Uri Levine Top 2x Unicorn Builder Launches New Book In 2023
Uri Levine top 2x Unicorn Builder, author “Fall in Love with the Problem, Not the Solution” shares … [+] his amazing success story and profound lessons for entrepreneurs.
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Uri Levine 2x Unicorn Builder, author “Fall in Love with the Problem, Not the Solution” shares his amazing success story and profound lessons for entrepreneurs.
I caught up with Uri in a detailed far-ranging “unscripted” chat, shared below.
This article is driven by my global insights from working daily pro bono with more than one million CEOs, investors, scientists, and experts across 100+ projects.
URI LEVINE’S PROFILE
Uri’s profile is so extensive that a summary is provided with the non-profit IEEE TEMS (see interview series – Stephen Ibaraki – “Transformational Leadership and Innovation…”). This direct link contains the profile and video interview.
Extensively edited for clarity and yet still maintaining Uri’s personal voice, the themes, “partial” extracts and summaries, are pulled from AI generated transcripts (about 80% accuracy). To learn from the entire deep sharing, gain full precision, and understand the considerable nuances from Uri’s engaging stories, it’s “highly” recommended going to the full video interview.
Uri Levine is a passionate entrepreneur and disruptor, a two-time ‘unicorn’ builder (Duocorn). He is co-founder of Waze, the world’s largest community-based driving traffic and navigation app, which Google acquired for $1.1 billion in 2013, and former investor and board member in Moovit, ‘Waze of public transportation, which Intel acquired for $1 Billion in 2020.
Levine heads the “The Found CHAOers Kitchen,” a company-builder fund. Among Uri’s startups are Pontera (formerly FeeX), FairFly, Refundit, and SeeTree, and he is always working on the next one. Also, Levine’s first book, Fall in Love with the Problem, Not the Solution – A Handbook for Entrepreneurs, is published on January 17, 2023.
Levine’s vision in building startups is to disrupt inefficient markets and improve under-functioning services, focusing on solving “BIG problems” and saving consumers time and money while empowering them and changing the world for the better.
Uri has been in the high-tech business for the last 30 years, half of them in the startup scene, and has seen everything ranging from failure, moderate success, and big success.
He is also a world-class speaker on entrepreneurship, disruption, evolution vs. revolutions of markets, mobility, and startups. Motivated to encourage the next generation of thinkers and innovators, he also leads an academic workshop entitled “How to Build a Startup,” aimed at undergraduate and graduate-level business students.
Levine is a BA graduate from Tel-Aviv University. Before attending University, he served in the Israeli army at special intelligence unit 8200. In his public activity, he serves on the board of trustees at Tel-Aviv University. He also mentors young entrepreneurs at the Zell Entrepreneurship Program at Reichman University (IDC Herzliya).
The startups Levine is Co-Founder, Chairman or Board Member, with the agenda of ‘doing good and doing well,’ include:
Co-Founder and Chairman at Pontera (formerly FeeX) that helps individuals retire wealthier by allowing them to work with their financial advisor on held away accounts like 401(k), 403(b), 529, and more. Pontera enables more holistic wealth management and better retirement outcomes for their clients. Co-Founder, Chairman at FairFly that addresses the biggest secret in the travel industry: What happened to airfare AFTER the booking. FairFly helps corporates to save 10% of their travel budget. Co-Founder & Chairman at Refundit, an advanced, fully digitized service with a simple mobile app that simplifies tax-free shopping and helps tourists obtain their VAT refund, saving them the time, paperwork, and lines at the airport. Investor & Board Member at SeeTree, which has responses to the particularly devastating challenges in permanent crop farming such as crop losses, epidemics etc. Seetree provides a unique intelligence platform for tree-farmers fusing AI/ML, IoT multi-sensory data, and other advanced technologies to enable them to manage their permanent crops best. Co-Founder & Chairman at Fibo: All over the world, filling tax returns is either a lengthy and complex process or costly. Fibo’s online service minimizes the filing process in less than five minutes, providing employees with a fast and easy way to complete their tax returns. Investor & Board Member at Dynamo: Dynamo, with its On-The-Go Learning platform, brings learners (students/employees) to learn much more with zero extra effort. Its product, Dynamo10x, offers a unique user learning experience that boosts gaining and maintaining knowledge without changing content or education methods. Investor & Board Member at Kahun: Kahun re-invents the way medical professionals interact with evidence-based medical knowledge. Its technology enables creating a comprehensive medical knowledge graph and the generation of clinical insights using an inference algorithm engine. Chairman at Zoomcar: The largest car-sharing marketplace covering emerging markets. Zoomcar is India’s first personal mobility platform and today a market leader in the self-drive space. In 2018, Zoomcar introduced India’s first peer-to-peer-based marketplace for cars with the launch of its shared subscription mobility model and currently commands over 90% market share in this space. Board Member at Infosys: Infosys (NSE: INFY) is a global leader in next-generation digital services and consulting, with clients in more than 50 countries, 250,000 employees worldwide, and a market cap of $90 Billion. The company’s always-on learning agenda drives its clients’ continuous improvement through building and transferring digital skills, expertise, and ideas from the innovation ecosystem.
