Why Israel Innovates Faster & the Role of Community with Yaron Samid, Serial Entrepreneur & Founder of TechAviv

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February 18, 2021

What is Israel doing to produce the most startups per capita, VC dollars spent per capita, and unicorns per capita?

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Yaron Samid is the Founder of TechAviv, a global Israeli startup founders club that's 3,000 members strong. He is also the Managing Partner of TechAviv Founder Partners, a pre-seed venture fund backed and powered by some of the world’s most successful company builders.Yaron was born in Israel, grew up and began his career in the US, and is now back in Israel where innovation and venture capital is booming.

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We discuss what Israel has done and is doing to support its startup community, why community is crucial for innovation, and what other countries and communities can do to mimic Israel’s innovation success.

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Transcript

MPD: Yaron, thank you for being on the show today,

Yaron Samid: [00:01:14] Mark.

My pleasure.

MPD: [00:01:16] This is officially my earliest recording session. Uh, it's eight o'clock here and you're in Israel. What time do you have?

Yaron Samid: [00:01:24] It is three 15 in the afternoon. Got it.

MPD: [00:01:27] So you're a lot more awake than I am. Okay. Before we jump into all the interesting stuff you're doing today, I'd love to drive a little bit through your background.

So could we start, where did you grow up?

Yaron Samid: [00:01:40] So you might've guessed from my name, which you probably can't pronounce if you just see it written down somewhere. But, um, I was born in Israel. Um, but very early on, uh, moved with my family to, uh, the States I grew up right outside of Washington, DC. How old were you?

And

MPD: [00:01:57] you moved three and a half. Okay. So you were really young, right? Yeah. You don't have much in the way of an accent.

Yaron Samid: [00:02:03] I don't, I mean, I speak Hebrew fluently so we can do this interview in Hebrew if you'd like,

MPD: [00:02:08] it was a one-sided conversation, unfortunately.

Yaron Samid: [00:02:11] Okay. Um, and so yeah, I grew up in the States, uh, Always knowing that I I'd go back to Israel at some point.

Um, but my, so my, uh, my education and my professional career were all between, um, Maryland, New York and Silicon Valley. Uh, I did a stint where I went to Israel and I studied at our local, uh, MIT sister school, which is called the Teknion. Um, and, uh, eventually I ended up back in Israel Medallia five years ago.

MPD: [00:02:44] Okay, fantastic. I want to explore all of that. Uh, now I saw you went to Maryland for college and I was going to ask when you came to the States, if you came later, I was going to try to understand that, but it sounds like that's a natural progression for a local boy and over to Maryland.

Yaron Samid: [00:03:01] Yeah. So I wanted to be close to my parents.

I think that, that, that was the extent of that. Decision-making was just wanting to be local. Right. Um, and funny story, I come from a lineage of, uh, of great academics and engineers and chemists, biologists, et cetera. And all the males in my family were engineers. And so I went to Maryland to study engineering and within a few months I realized very quickly, not only do I suck at being an engineer, I really hate it.

Right. So I literally failed out. Like flunked out of engineering school year and kind of did a reboot on my, uh, my academic life left, Maryland to go study, uh, at the Tiffany on for a year in Israel. That was new. I wanted to go back. I wanted to do the army, that kind of thing. And, uh, so my, my kind of, uh, academic career took a hard right from engineering to, um, I studied like project management and product management and marketing and so forth.

And that led me to kind of more of a business career. Uh, I went back to Maryland to finish my degree and it wasn't like some literally a BS degree in, uh, just business administration marketing. Right. That was my undergrad. But

MPD: [00:04:21] you found a way because you know, tech is now such a prevalent industry to marry the engineering roots, at least a little bit with your business

Yaron Samid: [00:04:30] skills.

This is, this was dumb luck. I graduated in 95, which. You're old enough to remember it was pretty much the birth of the web. Yeah. Right. And so, um, with a marketing degree, the very first job I got out of a college was in New York city being a junior account executive at Edelman public relations. Um, but, uh, I quickly found out that I suck at being an employee and I hate corporate America.

