Ido Susan launched his first hyper-growth startup – Intucell, at just 23 years old. Just a few years later he sold the company for $475 million. His newest venture, DriveNets, has raised one of the largest first rounds ever.
In spite of what some might consider a four year forced detour from his aspirations to become an entrepreneur, Ido leveraged the opportunity into an incredible business and exit. He is now building his formidable new venture.
Ido Susan recently appeared as a guest on the DealMakers podcast. During the exclusive interview, he shared how he fell in love with computers, how he got his start in business, on his grand exit, what’s next, and many more topics.
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Ido Susan was born in Israel. He grew up in Kibbutz. His parents were farmers, who never focused much about money.
In high-school, he developed a love for computers and creating things.
Israel has mandatory military service for everyone. Fortunately, that doesn’t just mean learning to use weapons. Ido was selected to work in the intelligence unit. He found it a great opportunity to gain technology experience he wouldn’t have gotten outside of that environment.
Exiting the service at 23 years old, Ido decided to make the jump right into entrepreneurship. He was driven to get out there and solve big problems and take on sizable challenges. He founded his first company, Intucell.
Intucell started out to create a Location-Based Solution (LBS) for advertising. After talking to potential customers the team realized that their original idea is not going to succeed in the market, and changed course. They invented the Self Optimizing Network (SON) and sold the technology to some of the world’s leading service providers.
During this experience, they were able to increase end-user bandwidth by almost 15% and reduced dropped calls by close to 20%.
With just one round of funding, at a modest $6 million, they continued to gain customers and were pulling in revenue from their second year, until receiving an offer from Cisco to acquire the company.
How To Get Your Startup Bought
Ido says the first step in getting your company acquired is not playing for the exit strategy at all. He recalls creating their investor pitch decks and purposely removing their chapter on the exit strategy.
He deleted it on the belief that “you need to build a company that will be solid, that will solve a real problem, create and generate revenue, that you will grow based on your revenue or based on funding.” He understood that getting this right would lead to naturally attracting people that want to buy your company.
They got focused on gaining customers, innovating and helping their customers solve problems.
As he points out companies aren’t sold, they are bought. With Cisco, everything began with being approached with a way to partner up and work together to serve joint customers. As Ido shared, the initial discussion breeds more conversations.
From his point of view, when you are showing you can deliver, work together well and can do something meaningful they want in on more efficiently than they can do in-house, a merger or acquisition is the natural next step.
The process can be very surreal too. Ido says it wasn’t until he was actually signing the final agreements that he was confident the deal would happen. In the meantime, they just focused on the business.
Ultimately the company was acquired for $475 million. Storytelling is critical for a transaction of this nature to happen and having a solid acquisition memorandum that captures the essence of the business is key. For a winning acquisition, memorandum template take a look at the one I recently covered (see it here).
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The next three years he spent working within Cisco doing the integration amongst other initiatives. He ended up staying a year longer than his vesting required where he experienced first hand the sales machine of a larger corporation that was generating $1 billion a week.
During the corporate experience, he learned how to take something from idea to product and to put it into the hands of a salesforce who would then go sell it all over the world.
DriveNets Is Born
Driven to disrupt and solve big challenges in networking and help take things from hardware to software, Ido Susan left Cisco, built a power team, and went at it again with a new startup called, DriveNets.
They began by bootstrapping the company. They built hundreds of millions in subscription revenues. They stayed lean so they were forced to innovate. This strategy gave team members lots of options and shares to make them very invested in the success of the company.
The idea behind bringing onboard outside investors was to leverage all of the extra value they could offer, and to speed up sales.
Along his journey, Ido connected with UpRamp, an organization that connects the startup world to the vast global cable network. DriveNets participated in The CableLabs Innovation Showcase in London in 2019.
The growth experienced has been notable. The company has now almost 200 employees, with offices in Israel and New Jersey, and presence in Asia, and Europe.
The company went on to raise one of the largest Series A rounds to date. They raised $120 million from top investors like Bessemer Ventures and Pitango Ventures Capital. For those that are fundraising, not long ago I covered the pitch deck template that was created by Silicon Valley legend, Peter Thiel (see it here) where the most critical slides are highlighted. Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400M (see it here).
How To Create A Successful Startup That Scales
Ido’s quick tips for launching a successful startup that can really scale include:
- Make sure you are focusing on the combination of technology and business
- When recruiting your team, remember your business is all about the people
- Bring in executives with domain expertise who have done it at least three times
- If you can get money from Bessemer, just do it
- Find a really big problem that is only going to grow larger over the next five years
Listen in to the full podcast episode to find out more, including:
- The question that Ido goes out to ask customers before launching a business
- His top piece of advice before beginning a startup
- How to pick cofounders
- Ways to reduce the steep learning curve as a founder