Were speaking with Arie Rutenberg, on my right, and Amnon Herzig, on my left. Some of you students will recognize Arie as my co-author of Cracking the Creativity Code and together we built Cracking the Creativity Code: Part One Discovering Ideas, our Coursera course. Im interviewing Amnon and Arie as startup entrepreneurs who created Club 50. So lets start at the end with Club 50, a social network, a real social network, not a virtual one, for people over 50 who want to enjoy life, invest their money, meet other people and enjoy other peoples company and remain relevant. One of the principles we teach in this course, Part Two, Delivering ideas is that sometimes the best market research is that of one person. You figure out something you would like to have, a real need, it doesnt exist, so you go out and make it happen. That sort of is the story of Club 50, although you did gather a lot of data. Basically Club 50 arose from something the two of you felt you needed. Tell us how that arose. Our personal experience gave us the understanding that we need, if we want to live and be productive, we need to reinvent ourselves. The society around us saw people aged 50 and over, 60 and over, in a way that didnt suit us. Id like to illustrate it. When I got from the State of Israel the announcement that I am a senior citizen, I got this pamphlet: State of Israel, all the Western societies, sees me in THIS way. Old, bent over, with a cane, barely breathing, barely alive. I did not feel that way. Amnon did not feel that way. We felt that we can still do things, create, contribute, create added value. As head of Private Banking in one of my roles, I dealt with people who had money in the bank. Then I recalled, most of these peoples, our clients, are older. That means, the older people are the ones with the money, on the one hand, and on the other,Bank Hapoalim doesnt seek them, advertise to them, try to interest them to come to the bank. From here, the distance was short to understand we have something significant, that exists that nobody has tried to crack before us, This is an opportunity for us. Thus was born the thinking underlying Club 50. One of the tools we teach in this course is called strategy. every business needs a strategy Strategy in business school is very complicated, thick text books. but we say strategy is really simple What is the main feature, the main thing that creates value for your clients? What was it about Club 50, the core value creating thing, that attracted people and made Club 50 successful? The deep need of those 50 and over is the recognition of their self-value and the challenge of loneliness those are the two main things The two emotional features that are very deep the difficulty is that those 50 plus are unwilling to recognize those challenges, they hide them, evade them, but as time passes, as you get older, the feeling of losing value, and of isolation, loneliness, are recognized, gets worse, unless you do something. In many cases, people or organizations think that dealing with challenges is a technical problem Financial, housing, medical this is true. Club 50 dealt with these topics. But the understanding that the main motive, is emotional, this was new. We brought this. Thats why we called it Club 50. The difficulty was not just for 50 and older to admit the problem, that they are losing their value in society, and are increasingly lonely, it was also the difficulty of society as a whole. Various bodies we turned to, and asked for cooperation, said, sorry, we dont want to deal with those older than 50. The image of those 50 and over is not one we want to be associated with We only deal with the young. It took us a lot of time to crack this problem. We still havent cracked it fully. But there is great closeness now, that 50 plus are a social segment that is important and valued. Adding to Amnons words: Research that we did, one of the most important ones, was a contact with Bank Discount, we asked for an exact number, how much money deposited in the Bank was that of 50 plus people? In Israel, they were then 20 per cent of the population. The astonishing data from the Bank: 80% the deposits were those of 50 and over No one ever asked the question, or checked the data. When we came with that data, 80% of the money, free money, belongs to 50 +, this astonished everyone. It began to open doors. It created a feeling of value. we 50+ we have the resources, we have the money, we are able to spend it, to give it to our children, we are important, we have value, you must relate to us. So therefore, in this topic, we created, with others, a revolution that was very important. Sometimes a whole business can be built on one key fact, like the one you cited, that people arent really aware of. It is important for a startup, for two partners, to have deep trust between each other, and harmony, but each takes a different position, knowing clearly that one makes the chaos, uproar, and the other out of the new things, discards what isnt important, keeps the important things, organizes, manages, makes them into an orderly business. It is important to say what the goals are, strategy, ideas behind Club 50, but what is the business? Our ability to bring new friends, because we gave them the feeling of self-importance, self-value, the ability to build their lives anew, after age 50, led after to many business elements. Financial services, health services, job services, many leisure activities, trips, workshops, courses, every part and element of a persons life, has an aspect in the cycle of life change in housing? Business? Dating? New friends? Change a profession? All are business opportunities. The challenge that faced, in a business sense how to take the emotional platform we built, to find new friends, and then offer