And within four months I got fired. Now why I got fired is very, is very relevant for defining the rest of my career, which is a, and this is a quote by the way, the boss who fired me as she was kicking me out the door and said, you're just too creative for this place. And what she meant was, um, I wouldn't do things the way they were normally done.

So I don't know how much you want me to go into this story, but I'd love

MPD: [00:05:25] to hear because that, I think this is actually a common thread, a lot of the. Uh, innate entrepreneurs. I think there's a lot of entrepreneurs who made a career decision and they had business skills and they applied them and built companies.

But people who are wired at their core as entrepreneurs, I think can very often make terrible employees. Yeah.

Yaron Samid: [00:05:45] No. And it's, it's more a function of who you are than what you do. Um, by the way, I now lecture worldwide and the universities, this is pretty Corona, obviously. And th and I start my lecture on entrepreneurship by basically trying to convince everybody in the room, not to do it and give them all the reasons why it's just a really bad idea.

Um, and then I look around the audience and I see the one or two kind of shining eyes of the folks who go. Yeah. But that just doesn't apply to me. All that logic doesn't apply to me. I'm the outlier. And I, the thought of going to work for a boss who will tell me what to do all day long. Is just so repulsive to these people or they're just so not good at it, but they have no option, but to be themselves, which is a kind of a creative spirit, somebody who builds a tomorrow that they would want to see rather than being told what to build.

So the really quick story of what happened at Edelman was up. So at the university of Maryland, I, while I was flunking out of engineering school, I, um, Spend my hobby time down in the basement of a parking lot, where we had our computer, uh, open computers, a lap, and there was a bunch of geeks down there, like just messing around with like HTML and stuff.

And I taught myself HTML just for the fun of it. And by the way, the interesting part of that era in Maryland, one of the geeks sitting next to me was a guy named Sergei Brin, Sergei. Yeah. I've heard of him. So he, uh, another kind of, uh, Israeli connection there. He went on, obviously know on Google. Um, it okay.

Uh, and I went to go work at Edelman public relations. Uh, but when I was told that every single morning at 9:00 AM, when I get up into that 33rd floor, you know, time square, you know, ball dropping building, uh, with my suit and tie, I would have to take a pair of scissors. And I would have to cut out the clippings of our clients so that we could put them in a book and show it to the clients, all the great press they got because of what we've done for them.

And I was like, really? That's you use? This is 1995. There's this thing called the internet. And I wrote a little page where I like a bunch of eye frames where I had like all the big search engines at the time. If you might recall. Yeah. Who AltaVista, Magellan, Lycos. Exactly. Uh, Google, I don't think was even around and I would type in my client's name, hit the print button and get all these results of like news stories about our clients.

Staple it, put my feet up on the desk is brash, you know, 23 year old at the time and was like looking at it and all these other, you know, junior account executives are sitting there with their scissors. Now I thought. They'd be impressed. My boss literally said, that's really cool. Now go back and finish the clippings because I was done in two minutes.

Right. The other, the other folks were working for an hour. I was done in two. And so it's like, you got another 58 minutes. Why don't you go do some clippings? And I was like, you gotta be kidding me. That doesn't make any sense. My results are better. I did it in two minutes. Why doesn't everybody do it this way?

And she was like, Go back and do the clicking clippings that same day. I went to somebody else at the company, the CIO and plane. He told her and I was fired the same day. That's amazing. Best thing that has ever happened to me professionally.

MPD: [00:09:17] Okay. So you talked about being a nerd going down to the basement and, you know, hacking and teaching yourself code next to Sergei Brin, but that wasn't totally your profile.

And I think, uh, hearing your story, there's a lot of. Duopoly going on, right? You're this, you're an engineer, but not an engineer in business. You're a nerd, but you were also the captain of the volleyball team. That's not a typical nerd profile. So tell me how did being an athlete affect your career path?

Yaron Samid: [00:09:51] Uh, well, first of all, it gave me a social life. Like I got out of the basement, right. Volleyball and, uh, that kind of, uh, It takes your, your ability to socialize with other humans to another level. And I think that's probably one of the most important things you need to do. Certainly as a founding CEO, you need to be a people person, um, needing to actually have the skills to, to lead.

