How Mellanox's Eyal Waldman Built a $2 Billion Unicorn in Israel

Eyal Waldman is not satisfied with what he has done so far. He has built two unicorn companies in the Israeli semiconductor industry, yet cannot point to a single time in his life where he felt satisfied. In fact, he says, "I don't think I've made it." Waldman makes us wonder if perhaps he can ever truly be content.

Startup Grind Tel Aviv chapter Co-Director Ram Yonish chatted with Eyal Waldman in April. They discussed his path from being in an elite unit in the Israel Defense Forces (IDF) to becoming founder and CEO of Mellanox, a public company currently valued at over $2 billion. 

Born in Jerusalem to an economist father and a mother with a PhD in biochemistry, Waldman spent part of his childhood in Scotland. Having served in the elite Golani brigade, he credits his army service for much of his education. "Golani was the best education and training; it pushes you to your limits and forces you to overcome your fears and to make the right decisions under pressure. I also learned how to motivate and incentivize a team."

The global startup community knows about Unit 8200 ('shmone matayim' in Hebrew), the IDF's renowned intelligence corp responsible for many successful Israeli technologists. Yet, the majority of accomplished CEOs and entrepreneurs of Israel's startup scene don't actually come from this intelligence unit, but rather from highly respected combat units. 

Waldman enrolled in the Technion's chemical engineering program, and later transferred to study computer science. He then worked at Elbit Systems on the IAI Lavi project, the ambitious fighter plane undertaken by the Israeli Air Force. Though the project was eventually scrapped, its complex software development turned into the mission computer for the Israeli Air Force's upgraded F-16 fleet.

Waldman admits that "it was a mistake for Israel to develop a plane, from an economic perspective." He continued to work full time at Elbit while getting a master's degree from the Technion. Later, Waldman spent two years working on semiconductors at Intel.

A group of entrepreneurial-minded friends and Waldman used to go to pubs every Tuesday to discuss the 'next big thing' but did not hit on any big ideas. Eventually, they decided they could start a semiconductor design center for American companies in Israel. This was in 1993 and it was the beginning of a new company called Gallileo. Waldman describes Gallileo as "four or five guys in a garage." Waldman stayed with Galileo until 1999, which was an especially exciting time for venture capital backed startups.

Mellanox, founded the same year Waldman left Galileo, easily raised over $7 million in its first financing round from noted firms Sequoia Capital and JVP. Waldman started Mellanox as a high functioning elite unit of engineers, eventually scaling up with a relentless focus on execution.

Today, Mellanox has 2,600 employees (including three in Gaza and 64 in the West Bank), but still maintains its elite unit culture. This means shipping products bug-free. "When you do it right from day one, the customer likes you; they trust you, and you can build more products and grow into more markets."

Mellanox competes well against large companies like Intel and Cisco, which are 50 to 100 times larger, depending on the trading day. Waldman says Mellanox's advantage stems from its elite unit culture: "we kill with one bullet instead of five or one hundred like our competitors." Waldman mentioned that they're able to do this by hiring the best people in the world. "Our engineers do analog design better than any other company in the world." 

Whether he believes it or not, Waldman has achieved a major accomplishment. He has built one of the most successful and important companies in the Israeli tech economy. He has invested in over 20 startups and has offered wise advice to others who are looking to make it. Waldman has been constantly stressing the importance of integrity, fairness, and persistence.

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