Uri Levine is a passionate entrepreneur and disruptor, a two-time ‘unicorn’ builder (Duocorn). He is … [+] co-founder of Waze, the world’s largest community-based driving traffic and navigation app, which Google acquired for $1.1 billion in 2013, and former investor and board member in Moovit, ‘Waze of public transportation, which Intel acquired for $1 Billion in 2020.
Credit: Uri Levine
Interview Outline and Interview Extracts
What were the inflection points in your life that led to this wonderful success? 0:00
Two things in the Israeli environment that makes it an amazing ecosystem. 3:06
What is the Israeli startup ecosystem like? 4:35
What led you to do your first startup? 10:03
Two or three things that really differentiated Waze from the rest. 15:20
If you don’t figure out product market fit, you’re unsuccessful. 20:54
The Found CHAOers Kitchen, a company-builder fund. 25:27
(Experiencing some problem and thus fostering some frustration which then leads to …) Is there a way that we can change that? 31:26
Why you need to fall in love with the problem, not the solution. 37:55
Firing and hiring is critical for success. 43:35
Different types of users and how to understand them. 48:42
Why you need to figure out your business model before you figure out how to grow it? 53:29
Stephen Ibaraki 00:00
Uri thank you for coming in. You are an icon in terms of innovation and transformation, and startups and entrepreneurship. And now you have this marvelous book and you get to share all of your experiences with a global audience. How many people would have your kind of background, tremendous success history, and really want to share that experience? And so it’s a must read.
Uri Levine 00:37
Thank you.
Stephen Ibaraki 00:39
My audience consists of investors and CEOs, but also people who are in mid career, and are aspiring to be entrepreneurs. And there’s also students as well. So it’s very broad. What were the inflection points in your life that led to this wonderful success that you’re having, and continue to have?
Uri Levine 01:09
You know what, I’m not even sure.
It’s probably fulfilling my destiny, always following the passion, the desire to make a bigger impact, becoming more meaningful, for more and more people.
I’m not sure exactly where was the inflection point. Maybe it was the choice to go into the tech space. When we didn’t even know what computers are.
Maybe it was the reality that I don’t take things for granted. And as a result, I would challenge pretty much everything until I get my satisfied answers. So I’m not sure where it was; the inflection point.
Stephen Ibaraki 02:08
That’s really interesting. I’m an investor, and we have investments in Israel. I find that it’s a really unique environment. Israel, and this confluence of R&D for the military, industry interwoven with universities and so on.
Do you think that helped in terms of your success?
I mean, you’re the co-founder of Waze. It’s the largest community driving traffic navigation acquired by Google for 1.1 billion in 2013.
Investor and board member of Moovit — Waze of public transportation acquired for 1 billion by Intel in 2020. So it’s like a Duocorn.
Do you think that helps, the environment that you’re part of as well? And then of course, you are global?
Uri Levine 03:02
Obviously, yes, right? There are two things in the Israeli environment that makes it an amazing ecosystem for startups in general. And recently, and maybe after Waze, for scaling up companies as well.
Part of it has to do with, as you mentioned, the military service, right? Military service in Israel is mandatory, and you go there at the age of 18. You stay for at least three years for males and two years for females. What it does is mature you faster, right?
At the end of this term, you ended up to be still uneducated, but much more mature person.
You understand working in teams. You understand leadership. You understand the state of mind that giving up is not an option. That makes you by and large, a better entrepreneur and a better leader. A better, maybe even professional in general.
The other part is that in Israel in general, the fear of failure is relatively low. The result is that there are more people willing to go into this entrepreneurship journey with high likelihood of failing. If there are more people starting the journey, then obviously statistically, we’ll have more finishing that successfully. Yes, makes Israel a better ecosystem.
Stephen Ibaraki 04:35
Israel ranks number one in the world as a startup nation. From a per capita standpoint, just a tremendous ecosystem. You find big corporates are there now, right? Because it is such a great ecosystem. I know you served in this special intelligence unit, the 8200. I guess you can’t talk about any of that work.
Uri Levine 04:58
It was long time ago; but yes, I was there. I spent there about six years.
Stephen Ibaraki 05:06
That’s a tremendous amount of commitment and dedication. And as you mentioned, you learn about leadership and teamwork and so on.
Uri Levine 05:16
The most important thing about the Israeli military service is for the secondary school. I would call that as a school or school for life, is that you get out of it. The fact that you go there, … is one thing. The fact that you get out relatively early in your career. Usually this is somewhere between 21 to 20 something. In my case, it was maybe 24. Gives you the training. The know how. The experience that you have gained. It has been used throughout your entire career later on, right? Because if I would do the same thing that I did in my military; in IDF time, in the US, then I might be still doing that.