Um, and, uh, I got that from, from very much from being, um, the captain of that team. It was in my sport throughout, uh, from high school. I ended up playing like in the junior Olympic team and, uh, Yeah, I, I, I honed my leadership skills there. Um, I wouldn't say I was a coder. I mean, I taught myself basic HTML, uh, in the basement at a time where that was just like all you needed for building a website.

So I just wanted to kind of tinker around with building websites that by the way that skill is what led me when I was fired that day. Um, and I think this is quite. This is telling of an entrepreneur. I wasn't bummed about getting fired. I was like, wow, what a great opportunity. Like I hated that job. I was only four months into it, but I hated it.

And I kind of picked up a newspaper put through the classified ads. And there was an ad for an internet company that needed somebody who knew how to kind of build basic websites. And I was like, I actually know how to do that. Um, and so I applied and got the job that company, um, at the time was called foreman interactive.

Working out of like a warehouse in Brooklyn, that company turned into register.com public multi-billion dollar company. I was employee number four, doing marketing and building websites.

MPD: [00:11:33] That's amazing. You are a leader type personality. I've known you long enough. You were talking about it, you know, early with the volleyball experience.

It's obvious when you're speaking now. Right. I don't want is that. And not every entrepreneur is extroverted or dominant. Uh, you and I are both community builders. Uh, what about the people out there who are maybe not going to be leaders of communities, but are entrepreneurs they're wired for? It just, is, is joining a community enough?

What types of communities should they seek out? How can they get comfort and knowledge and context around being an entrepreneur? And they're quitting their day job. So

Yaron Samid: [00:12:18] first of all, that's a super important point and it goes back to what I was saying about self-awareness be okay with your strengths and weaknesses and understand if you're not that kind of person who likes to be in the front like you and I, and you know, uh, um, you're not comfortable in that role.

Don't force it. You don't have to be, there are many roles, uh, That come into play to building a company. The CEO role is just one of many. And if you're the CTO or the CMO or the CPO or whatever, it might be the janitor, it's so important for you to be true to who you are, because you are the best in the world at being that person.

You okay. And so plenty of your strength. In the case of, uh, you know, community building, if that's not comfortable for you, if you don't like to get up on stage and talk and stuff like that, be in the audience, join the other communities, you know, go to a meetup locally or a webinar now, you know, COVID days.

And, uh, just start, you know, being a, a true contributor to that community. You can share online, you can post, you can do whatever you want. You don't have to be in the front, but just being a contributor. Builds up this network inherently that you will learn from, you will give to. And when you're ready to start your company, you're going to have your potential co-founder from that community, your first hires, your first customers, your first partners, your potential, your first investors.

And that's something that you can start like years before you actually launch your company. And if you do so, it's that much easier. To build

MPD: [00:13:59] a company. It's fantastic advice. I'd add one thing to it. Uh, I started a entrepreneurship community for Columbia university and one of the main objectives was that I saw so many people who are talented, bright, passionate would be founders following a path that everyone else was on to wall street or consulting.

And that's not a bad path. It just wasn't the right path for them. And I think part of the reason they chose that path was because it was scary to go alone, to do something different, without context, without basic understanding. Uh, and so my hope with this community I started, which I think has had the impact is a lot of entrepreneurs.

They come, they don't know what they're getting into their . Uh, they hear other people like you talking, they find other friends who are on the same journey. It's just a hell of a lot less scary. If you have people alongside you taking the same steps and people you've seen fail and that's okay. And people you've seen succeed.

And that's great. So I think the community path is, is magic for a lot of us folks that

Yaron Samid: [00:15:05] there there's one more piece of magic that happens at those community events. Okay. I've actually coined a, uh, an acronym for it. It's E C K was VC, which is venture capital. You need to raise some money to build a company.

But there's only one thing that kills the company. That's when the founders run out of E C, U C as a motion capital. Okay. You are doing the impossible. The only, you know, fuel in your engine is that you have the emotion to actually take action to try. And then when you hit walls and you're gushing with blood in the face, you actually walk around the wall and keep going that emotion, capital, that fuel for the car that.

