Episode 12: Jon Medved, high-tech entrepreneur

The serial entrepreneur, who’s invested in hundreds of Israeli startups, on being at the forefront of the Silicon Valley of the Mediterranean.

The guest: High-tech entrepreneur Jon Medved is one of Israel's leading high-tech venture capitalists. He's the founder and CEO of OurCrowd, a company that has invested in more than 100 Israeli startups. What makes OurCrowd unique is that it's made up of 25,000 members from around the world, who all pool their resources together to fund these startups. They have 10 offices around the globe, from Tel Aviv to Toronto, and from San Diego to Singapore. Forbes called OurCrowd one of the largest crowd-funding organizations on the planet. To date, they've raised nearly a billion dollars.

The gist: "We are risk takers here," Medved told us. "We're also delusional; have been since Abraham. I think that combination of risk, acceptance, and delusion makes for great entrepreneurial excitement." On this week's episode, we sit down with Jon Medved in his Jerusalem office to discuss his career, his favorite startups and why Israel is such a fertile place for launching a high-tech company.

Further reading:

"Our Friend from Israel" is hosted by Benyamin Cohen. Our podcast theme music is by Haim Mazar, a Hollywood film composer who grew up in Israel. Follow our podcast on Facebook for behind-the-scenes access to the show.

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Jon Medved has invested in more than 100 startups from his office in Jerusalem. Jon Medved has invested in more than 100 startups in Israel. (Photo: Courtesy)

Host Benyamin Cohen (left) interviewing Jon Medved in his Jerusalem office. Host Benyamin Cohen (left) interviewing Jon Medved in his Jerusalem office. (Photo: From The Grapevine)

Transcript

Benyamin: On this episode of Our Friend From Israel.

Jon: Ideas are dimes a dozen, okay? Good entrepreneurs are much more rare.

Benyamin: That's Jon Medved. He's invested in more than 200 Israeli start-ups.

Jon: And the best things today, are really crazy simple. You start, you release it quickly, you iterate. You add features, later, that's what the later word is for. But look at Twitter, look at WhatsApp. Look at even Facebook, how it started. Just, it's got a simple ... Look at Google, look at that incredible ... Remember that homepage with just, it was so simple. I think that certainly, in the tech area, you can do really well by keeping it simple.

Benyamin: According to the Washington Post, entrepreneur Jon Medved is one of Israel's leading high-tech venture capitalists. He's the founder and CEO of OurCrowd, a company that has invested in more than 100 Israeli start-ups.

Benyamin: What makes OurCrowd unique, is that it's made up of 25,000 members from around the world, who all pool their resources together, to fund these start-ups. They have 10 offices around the globe, from Tel Aviv to Toronto, and from San Diego to Singapore.

Benyamin: Forbes called OurCrowd one of the largest crowd-funding organizations on the planet. To date, they've raised nearly a billion dollars.

Benyamin: On this week's episode, we sit down with Jon Medved in his Jerusalem office, to discuss his career, his favorite start-ups, and why Israel is such a fertile place for launching a high-tech company. Stay tuned.

Benyamin: Welcome to Our Friend From Israel, a podcast brought to you buy FromtheGrapevine.com. I'm your host Benyamin Cohen, and each week we'll have a conversation with an intriguing Israeli. They'll come from all walks of life. Actors, artists, athletes, archeologists, and other news makers.

Benyamin: In today's episode, we chat with Israeli high-tech entrepreneur, Jon Medved.

Benyamin: Hello and welcome to today's episode. Today we are in the Jerusalem office of OurCrowd, and specifically, we are talking to Jon Medved the CEO and founder of OurCrowd.

Jon: It's great to be here.

Benyamin: Thank you so much for having us. I notice you don't have an Israeli accent, so where are you from?

Jon: I'm originally from the States. I grew up in California, born in San Diego. Raised in L.A., educated at Berkeley, and came here to Israel 36 years ago.