Stephen Ibaraki 06:13
It’s interesting, too, that you are a graduate from Tel Aviv University, and there’s this company called PitchBook. They published that 100 top universities, which are incubators for founders. Out of the top ten, nine are American, one Israeli. Out of the top 20, 18 are American and two are Israeli. Yet again, it’s Israel disproportionately being represented, because it’s not a big country. Maybe eight to nine plus million people. You’re a graduate of Tel Aviv University. Tel Aviv is actually within that ranking. So, I mean, I think it’s either in the top 10 or the top 20. What was that experience like? Because it’s an incubator for founders.
Uri Levine 07:12
Yes. You look at the entire ecosystem, and you would say, okay, schools are part of it. Military services, part of it. Large or medium sized corporations are part of it. So if you’re working in a corporate, then around you, there are other people that sooner or later will become entrepreneurs. Will quit their job. Go and build a startup. Reflects sort of a bit of a role model for you. That you would say, Wait a minute, if they can, then maybe I should try that as well. In many cases, if you’re doing what you’re doing, then they would call you up and say, let’s build something new.
Stephen Ibaraki 07:55
While you’re definitely a star graduate of Tel-Aviv University. In fact, you now serve on the Board of Trustees at Tel-Aviv University. You also mentor young entrepreneurs at the Zell Entrepreneurship Program at Reichman University. It’s really interesting. You have these roots, and yet you’re giving back. Can you talk about that journey?
Uri Levine 08:18
So, you know what. When you and as an investor you probably would know; when you run into an entrepreneur. You know their personality. The personality of entrepreneur. But I have another very strong personality of a teacher.
And, so the giving back is fulfilling my destiny as a teacher. In guiding more entrepreneurs. More people and essentially helping them to become more successful. To a certain extent, I would say, I feel equally rewarded. When I build stuff myself, or when I guide someone and help someone to build it.
I ended up being the mentor for most of my CEOs in my startups. Guiding and mentoring other entrepreneurs. I feel equally rewarded in both cases. And that’s, by the way is pretty unique.
Not a lot of the entrepreneurs that you have seen before. You can tell them but they’re also teachers.
Stephen Ibaraki 09:30
That’s really fascinating. I actually taught computing technology, business and math earlier my career. So, I have this kind of passion or understand the passion for teaching.
Now you’ve been in this business for the last 30 years and half that in the tech startup scene.
You got into high tech. How did you bridge into high tech? What drove you into high technology?
Uri Levine 10:03
Very early, my first computer at home was a Sinclair ZX81. And probably the first home computer ever made and had one kilobyte of data. Just for the audience. Let’s make sure that we heard that: one kilobyte, not one mega, not one giga, not one tera, just one kilo.
That was maybe an eureka moment. For me, maybe an inflection point. Realizing that, wait a minute, I can actually write code in the computer. Actually do what I wanted to. An eureka moment. Then, I ended up doing a lot of programming during my military service.
The first five years of my career after that, I was a software developer at Comverse Technology. Comverse was doing the voicemail. We don’t remember that long, long time ago, we all had voicemails associated with our mobile phone. This is where missed calls were recorded. And we listen to that and return the call and so forth. And today, no one is using that anymore. But, occasionally, I would say, look, there are probably a billion users of Waze and there are a billion users of Moovit. With Comverse, there were more than a billion users, but no one knew that they’re using the platform. So that was not a consumer service.
And then during my Comverse career, around maybe 1996 or 1994. I stopped writing code and become more of a product and marketing and business person and until I left in the year 2000.
Stephen Ibaraki 12:03
I would say that’s an inflection point. Then the Sinclair because you started coding. It had to be really efficient, because you didn’t have a lot of memory.
Uri Levine 12:12
Yes, that was really efficient.
Stephen Ibaraki 12:18
You write (worked on) this voicemail system. And you have like a billion users in Waze; you have a billion users in Moovit. Your audience was actually even bigger than that, using this technology, and you were responsible for writing (working on) that and so on.
What led you then to do your first startup? How did that lead to Waze and then Moovit?
Uri Levine 12:51
My first startup, was actually dealing with mobile email. This is year 2000. In the beginning of the internet phones or smartphones with using WAP (wireless application protocol for wireless mobile accessing of information).
I bet most of our audience probably don’t even know what it is. There was a need to access your email from your mobile phone. When you’re on the move. We actually build a system that enables that. That ended up eventually, as a failure. The need was there, but it was actually addressed differently by Blackberry. That actually had a better product, a better solution for accessing your email. We were out of business.
I think that during the Comverse years, I started a couple of products within Comverse. That was more of a study to reflect the good ecosystem of Comverse at the time. Basically say, Okay, wait a minute, there are a lot of creative ideas within the organization. Let’s make sure that we are not missing them. Because if we don’t do the right thing, then those people would leave and they will be someplace else. They enabled the start-in approach. That was helpful for me because as I mentioned earlier, I would run into situations that I would say, Wait a minute, we have to do something about it. It will keep on bothering me until we either validate that or we disqualify that. Which is actually very good to disqualify something early.
My first startup was in the year 2000; turns out to be unsuccessful. After that, I joined Openwave, which was the pioneer of the mobile internet—the WAP (Wireless Application Protocol; tech standards for accessing information over wireless mobile networks) at the time. Later on, I was helping startups as a consultant to figure out their value propositions, their product market fit, and so forth until 2007, when we started Waze.
