Israel requires all its citizens to serve in the army. A talented subset of these go to elite units such as the 8200 -- giving solders enormous responsibility for other people while developing their expertise in information security. When they complete their service, these entrepreneurs-in-training start companies. Fortunately for the U.S., they come to places like Silicon Valley and Boston to be close to customers and the talent they need to grow their companies.
One Israeli native, Yasmin Lukatz, found her way to Palo Alto and now leads an organization that brings this Israeli diaspora together and connects it with the Silicon Valley startup scene. As she explained in a September 6 interview, after serving in the Israeli Air Force for nearly three years in a helicopter search and rescue unit, she studied law, accounting and economics at Tel Aviv University and went to work as an investment banker.
From there she went to Stanford Business School where she earned her MBA -- then moved to Las Vegas where she worked for Sheldon Adelson, the chair of Las Vegas Sands -- helping with global expansion and cost cutting. In 2010, she served as Chair of Israel Hayom which is now Israel's largest daily newspaper. After that, she joined Evo, a baby monitor startup, as chief operating officer.
Since March 2014, she's served as Executive Director of the Israel Collaboration Network (Icon), a non-profit connecting industry leaders with Israeli tech and innovation. With over 300 Israeli companies and around 15,000 Israelis working in Silicon Valley the valley, Icon was created to spur entrepreneurship through networking.
Industry leaders such as Jeff Weiner CEO of LinkedIn, Keith Rabois of the "PayPal Mafia" and Alfred Lin of Sequoia speak at Icon conferences, leading roundtable discussions and looking to invest in Israeli businesses and Israeli talent.
Lukatz believes that local tech leaders participate in Icon because the combination of American sophistication and structure and the Israeli spirit of debate and thirst for disruption yields results in successful entrepreneurship.
A key player in Icon is angel investor Oren Zeev who has helped to finance and build many companies founded by Israeli entrepreneurs such as Houzz == which connects people renovating their houses with design professionals and products -- and Tipalti -- a global service that automates high volume global payments.
Houzz was started by a Palo Alto couple -- Adi Tatarko and Alon Cohen -- who were renovating their 1950s style home and did not like the way it was going. It was hard for them to envision a design and to find the right professionals to help. After spinning their wheels for a year, they scrapped what they had done.
In 2009, they started Houzz, a Pinterest-style social commerce platform for home design. Houzz supplies design ideas -- featuring interior photos supplied by architects and designers -- and product purchasing services so consumers can purchase what they see. Moreover, Houzz connects home professionals with people improving and designing their homes -- enabling consumers to engage with the professionals throughout the process.
Zeev got in early -- leading its Series B and participating in its Series D rounds. As he said in a September 14 interview, "Houzz is the only company providing an end-to-end solution for home renovation and design where people can get inspired, find a professional and shop. It built and introduced its two revenue channels based on the need and demand of its community. Houzz is dominant in attracting consumers and design professionals and strong in partnering with vendors. It has great momentum. I led the $2 million round of financing when Alon decided to quite eBay and work on Houzz full time. Nine months later Houzz raised its first venture capital round from Sequoia."
Houzz has since raised nearly $614 million in capital, serves 40 million monthly users and has more than 1.5 million home professionals in 60 categories (architects, interior designers, and landscape pros).
Zeev also helped finance and build San Mateo, Calif.-based Tipalti -- a company cofounded by his INSEAD classmate, Chen Amit, a serial entrepreneur that automates high volume global accounts payable. Amit and Zeev started Tipalti in the summer of 2010 when the president of InfoLinks, an online advertising exchange, told them that mass payments were a pain that needed a solution. Amit wanted to be sure that the market opportunity for helping InfoLinks would be enough to warrant starting a company so they "conducted due diligence to make sure it was a generic need."
They launched with their first version in September 2011 and a year later had signed up 25 customers with 15 employees. As he explained in a September 17 interview, Tipalti has since grown to 230 loyal customers -- with 85 employees -- some of whom are located in Herzliya, Israel.
Amit has built an organization of strong functional leaders. As he explained, "Our head of operations worked for a payments startup that was acquired by Fiserv; our head of marketing was previously a vice president of online marketing at NetSuite; our head of sales helped Coupa grow from $1 million to $100 million in revenue; and our head of engineering was hired out of the Technion and has grown into the CTO role. We are now looking for an internal CFO."
Zeev has helped recruit these talented executives. As Zeev said, "When were were recruiting the head of marketing, he was not looking for a job. But he liked Tipalti's problem domain; was impressed that it had near perfect customer retention; and he got a strong message about the value of its product. And Chen comes across as a grownup -- not a jerk. It is rare that I sit down with someone who I believe is a good fit for the company and can't convince him. I have the credibility to convey the message."
These examples suggest that Lukatz is right -- blending American sophistication and structure with the Israeli spirit of debate and disruption yields successful startups.