Yossi Vardi, godfather of Israel's hi-tech industry

Yossi Vardi reveals the secrets of his success

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"The secret sauce of Israel's success is the Jewish mother."

Yossi Vardi, the godfather of Israel's hi-tech industry, cracks yet another joke, sitting comfortably in his spacious house in Tel Aviv.

In the past few decades he has invested in and helped build some 80 Israeli start-ups - ranging from software firms to mobile phone and clean technology companies to name a few. Many of them he sold to international tech giants.

One of his possibly most famous investments was the first popular internet instant messaging service ICQ, bought by AOL in 1998 (who turned it into AOL Messenger).

He played a part in the creation of Answers.com, invested in software solutions firm Gteko (bought by Microsoft in 2006) and the Gifts Project (acquired by eBay), in Airlink, Scopus, BrightCove and many others.

Yossi Vardi For many, Yossi Vardi is like a grown-up child - curious, informal, and very different

At times, Mr Vardi - or simply Yossi, as he wants to be called - may sound only half-serious, but when he talks about in which kind of start-up to invest his money, he certainly means what he says.

Yes, there are a few things driving the rapid rise of the country's technology sector, not least government money and the army's specialised high-tech units.

But for Yossi, it has always been about people.

"It's a cultural and spiritual phenomenon, but not a technological one, as you have technology all over the world," he says.

"All Israeli kids know that their mother will tell them: 'After all that we've done for you, is asking for one Nobel prize really too much?'"

Blindfolded investor

Jokes aside, Yossi is very specific about his criteria for start-up founders to be successful.

Start Quote

I'm a no-title lucky guy who deals with people a third of his age and three times as smart as he is".”

End Quote Yossi Vardi

"I'm mainly looking for talent," he says.

"I don't look for an idea, because I won't understand it. It's from demography that I don't belong to - I'm a digital immigrant, and they are the natives.

"I want them to be talented, nice and nimble, and to aim their product at consumers - then I'm interested."

To illustrate his point, he nods at a portrait of his son Arik, hanging on the wall.

Back in 1997, when Arik was 26, he and his three friends asked Yossi to invest in their company Mibabilis.

Arik did not tell his dad anything about the project.

They simply asked him for cash.

Yossi Vardi Yossi Vardi's "Economy of Dreams"

"I knew they were a bunch of very talented kids, so I gave them a little bit of money, and as we say, the rest is history!" recalls Yossi.

By that he means that Arik's little venture - the first-ever internet instant messaging service ICQ - turned out to be huge success.

In a matter of months, the Israelis sold the start-up to AOL - for $400m (£259m).

'Bigger than life'

Mirabilis co-founder Yair Goldfinger says that Yossi saw potential in them.

"He invested in the people, but he is not just a financial investor - he brings tons of experience, both for product and business, not to mention his network," says Mr Goldfinger.

"He brings a different way of thinking - sometimes considered crazy - to the table."

Yossi Vardi, Ken Novack Yossi Vardi (here with Ken Novack, former vice chairman of AOL) is very involved in the Rogozin school for children of immigrants

And Yossi has always been like that, adds Mr Goldfinger: nice, kind, funny, regardless who he is dealing with - whether it's his family or besuited businessmen.

Ken Novack, who was AOL's vice chairman at the time of the ICQ purchase, agrees.

"Yossi is bigger than life, he always stands out in the crowd, and very often wherever the crowd is, Yossi is at the centre, whether it's Tel Aviv or New York, Silicon Valley or [at the World Economic Forum in] Davos," he says.

And he is pretty much always able to close a deal.

For instance, recalls Mr Novack, when the ICQ negotiations stumbled because of mutual mistrust between the American and Israeli sides, it was Yossi who saved the transaction.

Not many people know that besides his efforts helping the Israeli economy and creating jobs, Yossi Vardi has other sides as well.

Start Quote

Yossi was making a speech, saying that there's a lot of talk about peace, but not much progress - and he got so emotional that he started crying”

End Quote Chemi Peres Son of Israeli President Shimon Peres

He has a PhD, but modestly says that he is a "no-title lucky guy who deals with people a third of his age, and three times as smart" as himself.

Eyal Gever, a tech entrepreneur-turned-artist who grew up with the Vardi children, says that Yossi has always been different.

"He loves Israel, and he's doing a lot for this country," he says.

"For instance, look at his involvement in the Rogozin School in Tel Aviv - a special school for children of immigrants, the vast majority of whom are not Jewish.

"The school accepts anyone, even from places that aren't very friendly with Israel.

"There's no future for these kids in a way, their parents come here to make a living, and the government wants to kick them out, but Yossi and his family help them in unbelievable ways."

Israel's ambassador
Yossi Vardi Yossi says that blowing bubbles has a very special meaning for him - it symbolises the time when the dot.com bubble burst

When Yossi talks to journalists, he usually doesn't want to veer off the high-tech line.

But he has also left an important footprint on Israel's and global politics.

When he was just 27 years old, he was appointed as the youngest ever Director General of the Ministry of Development, and then the Director General of the Ministry of Energy.

Start Quote

When the goddess Fortuna knocks at your door, you better not be in the toilet”

End Quote Yossi Vardi

He is a big promoter of Israeli-Arab peace, and has participated in numerous peace talks - the Israeli-Egyptian peace process, the economic and regional cooperation discussions with Jordan, the Wye peace negotiations with Syria, as well as the economic discussions with the Palestinians.

The King of Jordan, for instance, even presented him with a watch as a token of his appreciation.

"Once I was in Davos, and Israelis and Arabs were talking about peace," remembers Chemi Peres, son of the Israeli President Shimon Peres and a good friend of Yossi's.

"Yossi was making a speech, saying that there's a lot of talk about peace, but not much progress.

"He got so emotional that he started crying - out of pain that it's about time to stop talking and start acting, because people are being killed.

"You usually don't see people express themselves in such an emotional way."

Mr Peres recalls another incident, too.

During a discussion between Israeli and an Arab delegations, the atmosphere was very cold, and Yossi wanted to break the ice.

Chemi Peres, Yossi Vardi Chemi Peres, son of Israel's President Shimon Peres, describes Yossi as "a great ambassador for Israel"

"He raised his glass and said that he wanted to salute the Arab delegation' s leader - so then everyone had to raise their glasses - and the talks got underway smoothly," recalls Mr Peres.

All about kids

Yossi also served on the Advisory Board of the Bank of Israel, acted as an advisor to the World Bank, the United Nations Development Program and the Mexican government.

But still, it is the young talented kids that keep him mesmerised, Yossi says.

And in his quirky, Yossi Vardi-kind of way, he gives advice to would-be entrepreneurs:

"When the goddess Fortuna knocks at your door, you better not be in the toilet.

"You have to be persistent, believe in yourself, you need the stamina, need to know how to take a failure and understand that failures are a part of doing business.

"You cannot make a cake if you don't have the ingredients, that's why you need the technology, but to make a good cake you need a good chef - and that's what good entrepreneurs are for."

Yossi Vardi Yossi says he is mesmerised by young, talented people

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