Stephen Ibaraki 15:20
You saw a need, and you were able to shape it and became really, really successful.
What would you say were two or three things that really differentiated you and created this great success?
Uri Levine 15:41
Focusing on the problem. Having the problem of traffic jams. Their mission to help drivers to avoid traffic jams as the North Star for our journey from the first day. Until even today, this is where Waze came about with this mission.
With the approach that we are going to help drivers to avoid traffic jams. Traffic jams is something that is happening every day. If you’re trying to address a problem that people face every day, and you’re successful in addressing that, you are very likely to be successful. That remains the mission of Waze from the first day and until today.
The other one which was critical as well, was the approach. We basically say, Look, in order to have to figure out what’s going on, on the roads, we need to have drivers ahead of us on the road, that they will tell us automatically. They will tell us what’s going on. We crowdsource everything. Not just traffic information and speed cameras. The magic of Waze is crowdsourcing of the maps as well. The reason is that at the time, licensing maps were extremely expensive. If you want to have traffic information, and in order to have that you need to have a lot of drivers. In order to have a lot of drivers, your application needs to be free. There is no way that you can license an expensive map and provide a free service that doesn’t work. We ended up creating our own maps and through crowdsource, which makes them not good enough at the beginning. And then after iterations becoming good enough. Waze was free; good enough and free wins the market. No one can compete with that. We ended up with disrupting the entire market.
Stephen Ibaraki 17:56
There are a lot of lessons in there that made for success. You saw need, and you’re able to address that need.
It was free. You said it was good enough and provided us with a sufficient solution that people would want to use it. Then you get this viral effect happening. Some people call it the Metcalfe effect, or maybe the network effect.
In continuing to grow, you must have had volatility during this process. Typically with startups, for those people in the audience, who don’t do startups, there’s definitely a lot of volatility. How did you manage that volatility with your team?
Uri Levine 18:36
Let me say the following. This is in general about the startup journey. People don’t realize that.
I would say three things about this journey.
It’s a roller coaster journey, with downs and ups and ups and downs. All businesses in the world have ups and downs. In particular, in the last three years, we have seen multiple ups and downs in the market.
These can create a little bit of a sense of ups and downs, but the frequency of those in a startup are way higher than any other business.
Rollercoaster is one part or one point of view of the journey. Journey of failures.
The reality is that we are trying to do multiple things and no one did before.
We have the conviction that we know exactly what we are doing. But the reality is that we don’t. So we try one thing and it doesn’t work. Another thing and it doesn’t work. We keep on trying different things until we find one thing that does work.
Journey of failures. There are two immediate conclusions out of the realization that this is a journey of failure. One is that if you’re afraid to fail, then in reality you already fail, because you’re not going to try.
Albert Einstein used to say that if you haven’t failed that is because you haven’t tried new things before. If you’re going to try new things, you will fail.
The other one is basically telling you, wait a minute. If you’re going to fail multiple times, then you should fail fast. The faster that you fail, you actually have enough time to make another attempt and another attempt or another experiment. Until, and the reality is that by having more of those, more iterations of the product, more trying different marketing approaches, you increase the likelihood of being successful.
Now the last part or the last observations of the startup journey is that this is a very long journey. The longest part of it is the one that I call, crossing the desert of no traction, nothing happens, right? You’re unsuccessful in whatever you try. The best way to think about it is, look, in startups, if they figure out product market fit, which means creating value, then they will be successful. If they don’t figure out product market fit, they will die.
The reality is that we never heard of a startup that did not figure out product market fit, they simply peacefully died. That’s it. But once they do figure that out, they don’t change the value proposition anymore. They don’t change the product anymore. And for a second, I would say think of, you know, everything that you’re using every day. From Waze to WhatsApp to Facebook (Meta), to searching Google, to Uber to Netflix, to whatever it is. Ask yourself, what is the difference between what you’re using today and the first time that you have used it? And the answer is that there is no difference. We are searching Google today, the same way that we search Google for the first time in our life, we are using Uber today or Netflix today. Well, maybe Netflix is a different story, or Waze today or whatever. Which basically means that nothing have changed since they figured out product market fit. This is the longest part of our journey. Figuring out product market fit. It’s a journey of failures, it’s a roller coaster, there were multiple times throughout this journey. We had patience whether or not we’re going to make it. When we started there were so many people that told us this will never work. These were the nice guys. The lesser nicer guys, they’ve told us that this is the stupidest idea that we ever had.
Stephen Ibaraki 22:41
Yes and you just have to ride that through. You have to have that confidence to keep persisting. And iterating, as you indicated, and finding that fit. You clearly found the fit. You got acquired by Google for 1.1 billion in 2013.
How did you get involved with Moovit? Both as investor and board member. Waze of public transportation, right? And what was that journey?
Uri Levine 23:11
The history is kind of different. They approached me in I think 2011. The CEO (Nir Erez) of Moovit approached me with the perspective that he would like to invest in Waze. He thought that Waze; it is brilliant. He really likes that and he would like to invest. We had this dialogue. We ended up with eventually taking money from Horizons Ventures (private investment arm of Li Ka-shing) and Kleiner Perkins and not from him.