Benyamin: I have relatives in San Diego, it's beautiful out there.

Jon: Yeah, it is, but not as beautiful as Jerusalem.

Benyamin: So, you cam here about 30 years ago. What brought you to Israel?

Jon: Hummus. No, seriously, I like the hummus, and still do unfortunately, all together too much. But, the culture, the excitement, the history, the spirituality, and ultimately, found my wife, and built a family, and found my way into business.

Benyamin: Were you always involved in start-ups? Or was there a precursor to that?

Jon: My late father was a physicist and a serial entrepreneur, and got involved with him. My first start-up, which was a fiber optic communications company, called MERET, which stands for Medved Research and Technology. We ultimately built a real pioneer in fiber optics and sold it to Amoco.

Benyamin: Now, you're based in Jerusalem. I always pictured start-ups as being a Tel Aviv thing.

Jon: Nah. Well, yes. I mean, Tel Aviv is obviously, this big brother to Jerusalem. But Jerusalem, now, is incredible. There are about 600 start-ups here. The ecosystem is dynamic. The largest, most successful start-up of recent time, Mobileye, is a Jerusalem company.

Benyamin: Really, I didn't think I knew that.

Jon: It was just bought last year by Intel for $15.3 billion. They're hiring 4,000 more people. The worldwide headquarters of Intel's mobility business is now Jerusalem. The Hebrew University is here, we have a spectacular incubator called Labs 02 who are setting out to invest in 100 new start-ups over the next 10 years.

Jon: So, the Jerusalem scene is pretty exciting. And I've lived here since the beginning. I'm committed to continuing to build Jerusalem.

Benyamin: Last time I was in Israel, I visited Jerusalem High Tech, it was by a mall, I think, on the outskirts of town?

Jon: In Malha.

Benyamin: Yeah. I was impressed. I didn't picture-

Jon: Look, there are all kinds of things going on here. And we don't make as much noise, perhaps, as Tel Aviv. Our Mayor, Nir Barkat's a very successful high-tech guy who was the seed investor at Check Point. Jerusalem's a great ecosystem.

Benyamin: So, a few decades ago, you got interested in start-ups because of your dad. And tell me a little bit about the genesis, and how things started to grow from there?

Jon: It's sort of, element leads to element. Basically, I built my first start-up with my father. It took about nine years from start to when I was able to leave Amoco.

Jon: Then I did my next start-up, which was only a two year episode. It was very successful company.

Benyamin: A chapter.

Jon: A chapter, yeah. A company called Accent Software.

Jon: Then I built a venture capital fund called Israel Seed Partners. We started with two million dollars, and ended up with about a quarter billion dollars under management. That was an 11 year gig. We invested in 60 companies.

Jon: Then I built another start-up called Vringo, which was a pioneer in social video, and video ringtones. Did that for six years and took public on the New York Stock Exchange.

Jon: Then five years ago started OurCrowd. So, I'm in the fifth year now.

Benyamin: Has the pace quickened? I mean, we're in 2018. I guess in the late 90s and early 2000s, we had the DotCom boom, maybe just from my perspective, I thought there was a few fallow years, but in the last five years or so, it's just every day I hear about it.

Jon: Look, the pace is unbelievable. You look at the blockchain and Crypto, and you ask yourself, "where was that?" I mean, things are coming out of no where. Autonomous driving, robotics, drones, big data, there is precision agriculture, digital health. It's wonderful, and exciting. I'm a big fan of technology.

Jon: I think there are potentially lots of issues in terms of how humans deal with technology. Technology itself is not inherently morally good. It can be used for evil too, and there are gonna be all kinds of negative side effects. Such as people losing their jobs, and evil people getting access to terribly powerful technology.

Jon: But, in general, I think it's good for the planet, good for people, and really good for Israel.

Benyamin: What is it about Israel that's such a good breeding ground for start-ups?

Jon: Because we are risk takers here. We're also delusional , have been since Abraham. I think that combination of risk, acceptance, and delusion makes for great entrepreneurial excitement.

