Monday Jan 31, 2022
Episode 44 - with Ran Harnevo, Serial entrepreneur
Monday Jan 31, 2022
Monday Jan 31, 2022
About success & failures, and why perspective is a crucial mindset for the entrepreneurial journey
Ran is a multi-talent serial entrepreneur. He sold his company 5min to AOL back in 2016 for $65M, creating their dependency on their platform - that it was hard to get rid of them…
He had 150 employees, and his attitude was as he didn’t care if they would fire him every day. That enabled him to pursue his way, not to ‘kiss asses’ and to lead the company from $10M to $450M. He had a CEO & CFO who backed him, respected his Israeli attitude and saw his business leadership. It was then the rise of Google & Facebook, he saw that AOL is not on the same path and decided to leave at its pick.
He & @Hanan (Lashover) have been working together for 15 years. It’s a crazy ride, but they have a great relationship and handle things together. “We had so many wins together, much thanks to a very low overlap of responsibilities. He’s on tech, I’m on product & business. We had a great founder-founder fit…”
He was always passionate about content - from Hollywood productions with Steve Buscemi & Sarah Jessica Parker, to AOL & writing his own publications.
Then came Bkstg, creating music tools for customers. They brought Justin Bieber & Ariana Grande. It was a red flag for him when they chose as a strategy to go top-tier to bottom and not bottom to top. It was dangerous.
Ran understood he wants to control the DNA of the company. Living in NYC for several years now - he saw first hand the nature of immigrants' communities which led to founding Homies. FB Groups was a small product within FB. They raised $12M, and then FB changed their strategy - groups are suddenly the future. It decreased the need for their product. “Startup has 2 phases - to find the market-fit, and then to increase it to maximum valuation.” That’s when they’ve understood they need to raise a white flag, as they didn't have enough velocity and organic growth.
Closing the company
They approached 30-35 top VCs in the US, thinking of raising additional $20M. NY was Covidised, and Ran remembers his snow walks. They were very transparent with the management about the direction it goes, as Ran never saw himself as a cheerleader. The board strategized a plan. It took 4 more months and they closed. “…There’s a moment, when you need to be very analytical, mature & honest with yourself, and decide not to raise more funds just to keep the company going, if you feel that it’s not good enough anymore.”
How does it feel to fail others?
They didn't deliver the ROI. 85% of the investors were there in their previous companies, so it was a bit easier to digest and they were sensitive about it. “It’s all part of the game. In the game you sometimes lose. You know the game and you still go for it. It’s mentally hard to disappoint, which makes the choice of the right people to run alongside you even more important.”
Ran is considering his new opportunities. “The money is cheaper than the next 3 years of your life. The opportunity cost is crazy.”
Ran speaks warmly about NYC. He doesn't like SV. since 2008 when he first arrived till today - there are more than 400 Israeli startups operating in the city - “The Israeli Mafia”.
With his growing children, he felt this is the time to bring them back home. His daughter has a neurological syndrome, and it has impacted a lot on his journey as an entrepreneur and a father.
For some years, Ran, who is full of charisma, felt unbeatable. Till he got bitten. That gave him a new perspective, a crucial understanding also of how much luck is needed. He nowadays knows that things are not as dramatic as they seem to be at a certain point of time.
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