A few months later, he approached me and says, Look at this idea. This concept of Waze for public transportation. Do I want to participate in any shape and form? I discussed that with the board of Waze. We finally agreed that the only thing that I can do is actually be on the board, but I cannot be active there. Not that it was a competition, but it occasionally could be perceived as competition. The reality is, look, in my mind, when you define your startup. Then your startup has this mission to do with two elements, right? The value propositions and the users or the customers. This is the value that we’re going to bring to these users. People that are driving are different than people that are using public transportation. They are not the same people, and therefore this will never be a competition. That part; people occasionally; they don’t see that. That there are only two elements to define a startup, the value proposition and the target audience.
Stephen Ibaraki 25:12
That’s interesting. Really you’re addressing different needs. There are similarities in terms of maybe the underlying solution. But really, they’re different targets.
You were very successful. I mean, acquired by Intel for 1 billion in 2020.
You also head up, “The Found CHAOers Kitchen” a company-builder fund. Can you describe this company builder fund? How did you come up with that name?
Uri Levine 25:45
I’m going to start with; I didn’t come up with the name. The reality is that most of the meetings happened in my kitchen. One told me, Look, all the meetings are happening in your kitchen, you should call that the founders kitchen. That was part of the informality of the process and informality of the relationship that we had.
Google acquired Waze in 2013. I left literally the day after. Since then, I’ve built multiple startups, about half are my ideas and half, founders come to me with their problem that they’re trying to address. I always join, way before they start.
I help them. Guide them throughout the entire process. Before the beginning. Throughout the beginning, and then throughout the journey. And initially, I was investing my own money as pre seed round in many of those. Then I realized that what happened is that when a company gets pre seed, then they start to execute and demonstrate the value that they’re about to build. Then they run out of cash. They immediately need a seed round. So, they kind of stopped because they don’t have funding for that. And then the CEO goes to raise capital, which might take multiple months to raise capital. I thought that with this approach, I need to have an investment vehicle that actually funds all of those startups and keep on building them… We decided that we’re going to build this investment vehicle, and we call that the founders kitchen.
We ended up funding, most of the startups that I had at the time. Then COVID hit and that was much harder to raise capital remotely. So we ended up with less capital than we wanted.
Throughout this journey, I realized that I don’t like to be an investor. I’d like to be a private investor. And because in my mind, the commitment of the vehicle is to the CEOs, and not to its external investors. Now in my mind, if you keep on supporting the company, the CEO, then you eventually increase the likelihood of the company being successful. The derivative of that is going to be higher return for the investors. But the first commitment is to the CEOs and to the founding teams. That was my approach. I don’t like to be in the conflict of between investors and founders.
Stephen Ibaraki 29:04
I can see how that ties into your love of mentoring, and teaching and so on. Because you’re guiding that whole process from inception all the way through. And you’re carrying that forward.
I recommend the audience, look at your profile, as published with the interview, and see all the companies that you’re part of. There’s a lot of them. Including you’re on the board of Infosys, which is one of the world’s largest public companies.
Before we get into your book, you want to talk a little bit about some of these companies that you founded? How you got into the board of of Infosys and what that’s like? I know you have to be careful because it’s a public company, but the audience are curious.
Uri Levine 29:52
In general, I would keep a slot of my time, to help larger companies as well. Because of the relationship. Because of getting to see what’s going on in the world. Because of realizing that, wait a minute, even large companies needs to have the innovative and entrepreneurship perspective that will help them. To become more successful throughout their journey. Because at end of the day, most of the companies in the world; they might be disrupted. Their market might change. They might be disrupted, and they need to see the perspective of innovations and entrepreneurship.
Speaking about few of the startups.
This is really important for me. I always start from the problem.
My problem is usually being revealed by frustration. Every time that I get frustrated, I keep on asking myself. Is that really the way it is? Is there a way that we can change that?
I’ll give you a very simple example. This is maybe the thought process.
I travel a lot. I get to different places. And in many cases, I don’t know enough of the public transportation system there. So I would take a taxi.
Usually when you go to a new place, and you take a taxi from the airport, chances are that they’re gonna rip you off. For different reasons.
This is sort of a common taxi behavior versus tourists. They figure out, Okay, there is someone that doesn’t know…That’s an opportunity to be overcharged.
I say, Wait a minute, you feel helpless when it happens. Because if you try to explain to the taxi driver that it should be something else, then they speak to you in the different language and you have no clue what to do. You end up with paying. Because you don’t know what are going to be the consequences if you don’t. You don’t even know where to complain if you don’t like that. You end up with being ripped off and being helpless. I hate that when it’s happened. It does happen often, right?
