When a startup gets big, the environment gets rougher, says Mellanox CEO
A new TOI series looks at the lives of Israeli tech entrepreneurs, starting with Eyal Waldman: He eats on the run, sleeps as much as he can and loves water sports
The CEO of Mellanox Technologies Ltd., Eyal Waldman, kicks off The Times of Israel’s new series of interviews with tech managers about their day-to-day lives.
Eyal Waldman founded Mellanox in 1999 in the northern Israel city of Yokne’am; the company, a maker of servers and storage switching solutions, now has a market value of some $3.3 billion. Waldman talks about the differences between running a startup and a large firm, the challenges he faces now, and his tendency to wake up just before his morning meetings. Perpetually in a rush, he tends to eat fast food. He gets joy from his success but spends as much time as possible with his family, including his soldier daughter on her army base.
Shares of Mellanox, which held a Nasdaq initial public offering in 2007, have risen some 55 percent in the past year. Last year the company made its largest acquisition, buying EZchip, an Israeli leader in high-performing processing solutions. Mellanox posted revenues of $857 million in 2016.
Now, however, Mellanox and Waldman himself may be facing their greatest challenge yet after New York activist investor Starboard Value LP acquired a 10.7% stake in the firm, urging it to improve its margins and stock and explore a potential sale.
Waldman declined to comment about the acquisition, and the company laconically said that the firm “maintains an open dialogue with all of our shareholders and we welcome their input and investment.” At a recent company event, however, Waldman told his workers that he is excited about his next 20 years at the company.
Challenges you faced when your firm was a startup: “The main challenge when you are a startup firm is to start getting revenues and sales and then a profit. You also need to build a team and raise money. You are dependent on investors and nobody knows you yet, so you need to convince companies and important people to start working with you and start becoming your customers.
“At each stage in the development of your company, you have concerns, but these change according to what stage you are at. When you are small, you are not a threat so people and companies are willing to collaborate and help. Once you become a big firm, you become a threat, and the environment can turn hostile.”
Challenges you face now: “Once you are a big company, you want to reach that $1 billion sales target. We have made eight acquisitions, and each acquisition has added value to our activities. As your company grows you have to get used to the fact that you cannot be involved in all the aspects of the company. To delegate is hard. I believe that my input is pretty valuable and that I can help in many ways. When the company was a startup I was much more involved in all the various processes of the firm. I miss that. I used to be more hands on. Now I need to talk a lot. It is harder to play in the adult playing field, because if you fail now the drop from the top is steeper and the fall is harder.”
Advice to startups: “Be persistent, understand what you are creating and build it up systematically. Surround yourself with a good team and build a product that people need now, not for some vague future. Look forward and keep moving forward as fast as you can, because if you look sideways, at your competitors, you could lose your way and your speed.
“I wouldn’t recommend raising money in the stock market at an early stage. If you are not able to raise money privately, then perhaps your technology is not so good. The overhead of being public as a small company is very high, it takes a heavy toll on the company. The regulatory pressures are intense and you need to report everything you do, giving your competitors access to your activities.”
Can you see moving on to another project, after Mellanox? “I would not want to set up another startup. It is just so hard to set up something new and to succeed.”
Daily schedule: “The schedule changes, depending on if I am in the US or in Israel. I travel one week a month to the US. In the US I have meetings from seven in the morning to 8 in the evening. I meet with investors, clients and also with officials from my companies. I sleep as much as I can — I get up half an hour before my meeting. I’m not one of those guys who wakes up nice and early and does a million of things before going to work. I prefer to sleep till the last minute. I go from one meeting to another, and then hop on a plane and go to my next destination, whether in the US or China, Europe or Japan. I sleep…and then get up for my next meeting in the morning.
“When I am in Tel Aviv my days are shorter: I start around 9:30 a.m. and often I go to the gym in the morning. I run for four kilometers and then work out. I work till 5-6 p.m., ending my day with calls to the US.”
Food: “I don’t have a healthy diet because I eat out so often. I eat sandwiches in the car, on the road, or grab some lunch while presenting to investors.”
Hobbies: Once he used to go skyboarding. Now his favorite water hobby is wakesurfing (in which a rider trails behind a boat, riding the boat’s wake without being pulled).
Where do you find joy in your work? “I find joy from success. In teamwork, to see the team developing and doing new and successful projects and developments.”
Dress code: “In Tel Aviv I wear T-shirts and jeans. When I am abroad I wear either business casual or a full suit — but never a tie.”
Where do you see your firm in five years? “With billions of dollars in sales.”
How much time do you spend with your family? “I spend as much time as I can. This Saturday I will be visiting my daughter who has guard duty in the army. It will be her birthday so I’ll be taking sushi and cakes and balloons for her and for her unit. I try to spend weekends and evenings with my family.”
How do you chill? “I like to go to bars, take holidays.”
How do you define yourself: “I’m just a normal guy.”
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