How to build a successful start-up: Lessons from Waze's Uri Levine

Uri Levine describes himself as a “passionate serial entrepreneur and disruptor.” The co-founder of Waze, one of the world’s most-used navigation apps – and dozens of other start-ups, most of them successful – he is now on a new journey: to spread his entrepreneurial tips to the masses.

In January, Levine released his first book, Fall in Love with the Problem – Not the Solution, a Handbook for Entrepreneurs. In the forward, Apple co-founder Steve Wozniak calls the 400-page book “a bible of entrepreneurship.”

Levine spoke to The Jerusalem Report in anticipation of the book’s launch to share some of his insights, starting with the reason for the book’s title.

“When you focus on the problem, you increase the likelihood of being successful,” Levine says. “When you solve a problem, you create value for those who have this problem. Obviously, if you create value, there is a good reason for your existence.”

He says that the problem should be the “North Star” of any successful start-up, and those entrepreneurs who manage to keep that star in focus will have a shorter path to success with fewer deviations. Being solution-oriented also makes it easier to tell your company’s story, he says. 

“Let’s go back to 2007, when I founded Waze,” Levine explains. “If I had told you I was building an AI-based navigation system, to be frank, you would not have really cared. But what if I told you I am going to help you to avoid traffic jams? Now we have something to talk about.”

Levine says he usually starts a new start-up because of frustration over something that he perceives does not work well – when he finds himself asking, “Why is this so?” or “Is there a way to change this for the better?” Once he defines a problem, he checks to see if enough others see it the same way. 

If so, the mission to solve the problem begins. 

In the case of Waze, Levine says that he and his team set out to help commuters avoid traffic jams. Quickly, the company realized Waze could play an even greater role not only in Israel but around the world. 

“We figured out that the perception of the value [of Waze] was different in different countries,” Levine tells the Report. “In Israel, the most significant value in the beginning was outsmarting the traffic light. If I could figure out the fastest way to get to work by two minutes, then it made my day.”

“In the US, let’s say you drive every day from San Jose to San Francisco,” Levine continues. “You can only go one or two ways, and you are not looking to change your route. What you really care about is how long the commute is going to take. And so the ETA – estimated time of arrival – ended up being the most significant feature for Americans.”

Some users leave Waze running in the background for directions, while others check the route and then turn off the application. 

“We have seen different use cases among different users and even the same people using the application differently on different occasions,” Levine says. “There is no right or wrong way.”

Is start-up success only about defining the problem? 

No, Levine says, it is also about establishing the right leadership team – including a CEO who is not afraid to make decisions. 

He says most of the time “we know the right decision, but we’re looking for confirmation” out of a fear of failing or making a mistake. But Levine says “there are only right decisions or no decisions.” 

One should make quick decisions and learn from them, he advises.

“People don’t like to admit that they were wrong,” Levine adds. “In some cases, we will get stuck with the wrong decisions because people are afraid to change their minds.” 

In his conversations with entrepreneurs whose start-ups have failed, he says he often hears that the team was just not strong enough or that there were communications issues. 

“The most significant question I asked these entrepreneurs is when they knew the team wasn’t good enough. Most of them knew within the first month.”

Levine says the problem, then, was not the team but the CEO. He cites a report by Harvard Business Review of 16,000 companies that found the No. 1 ingredient for a successful business is having a CEO that makes decisions with conviction.

“Now, for a start-up CEO, that would be No. 2 because perseverance is going to be No. 1; but making decisions with conviction is going to be very significant to the success of the company,” Levine teaches. “If you don’t make the decision, what will happen is that the top performing people will leave because they want to be in a place that they believe knows how to achieve success. They want the CEO to do the right thing and not wait.”

When Google reached out at the end of May 2013 to acquire Waze, the company said the transaction would be completed within a week, Levine recounts in his book. Levine immediately said yes. Ultimately, the $1.15 billion cash purchase – the most lucrative exit in Israeli history at the time – took 10 days. 

Google and Waze had been in dialogue for six months. 

Could Levine have deliberated more or held out for more money, given that today Waze is valued at so much more?