And so I said, What’s the big deal of creating an application that calls that taxi meter? That you will tell you how much you should pay in each and every place. Because the taxi meter or taxi; they are public knowledge everywhere. It’s not a big deal to build. It’s a big deal to actually promote the application. Because this is a traveler application. Traveler application, you need to promote at the origin and not at the destination. You need to figure out different corridors between people that are traveling and so forth. There is a way to address that. And then I looked into that … It’s probably not good. It’s not probably big enough. I am still being frustrated every time …
This is a story about a startup that never started because I thought it’s not big enough in terms of the frequency of use; in terms of rest of the market is large, but the frequency of use is low. In the travel space it’s very hard to find successful combinations for low frequency of use. So this is a startup that never started. But, I might eventually start that as well.
Let’s speak a little bit about some that I did start.
Pontera formerly FeeX. We started that. Actually when I was still at Waze in 2012. We started with the approach that people don’t know how much fees they’re paying on their retirement plan and as a result, they are going to retire with way less than what they need. Over time, we evolved that into, it’s not just fees, right? If you take most of the Americans and asked them what do you invest in your 401(k) plan? The answer is probably going to be, I don’t know. The reality is that I do know the default. That whatever you set up the first day that you joined that working place, is still in most of the cases, still the case, right? Which basically means that if you don’t optimize your investment on your retirement plan, then you will are probably going to be way off, than the average return of those that do. The result is that you’re going to retire with way less. The Pontera platform enable financial advisors to support their customers 401(k) plans. Essentially to help people to retire richer, which in my mind is a mission worth building a product. Worth going through the challenges part of the journey.
FairFly deals with the biggest secret in the travel industry. What happened to the airfare after you book your flight? Now, you don’t know because no one is comparing prices after they make the reservation. Prices are going up and down all the time. They’re going up and down before you’re making the reservations. And after you’re making the reservations. You can actually, if the price drops, you can rebook the same flight at a cheaper price. You think about it from the individual perspective, but I want you to think about it from a corporate perspective. We can probably save corporates about 10% of the travel budget that goes directly to the bottom line. This turns out to be pretty significant.
Refundit deals with the frustrations of trying to obtain the tax free shopping when you travel. When you travel to Europe, you’re entitled to, when you buy goods, you’re entitled to get the VAT back, which be about 20% of the deal. When you try to do that it simply doesn’t work. They’re always bad things that happen, right? Maybe long lines of customers. Maybe the stores don’t have the right form. Maybe you go to the airport, and you ask if they have a tax free. They tell you, our course we have. It’s in a different terminal. That’s something that happens there. The reality is that about 90% of the cases people don’t get their money back and feel very frustrated. This is the last taste that they have from that hosting country that they just visited. You think about that. You say, What if we can simplify that? What if we can make it in an app? That all you have to do is scan the receipt, scan the boarding pass, scan your passport and get your money back. Right? As simple as that. That turned out to be way easier said than done, because it requires the governments’ to agree to the new approach. That takes ages. Obviously, during COVID, when there were no travelers to Europe, then the entire company went into hibernation mode.
These are just examples of startups. There are dozens of them on my website. I mentioned more of them in my book.
They’re all starting from a pain point. From a problem. I will be the first one to experience that.
Once you think of a problem. You think this problem is big. Then, the next thing that you really want to do is ask yourself, so who has this problem? If a lot of people actually have this problem, then I would say go and speak with those people and understand their perception of the problem. Only then, go and build a solution.
And so when I say, fall in love with the problem, not the solution, this is exactly what I mean. Start with the problem. Let the problem remain the North Star of your journey, because then you know exactly where you remain focused. You know exactly where you’re going. It makes your story way easier to be told.
If I would be in 2007. We will speak and I will tell you, Oh, I’m building an AI based crowdsourced navigation system, then no one cares, right? But if I will tell you I’m going to help you to avoid traffic jams, then all of a sudden you do care. And that’s the difference. When you think of the solution versus you think of the problem and in the steps that you’re making. When you remain focused on the problem. It is always about, am I making any progress in addressing the problem. And not whether or not my technology works or my solution works or that feature or these features are working or doing what they supposed to.
Stephen Ibaraki 39:59
That’s really interesting. That’s the basis of this book.
The book that’s going to be published January 17 2023, “Fall in Love with the Problem, Not the Solution”, a handbook for entrepreneurs.
What motivated you to write this? I’d like to hear your narrative behind this book and why you put it together? And because a book is a lot of work!
Uri Levine 40:27
There was COVID around and I was not traveling. I actually had more time available for me to write that. But, the book was a mission. The book is essentially taking my entrepreneurship experience. Molding that into my teacher personality and creating something that I would say, I can actually make a bigger impact to the world, if I help entrepreneurs to become more successful.
That was, in my mind, the agenda of the book. Helping initially entrepreneurs but then I realized, wait a minute, there are so many chapters there that are relevant to all business people in the world. To anyone in the high tech industry in general and not just entrepreneurs.
If I’m speaking about how to figure out product market fit, it’s a process. It’s an iterative process. Anyone that is building a new product, actually needs to go through figuring out product market fit.
That could be a very well established company. That could be a new team within an established company.
That could be a startup. That could be anyone. Many of those are relevant to pretty much everyone…
I am sure that it’s going to help you as an investor. To be able to qualify better and faster. And realize, as well, where is it, that your startup needs your help.
This is the book.