Jon: Look, you have to believe that the odds don't affect you to set up a company. The odds of success are not good. But, no real entrepreneur looks at the odds. "Those are somebody else's odds, they're not my odds."

Benyamin: Right.

Jon: We have whole country of dreamers. This whole place was built on this concept, if you will it, if you dream it, if you want it, it's not a legend. What kind of country has that as its national, foundational motto? Start-up Nation. We were into pioneering and starting up before it became fashionable.

Benyamin: In all your years of working with, investing in start-ups, how many start-ups do you think you've had a finger in? Hundreds? Thousands?

Jon: Hundreds. No, not thousands. People ask me, you're getting on in age Medved, how do you keep track of all this stuff. Right now, our portfolio at OurCrowd is about 150 companies, and I can still remember them, and remember the CEOs, and more or less, what's going on. We have whole teams here to manage this, but I've been involved personally, now, in about 250 start-ups.

Benyamin: I know this is like a Sophie's Choice, do you have a favorite?

Jon: They're all my children. Look, we can talk about many of the companies that are really out there changing the world. Fast Company just two weeks ago, published their list for 2018 of the World's Most Innovative Companies. They have list, believe it or not, for Israel-

Benyamin: I saw that, yeah.

Jon: ...of the top 10. Now, what's cool is they have the Asia list, they have the Latin America list, then they have the Israel list. We get a whole continent. But of those 10 companies, four of them were ours. We are on the list, OurCrowd, together with Insight Tech, who have an amazing technology for Parkinson's tremor. Air Robotics, who do autonomous drones, and Zebra Medical, who are using A.I., or artificial intelligence for medical imaging. We have a bunch of really exciting companies that are changing the world.

Jon: We were just at AIPAC, the big gathering of 18,000 people in Washington. Of the four deals up on the stage, in what they call their Innovation Showcase, two of them were ours. A company called Edgy Bees, who were using drones to save people in hurricanes. And a company called CropX, who are doing sort of, wireless irrigation, if you will.

Jon: Whether it's in agriculture, or medicine, or the internet, or robotics, we're there.

Benyamin: Hello listeners. You'll notice that every single podcast on the planet asks you to rate and review them on iTunes. Why is that? Well, here's the answer. The more reviews and ratings that a show gets, the higher the show winds up on the iTunes charts, which in turn, helps more people find the show. So, if you're enjoying this podcast, please head on over to iTunes and leave us a rating and a review. It's greatly appreciated.

Benyamin: If you're looking for more episodes of Our Friend From Israel, head on over to FromTheGrapevine.com. One episode we'd recommend is our interview with Brian Blum, the author of a book about an Israeli start-up called Better Place, and it's charismatic, young CEO, Shai Agassi.

Benyamin: I think I read in your book he was also a competitive poker player with Ben Affleck and Tobey Maguire and he ran in those circles?

Brian: I wouldn't say exactly ran in those circles, but he used to sometimes play in the World Series of Poker, which took place in Las Vegas. At some point, Ben Affleck and Tobey Maguire were also in those World Series of Pokers, and Shai won a few small, but decent size pots as part of his poker playing, but he gave that up, actually, when he started Better Place. When Better Place went out of business, actually, he went back and played a little poker, and won a little bit more.

Benyamin: Look for that episode at FromTheGrapevine.com.

Benyamin: And now, back to today's interview, with Israeli entrepreneur, John Medved.

Benyamin: ...you watch the show Silicon Valley on HBO?

Jon: Love it.

Benyamin: How rooted in reality is stuff like that?

Jon: Surprisingly rooted in reality.

Speaker 4: Thanks for coming in and sitting down with us. We're really excited to meet a few good engineers to join the Pied Piper team.

Speaker 5: So, why don't you tell us a little about yourself?

Speaker 6: I don't work before noon, or after two PM. And I need to bring my dog to work. Are you dog friendly?

