My name is YARIV LEVSKI,
I live in Tel

Aviv

YarivWife
1 Levski
2 Kids
Current status@ Israeli startup scene
1 Exit
Hobbi...
Let’s Start
Today
I will be talking about

Horses,
Startups and Israeli Eco System
Question:
Who wins a running
competition,

The man or the horse?
The man vs. the horse competition:
• Started after a Pub dispute

• 35 Km, takes place in Welsh
• 1ST Race at 1980
The man vs. the horse competition:
For 23 years, the horse won

On 2004 the man won! (also 2007)
(both times – it was very...
How can a man win against a horse?
What is the advantage for man In a HOT weather?

We sweat better than a horse
(Better a...
Some Research Insights
Startup Genome:

Why do startups fail?
Startup needs to be able to
scale properly

DISCOVERY

VALIDATION

EFFICIENCY

Confirm
whether they
are solving a
meaningf...
Scaling properly:
Customer, product, team, business model and funding
What were the results?
The research presents
2 kind of startups:
Inconsistent - scales prematurely
Consistent - scales properly
Companies that sc...
Team size
BEFORE scaling

AFTER

50%

50%

larger teams

smaller teams

Inconsistent startups have 50% larger teams
before...
18 times

Funding

more money

Inconsistent startups raise 3
times more money in the
efficiency stage and 8 times
less mon...
Customer Acquisition
45% of startups that scale prematurely spend more
than 15,000$ per month on customer acquisition
befo...
User Growth
16-26

10-12

Inconsistent
startups grow 1012 times faster in
discovery
stage, 1.5-2 times
faster in validatio...
Users (not paying) - how
many reached more than
100,000?
23%
23% of consistent
startups exceed
100,000 users.

exceed

100...
Users (paying) - which phase
they acquire Paying customers?
Enterprise startups that
scale prematurely have
75% more paid ...
Efficiency in programming
of lean product
inconsistent startups write
3.4 times more lines of code
in the Discovery stage ...
What is the focus on
Discovery phase?
77% of startups that scale prematurely focus 50% or more of
their resources in Disco...
Startups that succeed in scaling properly
Simply invest more resources at the
Right Moment (and not before)
Exactly like the man
that wins the horse:
They know how to sweat and cool
their body before losing energy and
dehydrate
Israeli Startups: Facts & Numbers
First,
Let’s start with some numbers
Capital Raised by Israeli High-Tech Companies ($M)
77%
73%

64%
76%

74%

66%

34%

Q

36%

24%

Q

Israeli VC Fund Share
...
Great eco system that attracts foreign capital
VC investments Y2D H1 2013 ( in Millions$)

Germany

France

UK

Israel

So...
Money in, money out - the ratio

Capital Received (M&As and IPSs

Capital Raised by Israeli High-Tech companies
So,
what is the biggest trend
in Tel Aviv?
Building

Big

Companies!

(Meaning Hugh valuations)
Biggest deal this year

Google buys WAZE:

1 Billion $
1 B$

650 M$

221 M$

250 M$

480 M$

405M$

650 M$

475 M$

235 M$

150 M$

120 M$

800 M$
The next big companies exits

Israeli companies with revenue over 50M$ /
valuation over 500M$
What’s the

secret
sauce?

No local Market
(8M people)

Commercial relations
with our neighbors: 0
What’s the

secret
sauce?

We build international
companies

From Day1*
*Save From China Israel is #2 country in NASDAQ
What’s the

secret
sauce?









R&D centers all every important US company
Government money supports R&D
Biggest...
With new records of valuations in exits,
the investors become more and more

patience to build big companies
As in Startup Genome,
The eco systems supports the startups

that reach scaling
BTW,
This is why Startups Genome ranked Tel Aviv as
2nd place best Ecosystem in the world
Tel Aviv Entrepreneurs are NOT
smarter than anywhere else
They just have more capital to scale
if they succeed.
This makes...
My advice (in a nutshell)
Make sure that you raise capital only

after
Reaching the scaling phase.

Don’t raise significant amount when
you’re not r...
That is the best way to

grow the company well,
And eventually earn
enough money to
buy a horse..
Thank You.
Current status@ Israeli startup scene
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Israel Eco system and timing by Yariv Levski

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Yariv Levski Presentation at coaching Day in Cologne, Germany (http://www.coaching-day.de/) about the Israeli Eco System.

Published in: Economy & Finance, Business
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Israel Eco system and timing by Yariv Levski