It’s fulfilling my destiny as a teacher in the sense that I can create more value to more people. As a result, will create more value to the world.
That’s why I wrote that.
The journey is not over, but the writing journey was about a year of writing. And in more months of back and forth iterations. And Adi, was doing absolutely amazing work, helping me throughout the entire journey. For a second, I would say, I’m not even sure if I would got here without her. And that’s the book.
Stephen Ibaraki 43:16
The book. I can see the entire narrative. We’ve been talking for 45 minutes, and then the entire narrative is in your book.
You’ve talked about this whole problem area. Fall in love with the problem, not the solution. Having that, as you mentioned, your North Star. This is not just only for entrepreneurs, it’s really for anybody!
Uri Levine 43:41
Give you a simple example.
There is one chapter in this book that is called, firing and hiring. I send that to the editors; to the publisher. They say, No, it should be hiring and firing. I said, No, it should be firing and hiring because firing is our (hard) decision. Hiring is easy decision. For all the managers, all the leaders in the war, making hard decisions with conviction is critical for their success path.
It all started from me speaking with a lot of entrepreneurs. That their startup failed them. I asked them what happened? They told me. We had this guy, not good enough. This guy, not good enough, was one reason I really heard quite often.
Another reason that I heard quite often was that we had communication issues, or something that I prefer to call the ego management issues.
I asked them, the most interesting question. When did you know that the team is not right? Now all of them said within the first month.
Within the first month. There was one guy that told me before we even started. You say wait a minute. If you knew within the first month that the team is not right and you didn’t do anything. The problem was not that the team was not right. The problem was that the CEO did not make the hard decision. Then he realized that firing are hard decisions and firing are critical decisions. Because if you don’t do that, the problem with having someone that does not fit, is that everyone knows. Forget the stuff that this person does not deliver what you expect them to deliver. Everyone knows that there is someone that does not deliver, or someone that is a complete jerk, and no one wants to work with them. Right? Everyone knows, and the CEO doesn’t do anything. That is the beginning of the end, because that will result into the top performing people would leave.
And so the entire chapter speaks about first of all, firing. The key takeaway that I will say to all the people that are hiring other people in the world, is the following. When you hire someone, mark your calendar for 30 days down the road. Ask yourself one question, only one question. Knowing what I know today, would I hire this guy? If the answer is yes, then you have done an amazing job. It’s time to tell that person that they are doing amazing job and you’re very pleased. But if the answer is no, fire them immediately, because you already put them in a path that they are not going to be successful. Part of it is them and part of it is you but they’re not going to be successful. And the longer that they will stay, the more damage that they will create because of everyone else. And so this is about, firing and hiring.
Another interesting chapter…by the way, think about it, as this is critical for startups. I would say yes, it’s definitely critical for startups. But this is equally important for organizations in the world, right? If you have the wrong people, the problem with wrong people is that everyone else. In that aspect, that turned out to be another chapter that I call, understanding your users.
This is coming from…it’s a story back in 2015, or 2016…2015, I think, I was speaking at a conference in Guatemala. Together with me was Steve Wozniak, co founder of Apple.
We had dinner the night before. I basically say, Let me have a selfie with you?
I took out my iPhone and on the iPhone, you can take a picture in two different ways.
You can click on the bottom (of the screen) here. It will take a picture, or you can click on the volume bottom on the side in order to take a picture. So I stand up and took a picture with the volume button. He told me, Finally. I said, Finally, What? … (you are) finally using it the way that I meant it to be.
Just think of the evolution. The iPhone came out of a digital camera. Just imagine that this is not an iPhone. It’s a digital camera. We are holding it like this (on its side) and clicking right here (on the top with the volume button). Right? That was the common way of taking pictures before we had the push bottom on the screen.
You realize that, wait a minute, there are different people that are using products, different ways. Each one of us is an amazing sample of one person. That’s one person.
There are different types of users. Each one of them is using products differently. Each one of them is thinking of a problem differently. Each one of them is behaving differently.
In particular, even if we will say, Okay, we’re going to categorize them into different groups. We will have innovators, early adopters, early majority, late majority and so forth.
The problem is that if you belong to one group, you can not even imagine what comes to their minds of other people from a different group. You’re still a sample of one person or maybe one group.
There is only one way that you can try to understand people from different groups and this is watching them and asking why. If you’re an early adopter, then you think that, what’s the big deal, I can build a product for early majority. No. The early adopters, innovators, they are going to use a new product because it’s new. The new part is the most interesting part. Whether or not there is value in this product. If there is value, they will keep on using that. If not, then not. Early adopters; they will try to capture the value and if there is value, then they will use the product, there is no issues there.
The issue is with the early majority. They are not going to use the new product because they are afraid of changes. Their mindset is that, I’m having a happy life up until now. Whatever I’m currently doing is okay. Why do you want me to change that? They would need someone to take them by their hand, and cross that chasm of using something new.
If you’re a product manager, and you belong to the early adopters, or to the innovative group, you don’t see that unless you want to watch them and ask them why. They will tell you exactly that. Why do I need need to change? Whatever I’m currently doing is working fine.
