Waze Co-founder and new author Uri Levine joins Yahoo Finance Live to discuss his book ‘Fall in Love with the Problem, Not the Solution,’ entrepreneurship, competition in the tech space, success, and artificial intelligence.
RACHELLE AKUFFO: All right. Well, as the tech industry continues to face uncertainty, industry veteran Uri Levine has some advice for entrepreneurs in the tech space. Now, Levine is the confounder of Waze and is out with a new book, "Fall in Love with the Problem, Not the Solution," in which he details how he built and sold Waze to Google for over $1 billion, and offers guidance on navigating today's tech landscape.
He joins us now. Very good to see you here. So a lot of people wondering, when you have a company, how do you determine when is a good time to sell? Because I know Google wasn't the first to offer for Waze. And they initially offered, I believe, $400 million. But you got them to bump it up to a billion. How did that happen?
URI LEVINE: So essentially-- and I would say that as a general rule, right? So the reality is that when you make a decision, by definition this is going to be the right decision because you don't know what it would be like if you will choose a different path. But in general, I would say for entrepreneurs, if they face the challenge of selling their companies, then I would ask them to ask themselves three questions.
The first one, is that going to be a life-changing event or not? And if it is, then start to consider that favorably. If it's not, then keep on building your startup until it's become a life-changing event. The second one is, what's going to happen to your team, to your employees, to those that actually followed you and have built the company for a long while? And if this is going to be a life-changing event for them, then consider that even more favorably.
And the last one will be, is that going to be a once-in-a-lifetime startup for you, or you are going to keep on building different startups? And if you are going to keep difference-- to keep building different startups, then I would say to think favorably. If this is once in a lifetime, then keep it.
RACHELLE AKUFFO: I mean, it can be overwhelming, especially in an environment like this. You have high inflation. You know, people have-- are quite comfortable. You have a tight labor market here. What would make people go out and say, create something like a Waze, when you do already have such big tech competitors in the exact same space?
URI LEVINE: So at the end of the day, what drives entrepreneurs is a passion for change, is the desire to go and create an impact, change the world, make it a better place. And in many cases, and in particular in my case, this is about falling in love with the problem and not with the solution. And so I would run into different problems, and I would tell myself, wait a minute, I can actually change that, and I can make the world a better place and impact the lives of so many people.
RACHELLE AKUFFO: So how do you determine if it's a problem that's worth falling in love with?
URI LEVINE: So I would say, always start with the problem, right? Think of a problem, a big problem, something that it's really worth solving. And then ask yourself, so who has this problem? And if a lot of people have this problem, then go and speak with those people and understand their perception of the problem. And only then start to think about the solution. Now, if a lot of people are going to echo back to you that this is a problem worth solving, then two things are going to happen.
Number one, your solution is probably going to be way more focused on what's really need to be solved. And number two, they will help you to fall in love with the problem. These people that will sort of ask you to solve that for them or send you on a mission to solve that for them will make you fall in love with the problem.
Now, when you fall in love with the problem, then you essentially increase your likelihood of being successful for two main reasons, right? One is, you have a North Star. The problem is the North Star for your journey. And the journey is going to be long and hard and a roller coaster journey. But if you have a North Star, then the deviations from the real journey is going to be smaller and shorter.
And the second one is that the story that you are about to tell is going to be way easier if you focus on the problem, right? If we will be in 2007 and I will tell you, I'm going to build an AI crowdsourced-based navigation system, then the reality is that you don't really care. But if I will tell you I'm going to help you to avoid traffic jams, then you do care.
RACHELLE AKUFFO: So in terms of building a community then-- because obviously, there were other-- these map apps before. Google had one. Apple had its own. But you talk about this sense of community. How do you sell that to investors in this space?
URI LEVINE: So going back into 2007, when we started this journey, Google Maps was just a display map, right? Apple Maps did not exist, right? Bing Maps or MapQuest were basically just a display map. And if you want a turn-by-turn navigation, then it was a navigation devices like Garmin or TomTom and so forth. And the reason that we started that is that we really wanted to help people to avoid traffic jams. And we realized that we will need to have crowd-- we will need the crowd to create the map data and the traffic information and everything that is being used by the application.
And we started with this approach that at the beginning-- at the beginning, everyone told me this will never work, right? And these were the nice guys. The lesser nice guys, they told me, this is the stupidest idea that I ever heard. But when you try to address a real problem, then you will figure out a way to solve that.
RACHELLE AKUFFO: So then as a serial entrepreneur, when you look at the economic environment that we're in right now, what stages should people go through when you're trying to start a business in this environment?
URI LEVINE: So at the end of the day, the first and the most important phase for all the startups is to figure out product market fit. And product market fit is about creating value to your customers. If you don't create value, there is no reason for existence. So essentially, you're either going to figure out product market fit, or you will die, as simple as that. In fact, we never heard of a company that did not figure out product market fit. They simply died.
But when you think of companies that did, I want you for a second to think about all the applications that you are using every day, right? So searching Google, using Uber, Waze, whatever it is, right? And ask yourself, what is the difference between the application that I'm using today and the first time that I've used it? And the answer is that there is no difference. We are searching Google today the same way that we searched Google for the first time in our life.
But it did take Google or Facebook or WhatsApp or Uber or Waze or Netflix a long journey to figure out their product market fit. And once they do, they're on a path of being successful. So from all the parts of the journeys that you will need to go through, from figuring out product market fit and figuring out business model and figuring out growth and figuring out going global and so forth, if you figure out product market fit, you are on a path of being successful.
RACHELLE AKUFFO: And, Uri, just very quickly because I want to ask you about the role of AI. We've seen that increasingly being added in as we look at things like ChatGPT. How do you see that really shaping the startup community going forward?
URI LEVINE: You know, think of the top 10 companies of the world today, right? So the Google and Amazon and Netflix and Facebook and Tesla and whatever. And you look at their journey, and you will say, wait a minute, they are very young. So the oldest one will be Apple and Microsoft, and they're about 45 years old, right? But if you're looking at Google or Netflix or Amazon, they are about 25 years old, right? And Tesla and Facebook are less than 20.
And so at the end of the day, these changes have been faster and faster and faster. And it's very possible that we are-- in the last month, we have seen ChatGPT as something dramatic. It's very possible that the company will become one of the top 10 companies a decade from now. But it's even more interesting that it's possible that there might be a company that we even haven't heard their name yet that will become one of the top 10. This is how fast things are changing.
Now, in reality, ChatGPT, it's not about the technology. What is really important is what exactly we are doing with that. Because in order to become such a dramatic company, you need to change behavior. You need to change the market equilibrium. You need to be in a phase that if you would ask people what it was like before, they don't even remember.
RACHELLE AKUFFO: Yeah, it's very true. And considering how fast OpenAI has grown, it really is remarkable. We will have to leave it there, though. Uri Levine, thank you so much, Waze co-founder and author. Thank you so much for joining us this morning.