  1. 1. My name is YARIV LEVSKI, I live in Tel Aviv YarivWife 1 Levski 2 Kids Current status@ Israeli startup scene 1 Exit Hobbies: Triathlon
  2. 2. Let’s Start
  3. 3. Today I will be talking about Horses, Startups and Israeli Eco System
  4. 4. Question: Who wins a running competition, The man or the horse?
  5. 5. The man vs. the horse competition: • Started after a Pub dispute • 35 Km, takes place in Welsh • 1ST Race at 1980
  6. 6. The man vs. the horse competition: For 23 years, the horse won On 2004 the man won! (also 2007) (both times – it was very HOT weather)
  7. 7. How can a man win against a horse? What is the advantage for man In a HOT weather? We sweat better than a horse (Better abilities to climate our body)
  8. 8. Some Research Insights
  9. 9. Startup Genome: Why do startups fail?
  10. 10. Startup needs to be able to scale properly DISCOVERY VALIDATION EFFICIENCY Confirm whether they are solving a meaningful problem Seek validation that people are interested in their product Refine business model and improve efficiency of customer acquisition SCALE Drive growth aggressively SUSTAIN RENEWAL
  11. 11. Scaling properly: Customer, product, team, business model and funding
  12. 12. What were the results?
  13. 13. The research presents 2 kind of startups: Inconsistent - scales prematurely Consistent - scales properly Companies that scale prematurely are Average funding raised Classifies as Inconsistent And companies that scale properly are classified as consistent $ 1,100,000 $ 3,400,000
  14. 14. Team size BEFORE scaling AFTER 50% 50% larger teams smaller teams Inconsistent startups have 50% larger teams before scaling and 50% smaller teams after scaling
  15. 15. 18 times Funding more money Inconsistent startups raise 3 times more money in the efficiency stage and 8 times less money in scale stage 3 times more money EFFICIENCY SCALE
  16. 16. Customer Acquisition 45% of startups that scale prematurely spend more than 15,000$ per month on customer acquisition before optimizing their conversion funnels & acquisition costs. 80% of consistent startups spend less than 15,000$ 45% 15,000$ Spend more per month 80% Spend less
  17. 17. User Growth 16-26 10-12 Inconsistent startups grow 1012 times faster in discovery stage, 1.5-2 times faster in validation stag. 7-8 times slower in efficiency stage and 16-26 times slower in scale stage. times faster 1.5-2 times faster times faster 7-8 times faster DISCOVERY VALODATION EFFICIENCY SCALE
  18. 18. Users (not paying) - how many reached more than 100,000? 23% 23% of consistent startups exceed 100,000 users. exceed 100,000 Users 99% of consumer focused startups that scale prematurely stay below 100,000 users. 99% Don’t break the mark
  19. 19. Users (paying) - which phase they acquire Paying customers? Enterprise startups that scale prematurely have 75% more paid users in Discovery and Validation stages compared to consistent startups. 50% more users 75% 75% more users more users DISCOVERY VALODATION consistent startups have 50% more paid users in the Scale stage that inconsistent startups. SCALE
  20. 20. Efficiency in programming of lean product inconsistent startups write 3.4 times more lines of code in the Discovery stage and 2.25 times more lines of code in the Efficiency stage. 2.25 3.4 times more code times more code DISCOVERY EFFICIENCY
  21. 21. What is the focus on Discovery phase? 77% of startups that scale prematurely focus 50% or more of their resources in Discovery stage on product development. 45% of consistent startups focus their energy on customer development. Spend 50% Focus on customer development 77% Of their resources on product development 45% DISCOVERY
  22. 22. Startups that succeed in scaling properly Simply invest more resources at the Right Moment (and not before)
  23. 23. Exactly like the man that wins the horse: They know how to sweat and cool their body before losing energy and dehydrate
  24. 24. Israeli Startups: Facts & Numbers
  25. 25. First, Let’s start with some numbers
  26. 26. Capital Raised by Israeli High-Tech Companies ($M) 77% 73% 64% 76% 74% 66% 34% Q 36% 24% Q Israeli VC Fund Share Other Investors Q 27% Q 72% 73% 71% 26% 28% 27% 29% Q Q Q 70% 75% 30% 25% Q Q Q 23% Q Source: IVC Research Center
  27. 27. Great eco system that attracts foreign capital VC investments Y2D H1 2013 ( in Millions$) Germany France UK Israel Source: DFJ Esprit & Go4Venture Advisers mid-year analysis of European Venture Market
  28. 28. Money in, money out - the ratio Capital Received (M&As and IPSs Capital Raised by Israeli High-Tech companies
  29. 29. So, what is the biggest trend in Tel Aviv?
  30. 30. Building Big Companies! (Meaning Hugh valuations)
  31. 31. Biggest deal this year Google buys WAZE: 1 Billion $
  32. 32. 1 B$ 650 M$ 221 M$ 250 M$ 480 M$ 405M$ 650 M$ 475 M$ 235 M$ 150 M$ 120 M$ 800 M$
  33. 33. The next big companies exits Israeli companies with revenue over 50M$ / valuation over 500M$
  34. 34. What’s the secret sauce? No local Market (8M people) Commercial relations with our neighbors: 0
  35. 35. What’s the secret sauce? We build international companies From Day1* *Save From China Israel is #2 country in NASDAQ
  36. 36. What’s the secret sauce?        R&D centers all every important US company Government money supports R&D Biggest Patents per capita Biggest VC money per capita Failure - isn’t failing Presence of almost every important US VC Army as incubator of management and technology
  37. 37. With new records of valuations in exits, the investors become more and more patience to build big companies
  38. 38. As in Startup Genome, The eco systems supports the startups that reach scaling
  39. 39. BTW, This is why Startups Genome ranked Tel Aviv as 2nd place best Ecosystem in the world
  40. 40. Tel Aviv Entrepreneurs are NOT smarter than anywhere else They just have more capital to scale if they succeed. This makes a Hugh difference and allows to grow big companies
  41. 41. My advice (in a nutshell)
  42. 42. Make sure that you raise capital only after Reaching the scaling phase. Don’t raise significant amount when you’re not ready to scale.
  43. 43. That is the best way to grow the company well, And eventually earn enough money to buy a horse..
  44. 44. Thank You. Current status@ Israeli startup scene

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