Just earlier today, I had a WhatsApp dialogue with a group of people. They said, we were trying to schedule a meeting. I offered three different dates. They said we should use an app or we should use Calendly for that. I said, What’s wrong with Excel?
These are just examples.
A lot of people would like to think that a business model is something that they can create. The reality is that you don’t necessarily create your business model. It might be a derivative of what you’re doing. Of the value that you create.
In the end of the day, pricing level is always associated with the value that you create. Now the value that you create usually can be measured by either money or time. Sometimes it’s a headache, and then harder to qualify that but you still need to qualify the value that you create to your customers in order to be able to price it right.
Most of the startups will have three major journeys in their lifetime. Associated with that multiple side journeys.
Product market fit is always going to be the first one. But the two other major journeys are going to be growth and business model.
Again, each one of them is going to be guesswork; rollercoaster journey; journey of failures and long one. In a long period of time with no traction.
Which one is going to follow the product market fit?
Product market fit is always the first. But what do you do next?
If you look at multiple startups, then you realize that what we do next is not up to you to decide, it’s actually up to the value that you create.
I would say if you are building consumer service, and you have high frequency of use, then growth will follow product market fit.
If you have low frequency of use, then business model will follow product market fit and growth later.
Because with high frequency of use, you will end up with word of mouth growth. Doesn’t matter where you start, you will end up with word of mouth. People are using that a lot of times and they have an opportunity to tell someone else a lot of times and they will.
If you have a very low frequency of use. Let’s say that, one of my startups is doing tax returns. Tax returns is always complex and hard and expensive and so forth. And when we started to say, No. We’re gonna oversimplify that and we promised ourselves that our journey with the customer needs to be less than five … But the frequency of use of that is once a year. That you don’t want to deal with taxes more than once a year. And so, obviously, you need to figure out your business model before you figure out growth.
Waze and Moovit with high frequency of use. Obviously they figured out growth before and then the reality is that each one of them addressed the business model differently because of the durations of use. Waze durations of use is relatively long. And as a result if you have high frequency of use and long duration then I would say advertisement. That’s it simple as that. Don’t even bother to think of something else.
If you have high frequency of use and low durations of use, then I will say you are going to end up with selling data. Anything else is going to be challenging because of that.
In many cases you will end up with a business model and a growth strategy that relates to what your product does, right?
What’s the value proposition that you bring in, and how people are using that, or how customers are using it?
These are all, each one of them, is a chapter in my book, because each one of them is going to be a journey by itself.
Not to mention the fundraising by itself, which is a journey that is actually going to return itself multiple times, or potentially multiple times. Each time is actually different, right? Because the first one is about telling a good story. At the end of the day, when you speak with investors that invested in a startup pre seed round and you ask them why, They said, We like the CEO, We like the story, because there is nothing else. You don’t know anything else, and they don’t know anything else. Based on those two, then people will make the decision to invest.
Now, if this is the case, and you’re a CEO of a startup and looking to raise, your pre seed round or your first funding round, then you need to learn how to tell a good story. If you don’t know how to tell a good story, then people are not going to invest as simple as that.
Stephen Ibaraki 56:26
(I suggest the book has many dimensions beyond entrepreneurship and into broad area such as relationships and as a handbook for entrepreneurs, handbook for success, and handbook for life.)
Uri Levine 57:02
It abstracts many things. Many of the issues, many of the challenges that we have, it eventually abstracts that into something that is really easy to make the call; when because in many cases, we struggle too much … making decisions is hard, right?
The reality is that a lot of people don’t like to make decisions because they actually need to live with the consequences of them.
When I was younger, one day, I came to my dad and said, Look, I don’t know which path to follow, I have these two options. I don’t know which one to follow. He reached out to his pocket and got a coin out and said I am going to flip the coin. And before the coin drops, you’re going to make the call.
At the end of the day, we usually know what’s the right decision, but we’re looking for confirmation. Guess what the coin will drop. This is your confirmation.
By the way, I would say, look, there are … right decisions or no decisions. Because when you make a decision, you don’t know what it would be like, if you choose a different path.
Stephen Ibaraki 58:21
There’s all of these wonderful nuggets.
Just one final question.
What additional recommendations do you want to give the audience? That’s the last question.
Thank you to Adi Barill for setting this up. You were mentioned Adi before and she’s such a creative, wonderful, talented person and professional.
Uri Levine 58:44
I second that.
There is a place in my book, it might be at the end of it, but might be at the beginning of it, that I basically tell the audience the following. If there is something; if I’ve created value for you throughout this book, and I’m pretty sure that I will; but the value needs to be appreciated by the one that is actually I’ve created the value for them, then I would ask you to pay it forward. And make sure that you are helping. You’re creating value for someone else as well.
Stephen Ibaraki 59:25
That’s a wonderful message.
Uri thank you for sharing so much during this hour.
Your wonderful journey. All the success but all the lessons that you learned. Like you said, fast failing as well, and making the hard decisions and so on. I really enjoyed my time with you today. Thank you for coming in.
Uri Levine 59:47
Thank you appreciate that.
