Noam Bardin, a scheduled speaker at DLD, is the CEO of Waze, the Israeli crowd-sourced navigation and mapping app that sold to Google last summer for $1.15 billion. Bardin, who holds a B.A. in Economics from Hebrew University and a Masters of Public Administration from Harvard University's John F. Kennedy School of Government, recently spoke with Informilo’s Jennifer L. Schenker about Waze before and after the sale.
Why sell to Google rather than go public?
Why go public at all? None of us saw going public as a positive. I ran a tech company that went public [VoIP provider DeltaThree] and it was one of the worst experiences of my life. Why is the old model of an IPO still relevant? There are many other monetization models that don't require it. The question is more why we didn't stay independent.
Why didn’t you?
In the world of tech today the reality is that four, five large conglomerates will end up owning most of the technology. The large companies are going to build a product anytime something proves to be a success. In the case of Waze we were competing directly with Nokia, Google, Apple and TomTom which was quite something for a small company based in Ra’anana in Israel. If you are going to get really big you have to come up with a new platform. And only one successful platform along the lines of those built by the likes of a Google or a Facebook or maybe a Twitter comes along every ten years. The odds of it happening are slim. Every start-up should assume it will not happen to them so then the question is, 'how big can you grow on your own and who is the right company to acquire you?' For us it all came together.
What other benefits do you think the company has reaped since the Google acquisition?
A big mistake we made was not hiring more aggressively in 2013. By the end of 2012 we only had 108 people and should have had more. But we were conservative and agonized over each hire. We would wait until one of our employees would fall apart from exhaustion before getting them help because we didn’t want to create more overhead. What Google has done is to put their recruiting force behind us — now we have multiple people whose only job is to focus on recruitment for us. We are hiring very fast. Google knows how to find the best people everywhere; so we have a well-oiled machine working behind us now.
The sale created a lot of millionaires — including you — but a lot of people don’t realize there is a whole other group of people who benefited: the Waze sale netted $1.5 million for Tmura, an organization that for the past decade has offered high-tech entrepreneurs the opportunity to donate their start-up’s shares or stock options — as Waze did three years ago — with the proceeds going to help the disadvantaged in Israel. What led Waze to give a percentage of its shares to the organization in the first place?
The model used by Tmura began in the U.S. but never really took off there. That’s because Americans regularly give to causes; it’s part of their culture. This is not the case in Israel. So it was important to build a philanthropic model for Israeli high-tech people and that is what Tmura has done.
In 2013 Tmura distributed over $2 million to Israeli charities focused on kids and education. We involved all the employees in shortlisting five philanthropic organizations we wanted to support. It was a very moving moment. People were literally in tears when they suddenly saw what life is like for people below the poverty line in Israel.
Another great social outcome from our exit is that one of our investors, Li Ka-Shing (the billionaire investor behind Horizon Ventures, a Hong-Kong based firm that invests in early-stage ventures in the tech sector), donated the proceeds from the Waze exit. When Waze — his first tech investment in Israel — was sold to Google he donated $130 million to the Technion (Israel Institute of Technology, a public research institute located in Haifa) and another $140 million to a project promoting cooperation between the Technion and a Chinese university; so now Israelis attending the Technion can spend time studying in China. So a lot of public good has come out of Waze.
Waze has become the new poster child for tech success in Israel and is inspiring a whole new generation of start-ups to focus on being mobile first. In what other ways do you think the sale has impacted the Israeli start-up scene?
We are recruiting Israelis from abroad who work for Google and want to come back to Israel. We are also recruiting a lot in Israel so more Israelis are going to get trained in the Google way and see the world at a scale that doesn't exist in Israel. This was one of the key things that Israel was missing in the '90s: to know how do Bay area companies work and think, how start-ups go from small to huge and to do one of the things that makes Silicon Valley so special — building global tech brands. The most important factor in determining the success of a start-up is the experience of the founders along with who are their investors and mentors. When people eventually leave Waze, we will be releasing into the market developers and product people who have done it before, seen it and understand what it takes to become very big globally.
What’s next for Waze?
We have to look at the world at the scale of a Google — that is our challenge now. But Google is letting us be independent and allowing us to do things that are different and outside of its comfort zone. You will not see Waze becoming more like Google Maps but rather more and more of something else based on a stronger community, that is more social and used as an everyday commuting tool.