In November, Startup Grind Tel Aviv was pleased to host Yuval Tal, Founder & CEO of Payoneer. Payoneer is a leader in cross border payment solutions and is billed by many to be the next Israeli Unicorn. Yuval advice for entrepreneurs is special: it targets the single founding entrepreneur, from raising money from venture capitalists and angel investors, to landing your first big account.
Getting Started, with Room for Creativity & Grit
Yuval Tal grew up one of three brothers in Jerusalem and later in Tel Aviv. He jokingly attributes the seed of his entrepreneurship to the negligent education he received from his parents. His father worked in banking and his mother was a teacher and entrepreneur with her own travel company.
As a child he was not a great student which he partially attributes to his ADHD. He didn't follow instructions, either - another good early indicator that having a normal job would be a nightmare Yuval. It is often the case that an unemployable disposition is a big motivation for entrepreneurship.
Yuval didn't know exactly what he wanted to be when he grew up. But times have luckily changed: "the number of exits that Israel has had thankfully gives kids these days more options and role models than just being a fireman," said Yuval, and "doing something good that people will pay money for is the new dream."
After finishing high school Yuval joined the IDF. He was accepted into the elite 669 rescue unit and went through very rigorous training. He received high honors in a special awards ceremony for risking his life to save another, and for going beyond the call of duty. Yuval gives a lot of credit to the IDF for helping breed entrepreneurs. "The one criteria for producing entrepreneurs is having done something really hard. The IDF gives many this opportunity to do something really hard, take the punishment, do it from A to Z and then get the credential to prove to others that they are highly capable individuals."
Stairway to Heaven: From Engineering, Finance, and Marketing, to CEO
He then studied mechanical and biomedical engineering at Tel Aviv University and says that "engineering is a great education" but notes he ended up in banking like his father. He started his career in R&D but rather quickly moved to marketing and business development and then to sales and then to CEO. He advises the ambitious not to worry about leaving a post too soon if the direction is right. He further advises to "be transparent, I was honest with the companies I worked for about my ambitions." Yuval gives great importance to working on "something real" and likes to get involved with ideas early so he can help "create something from nothing."
And that is exactly what he did with his first startup Borderfree which allowed retailers to make an international impact by solving the payment and logistics problems associated with international retail sales. Like most entrepreneurs Yuval has an irreplaceable success path which involved a lot of luck and the right timing.
Borderfree & Payoneer: Dominating Payments
Yuval and an associate had worked out how payments could work online on the back of a napkin and found investment in the middle of 2000 right before funding completely dried up. One of the benefits of funding drying up right after the raise was that they had no competition. Anyone else with a similar idea a few months later could not find any funding. Borderfree eventually listed on the NASDAQ and was recently purchased outright by Pitney Bowes in 2015.
Yuval left Borderfree and started Payoneer in 2005 which according to its website "empowers global commerce by connecting businesses, professionals, countries and currencies with its innovative cross-border payments platform." Yuval adds "Business to business payments is a $50 trillion industry." So there was no doubt about the potential of solving cross border, cross currency problems. It was only a question of managing risk associated with those problems.
Payoneer was recently selected by Amazon as a vendor payment services provider. Yuval said "Amazon collects money and needs to pay vendors. If the vendor is in China it is quite tricky. Payoneer solved the problem." They started providing the services to the Amazon vendor without direct approval of Amazon and sort of "got them pregnant without meeting the parents." Once they were doing enough business and the customers were happy they met with Amazon and became an official provider.
The Secret to Success: Getting Good at Accepting Rejection
On the prevalence of male entrepreneurs Yuval says "To be an entrepreneur you should have a lot of experience being rejected. And men have more experience being rejected than women." Yuval has raised money from more than 30 VCs and 90 angels and says there is no secret to raising. His best advice is to ask the investor exactly what they are looking for.
"Some VCs only look for huge opportunities and so it can be too late in the development of the startup for that type of VC. For others it could be too early you have to learn how they think. Angel investors can have romantic reasons for investing and it is important to understand that."
He says it is important that the investor feel comfortable and on equal footing with the entrepreneur. "Start out by asking the investor how he got to his position. This will help get a conversation going as equals. Investors like to invest in people they like." Persistence is also important. "With investors 'no' means 'not now'. It is always good to ask them if it is ok to keep updating them. VC's want to see all companies because their job is not to miss an opportunity. They like to help. They might connect you to very important customers without investing."
For example Yuval didn't do a deal with Excel but took all of their portfolio companies as clients. He also advises that "negotiations should not be too tough because at the end you need to be partners." Also VCs will push to build a big company. But not every idea makes sense to build into a large company. Picasa for example needed to exit (by joining a larger ecosystem) early.
Company Culture 101: Lead with Radical Honesty
Yuval believes in running a company with radical honesty. "This means being honest with your investors, your employees, your board of directors and even with your competitors." He also believes that a single entrepreneur is better than having multiple cofounders "because tyranny is more effective than democracy." He does not believe in preparing traditional business plans and places a high importance on style and never being boring.
Yuval suggests to start global and in the mobile world global means Android. He believes the next big thing could be helping large companies get out of crisis mode. "US and China are both important" he says "it is not an either or proposition." Though he adds "the US is more accepting of new startups than China."
Yuval has invested in over 20 companies and believes that "greed is a good motivation" because that trade-off is fair: "young entrepreneurs are exchanging their youth and energy to create value." He also advises startups to be sensitive to local culture. "Have a Chinese sales team for China."
When asked about his investment in Bar Refaeli's lingerie startup under.me. Yuval said that Bar and her partner David Balsar were very professional and he was impressed with their business acumen. However "it is important to move on when an investment doesn't work." He ended his interview on a positive note adding "when you create value so many great things happen."
Watch the full interview with Payoneer Founder Yuval Tal in Tel Aviv below.