Israel is a beautiful country with a rich culture of innovation and entrepreneurship. I recently undertook an internship at a MedTech company in Tel Aviv with some help from UQ Ventures. Here are some business strategy gems I picked up along the way.
1. Hiring starts on day one
This doesn’t mean that you have to put people on the payroll from day one, but you should always be looking for good people. Startups who see success always report hiring as a major problem, and so the easiest solution is to start building your network and looking for good people right from the get-go.
2. Honesty is everything with investors
Especially in Israel, the startup community is tight-knit. Dishonesty of any kind (including acts of omission) will always come back to haunt you.
3. Let go of dead weight
Speed is everything in the startup world, and so if someone is slowing you down or not pulling their weight, it’s time to let them go. The earlier and the faster you do this, the less painful it will be. The cultural bluntness of the Israelis probably helps a lot with this one!.
4. Take investment from strategic partners
When you take capital investment from someone, there’s a tendency to think that this means they become your boss or they have some sort of power over you. A more productive way to think about this is that they really become your partner, as your interests are typically far more aligned after investment. With that in mind, consider that a $100 investment from person A might be worth more than $150 from person B.
5. The more money you want to raise, the further in advance you need to plan.
This gem came from a startup founder who had recently raised USD $70m in a series C. He started planning the series C before the series B, which was 18 months prior!
6. Growth is one of the only things that matter in VC land.
Grow your monthly active users, revenue. site visits. Downloads. Metrics are important as they substantiate your delusions of grandeur. Spend your time on things that move the needle on these, rather than wasting your time on things that don’t! (This is an art and it’s very easy to get distracted).
7. Find the right business model
There are many different ways to fund your startup, including self-financing, bootstrapping (growing a company with revenue from the company), raising venture capital, listing on a public exchange (for mature companies), loans, government R&D grants and more. Make sure you consider the merits and drawbacks of all of them. For example, bootstrapping is the lowest risk, but is also the slowest, which can be deadly in itself in innovative ecosystems.
8. Start with a customer
In most cases, the very first thing a company should do is find a customer. Not a technology, not an invention, not a logo, but a customer. Start with a customer and find a product or service to sell them. This is often far easier than starting with a product, service or technology that people may or may not want and trying to find someone to sell it to.
9. If it's broke, fix it
Almost all startups pivot from their first idea. Don’t be afraid to change direction when it’s not working out, or it’s not working as fast as you’d like it to.
10. A good idea is nothing without a market
You can have the best product the world has ever seen but if your business model is broken, you will struggle. Therefore, develop your business model alongside your core offering. I saw lots of situations like this in MedTech. Some devices are very clinically useful but don’t have a clear party to foot the bill. This makes building a business around them almost impossible.
11. You need an elevator pitch
Pitching is a skill that is practised over many repetitions. Some VCs hear 700+ pitches a year and their attention spans are short. Practice delivering your pitch in short chunks that are digestible for all knowledge levels. This will help you become a high-quality ambassador for your brand, and enable you to communicate your ideas efficiently when you get in front of the right people.
12. Solution, launch, feedback, and repeat
This is the most efficient approach to building a product. If no-one wants your product, you want to know ASAP so that you can drop it and work on something else. You want to build something that just barely solves the problem it’s intended for, launch it, and see what happens. If you spend several months or more developing something without launching, you have no way to tell if anyone wants what you’re building, and you’ll therefore likely end up wasting all that development time. The “they never forget your first impression” mentality is out of date!
13. The upside of your company must be worth the level of risk
Consider this one carefully when looking to raise money. VC’s know that almost all VC-funded startups “fail” completely or struggle to significantly increase the value of their investment. Therefore, the minority of companies that do hit it big, need to hit it BIG to pay for all the others. Consider this when pricing your offering.
14. Avoid depending on regulation
Laws and regulations change all the time. If your company heavily depends on laws or regulations, try to find a way that your company could exist independent of those laws or regulations. The same goes for products that depend on other products, for example, Facebook Apps, Shopify apps, etc. When you have dependencies on third-parties, you open yourself up to instability when those third-party conditions change.
15. Focus
The only true advantage all startups have versus established corporations is their speed of execution. Decision-making loops are far smaller, and coordinating their smaller pool of resources is typically far more efficient. Therefore, you have to execute in a way that protects this advantage. The #1 reason startups fail is that they are not focused, and the main problem with this is that they dilute their main advantage: speed. Don’t boil the ocean. Target the right pain points and metrics, and go hard at these, and ignore everything else (at least to begin with, anyway).
Additional tips
- It’s okay to “fail”.
- There are smart, experienced people that don’t work at your company. Use them.
- Start with a problem, not a solution.
- Designing/building your product is just one part of your company.
- Companies that aren’t thinking global from day one will struggle to go global.
- You never know when or where you will meet an investor, co-founder or potential partner, so always be courteous, humble, professional and open-minded.
- Never disrespect your competitors (especially in public).
- People are more important than skills.
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