them a wide and growing range of services and make profit from these services. This required a lot of enterprise, many attempts, many different trials, how do we do it? Afterward, when we succeeded in some area- how do we formulate the success, how do we build a format that we can continue to work with it, on a regular basis, how do we transport this into other subjects, to supply this service to 50 plus people? One of the things we teach our students is that a startup can always use a strategic partner a STRONG strategic partner. You have had a good strategic partner, a financial services and insurance company, Migdal, they were a partner quite early and eventually they acquired Club 50. You did an exit. Tell us about the relationship with Migdal and how this strategic partner was crucial to Club 50. Migdal identified an opportunity with Club 50 from the start, as a group they wished to work with, because those 50 plus are a group Migdal wanted to work with for pension and insurance business. Initially they advertised with us. We developed an Website, magazine, mailing list, telemarketing, Migdal saw these tools as tools that it was happy to employ. Later, Migdal understood that Club 50 could be for it a strategic tool, that would give it advantages, relatively, against other insurance companies that competed with us in the pension market. Thus, from its point of view, began the courtship of Migdal, for Club 50. Like every startup, we debated at first, do we want to give up our complete freedom? But there were many advantages of partnership with Migdal, in our ability to move our activities ahead, with their investment, and mainly because Migdal made it possible for us, professionally, to offer a financial service that we could not start on our own. With Migdal, we set up an insurance and pension agency, independent, of our own, for our members, that gave our members all the services of an insurance company regular insurance, car, house, for 50 plus, car insurance for 50 plus is quite different than insurance for the young, but mainly, pension planning, how to plan the pension, how to implement your pension, construct it, how you use the pension funds, all this, Migdal enabled us, in the most professional way, to construct. This bet was win-win for each partner. Adding Migdal as a strategic partner to Club 50 was the point at which Club 50 shifted from startup to a serious established company, everyone saw as thriving and able to develop. I think I might add a small bit of advice to our students, entrepreneurs. Even if you do want to do an exit, start a business and sell it, the best way to do it, is to pretend that you are building a business for 100 years. Build a solid well organized business that will greatly increase a value you built a business for Migdal, they did not have to build it, they could add to it, but they purchased a well run well organized business. Perhaps one last question. I always ask in these interviews, for the startups and entrepreneurs, to share some wisdom with us about what theyve learned in their experiences, I think you two have an important piece of wisdom to share, it has to do with managing people. People are the core asset of any business, especially a startup. I think you two have a special approach to managing the people, the human capital, in your business. What can you share with us, regarding how you treat the people who work for you? The key point I learned, in my business career, the best chance to succeed is when you enjoy what you are doing, when you do not go work because you have to go to it, but when you choose to, this is a privilege of very few, the decision with whom I will work, like our decision, Amnon and I, even before we decided to start a business, it was good for me to work with Amnon, we enjoy being together, working together. This already creates a foundation to come to work joyfully! It continues to the choice of the fields you work in. We chose a field that interested us, personally, made us curious, we felt that we have an important social issue that we want to contribute to, to develop so we enjoyed coming to work in the morning, to do things, this made us happy. Choosing people for the business? This wasnt necessarily according to standard criteria, many organizations follow, top professional performance. Is it enjoyable to work with these people? Pleasant? We had workers, who were not the most efficient. But they were people that it was fun to meet them, and in the end their contribution was enormous. Therefore, I think, when a person has the chance to build a startup, he or she should be in touch with their emotions, their feelings, vibrations, does it make me feel good or not, do I enjoy being with my partners, is the office I choose, my workers, the field of work, the industry, does it make me feel good? I can say, from my own experience, that in the places where people meet others, go to other fields, that make them feel good, their chances to succeed are far higher than otherwise. Let your heart, your emotions, your feelings, let them work a bit more than your intellect and your financial analysis. The business plan is very important. But the business plan has to have a section, beyond the business, what your heart, your feelings, tell you? What do you FEEL? To a great extent, think that the decision, in the end, over time, should be made through great importance given to the emotions. I think that this a very valuable advice. Amnon, adding to that? I want to say something, I dont know if I can define it as a universal principle. It is certainly true when you start a business, be true to yourself, be certain you implement your own personal values, what you believe, the values behind the business, fully. Do not be divided internally, do not mislead yourself.
