Being a founder, not to mention a CEO, can be a very lonely place, carrying loads of stress and required to constantly be at peak performance. This often makes it hard to find balance between one's professional and personal life. Maintaining strong relationships with the co-founders and investors, is also not an easy task, where clarity and empathy are not always present. As one of my entrepreneurs says: “It’s not the technological challenge we deal with, it’s the mental one.”
“Throughout my +15 years as a professional, I've always been attracted to the intersection of business and psychology through entrepreneurship - What makes people tick? How do people think and act? And what motivates people in business? What drives me is being there for the amazing entrepreneurs, who are under constant pressure, so that they can make our world a better place. That’s what I’m here for, and this is my podcast – The Human Founder.”
Ran Harnevo, Serial entrepreneur
Ran is a multi-talent serial entrepreneur. He sold his company 5min to AOL back in 2010 for $65 million. It created AOL’s dependence on both him and his platform, so it was hard to get rid of him. He had 150 employees under him, and his daily attitude was to not care if he would get fired. This attitude allowed him to go about things in his way, not have to ‘kiss anyone's ass’ and to lead the company from a valuation of $10 million to $450 million. He had a CEO & CFO who backed him, respected his Israeli attitude, and saw his business leadership. When Google & Facebook began to rise, he saw that AOL is not on the same path and decided to leave.
He and Hanan Lashover, his co-founder from 5min, have been working together for 15 years. It’s a crazy ride, but they have a great relationship and handle things together. “We had so many wins together, thanks to a very low overlap of responsibilities. He’s on tech, I’m on product & business. We had a great founder-founder fit…”
He was always passionate about content - from Hollywood productions with Steve Buscemi and Sarah Jessica Parker, to AOL and writing his own publications.
Then came Bkstg, a music-tool platform that hired him to be CEO. The company brought Justin Bieber and Ariana Grande on board which was a red flag for Ran because he felt that a business strategy that goes top tier to bottom and not bottom to top was dangerous.
Ran understood he wanted to control the DNA of a company. Living in NYC for several years now - he saw firsthand the nature of immigrant communities which led him to found Homies, a start-up that connects expats with one another. Back then, Facebook Groups was just a small feature within Facebook, so there was still a market for it which allowed them to raise $12 million. But then Facebook changed their strategy and groups suddenly became an integral part of the future of their platform, which therefore decreased the need for their product. “Startup has 2 phases - first you find the market-fit, and then to increase it to maximum valuation.” That’s when they’ve understood they need to raise a white flag, as they didn't have enough velocity and organic growth.
Closing the Company
Homeis approached 30-35 top VCs in the U.S, with hopes of raising an additional $20 million. New York has already started bearing the brunt of COVID-19. Ran remembers his long walks in the snow. He was very transparent with the management about the direction the company was going in because Ran never saw the need for him to be a cheerleader. The board strategized a plan. It took 4 more months and they closed. “There’s a moment when you need to be very analytical, mature and honest with yourself, and decide not to raise more funds just to keep the company going, if you feel that it’s not good enough anymore.”
How does it feel to fail others?
They didn't deliver the ROI. 85% of the investors were there in their previous companies, so it was a bit easier to digest and they were sensitive about it. “It’s all part of the game. In the game, you sometimes lose. You know the game and you still play, even with its risks. It’s mentally hard to disappoint people, which makes having the right people to run the company alongside you even more important.”
Ran is considering new opportunities. To build something new takes time, but there are so many opportunities, and so much money at stake - “So whenever you do things, you have to do them fast; you have to make sure they take you somewhere.”
Ran speaks warmly about NYC. He doesn't like Silicon Valley. Since he arrived in NY in 2008, there are more than 400 Israeli start-ups that have opened and are operating in the city- he refers to it as “The Israeli Mafia”.
Since his children are growing, he felt this is the time to bring them back home to Israel. His daughter has a neurological syndrome that has impacted his journey as an entrepreneur and a father in more ways than one.
For many years, Ran, who is full of charisma, felt unbeatable. Then, he was finally defeated. It gave him a new perspective of the industry, a crucial understanding also of how much luck is needed to succeed. He now understands that things are not as dramatic as they seem to be at a certain point in time.