Perhaps one of the best talks given at a TechAviv Founders Club event ever. A true startup struggle and success story told by a master of product vision, business acumen and tactical execution.

1. The MyHeritage Story
TechAviv, Feb 5 2013
Gilad Japhet
Founder & CEO

2. About
Coded in Z80 assembly for ZX-Spectrum
computer in 1988 by Gilad (“The Nightman”)

3. The MyHeritage team

4. What is genealogy

5. Vision
Bring family history to the masses

6. The MyHeritage platform
Family Tree Research
Family Sites
Builder & Matching

7. Smart Matches
A green icon appears on the tree when you get a match
See all matches from the same side and contact him/her
Compare the two trees side by user

8. Founding MyHeritage:
the difficult start
• How it started in 2003
• Working from home, bootstrap years 2003-2004
• Terrible experience outsourcing to India
• Repeated fundraising failure
• Taking a loan and mortgaging all my property
• Seed round in Q1 2005

9. Celebrity: accidental bonanza
• Licensing the technology for family history and
tagging
• Inventing celebrity matching by luck and accident
• Viral wave, 2005 onwards
• Learning from MetaCafe
• Doppelganger 2010
• Doppelganger 2013

10. Founding MyHeritage:
growth years
• VCs get interested
• Benchmark mentoring
• Pearl Street Software acquisition
• Accel in 2006 and 2007
• Index in 2008
• Bessemer in 2012
• Strong expansion in 2013

11. MyHeritage in numbers

12. The 4 key ingredients of success
• Passion
• Execution
• Hard work
• Pure luck

13. Raising money: few tips
• Fundraising is the CEO’s #1 task
• Don’t neglect to due diligence the investor
• “No” could be the best thing that happened to you
• Biggest problem with VCs: “slow No”
• Raise more than you think you need
• Do not accept warrants
• Raise money when graphs look good, get some
traction, investors will see the $

14. Phases in an Internet company
• Phase 1: Dream
• Phase 2: Revenues
• Phase 3: Dream revenues

15. The power of M&A
Seal global leadership in family trees
Expand from family trees into historical records
250M+ family tree profiles; Technology for family tree
backup
Seal market leadership in Poland
Base of high quality users in the Netherlands
Market leadership status in Germany; ~90 million family
tree profiles
Family tree social network in UK
Smart Matching technology; Large US user base; 100M
family tree profiles

16. M&A case study: FamilyLink
Utah-based FamilyLink.com, Inc. acquired in Nov 2011
Main assets:
• Two historical records websites with subscriptions
• 4 billion historical records
• Talent and expertise
Outcome:
• Grew subscriptions 80%
in just 8 months
• Grew team from 12 to 20
• Hired world class content experts
• Entered new category
• All thanks to pure luck
• Unique negotiation model

17. Freemium
• Great model
• Free -> traction
• Know when to start revenues
• Choose which features to charge for
• Early monetization can be a mistake

18. Subscriptions
• Excellent model
• Predictable revenue flow
• If new acquisition exceeds churn,
revenues will keep growing
• Key terms: CAC, LTV, Churn
• If LTV >> CAC and churn is low,
business is unstoppable
• Not right for every business,
but Freemium + subscriptions
is highly recommended
(also the model of Wix.com)

19. Go global
• The world is the big opportunity
• Beat your US competitors
• Translations + cultural adaptations
• Do it from day one, not “later”
• Create the infrastructure
• Utilize volunteer users and professionals
• Global PPC

20. Dealing with customers
• As CEO, stay very close to customers
• Communicate daily with customers
• Make yourself accessible
• Convert negative passion to positivity
• Reduce barriers from customers who want to contact the company
• Cultivate power users / evangelists

21. Dealing with negativity
• There will always be haters
• http://moz.com/rand/what-i-wish-i-knew-before-i-started-my-company/
Rand Fishkin: “If you don’t have haters, you’re doing something wrong, or,
you’re doing something that doesn’t matter. ”
• Maintain positive attitude. Your positive karma is your #1 asset.
• Fight poison with honey

22. Some mistakes to avoid
• Outsourcing key areas of the product
• Taking over user’s browser as business model
• Converting previously free functionality into paid
• Hiring “snakes”
• Keeping mediocre people too long
• Starting small in Israel, expanding to other markets
“later”

23. Some good things to do
• Hire the best people
• Obsess about metrics. Measure everything
• A/b test everything, from design to pricing
• Support coupons, discounts, bundles
• Try to make the product viral
• Incentivize every employee with options
• Maintain your values
• Build a company or product
that do good in the world
• Bring pride to Israel

24. Good luck!
gilad@myheritage.com