“If you would ask me would Waze today be worth more than $1.15 billion? Absolutely. Would it have gotten where it is today without the acquisition? That we do not know,” Levine says. “When we make a decision, by definition it’s the right decision because we don’t know what would be if we chose a different path.”

Still, by most reports, 90% of start-ups fail, and it seems unlikely that all these CEOs just could not make decisions. Levine says that’s because there are also the issues of defining the problem, market fit and “essentially falling in love” with the start-up journey.

“It’s a roller coaster,” he admits. “It’s a journey of failures. At the end of the day, you need to be in love in order to go through the journey. If you are in love, it will increase the likelihood of you not giving up when things become tough – and they will become tough multiple times. And when you are in love, there are many things that you are willing to do; and one of them, which is critical, is sacrifice.”

To run a start-up, Levine says, a person has to invest more than 100% of him or herself in the company. That means “there is no work-life balance. When you invest 100% into the start-up, there is way less for everything else.”

You also need to believe that the opportunity is bigger than the threat.

Is that why so few corporations disrupt the marketplace, and innovation usually starts with newcomers?

According to Levine, it is hard – if not impossible – for corporations to disrupt because even if one member of the leadership has an idea, “he would have to convince the rest of the management that what they are currently doing is wrong, and no one wants to hear that.”

The other challenge is fear of failure.

“Corporate becomes an entity that has a lot to lose,” Levine says. “When you have a lot to lose, then the fear of failure changes dramatically. The DNA of the culture of corporate is that there is a high fear of failure. People are afraid to fail because they might get fired or they might not get promoted or their bonus and so forth.” 

“So, they don’t take risks, they don’t try something new,” Levine continues. “What often happens is that the people who are innovative or are entrepreneurs become known as troublemakers, and corporates don’t like problem makers. So they probably fired all the troublemakers throughout the years, and then they don’t have the right people in place to build stuff themselves.”

How come Israelis became so good at start-ups?

Because Jews are the People of the Book, Levine says. 

“The Jewish people were always about studying and learning… If you are Jewish, you need to read the Bible,” he says. “Reading was one of the things that created the Jewish people. Seeking knowledge was always part of the Jewish people. And when we came together to form Israel in 1948, it was already part of our DNA.”

It’s also about wanting to make the world a better place, tikkun olam, though Levine did not specifically use that phrase. 

Today, he says he is working on solving the problem of street parking, which “turns out to be really frustrating in major cities” in Israel and Europe. It’s not that he is only focused on mobility; he’s open to working on start-ups in the medical technology or Fintech fields, for example.

His criteria for joining a start-up are really only one: It needs to be focused on improving the world. According to Levine, “solving a problem is by definition doing good.”

Levine’s book is filled with what he calls “Startips” – bulleted advice for readers that they can take with them on their entrepreneurial journey. 

Is the author not worried that he is giving away all his trade secrets?

On the contrary, Levine wants everyone else to become more successful so that the world will be a better place. Levine prides himself on having “multiple parts to my personality.” While on the one hand he is an entrepreneur – and that is the person that most people know – he is also a teacher, he says. 

“I feel equally as rewarded if I build stuff myself or guide someone to build it,” Levine says. 

The intent of the book is to help people build their own start-ups – from the grandiose questions to the day-to-day challenges, like hiring and firing. Levine says that hiring is easy, and firing is hard. He offers advice to other CEOs, instructing them that they should ask themselves 30 days after bringing on someone new if knowing what they know today, would they still hire the person.

“If the answer is no, you are actually doing better in allowing them to be successful someplace else,” he says.

Levine acknowledges that some percentage of start-up successes stems from luck. But “the likelihood of being lucky is increased by creating a systematic approach.” He doesn’t expect that anyone who reads the book will launch a winning business, but he believes that “if you read the book, you increase the likelihood of being successful. It’s as simple as that.”

Levine is a multi-millionaire who turns 58 this year. Why not retire early and enjoy life?

“My mission in life is to create value,” he concludes. “This is my destiny, and I will keep on doing that.” 

To purchase Uri Levine's new book, click here.