Yossi Vardi never quits. The man considered as one of the founding fathers of Israeli high-tech received a lifetime achievement award in May from Dun & Bradstreet’s DUN's 100 but it is still too early to conclude his tale. Vardi invests in startups, organizes conferences, and hosts foreign investors looking to crack the code of the “Startup Nation”.
“I have a revolving door,” says Vardi of his global guests, “There are days when I have three different meetings, with a variety of visitors coming to Israel to learn our secret; but the truth is that it cannot be replicated point for point.”
The past few years have been very good for Israeli high-tech.
“In the past decade it took on much bigger proportions. I am involved in a lot in dozens of conferences worldwide. I became really involved, looking into which conferences to join, even chairing them in 2003 and 2004; the growth is simply astounding. The last conference I chaired in Barcelona had 2,000 attendees in 2014, and 8,000 in 2015; by 2016 we had 16,000 guests. I think that shows a lot about the phenomenon.
It seems that the whole world is chasing innovation.
“Not the whole world; it is happening in a few places dispersed across the world, but the startups sit in clusters, with Israel a very important cluster. I’m fortunate to have ridden this wave from the beginning. I founded my first startup, TEKEM, in 1969. After a few years, it became the largest software company in the country.”
Vardi began his career early on. At the age of 27, he was appointed director-general of the Ministry of Development, which later became the Ministry of Energy and Water.
When you look back, do you have any regrets?
“The better question is what satisfied me. In my long career, I could have been involved in a slew of topics say, the public sector.”
Did the Israeli government follow the right policies for the high-tech sector?
“Luckily, the policy turned in that direction. It did not happen in a vacuum, it happened after a long, structured chain of activities to encourage these things. There were individuals and governments that helped actually, all governments cooperated with the industry. The process started even before the 1990s, but it took a serious turn in the 1990s when foreign capital entered the picture.”
You were a founder of firms.
“It is not only about founding startups, it is about the comprehensive ecosystem; there are numerous cog-wheels in the system and only when they all fit in their place does the whole system work as it does in Israel.”
You invested in dozens of companies and managed more than a few by yourself. What makes an excellent manager?
“I do not know. I think there are things that happened over the years because of my activity, not because of my excellence. Some things I do turn out very successful, and yet there are many times I falter. Maybe you just need to try a lot until you succeed. I think it is very hard to start with failure and maintain your morale. Usually you start with success, then you make a mistake with an idea not because of luck but because of your abilities, and you eventually fail. But I believe the people who start with failures have a greater drive for success.”
They are less complacent?
“They are less complacent and they are more motivated. By the way, my mother always said I was an idiot and it spurred me on.”
What about you. How did you raise your children?
“First of all, my wife raised our children. My eldest and I argued often because he was not fond of his studies, but he was extremely talented as we found out later (Arik Vardi was one of the founders of Mirabilis which was bought by AOL for $407 million in 1998).
“When you raise children, it is not about excellence as much as character. You want them to be good people. At least, that’s my perspective after all these years.”
Did you think differently in the past?
“Of course I felt differently long ago; but as you age, you shift your perspective and your priorities.”
You were involved with the illustrious Mirabilis exit; you must be familiar with the claim Israeli startups sell too quickly instead of growing into big companies.
“The State of Israel owes its success in the high-tech sector to the exit culture. We need to understand our limitations; we are a small country, covered in red-tape, and we have no local market we are tiny. When we tried to found large firms to fend for themselves in the past, they often collapsed after the first, second, or third hiccup: even great companies like Scitex. Elscint did not survive, nor did any of another twenty companies I can remember. When each one ran into a hitch that was not extraordinary by American standards, it failed.
“There’s an old adage that says when America catches a cold, we come down with pneumonia. The success of Israeli high-tech comes down to this crazy synergy, between big American companies and lots of small Israeli entrepreneurs. The big companies come here to buy companies and connect. There are 350-400 research centers of the most esteemed companies in the world; Intel has 10,000 people here, IBM has 2,200 workers here, HP has 6,000 employees in Israel, and Broadcom and Cisco also have a presence.
“It is important to remember that most startups do not survive, most startups vanish. It comes down to a question of which is better: to risk and entire industry in an attempt to build big companies and bury many on the way or take the innovation, the knowledge, and the abilities which fit startups so well but not big companies and to maximize that advantage. This connection to American companies is what built all these research centers that provide experience and training and create new jobs.”
So it pays off financially.
“Of course, these are big companies. Intel Israel is a big company by any standard. Why should exchange-listed companies be a more appealing prospect than a massive Intel Israel?”
What would you say you got right along your way?
“In my career, I made a lot of mistakes. Here and there, I had luck and things turned out well. I think the one area where I excelled more than any other is in my cooperation with many others; it helped build a system that I love. It provided me with satisfaction, and it provided me the opportunity to help and volunteer in many areas. It is no easy feat, because the tendency of each person is to believe that the way they want things done is the right way.
“When you cooperate with others, many things do not happen as you wanted, but many more things happen in general, and often enough they are better than what you could have achieved alone. Today my entire work process is to cooperate with other people that I love to work alongside. I bring my strengths, they bring their strengths, and together we do beautiful work.”
Is there any hesitation in the world about working with Israeli companies?
“Not in high-tech. There are two levels everything related to high-tech and everything else. Those who work with us, do it because they want to, because they love what we do. There will always be the political questions in the background. I believe that if we do not hurry with the two-state solution, it will not make our lives easier.
“But we also need to remember that the entire high-tech phenomenon is less than 10% of the workforce. We need to take a step back and think about the proportions. I think some of the negative symptoms we have seen are due to the gap between the digital natives and those who struggle with high technology.”
Published by Globes [online], Israel business news - www.globes-online.com - on June 14, 2016
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