Speaker 4: Oh, yeah, you can bring your dog to work.

Speaker 6: That's not what I asked. Are you dog friendly?

Speaker 7: Nice pool. Can my dog go in?

Speaker 4: Yeah, we're very dog friendly.

Speaker 7: Is there a life guard? Because my dog can't swim.

Jon: I mean the guys who write this, are people who are wired. I always find it interesting to see all kinds of insider lore that is out there. Most people, i think, in the world, when you talk about exit, they look for how do I get out of the room. They don't think in terms of how do I get liquid in a private company. I think most people don't understand what a term sheet is. Or preferred stock, or liquidation preference. But, if you're watching Silicon Valley, you're starting to hear, and to learn this stuff. It's part of the Zeitgeist. It's part of who we are today.

Jon: This uber myth of people starting companies and changing the world and becoming fabulously wealthy, and hopefully doing good. We've seen it so many times. Whether it's the origins of Apple, or Google, or Facebook, or here in Start-up Nation. What we're seeing is that as people become delusional on mass, it actually creates a feeding frenzy where most kids today say, "You know, I can do this."

Benyamin: Right.

Jon: "I want to work for a start-up." What's interesting is they actually asked Israeli high school students, "How many of you either want to start a company or work in a start-up?" And the answer was like 75% yes. They asked the same question in Switzerland, and they got, I think it was 5% yes. Here, and I'm sure it's true of Silicon Valley, this is just part of life. Everybody wants to be part of this start-up game.

Benyamin: I was just talking to my niece who's deciding what to major in in college, and you know, she was ... For a while she wanted to be a doctor, now she just told me recently she wants to study computer science.

Jon: Good for her. We need a lot more women. That's one of the big issues, is we simply don't have enough women in this business. It's not just true about the programmers and the scientists, but it's also true for the venture capitalists and for the CEOs.

Jon: So, any of the women, or moms, who are out there listening, or dads. If you can somehow influence your daughters to get into this, please do.

Benyamin: Do you have a story of the most ridiculous start-up pitch that you ... Whether you went and invested in it, or didn't. I'm sure you've seen a lot of silly ideas for silly apps, or-

Jon: The really silly ones don't get to me any more.

Benyamin: Okay.

Jon: Because we have layers of diligence that prevent me from, hopefully, wasting too much of my time. We have a big team here do what's called Deal, Flow and are constantly, both being pitched deals in person, in writing. But most of the good deals are things that we're actually pro-active about. Look, we've missed wonderful deals.

Benyamin: Such as?

Jon: Well, we missed a huge Crypto Fund called Polychain. Which was like the first Crypto hedge fund. This would have returned literally 1,000 times our money.

Benyamin: Wow.

Jon: So, we miss stuff too. We hear really, things that sound crazy, but are true. We're very happy that we invested in an elder care robot called ELLI Q.

Benyamin: Yeah, we've written about that, yeah.

Jon: What an incredible story.

Benyamin: Isn't Toyota involved in that?

Jon: Toyota's involved, and Samsung now, and it's an amazing ... Stephen Colbert just made fun of it.

Benyamin: Really?

Jon: You have to put that up on From The Grapevine. That's a sign of really having arrived. That's part of the Zeitgeist.

Jon: Look, you get ... This is one of the most wonderful jobs in the world. When people get to come to you, and essentially share their dreams, and you get to be an enabler. In other words, with venture capital types, or crowd funders, like myself, have to keep in mind, we're not the maker or the spinner of these dreams. We're just enablers. We can be supportive. We can be helpful. We can fund. Okay, but it's really the entrepreneurs who do the work, and who create the value. But, being able to listen to them, and to choose them and to help them? That's a great lesson.

Benyamin: What advice would you give to people who are creating a start-up?

Jon: Go for it. Right now, it's never been better than now.

Benyamin: Really?

