogen molecule, which led to several publications.
In 1966, Rothenberg accepted a postdoctoral position at Princeton University, where he invented the first comprehensive computer software for integrating multiple models for computational chemistry; the resulting software produced over 150 publications between 1967-1975.
At this time, Rothenberg was one of roughly 100 computational chemists in the United States, and only 200 worldwide. However, faced with the Vietnam War, a lack of funding for scientific research and harder to access mainframe machines, Rothenberg found himself at a crossroads.
Among the Microcomputing Vanguard
While at Princeton, Rothenberg had gotten involved in consulting for a data-processing service, University Computing Company (UCC), to help supplement his postdoctoral stipend. The company operated on a “time-share” model whereby customers could use UCC’s large mainframe computers and only pay for the time and the software that they needed.
In 1968, Rothenberg left academia and joined the company full-time as manager of software applications, where he evaluated and acquired software licenses for customers’ use, and moved out west to the company’s headquarters in Palo Alto, California.
Rothenberg left UCC in 1971 to work for Information Systems Design, a leading west coast “time-share” company, as manager and later vice president of technical services. But, by early 1976, the days of shared mainframe computers were nearing an end, and Rothenberg knew the company would need to adjust its business model to keep up with the changes.
“I saw the embryonic stages of the microcomputer introduction and thought that the company could use them to broaden its offerings,” Rothenberg said. When the company declined to invest in this direction, Rothenberg decided to start his own company, taking advantage of this new technology for office applications.
Founded in 1976, Rothenberg Information Systems (RIS) developed software for word processing, accounting, list management, legal billing, job costing and various database applications for microcomputers, selling hundreds of systems over the next 10 years. These software programs were integrated into microcomputers using the CP/M OS, the first mass-market operating system.
Rothenberg admits that these early years were a struggle. With the quick-paced changes of the computer industry, Rothenberg had to be on his toes, ready to adapt to wherever the market was headed. In 1981, IBM released its first personal computer and as off-the-shelf software improved, RIS had two options: sink or swim. In 1987, RIS shrunk from about 30 employees to six while the company transitioned to develop a collection and an accounts receivable management system for financial companies that offered consumer credit.
RIS developed software called the LegalMaster system to file and track lawsuits for delinquent card holders. With this software, the company became experts in helping companies collect bad debt. In 1990, additional components for collection agency management and bankruptcy claim filings were added and the product was renamed to RecoverMaster. A few years later, RIS became Rothenberg Systems International as their software went global with sales to Europe, and a third generation of the software named Atlas expanded sales to Asia. By 1999, the product was capturing 75 percent of the new systems worldwide, and Rothenberg agreed to sell the company to its biggest competitor, London Bridge Software.
A couple of months later, the dot com bubble burst in the United States, and Rothenberg knew that he had bowed out at just the right moment.
“It’s like in a baseball game where a player hits a homerun, maybe if he had swung a quarter of an inch higher, it would have been a pop out,” Rothenberg said. Fortunately, the company survived its acquisition and the dot com bust, and Rothenberg happily entered retirement after helping integrate the two businesses.
Investing in the Future
After retiring from his company, Rothenberg found a new niche — he became an Angel Investor and start-up advisor, investing in more than 20 startups, advising an additional 25 companies and serving on six company boards.
Since 2006, he also has been a member of the Band of Angels, Silicon Valley's oldest seed funding organization comprised of former and current high-tech executives. The Band has invested in over 277 companies and has had 61 profitable mergers and acquisitions exits and 11 initial public openings.
Post-retirement, companies continually have sought Rothenberg out for his leadership. He has served stints as chief technology officer and chief executive officer for three different companies between 2002 and 2009, before fully returning to retirement.
In addition to dedicating his time to the Band of Angels, Rothenberg keeps busy playing doubles tennis. Currently, he is ranked number nine in men’s tennis doubles in the United States Tennis Association’s age 75 division. Rothenberg has been playing tennis since his Carnegie Mellon days, where he played four years on the university’s varsity singles and doubles teams.
Thinking back, while chemistry didn’t stick for Rothenberg, he says that Carnegie Mellon was an invaluable formational experience that set the tone for much of his adult life.
“I had learned so many skills along the way —how to think, how to reason, how to present arguments, how to write, how to be critical,” Rothenberg said. But it wasn’t just academics that left a mark on him. “Attending Carnegie Mellon took me from being an immature adolescent to a young adult ready to operate in the world, which speaks to the development of the “whole” person by being in an environment that was both challenging and supportive.
“Learning about teamwork through both intramural and varsity sports, fraternity operations and projects and different living conditions in the dorms were all important non-academic aspects of my four years at CMU that prepared me for leadership roles in my later business life,” he added.