Israeli startups beginning to see benefits of New York

Navot Volk Photo: Mor Shmoshkovitz

Some Israeli startups prefer to set up their headquarters in New York rather than Silicon Valley. Microsoft Accelerator Israel head Navot Volk explains why.

A decade ago, it seemed like a no-brainer for a startup to move to Silicon Valley. It was both an inspirational and practical choice for founders to build their startup and aim for world domination. After all, it gave birth to giants such as: Google, Facebook, Uber, Airbnb and so on. Moving to Silicon Valley not only gave startups access to venture capitalists and unparalleled networking opportunities, it also fueled their dreams. A dream to not only stand on the shoulder of the giants, but to become giants themselves.

With this startup dream, it seemed inconceivable for founders to move or stay in New York. In fact, years ago, startups would leave New York as soon as salaries and rent became too high and funds started running low.

In 2003, when Jon Oringer founder of Shutterstock.com decided to stay in New York, it was taken as a surprise to many since moving to Silicon Valley was such a consensus. Oringer was interviewed at the time and explained that New York has everything a startup needs. He is considered to be one of the “pioneers” who made the bold move to stay in New York and forego Silicon Valley.

Today, there appears to be a shift in the general approach. It’s no longer crazy to choose NYC. As a matter of fact, these Israeli startups - Siemplify, Semperis, and OwnBackup— chose NYC, a decision that turned to be a smart move that gave the companies the leverage they needed. For them, the choice was crystal clear when moving their headquarters from the sunny beaches of Israel to the ‘concrete jungle where dreams are made of’.

Home is Where the Customers Are

Amos Stern, chief executive and co-founder of Siemplify, left Israel for NYC after securing a $4 million seed funding round (the company had later secured an additional $10 million round A funding). After Stern had considered many factors, his final decision was undoubted: “Siemplify’s first users were in NYC and it was therefore the best location for the company, and still is.” Siemplify ThreatNexus is a leading security orchestration and incident response platform designed to manage, investigate, and automate threat response from a single pane of glass.

Stern said, “It was important for us to be close to our first customers and strengthen our position in the local financial market that turned out to be early adopters of cyber protection technologies as they were greatly exposed to attacks as well as limited by strict regulation.”

Reaching Product-to-Market Fit

For Semperis CEO, Mickey Bresman, leaving the beach shores of Israel in favor of the Big Apple was done for a similar reason. “We decided to establish an NYC office in 2015 in order to get closer to our customers, which is one of our top priorities. This decision has allowed us to interact with them directly, gather feedback, provide better support options and reach a product market fit faster.”

Semperis’ Directory Services Protection Platform ensures that the enterprise IT environment is secure, operational and compliant through early detection and remediation of threats that compromise Active Directory.

Bresman added, “There is no place like NYC! Being closer to the US tech industry has allowed us to have direct interaction both with customers as well as with our partners. Even-though most of the external interaction is digital these days, it still feels different to know that someone is a train stop away, especially in the sensitive security industry. Plus, we are located in the World Trade Center. Nothing compares to the views we see from our office building.”

The Valley versus The Big Apple “The NY marketplace is robust in terms of customers.” says Sam Gutmann, OwnBackup CEO, when asked why he decided to make the move from Israel to NYC instead of choosing the Valley. “I really wouldn’t consider SF. It is more expensive and even harder to find talent. The local scene is more competitive,” he added.

OwnBackup is a leading cloud-to-cloud backup & restore vendor - and along with Siemplify and Semperis - is a Microsoft Accelerator (MA) alum. The company provides secure, automated, daily backups of SaaS & PaaS data as well as sophisticated data compare & restore tools for disaster recovery.

Besides wanting to be close to their customers, Gutman had another practical reason to choose the Big Apple over the Valley: “Our team is currently split between US and IL. The seven-hour difference between Israel and NYC means overlapping working hours rather than constantly coordinating calls with the west coast. This is a major positive factor for the remote team. It is also relatively easy to fly back and forth on the NY-IL route.” says Gutmann.

Customer-centricity in NYC

With Stern, Bresnan, and Gutmann’s “customer first” principle, NYC is the perfect place to further cultivate this strategy.

Tristan Louis, a tech writer and entrepreneur who lives and works in NYC writes about the difference between the valley entrepreneurs and the NY ones. He said, “Entrepreneurs in Silicon Valley have the “Build it and they will come” attitude. They are huge risk takers and day dreamers who favor world disruption instead of incremental growth. Founders in NYC, on the other hand, have a more “Listen to the customer and build what they want” approach. They are considered to be more pragmatic and focused on building a stable path to revenue instead of acquiring massive wealth by changing the entire industry.”

Seems like some startups are breaking Louis’s paradigm. Siemplify, Semperis, and OwnBackup not only successfully transitioned from IL to NYC, these are also extremely successful companies that are conquering their industries. Siemplify’s US team has grown to 12 employees since their move in 2015 and is still hiring. Semperis has launched its own conference, Hybrid Identity Protection, which will be held on Nov. 6-7, 2017 at the World Trade Center in NYC, bringing together leading identity experts from organizations like Microsoft, Accenture and others, to share their knowledge. “Our location in downtown Manhattan has helped us attract some of the best speakers in the world to our conference,” Bresman adds. OwnBackup is the top-ranked backup & restore ISV on the Salesforce.com AppExchange and was selected as a Gartner 2015 “Cool Vendor” in Business Continuity and IT Disaster Recovery.

Should You Stay or Should You Go?

When asked what advice to give to startups considering the move to NY on the same grounds, Stern replied, “Moving to NYC may seem like a brave step, but ultimately the ability and speed with which we were able to develop as well as sell and distribute our products, has accelerated. Our decision paved the path to where we are today. I highly recommend it to other start-ups who have local customers or are focused on the US market.”

Bresman enthusiastically agrees with his peer, “Do it! And sooner rather than later. You will gain a lot of insights that are very hard to get without moving closer to your customers. Your proximity to customers will have a tremendous impact on your business and the personal experience itself, of living in such a vibrant and exciting city, is a win-win situation.”

For these Israeli start-ups, moving to NYC allowed them to be closer to their customers while at the same time remain close to their teams back home - with its strategic location for overlapping working hours and international flights. Ultimately, moving to NYC propelled the growth of their teams, customers, and revenue.

With more and more start-ups moving to NYC and reaping the benefits, the Valley is no longer the “holy grail” for start-up destination. NYC has become a great alternative. While NYC and the Valley may be worlds apart - in terms of its climate and general culture - it has all the resources that a start-up needs in order to grow and succeed.

Navot Volk is the Managing Director of Microsoft Accelerator Israel

Published by Globes [online], Israel business news - www.globes-online.com - on October 17, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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Navot Volk Photo: Mor Shmoshkovitz
Navot Volk Photo: Mor Shmoshkovitz
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