Jon: In other words, it's not the kind of thing, "Well, I'll wait a couple years, and see how the market develops. Right now is the best time to raise money, it's the best time to build a company. There's so many building blocks that are in place.

Jon: In the old days, for example, you had to buy hardware. Today, you don't buy hardware, you rent servers. You had to buy software. Today you get open source software. You had to hire full time staff. Today, you rent a coder. Find part-timers. You had to figure out sophisticated public relation strategies, today it's social networks. There's so much that's already there in place. Go do it. What are you waiting for? What's the worse thing that's gonna happen to you? You're gonna fail. Which only makes you, by the way, a better entrepreneur. Your odds of success in the second time, are much higher if you've had a failure.

Benyamin: It's that famous story with Walt Disney tried to get a loan from 100 banks before he found one that would give him money to start Disney.

Jon: Yeah, I don't think you're gonna need to go to 100 funders today.

Benyamin: Right.

Jon: Because there's simply a lot of people who want to get into this asset class, and if you've got a good idea, I think you have a reasonable chance of succeeding.

Benyamin: Our Friend From Israel is a production of FromTheGrapevine.com. If you're enjoying this episode about Israeli start-ups, you may also be interested in the story we published about a team of Israeli inventors who created a car that can fold up while you're driving so you can weave through traffic, and when you arrive at your destination, it can fit into a parking space, the size of a motorcycle. Here, take a listen to what one of the inventors had to say.

Speaker 8: To bring something like that is a solution for transportation in cities when so many people around the world are stuck in traffic jams, basically. It's gonna be something I think can really change the experience of drivers.

Benyamin: Check out the story of the Incredible Shrinking Car, on FromTheGrapevine.com. And when you're there, click on the podcast tab to find all the archived episodes of Our Friend From Israel.

Benyamin: And now, back to today's episode with Israeli entrepreneur, John Medved.

Benyamin: Is there a particular field, I know we've talked about health, medical, and autonomous cars, I was just Ben-Gurion University for a few days, and every professor who was showing me his research, somehow it was connected to artificial intelligence.

Jon: Yes. By the way, the three big areas of Israel now, that represent the majority of the money going into this asset class, are A.I., number one. Artificial intelligence. Automotive, number two, and cyber security, number three.

Benyamin: Yeah, and if you can combine all three.

Jon: That's right. If you can have cyber security for the car driven by A.I, you've got a buzzword compliant software start-up.

Benyamin: Crypto Blockchain.

Jon: Yeah add a little Crypto to it and be good. That's right.

Benyamin: Is there a field of technology, or piece of technology that you personally don't enjoy, or don't like, or don't see a future in? For example, are you into social media? Or are you like, "I'm one of these people I'm not even on social media."

Jon: Oh, no, I love social media. I'm addicted.

Benyamin: Okay. Is there a technology that just doesn't interest you?

Jon: No. No. I'm interested in them all. There's certain things that are less sexy. I think you can make money. For example, storage doesn't get me all hot-

Benyamin: Server storage.

Jon: I think storage is huge, and it's a wonderful area. But it's sort of, inherently boring. So, there's a lot of guys who make money in it.

Jon: Look, I think there is just so much opportunity across the board. I'm interested, though, in big problems. I just saw this video from Bali on the BBC a couple of days ago, about someone swimming through trash. And I was in Bali, and I had that same experience. We gotta clean up the oceans. I want to invest in companies that are gonna mitigate the terrible disaster that is happening in the oceans. I want to invest in companies who are gonna feed people. 65% of the Indian population today is dependent on agriculture for their livelihood. We have so much we can do to help them really do this in a better way.

Jon: When you look at what's going on with digital health, we have so much to do. Israel, by the way, our health system rocks. We spend about $3,000 per capita as opposed to $10,000 per capita in the U.S., and we outlive the U.S. by about five years on a life expectancy basis. We have a ton of things to do, in all of these areas. I think that technology has a big part of the solution to many of these problems.