Creates, eventually a company is something that you can fuel up on when you're hanging around fellow men and women in the arena. When you realize that they're in the trenches and they're going through the slog and dealing with all the deep, psychological up and down of trying to be an entrepreneur, you, you fill up with that emotion capital that ISI and you come home and you.

Spend that extra hour, that night working on your PowerPoint deck. I love

MPD: [00:16:17] that super important. I love that, you know, you're hitting on something that keeps coming up is founder depression, right? The anxiety founders feel, uh, I think it's outsized to what a lot of people are exposed to with more stable work environments.

Right? What one week the future's bright and the next week it's very bleak. Yeah. They're associated with yourself. Yeah. And there's a psychological toll. So you think community is a good way to help mitigate some of that real good

Yaron Samid: [00:16:49] rollercoaster, a hundred percent like you see fellow crazies and you see that they're going through it the same way that you are.

It's not what you read. You'll read on tech ranch about this founder raise that much money. And this exit was that big, which is all so amazing. But when you get into these communities where these, you have a safe place where you can talk. Real talk with fellow founders. You realize that the vast majority of the time you're failing and the psychology is it cuts so deep because basically is a reflection on you.

You failed. There is no company it's you in the beginning. So your idea is stupid. You're not a good operator. You didn't hire the right people, et cetera, et cetera. And that's very hard to take constantly getting rejection. Um, and if you do it together and you realize that everyone's getting rejected, it kind of normalizes.

Yeah. Very important.

MPD: [00:17:41] Yeah. Very powerful stuff. I know you started off on the marketing side of the house. I think that's a good place for would be founders CEOs to cut their teeth.

Yaron Samid: [00:17:54] I do actually it's, this is a little bit of a contrarian, uh, take most, you know, uh, Most people in the tech world will say, you want to find two technical founders or, you know, tech folks who can build some proprietary IP I'm of the belief that you need to be uniquely astute at understanding the market before you even consider building anything for it.

And marketers, I mean, that's our jobs, you know, uh, we're supposed to understand what the market demands and then we need to fill that demand. Pretty simple of a formula. You need to build something that people actually care enough to want and understanding what people want is, uh, is a function that a lot of technical co-founders just don't have.

It can build amazing widgets, but most often people just don't care. Uh, and so along that lines, you know, my, my career was more of a product manager than a, just a pure marketing person. But as I, uh, develop my career became a CEO build organizations. I always had product management report into marketing, not into R and D.

Interesting. You want the ability to, to first and foremost develop a product that people care about. And so I actually think having that skill set is, is quite an advantage.

MPD: [00:19:14] And that's the customer development. That's the brand label that's been put on that philosophy. Right.

Yaron Samid: [00:19:19] And so customer validation, which is the very first step.

Of building a company. You just want to validate that there will be some people or some organizations who will care enough to even try your product and then maybe use it and then maybe pay for it. That's step one. Before you do anything

MPD: [00:19:38] else. That is fantastic advice. Uh, and now you're a serial entrepreneur.

I know that, uh, the people listening probably don't know everything about you. Can you walk us through some of the companies you've started.

Yaron Samid: [00:19:50] Sure. Um, so I mean, I had a few real jobs. Like I said, in the beginning, I was a registered at running marketing. Then I joined a company called back web and ran product management.

Uh, then I joined a company called Zen to the PHB company. It was VP marketing at my very first company that I started was called fan networks. It was back in 2001 where, you know, Napster scour, all these like illegal file sharing apps were around and the music industry was basically crumbling. Um, and I had this idea for creating a piece of software that the record labels could put on their CD, the physical CD that you'd have to buy.

And only if you bought the CD and you popped into your computer, then you would get exclusive tracks and, and, uh, commentary and video from the artists, et cetera. It was like a kind of vertical MTV channels for artists. I called a fan networks and, um, very, very early on merged with another company. This is about building a community and talking to other people in the space.

Met another company called DeskSite, but there were ahead of me. They had funding, they had a team and we merged. And so that became desk-side music. That was my first company that I co-founded. Um, the next company was born from the limitation of that business, the fan networks business, which was, we were monetizing with ads, but back in 2000, it was so expensive to deliver rich media from server to client.

