It was also the largest buyout ever for an Israeli consumer firm, far
outdoing Face.com's sell to Facebook for $60 million last year. Waze's success opens a new frontier for Israeli start-ups, which have traditionally focused
encapsulated software solutions, to online consumer engagement
. Because these jobs are web-based, this precedent may also eventually shift Israeli start-up jobs from abroad to back home.
Venture capitalist David Stark immigrated from Wall Street to Israel to join the Jerusalem-based v.c. firm OurCrowd, which funds early-stage Israeli
Stark, a Wharton business school graduate wearing a kippa, or religious skullcap, says that he is seeing fewer Israeli companies move abroad because many
current start-ups are more internet-based. "More and more business is being done on the web. Successful companies like Waze that are more consumer-facing
have an online or mobile presence that you can build from anywhere. Now fewer [Israelis] feel pressure to move abroad." Of the 21 companies in OurCrowd's
portfolio, only 30 percent have staff located overseas, specifically in the U.S.
He claims that a lot of Israeli entrepreneurs prefer staying in Israel, but at some point, they feel the need to live abroad for a period of time in order
to broaden their networks: "I'll be sitting at a meeting, and [entrepreneurs] will show all the startups they have been in, and they usually will have
spent some time abroad."
But when it comes time to start their next business, he says, many will opt to return to Israel.
"They say, 'I want to do it here.' Maybe it's easier for them. They've been abroad, they've built the networks and can leverage the networks. Their
preference is to be closer to home, close to family."
One common criticism of the Israeli start-up scene is that few Israeli companies grow into mature businesses. This creates a pattern of "serial
entrepreneurship," in which founders look for a big buyout rather than developing a long-term company.
The first official statement from Waze after the buyout, however, seemed to
assure customers that its leadership team will not change anytime soon. "Nothing practical will change here at Waze. We will maintain our community, brand,
service and organization -- the community hierarchy, responsibilities and processes will remain the same," the company said. They further specified that,
"Our employees, managers, founders... are all committed to our vision for many years to come."
Uri Levine, one of Waze's co-founders, explains this line of thought in a recent speech at the Technion - Israel Institute of Technology in Haifa. He gives
the example of the Israeli entrepreneurs that formed the start-up HumanClick (now part of LivePerson), who remained at their company even seven years after
the buyout. Levine says, "I asked one of the partners a simple question, 'Why?' He said, 'It was the funnest workplace we ever had.' And with that
understanding, we decided that we were going to found Waze."