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Successful case: Tips to make your startup great

Meeting two entrepreneurs in one day who have made billions of exits – that’s only possible in Israel. One, Dov Moran, invented the USB stick, the other, Uri Levine, the navigation app Waze co-founded. But instead of sitting back and enjoying the beautiful life, they have remained down-to-earth, welcoming the Business Delegation of Foreign Trade Austria of the WKÖ and the aws i2 Business Angels friendly and taking their time to give insights into their careers.

The Israeli startup ecosystem has several key advantages over many others:

People are highly entrepreneurial, there is a lot of venture capital, a high-tech military with spill-over effects – and large international corporates (trending topics reported). Around 350 multinational corporations have opened offices in Israel, often with thousands of employees, to develop. And they make sure that there are billions of exits in the small country churning out. Here is an overview:

Startup Buyer Year of Purchase Year Mobileye Intel $ 15.3 billion 2017 NDS Cisco $ 5 billion 2012 Mercury HP $ 4.5 billion 2006 Playtika Chinese Consortium $ 4.4 billion 2016 Orbotech KLA Tencor $ 3.4 billion 2018 Imperva Thomas Bravo $ 2.1 billion 2018 Mazor Robotics Medtronic $ 1.6 billion 2018 M-Systems SanDisk $ 1.5 billion 2006 Waze Google $ 1.1 billion 2013 Trusteer IBM $ 1 billion 2013 Viber Rakuten 900 Million dollars 2014 Anobit Apple 400-500 million dollars 2011 CloudEndure Amazon 250 million dollars 2019

“There were many failures on the way to success”

Dov Moran, the inventor of the USB stick, is one of those entrepreneurs who have made a billions exit. The graduate of the Israeli technical college Technion has sold its already founded in 1989 M-Systems 2006 by about $ 1.5 billion to SanDisk (now Western Digital). The storage technologies developed by M-Systems are today an important component of flash memories installed in smartphones, notebooks or tablets.

The success was never pre-programmed. “We had very different plans,” says Moran today. It was not foreseeable at the time that the developments of M-Systems today are essential for flash memory. “There were many failures on the way to success,” says Moran. The 63-year-old is happy to pass this knowledge on to younger entrepreneurs today. For example, Moran is a mentor to Mobileye – the autonomous driving company that snatched Intel a whopping $ 15.3 billion in 2017, bringing Israel its biggest ever exit. And: With Grove Ventures, Moran runs his own investment firm, which finances deep-tech startups like 3DSignals or Kiralis with a fund of $ 110 million.

“Fails are hugely important for development”

It is not uncommon for successful entrepreneurs to remain true to the industry after major exits. Uri Levine, one of the three founders of the Israeli-based map app Waze, is another example. Waze was bought by Google for $ 1.1 billion in 2013 to snatch the then fast-growing Google Maps competitor’s rival Facebook. Today, Levine is working hard with Israeli startups – including SeeTree and Moovit – to build the next potential unicorn.

“Fails are hugely important to development,” says Levine today. You have to constantly try new things until a startup reaches its “Product Market Fit”. Often, the assumptions of founders about how consumers use their products simply would not be correct. Only those who evaluate the data and constantly adapt the service could turn the product in the right direction at the end. “The magic of Waze is that the drivers help shape the map,” says Levine about the crowdsourcing approach. “The concept was completely new, at that time no one believed that you could build such maps.”

China is coming to the USA

Still, it is US companies that put the most venture capital into Israel and make the biggest exits. But as figures from VCs Magma Ventures (Waze’s first investor) show, there has recently been a new trend: China is also pushing the small market. While the investments from Europe remain relatively constant over the years, the proportion that comes from China has grown to almost 30 percent. The next big exit could soon not be in the US, but in the Middle Kingdom.

Published inStartups

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