And so I inspired by those peer to peer companies that were basically moving bits around the internet in a more efficient way. I built a legitimate enterprise peer to peer CDN content delivery network that could use peer to peer networking, to move files legitimately for people and businesses. And, uh, that company was called Pando.

Uh, grew very quickly to tens of millions of users, uh, was acquired by Microsoft. And then the company right after that was bill guard, which was, uh, my most recent company. It was in the FinTech space, personal finance management tool that use crowdsourcing to identify, uh, overcharging, uh, wrongful charges and overspending on your credit card bills.

Um, kind of like how computers can find what a bad email is by all these people clicking Mark as spam in their own inboxes. Right. We did the same thing for credit card bills. And that became one of the most popular, personal finance apps, both the Google and the, and the, and the Apple, uh, stores, uh, app stores, and was acquired by prosper at the end of 2015.

And, uh, yeah, those are the three companies that I founded as a, as a founding CEO. I've also helped start two more companies as a founding board director. One of them out of New York called pawn five. Uh, you probably remember that company. Uh, and, uh, CloudLock, uh, out of Boston, which was acquired by Cisco.

Um, so I've been, uh, been involved with helping build five companies. Been very, very lucky for those companies were acquired. Um, a lot of luck involved around the block enough had enough failures to get lucky a few times

MPD: [00:22:54] you you've had a tremendous amount of success on the entrepreneur side. Uh, you've made some career moves.

You, uh, You, you moved back to Israel, things have changed. Uh, when did you go back to Israel? When did that happen?

Yaron Samid: [00:23:09] It was, uh, three days ago, plus five years. So, well you ha you're counting. Yeah, exactly. It was, uh, January 4th, 2016. We moved back to Israel after.

MPD: [00:23:23] Interesting. Okay. And, uh, what drove you back?

You know, it sounds like you grew up in the States more or less.

Yaron Samid: [00:23:29] Yeah. So, um, Israel is my home. Uh, you can take me out and when I was three and a half, but you couldn't take the Israeli from, from within deep in my heart. Um, I always sort of knew. I always felt like in Israeli, living in America, I've always been very connected to the Israeli, uh, tech community in particular.

Um, and I, I knew I wanted to come back at some point, the, the, the catalyst was, was my wife. Um, I'm, uh, I'm very lucky to ma to have married an amazing Israeli woman who her whole family is here. And we knew that after she would let me play start-up for a while in the States, once I would sell bill guard, we would be coming back.

And so, uh, that is, that is definitely, you know, Kind of the catalyst for the timing. And I'm really happy about it because I have three young kids, uh, today, a 13 year old, a 10 year old and an eight year old. And having them grow up Israeli kids, uh, you can only really understand what that means if you, if you've lived in Israel, uh, and have Israeli kids, it's, it's a real, I'm very fortunate to have them be able to, to grow up here.

So that was a big. Those are kind of the main reasons for coming back. Um, I also now play an important role here in the local tech community. So I'm very privileged to be at the right place for myself professionally as well.

MPD: [00:24:56] Yeah. I can take us through that. So you started tech Aviv, right? And that's something you started when you were in New York, correct?

Yeah. Do you want to tell us a little bit about, uh, the first iteration of that as a community?

Yaron Samid: [00:25:09] Sure. So. Very much inspired by how I started the New York video meetup. Uh, I wanted to gather fellow Israeli founders, um, and learn from each other and help each other out. Um, and so back in the summer of 2007, I organized some fellow founding CEO's who were Israelis living in New York.

And we would just do a coffee shop meeting once a month. Same idea, very candid, open, safe space, where you could talk to fellow founders about. All the stuff you're going through. And, uh, that, that group today has become the largest, um, global organization of Israeli founders in the world. But more importantly than its size because of the way we grew.

So we wanted to really protect that safe place, that safe space. And so we kind of grew YPO style in order to. Be invited in an existing member would have to recommend you. And so we just skewed to a uniquely high quality cohort of a founders, 35 unicorn seven merged from this group that's but majority of them joined when they were preceded pre company and we've have over 200 companies that are valued well, North of a hundred million.