Benyamin: Right. Especially, when you look at humanitarian ... we were talking about Edgy Bees helping after disasters and what you're just describing right now. Tell me, what is does it do for Israel, for the reputation Israel when the world sees them involved in these humanitarian types of technologies?

Jon: I think that the world is very interested in Israel now. We see people, whether it's in Asia, or Latin America, or Africa who want to get closer to Israel. Who want our technology, who want to work with our companies so they can help themselves and get ahead. Whether that's a company like Edgy Bees that sends drones up with a software overlay in firefighting in Northern California, or in hurricanes down in Florida or Houston.

Jon: If it's companies like enVerid, who are changing the way that air is filtered in buildings so that we can save 30 or 40% off electricity costs, and improve the air quality.

Jon: If it's companies like SCiO, the company that's called Consumer Physics, they make the little SCiO miniature spectrometer, which today is pioneering the internet of hay. It basically is being used by farmers to measure what's in hay that they're feeding Bessie. Which is incredibly important.

Jon: Companies like Teranis, who are just fundamentally changing the soy bean output by spectacular areal photography where crop dusters or drones can see a little bug the size of a pin, okay, from the air.

Jon: This is wonderful stuff, and the world wants it. The world wants to be part of it, and whether they're in China, or they're in Columbia, or they're in Nigeria, they're coming to get it.

Benyamin: Where do you see yourself and OurCrowd five, 10 years from now?

Jon: Bigger. More successful. Having more fun. Look, we're gonna pass the billion dollars in assets under management this year. We have 25,000 members worldwide, they come from 150 countries. We're running out of countries to get. We have about 150 companies on the platform doing different things. We now have, I think it's 13 funds that are active.

Jon: So, we're gonna continue to grow, but we're gonna continue to mobilize this crowd, very educated, committed, motivated crowd, we're gonna mobilize them on behalf of these start-ups. Because what we're doing is not just a cool way to fund companies, but it's a cool way to build companies, and to get people involved in building them.

Jon: Whether it just means re-posting their notices on social media, or it means joining a company's board of directors or advisory board, or hooking up a company with your brother-in-law at a hospital where your sister is working, an ag fund, or autonomous driving start-up, we want the crowd to be involved. We're trying to build software and systems on our platform that mobilize the crown, on behalf of these innovative companies.

Benyamin: Lastly, is there any question I didn't ask you which I should have asked you?

Jon: Look, I think that one of the big things that Israel needs, at the moment, is people. We need people who follow us on wonderful sites like From The Grapevine, or invest with us on sites like OurCrowd. We also need interns. We need thousands, and thousands of young people who will come here and join our start-ups, whether it's for a month, or a summer, or for a year, because in the old days, they used come and work on the [Kebutz 00:27:05]. Now, they come and work in start-ups. We also need people who will come and spend a couple years here. There are new Visas for people who can come from India, from China, from America, from anywhere who want to be a part of this incredible start-up nation.

Jon: I think that there's a new openness, here in Israel, to the world, and we need you, and want you, and it can be a lot of fun. It's a great place. Great parties, great weather, great beaches, and great companies.

Benyamin: Well, thank you so much for taking the time, Jon, to chat with us today. It's been enjoyable, and educational.

Jon: Thank you very much.

Benyamin: Our Friend From Israel is a production of FromTheGrapevine.com. Extra notes and a transcript of today's episode, can be found at OurFriendFromIsrael.com.

Benyamin: Our show is produced by Paul Kasko. Editorial help from Jaime Bender. Our Head Engineer is Everett Adams. Our theme music is by Haim Mazar, a Hollywood film composer who grew up in Israel.

Benyamin: You can visit our website at OurFriendFromIsrael.com to find more episodes of the show. Subscribe to our podcast on iTunes, Google Play, or your favorite podcast app. Feel free to leave us a review. When you do, it helps other discover Our Friend From Israel.

Benyamin: I'm your host Benyamin Cohen, and until next time, we hope you have a great week.

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