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A takeaway from Mini Seedcamp Tel Aviv: Submarine Captains and Fisherman

I had the privilege of attending Mini Seedcamp Tel Aviv last week. It was a great event with 20 impressive start ups and lots of good advice and good will from the Israeli entrepreneurial community. It’s exciting to see so much young talent in Israel and so many people willing to help by donating their time.

SeedCamp

During one of the panel discussions, Gigi Levy, who is currently the CEO of 888.com, made a comment that really struck me.

He said (and I hope he will forgive me if I misquote him) that “the same tendency towards secrecy that can help Israeli start-ups succeed in fields like semiconductors and enterprise software, can really hurt them when it comes to consumer-facing offerings.” The reason? When a company has lots of IP and is pursuing a step-function improvement in functionality, it can get away with disconnecting from the market and developing, developing, developing until its ready to show its wares to the market and get some feedback. In many cases, there isn’t much point in constantly communicating with the market when you are still months or even years away from a product or even a proof of concept. Lots of Israeli companies have historically been successful with approaches such as this one because their products represented major technological advancements. In other places, I’ve heard this strategy described as the “submarine” strategy. You put up your periscope from time to time to get direction and make sure you are on target, but most of the time you are underwater, moving towards your objective but not in eye contact.

On the other hand, if the success of your product is driven entirely by user adoption/behavior/experience and if it doesn’t represent a major technological leap forward, then you can’t afford to disconnect from your customers. You need them involved, almost from day one, to help give the product direction, to provide feedback, to do A/B testing, to start building a loyal user base and buzz, and to prove that you are on the right track in terms of providing users with value. By contrast to the submarine strategy, this one resembles a deep sea fishing boat – you’re always looking for the fish, and when you find them, you never take your eyes off them.

I think Gigi’s comment is brilliant and insightful – and deeper than meets the eye. It also says a lot about Israeli entrepreneurs and their historic sources of strength. As the Israeli entrepreneurial economy looks to the consumer as a source of opportunity, we are going to have to recognize that some of the ways we used to operate might need to shift. Fortunately, many Israeli entrepreneurs have fully embraced the realities of the consumer world, and many of them are returning to Israel to start companies based on years of experience dealing directly with the consumer at companies such as Google and Yahoo!.

So as you think about running your business, ask yourself whether you are the captain of a submarine or a deep sea fishing boat….and then ask yourself if you’ve picked the right type of boat for the job.

Hunt For Red October  deep-sea-fishing2

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