And, uh, till this day it's a nonprofit informal. Global network of Israeli founders who kind of get together now more online than offline, but usually offline major branches are like in, uh, Tel Aviv, New York, Silicon Valley, and Boston. But we have members in 16 cities around the world. And we were, we, the whole idea here is to kind of harness our collective knowledge as entrepreneurs and our networks in order to help each other succeed.

That's the whole spirit of the thing. And it's really turned into a very powerful network.

MPD: [00:27:03] Yeah. And it, it, it succeeded in no small part because of you, right. You have an enigmatic leadership style, which I think comes across even into this conversation. What did you learn about community management through the development of tech of Eve that other people should know, people who are going to follow your advice to go out and build communities of their own.

What are trade secrets or strategies or things that they should understand or think about to be successful in that community building skill.

Yaron Samid: [00:27:37] So really important question by the way, because a lot of, a lot of people are building communities these days, a lot of tools to do that online. Um, I think the most important lesson, uh, it's like foundational lesson of tech of Eve, is that the way it was started?

And until today, the way it is run. I, I guess, set a tone that this was a giving network. And if you've read Adam Grant's book, give and take and have, if you haven't highly recommend

MPD: [00:28:05] that. Okay. We'll be linking

Yaron Samid: [00:28:06] that to the show notes, give and take by Adam Grant, um, tech Aviva's a giver network. The idea is that when you join into this network, it's about what can you give to others?

How can you help others? Not what can you get from it? Um, and so when I started it, it wasn't like, what can I get out of starting a, uh, global network of Israeli founders. It was just wanting to give back. Um, and when you, as the leader of a community set that tone, it's kind of like, okay, that's the modus operandi.

That's how we function here. Um, there is no, there's no fee for being a member. There's no financial interest here. There's no big corporate above us who was like trying to. You know, scoop up some innovation, whatever. It's just a bunch of founders who get together to help each other out. When you set that tone, you define your ethos.

Ethos is a glue that binds you, whether you're three, uh, uh, three founders meeting at a coffee shop, or you're 3000 members worldwide, it's just kind of the tone. Um, it's the identity of the brand and the, and the network. And so then everybody kind of defaults to, wow. Everybody's giving kind of, okay. I should have to.

And one of the, I think one of the. One of the ways this manifests itself. And one of my favorite parts of our meetings when we get together is at the end of every, um, gathering, we do member announcements where any member can kind of stand up and say, here's, here's help that I need. And then typically we'll have a hundred or 200 other founders in the room who will then say, Oh, I can help you with that.

I can help you with that. People just raise their hand to say how they can help. And then we just match, make between them. And they kind of talk offline. I cannot, I wish I would have quantified this over the years, but the amount of hiring business development, fundraising, MNA, you name it advisory, like help that founders have provided each other through that, that framework, which by the way, it's the most meaningful thing I've done in my career.

I built a bunch of tech companies I've been fortunate, made, made some money. Um, the most meaningful thing that I have. Built in my life are these frameworks that enable founders to help each other where I don't have to be. I'm not a middleman. I do. I'm an accidental connector because I'm in the middle, on the human router, sometimes connecting the dots.

But when you, when you create that environment where everyone's just helping each other, that is exponentially more powerful. And so if you're starting a community today, don't think about what you can charge for membership or what kind of sponsorships you can bring on or. Think about what can you give to others?

And just give, don't think about what you're going to get back we'll credit. You'll get for it, et cetera, just give and you will get in return. Tenfold. My professional career has been built on the help of people in the communities that I've helped facilitate.

MPD: [00:30:55] It's very powerful advice. I received the same advice from a different person, a mentor of mine early in my venture career.

The phrase he used was the more you give, the more you get, but don't keep score.

Yaron Samid: [00:31:09] That's actually, by the way, you'll read that in the book as well. Uh, give and take. You don't want to be a matcher. There's three people that Adam Grant talks about, a giver, a taker, and a matcher. Um, the givers are always when they, whenever