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

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. Let’s Start

3. Today
I will be talking about
Horses,
Startups and Israeli Eco System

4. Question:
Who wins a running
competition,
The man or the horse?

5. The man vs. the horse competition:
• Started after a Pub dispute
• 35 Km, takes place in Welsh
• 1ST Race at 1980

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. 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. Some Research Insights

9. Startup Genome:
Why do startups fail?

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. Scaling properly:
Customer, product, team, business model and funding

12. What were the results?

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. 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. 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. 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. 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. 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. 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. 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. 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. Startups that succeed in scaling properly
Simply invest more resources at the
Right Moment (and not before)

23. Exactly like the man
that wins the horse:
They know how to sweat and cool
their body before losing energy and
dehydrate

24. Israeli Startups: Facts & Numbers

25. First,
Let’s start with some numbers

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. 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. Money in, money out - the ratio
Capital Received (M&As and IPSs
Capital Raised by Israeli High-Tech companies

29. So,
what is the biggest trend
in Tel Aviv?

30. Building
Big
Companies!
(Meaning Hugh valuations)

31. Biggest deal this year
Google buys WAZE:
1 Billion $

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. The next big companies exits
Israeli companies with revenue over 50M$ /
valuation over 500M$

34. What’s the
secret
sauce?
No local Market
(8M people)
Commercial relations
with our neighbors: 0

35. What’s the
secret
sauce?
We build international
companies
From Day1*
*Save From China Israel is #2 country in NASDAQ

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. With new records of valuations in exits,
the investors become more and more
patience to build big companies

38. As in Startup Genome,
The eco systems supports the startups
that reach scaling

39. BTW,
This is why Startups Genome ranked Tel Aviv as
2nd place best Ecosystem in the world

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. My advice (in a nutshell)

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. That is the best way to
grow the company well,
And eventually earn
enough money to
buy a horse..

44. Thank You.
Current status@ Israeli startup scene